EXHIBIT 10.3
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CHS ELECTRONICS, INC.
CHS ELECTRONICS, INC. (NEVADA)
CHS DELAWARE INC.
CHS DELAWARE L.L.C.
CHS AMERICAS, INC.
and
THE CHASE MANHATTAN BANK
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INDENTURE
Dated as of April 9, 1998
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U.S. $ 200,000,000
9 7/8% Senior Notes due 2005
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CHS ELECTRONICS, INC.
RECONCILIATION AND TIE BETWEEN THE UNITED STATES TRUST INDENTURE ACT
OF 1939, AS AMENDED, AND THIS INDENTURE, DATED AS OF APRIL 9, 1998
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
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/section/ 310(a)(1) .................................. 7.10; 11.1
(a)(2) .................................. 7.10; 11.1
(b) .................................. 7.8; 7.10; 11.2
/section/ 312(c) .................................. 11.3
/section/ 314(a) .................................. 4.6; 4.7(a);11.2
(c)(1) .................................. 11.4
(c)(2) .................................. 11.4
(e) .................................. 7.5
/section/ 315(b) .................................. 7.5; 11.2
/section/ 316(a)(last
sentence) .................................. 2.9
(a)(1)(A) .................................. 6.5
(a)(1)(B) .................................. 6.4
(b) .................................. 6.7
/section/ 317(a)(1) .................................. 6.8
(a)(2) .................................. 6.9
(b) .................................. 2.6
/section/ 318(a) .................................. 11.1
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
PAGE
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RECITALS OF THE COMPANY
ARTICLE I.......................................................................................2
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS........................................................................2
SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.................................20
SECTION 1.3 RULES OF CONSTRUCTION.............................................................20
ARTICLE II
THE NOTES
SECTION 2.1 FORM AND DATING...................................................................21
SECTION 2.2 DENOMINATION AND TERMS............................................................22
SECTION 2.3 EXECUTION AND AUTHENTICATION......................................................22
SECTION 2.4 REGISTRAR AND SECURITY REGISTER. .................................................23
SECTION 2.5 HOLDERS TO BE TREATED AS OWNERS; PAYMENTS OF INTEREST.............................24
SECTION 2.6 PAYING AGENT TO HOLD MONEY IN TRUST...............................................24
SECTION 2.7 TRANSFER AND EXCHANGE.............................................................25
SECTION 2.8 REPLACEMENT NOTES..................................................................29
SECTION 2.10 TREASURY NOTES...................................................................30
SECTION 2.11 TEMPORARY NOTES..................................................................30
SECTION 2.12 CANCELLATION.....................................................................31
SECTION 2.13 DEFAULTED INTEREST...............................................................31
SECTION 2.14 CUSIP, CINS AND ISIN.............................................................31
SECTION 2.15 DEPOSIT OF MONEYS................................................................31
ARTICLE III
REDEMPTION
SECTION 3.1 RIGHT OF REDEMPTION...............................................................32
SECTION 3.2 ELECTION TO REDEEM; NOTICES TO TRUSTEE............................................32
SECTION 3.3 SELECTION OF NOTES TO BE REDEEMED.................................................33
SECTION 3.4 NOTICE OF REDEMPTION..............................................................33
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION....................................................34
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE.......................................................34
SECTION 3.7 NOTES REDEEMED IN PART............................................................34
ARTICLE IVCOVENANTS
SECTION 4.1 PAYMENT OF NOTES.......................................................................35
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY........................................................35
SECTION 4.3 CORPORATE EXISTENCE....................................................................35
SECTION 4.4 PAYMENT OF TAXES AND OTHER CLAIMS......................................................36
SECTION 4.5 MAINTENANCE OF PROPERTIES; INSURANCE; BOOKS AND RECORDS; COMPLIANCE WITH
LAW.......................................................................................36
SECTION 4.6 COMPLIANCE CERTIFICATES................................................................36
SECTION 4.7 COMMISSION REPORTS AND REPORTS TO HOLDERS..............................................37
SECTION 4.8 LIMITATION ON INDEBTEDNE/section/......................................................37
SECTION 4.9 LIMITATION ON RESTRICTED PAYMENTS......................................................39
SECTION 4.10 LIMITATION ON LIENS; NEGATIVE PLEDGES..................................................41
SECTION 4.11 LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.......................42
SECTION 4.12 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES..............................................................................42
SECTION 4.13 LIMITATION ON ASSET SALES..............................................................43
SECTION 4.14 LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES............................44
SECTION 4.15 REPURCHASE OF NOTES UPON A CHANGE OF CONTROL...........................................45
SECTION 4.16 LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES..............................................................................45
SECTION 4.17 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS..........................................45
SECTION 4.18 WAIVER OF STAY, EXTENSION OR USURY LAWS................................................46
SECTION 4.19 ADDITIONAL SUBSIDIARY GUARANTEES AND PLEDGES............................................46
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 CONSOLIDATION, MERGER AND SALE OF ASSETS.................................................47
SECTION 5.2 SUCCESSOR ENTITY SUBSTITUTED............................................................48
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.......................................................................49
SECTION 6.2 ACCELERATION............................................................................50
SECTION 6.3 OTHER REMEDIES..........................................................................51
SECTION 6.4 WAIVER OF PAST DEFAULT..................................................................51
SECTION 6.5 CONTROL BY MAJORITY.....................................................................51
SECTION 6.6 LIMITATION ON SUITS.....................................................................52
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT....................................................52
SECTION 6.8 COLLECTION SUIT BY TRUSTEE..............................................................52
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.................................................53
SECTION 6.10 PRIORITIES.......................................................................53
SECTION 6.11 UNDERTAKING FOR COSTS............................................................53
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES...............................................53
SECTION 6.13 RIGHTS AND REMEDIES CUMULATIVE...................................................54
SECTION 6.14 DELAY OR OMISSION NOT WAIVER.....................................................54
ARTICLE VII
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.................................................................55
SECTION 7.2 RIGHTS OF TRUSTEE.................................................................56
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE......................................................56
SECTION 7.4 TRUSTEE'S DISCLAIMER..............................................................57
SECTION 7.5 NOTICE OF DEFAULTS................................................................57
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.....................................................57
SECTION 7.7 COMPENSATION AND INDEMNITY........................................................57
SECTION 7.8 REPLACEMENT OF TRUSTEE............................................................58
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC. ...............................................59
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION....................................................59
SECTION 7.11 MONEY HELD IN TRUST..............................................................59
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1 TERMINATION OF COMPANY'S OBLIGATIONS..............................................60
SECTION 8.2 LEGAL DEFEASANCE AND COVENANT DEFEASANCE..........................................60
SECTION 8.3 APPLICATION OF TRUST MONEY........................................................63
SECTION 8.4 REPAYMENT TO COMPANY..............................................................63
SECTION 8.5 REINSTATEMENT.....................................................................64
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS........................................................65
SECTION 9.2 WITH CONSENT OF HOLDERS. ........................................................65
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT...............................................66
SECTION 9.4 REVOCATION AND EFFECT OF AMENDMENTS AND CONSENTS..................................66
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES..................................................67
SECTION 9.6 TRUSTEE TO SIGN AND NOTIFY HOLDERS OF AMENDMENTS, ETC.............................67
ARTICLE X
SUBSIDIARY GUARANTEES
SECTION 10.1 SUBSIDIARY GUARANTEE.............................................................68
SECTION 10.2 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE...................................69
SECTION 10.3 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON CERTAIN TERMS.....................70
SECTION 10.4 RELEASES FOLLOWING SALE OF ASSETS................................................71
SECTION 10.5 TRUSTEE TO INCLUDE PAYING AGENT..................................................71
SECTION 10.6 RANKING OF SUBSIDIARY GUARANTEES.................................................71
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.....................................................74
SECTION 11.2 NOTICES..........................................................................74
SECTION 11.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.....................................75
SECTION 11.4 CERTIFICATE AND OPINION OF COUNSEL AS TO CONDITIONS PRECEDENT....................75
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE AND OPINION OF COUNSEL........................75
SECTION 11.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR........................................75
SECTION 11.7 AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF IMMUNITIES..............75
SECTION 11.8 CONVERSION OF CURRENCY...........................................................76
SECTION 11.9 LEGAL HOLIDAYS...................................................................77
SECTION 11.10 GOVERNING LAW...................................................................77
SECTION 11.11 NO RECOURSE AGAINST OTHERS......................................................77
SECTION 11.12 SUCCESSORS......................................................................78
SECTION 11.13 DUPLICATE ORIGINALS.............................................................78
SECTION 11.14 SEPARABILITY....................................................................78
SECTION 11.15 TABLE OF CONTENTS, HEADINGS, ETC................................................78
SECTION 11.16 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...................................78
EXHIBIT A
FORM OF GLOBAL NOTE
OPTION OF HOLDER TO ELECT PURCHASE
EXHIBIT B
FORM OF DEFINITIVE REGISTERED NOTE
OPTION OF HOLDER TO ELECT PURCHASE
EXHIBIT C
SUBSIDIARY GUARANTEE
EXHIBIT D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
EXHIBIT E
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO RULE 144A
EXHIBIT F
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER
INDENTURE, dated as of April 9, 1998 among CHS Electronics, Inc., a
Florida corporation, as issuer (the "Company"), CHS Electronics, Inc. (Nevada),
CHS Delaware Inc., CHS Delaware L.L.C. and CHS Americas, Inc., as guarantors
(the "Subsidiary Guarantors"), and The Chase Manhattan Bank, a New York banking
corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of an initial aggregate principal amount
of U.S.$200,000,000 of the Company's 9_% Senior Notes due 2005 (the "Initial
Notes"), and 9_% Senior Notes due 2005 that will be registered under the United
States Securities Act of 1933, as amended, (the "Exchange Notes" and, together
with the Initial Notes, the "Notes") to be issued as provided for in this
Indenture. Pursuant to the terms of a Purchase Agreement dated April 6, 1998,
between the Company and the Subsidiary Guarantors, on the one hand, and SBC
Warburg Dillon Read Inc., Barclays Capital, acting through BZW Securities, Inc.,
Scotia Capital Markets (USA) Inc. and Xxxxxxx Xxxxx & Associates, Inc. (the
"Initial Purchasers"), on the other hand, the Company has agreed to issue and
sell the Notes to the Initial Purchasers.
The Company reserves the right to issue up to an additional
$100,000,000 aggregate principal amount of Notes under this Indenture, which
Notes will have terms identical to the Notes initially issued hereunder and form
part of the same class of Notes for purposes of this Indenture.
All things necessary to make this Indenture a valid agreement of the
Company and the Subsidiary Guarantors, enforceable against the Company and the
Subsidiary Guarantors in accordance with its terms, have been done, and each of
the Company and the Subsidiary Guarantors have done all things necessary to make
the Notes, when executed by the Company and the Subsidiary Guarantors and
authenticated and delivered by the Trustee hereunder, the valid obligations of
the Company and the Subsidiary Guarantors as hereinafter provided.
Upon the issuance of the Exchange Notes, if any, or the effectiveness
of the Shelf Registration Statement (as defined herein), this Indenture will be
subject to, and shall be governed by, the provisions of the United States Trust
Indenture Act of 1939, as amended, that are required to be a part of and shall,
to the extent applicable, be governed by such provisions.
The parties hereto agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the Notes:
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS
"ACQUIRED INDEBTEDNESS" means (a) with respect to any Person that
becomes a direct or indirect Restricted Subsidiary of the Company after the date
of this Indenture, Indebtedness of such Person and its Restricted Subsidiaries
existing at the time such Person becomes a Restricted Subsidiary of the Company
that was not Incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary of the Company and (b) with respect to the
Company or any of its Restricted Subsidiaries, any Indebtedness assumed by the
Company or any of its Restricted Subsidiaries in connection with the acquisition
of an asset from another Person that was not Incurred by such other Person in
connection with, or in contemplation of, such acquisition.
"ADJUSTED CONSOLIDATED NET INCOME" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with GAAP; PROVIDED that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person (other than net income
attributable to a Restricted Subsidiary) in which any Person (other than the
Company or any of its Restricted Subsidiaries) has a joint interest and the net
income of any Unrestricted Subsidiary, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of its
Restricted Subsidiaries by such other Person or such Unrestricted Subsidiary
during such period; (ii) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (iv)(C) of the first
paragraph of Section 4.9 (and in such case, except to the extent includable
pursuant to clause (i) above), the net income (or loss) of any Person accrued
prior to the date it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person are acquired by the
Company or any of its Restricted Subsidiaries; (iii) except in the case of any
restriction or encumbrance permitted under clause (ii) of the second paragraph
of Section 4.12, the net income of any Restricted Subsidiary if the declaration
or payment of dividends or similar distributions or advances by such Restricted
Subsidiary as necessary to make interest payments on the Notes when due is
prohibited at the time of such determination by the operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to such Restricted Subsidiary; (iv) any
gains or losses (on an after-tax basis) attributable to Asset Sales; (v) except
for purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (iv)(C) of the first paragraph of Section 4.9, any amount
paid or accrued as dividends on Preferred Stock of the Company or any Restricted
Subsidiary owned by Persons other than the Company and any of its Restricted
Subsidiaries; and (vi) all extraordinary gains and extraordinary losses.
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding
2
intercompany items) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent quarterly or annual consolidated balance sheet of the
Company and its Restricted Subsidiaries, prepared in conformity with GAAP and
filed with the Commission pursuant to Section 4.7.
"AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGENT" means any Registrar, Paying Agent, authenticating agent or
co-registrar.
"APPLICABLE PROCEDURES" means the applicable procedures of the
Book-Entry Depositary (including the procedures of Euroclear and Cedel Bank) to
the extent applicable.
"ASSET ACQUISITION" means (i) an investment by the Company or any of
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; PROVIDED that such
Person's primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company or
any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; PROVIDED that the property and
assets acquired are related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such acquisition.
"ASSET DISPOSITION" means the sale or other disposition by the Company
or any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"ASSET SALE" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of the Company or any of its
Restricted Subsidiaries outside the ordinary course of business of the Company
or such Restricted Subsidiary and, in each case, that is not governed by Article
V; PROVIDED that "Asset Sale" shall not include (a) sales or other dispositions
of inventory, receivables and other current assets, (b) sales or other
dispositions of assets with a Fair Market Value (as certified in an Officers'
Certificate) not in excess of $1 million or (c)
3
sales or other dispositions of assets to the extent the consideration received
has a Fair Market Value at least equal to the Fair Market Value of the assets
sold or disposed of, provided that the consideration received shall be applied
in a manner that would satisfy clause (i)(B) of the second paragraph of Section
4.13.
"ATTRIBUTABLE INDEBTEDNESS", when used with respect to any Sale and
Leaseback Transaction, means, as at the time of determination, property subject
to such Sale and Leaseback Transaction and the present value (discounted at a
rate equivalent to the Company's then-current weighted average cost of funds for
borrowed money as at the time of determination, compounded on a semiannual
basis) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in any such Sale and Leaseback Transaction.
"AVERAGE LIFE" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"BANKRUPTCY LAW" means (i) Title 11 of the U.S. Code, (ii) the
Insolvency Xxx 0000 or (iii) any other law of the United States, any political
subdivision thereof or any other jurisdiction relating to bankruptcy,
insolvency, winding up, liquidation, reorganization or relief of debtors as such
law may be amended from time to time.
"BANKRUPTCY ORDER" has the meaning set forth in Section 6.1(b).
"BOARD OF DIRECTORS" means the Board of Directors of the Company or any
committee of such Board of Directors authorized to act for it.
"BOARD RESOLUTION" means a copy of a resolution certified by a Director
or the Secretary or an Assistant Secretary of the Company as having been duly
adopted by the Board of Directors of the Company and as being in full force and
effect on the date of such certification, and delivered to the Trustee.
"BOOK-ENTRY DEPOSITARY" means DTC or its nominee until a successor
depositary shall have become such pursuant to the provisions of this Indenture,
and thereafter "Book-Entry Depositary" shall mean such successor book-entry
depositary or its nominee.
"BOOK-ENTRY INTEREST" means an indirect beneficial interest in a Global
Note held through a Book-Entry Depositary and shown on, and transferred only
through, records maintained in book-entry form by the Book-Entry Depositary.
"BUSINESS DAY" means any day (other than a Saturday or Sunday) on which
DTC and banks in New York City are open for busine/section/
"CAPITALIZED LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person
4
as lessee, in conformity with GAAP, is required to be capitalized on the balance
sheet of such Person.
"CAPITALIZED LEASE OBLIGATIONS" means the discounted present value of
the rental obligations under a Capitalized Lease.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the Closing Date, including, without limitation, all Common Stock
and Preferred Stock.
"CEDEL BANK" means Cedel Bank, societe anonyme.
"CHANGE OF CONTROL" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 50% of the total voting power of the Voting Stock of the
Company on a fully diluted basis; or (ii) individuals who on the Closing Date
constitute the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination by the Board of Directors
for election by the Company's shareholders was approved by a vote of at least
two-thirds of the members of the Board of Directors then in office who either
were members of the Board of Directors on the Closing Date or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the members of the Board of Directors then in office.
"CLOSING DATE" means the date on which the Initial Notes are originally
issued under this Indenture.
"COMMISSION" or "SEC" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the TIA, then the
body performing such duties at such time.
"COMMON STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether now outstanding or issued after the Closing Date, including
without limitation, all series and classes of such common stock.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and,
thereafter, means the successor.
"COMPANY ORDER" means a written request or order signed in the name of
the Company (i) by the Chairman of the Board, the President or a Director and
(ii) by its Treasurer or Secretary and delivered to the Trustee; PROVIDED,
HOWEVER, that such written request or order may be signed by any two of the
officers or directors listed in clause (i) above in lieu of being signed by one
of such officer or director listed in clause (i) and one officer listed in
clause (ii).
5
"CONSOLIDATED EBITDA" means, for any period, the sum of the amounts for
such period of (i) Adjusted Consolidated Net Income, (ii) Consolidated Interest
Expense to the extent such amount was deducted in calculating Adjusted
Consolidated Net Income, (iii) income taxes, to the extent such amount was
deducted in calculating Adjusted Consolidated Net Income (other than income
taxes (either positive or negative) attributable to extraordinary and
non-recurring gains or losses or sales of assets), (iv) depreciation expense, to
the extent such amount was deducted in calculating Adjusted Consolidated Net
Income, (v) amortization expense, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income, and (vi) all other non-cash items
reducing Adjusted Consolidated Net Income (other than items that will require
cash payments and for which an accrual or reserve is, or is required by GAAP to
be, made), less all non-cash items increasing Adjusted Consolidated Net Income,
all as determined on a consolidated basis for the Company and its Restricted
Subsidiaries in conformity with GAAP, PROVIDED that, if any Restricted
Subsidiary is not a Wholly Owned Restricted Subsidiary, Consolidated EBITDA
shall be reduced (to the extent not otherwise reduced in accordance with GAAP)
by an amount equal to (A) the amount of the Adjusted Consolidated Net Income
attributable to such Restricted Security multiplied by (B) the quotient of (1)
the number of shares outstanding Common Stock of such Restricted Subsidiary not
owned on the last day of such period by the Company or any of its Restricted
Subsidiaries divided by (2) the total number of shares outstanding Common Stock
of such Restricted Subsidiary on the last day of such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptances
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; EXCLUDING, HOWEVER, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the Offering, all as determined on a consolidated basis (without taking
into account Unrestricted Subsidiaries) in conformity with GAAP.
"CONSOLIDATED LEVERAGE RATIO" means, on any Transaction Date, the ratio
of (i) the aggregate amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding on such Transaction Date to
(ii) the aggregate amount of Consolidated EBITDA for the most recent four fiscal
quarters for which financial statements of the Company have been filed with the
Commission pursuant to Section 4.7 (such four fiscal quarter periods being the
"Four Quarter Period"); PROVIDED that (A) pro forma effect shall be given to (x)
any Indebtedness Incurred from the beginning of the Four Quarter Period through
the Transaction Date (the "Reference Period"), to the extent such Indebtedness
is outstanding on the Transaction Date and (y) any Indebtedness that was
6
outstanding during such Reference Period but that is not outstanding or is to be
repaid on the Transaction Date; (B) pro forma effect shall not be given to Asset
Dispositions and Asset Acquisitions having a total consideration less than or
equal to $5 million individually, not to exceed $20 million in the aggregate
(including giving a pro forma effect to the application of proceeds of any Asset
Disposition) that occur during such Reference Period, as if they had occurred
and such proceeds had been applied on the first day of such Reference Period;
and (C) pro forma effect shall be given to asset dispositions and asset
acquisitions (including giving pro forma effect to the application of proceeds
of any asset disposition) that have been made by any Person that has become a
Restricted Subsidiary or has been merged with or into the Company or any
Restricted Subsidiary during such Reference Period and that would have
constituted Asset Dispositions or Asset Acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions
that occurred on the first day of such Reference Period; PROVIDED that to the
extent that clause (B) or (C) of this sentence requires that pro forma effect be
given to an Asset Acquisition or Asset Disposition, such pro forma calculation
shall be based upon the four full fiscal quarters immediately preceding the
Transaction Date of the Person, or division or line of business of the Person,
that is acquired or disposed for which financial information is available and
(D) the aggregate amount of Indebtedness outstanding as of the end of the
Reference Period will be deemed to include the total amount of funds outstanding
on the Transaction Date under any revolving credit or similar facilities of the
Company or its Restricted Subsidiaries.
"CONSOLIDATED NET WORTH" means, at any date of determination,
shareholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Redeemable Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments).
"CONSOLIDATION" means, with respect to the Company, the consolidation
of the accounts of the Restricted Subsidiaries with those of the Company, all in
accordance with GAAP; PROVIDED that "consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary with the accounts
of the Company. The term "consolidated" has a correlative meaning to the
foregoing.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"CUSTODIAN" has the meaning provided in Section 6.1(b).
7
"DEFAULT" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"DEFINITIVE REGISTERED NOTE" means any Note registered in the
Registrar's books, substantially in the form attached hereto as Exhibit B.
"DEPOSITARY INTEREST" means a certificateless depositary interest
representing a beneficial interest in a Global Note.
"DTC" means The Depository Trust Company and any successor depository
for beneficial interests in the Notes.
"EU COUNTRY" means any of the following countries: Austria; Belgium;
Denmark; France; Finland; Germany; Greece; Ireland; Italy; Luxembourg; The
Netherlands; Portugal; Spain; Sweden; and the United Kingdom.
"EUROCLEAR" means the Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"EVENT OF DEFAULT" has the meaning provided in Section 6.1.
"EXCESS PROCEEDS" has the meaning provided in Section 4.13.
"EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
as amended.
"EXCHANGE NOTES" has the meaning stated in the recital to this
Indenture and refers to any Exchange Notes containing terms substantially
identical to the Initial Notes (except that such Exchange Notes shall not
contain terms with respect to transfer restrictions and certain provisions
relating to an increase in the stated rate of interest) that are to be issued
and exchanged for the Initial Notes pursuant to the Registration Rights
Agreement and this Indenture.
"EXCHANGE OFFER" means the exchange offer that may be effected pursuant
to the Exchange Offer Registration Statement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"FAIR MARKET VALUE" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum of (a) the Consolidated Interest Expense of such Person and its Restricted
Subsidiaries for such period, and (b) the product of (i) all cash dividend
payments (and non-cash dividend payments in the case of a
8
Person that is a Restricted Subsidiary) on any series of Preferred Stock of such
Person or a Restricted Subsidiary of such Person, times (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
"GAAP" means generally accepted accounting principles in the United
States as in effect as of the Closing Date.
"GLOBAL NOTES" means the Rule 144A Global Notes and the Regulation S
Global Notes.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); PROVIDED that the term "Guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
busine/section/ The term "Guarantee" used as a verb has a corresponding meaning.
"GUARANTEED INDEBTEDNESS" has the meaning provided in Section 4.11.
"HOLDER" means the registered holder of (i) the Rule 144A Global Notes,
which on the Closing Date will be the DTC or its nominee; (ii) the Regulation S
Global Notes, which on the Closing Date will be DTC or its nominee; or (iii) any
Definitive Registered Note.
"INCUR" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an Incurrence of Indebtedness by reason of a Person
becoming a Restricted Subsidiary; PROVIDED that neither the accrual of interest
nor the accretion of original issue discount shall be considered an Incurrence
of Indebtedne/section/
"INDEBTEDNESS" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit (except Trade Payables) or other similar
instruments (including reimbursement obligations with respect thereto), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, in each case determined
in accordance with GAAP, (v) all Capitalized Lease Obligations and Redeemable
Stock of such Person, (vi) all Indebtedness of other Persons secured by a Lien
on any asset of such Person, whether or not such Indebtedness is assumed by such
Person; PROVIDED that the amount of such Indebtedness shall be the
9
lesser of (A) the Fair Market Value of such asset at such date of determination
and (B) the amount of such Indebtedness, (vii) all Indebtedness of other Persons
Guaranteed by such Person to the extent such Indebtedness is Guaranteed by such
Person and (viii) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements. The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date (or in the case of a revolving credit or other similar facility, the
total amount of funds outstanding and/or available on the date of determination)
of all unconditional obligations as described above and, with respect to
contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation, PROVIDED (i) that the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP and (ii) that Indebtedness shall not include any
liability for federal, state, local or other taxes.
"INDENTURE" means this Indenture as amended or supplemented from time
to time pursuant to the terms hereof.
"INDIRECT PARTICIPANT" means a Person who holds an interest in a Note
through a Participant.
"INITIAL NOTES" has the meaning stated in the recital to this
Indenture.
"INITIAL PURCHASERS" means the Initial Purchasers named in the Purchase
Agreement.
"INSTITUTIONAL ACCREDITED INVESTOR" has the meaning given in Section
2.7(a)(i).
"INTEREST PAYMENT DATE," when used with respect to any Note, means each
semi-annual interest payment date on April 15 and October 15 of each year,
commencing October 15, 1998.
"INTEREST RATE AGREEMENT" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"INVESTMENT" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of the Company or its Restricted Subsidiaries)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall include
(i) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and
(ii) the Fair Market Value of the Capital Stock (or any other Investment), held
by the Company or any of its Restricted Subsidiaries, of (or in) any Person that
has ceased to be a Restricted Subsidiary, including, without limitation, by
reason of any transaction permitted by clause (iii) of Section 4.17. For
purposes of the definition of "Unrestricted Subsidiary" and Section 4.9, (i)
"Investment" shall include the Fair
10
Market Value of the assets (net of liabilities (other than liabilities to the
Company or its Subsidiaries)) of any Restricted Subsidiary of the Company at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary,
(ii) the Fair Market Value of the assets (net of liabilities (other than
liabilities to the Company or its Subsidiaries)) of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary shall be considered a reduction in outstanding Investments and (iii)
any property transferred to or from any Person shall be valued at its Fair
Market Value at the time of such transfer.
"LEGAL HOLIDAY" means any day other than a Business Day.
"LIEN" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof, any sale with
recourse against the seller or any Affiliate of the seller, or any agreement to
give any security interest).
"MATURITY DATE" means the Stated Maturity of the Notes.
"MICROCOMPUTER PRODUCTS DISTRIBUTION BUSINESS" means the sale, lease or
other distribution of personal computers, peripherals, networking products and
software, including but not limited to, local area networks, disk drives,
printers, random access memory chips, mass storage, central processing units,
integrated circuit boards and supplies and the provision of services related
thereto.
"NEGATIVE PLEDGE" means, with respect to any Subsidiary of the Company,
a covenant by such Subsidiary to maintain that portion of its assets or total
partnership interests, as the case may be, that is subject to such Negative
Pledge free of all encumbrances or pledges to any other Person, and a covenant
by the owner of a Subsidiary that is subject to a Negative Pledge to maintain
that portion of the capital stock of such Subsidiary that is subject to such
Negative Pledge free of all encumbrances or pledges to any other Person.
"NET CASH PROCEEDS" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary of the Company as a reserve against any
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such
11
Asset Sale, all as determined in conformity with GAAP and (b) with respect to
any issuance or sale of Capital Stock, the proceeds of such issuance or sale in
the form of cash or cash equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary of the Company) and
proceeds from the conversion of other property received when converted to cash
or cash equivalents, net of attorney's fees, accountants' fees, Initial
Purchasers' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof.
"NEW CREDIT FACILITY" means the $325,000,000 revolving credit facility
with Barclays Bank and Scotiabank as joint arrangers, with CHS Finance S.L., or
another subsidiary of the Company, as the borrower.
"NEW YORK BUSINESS DAY" means any day other than a Saturday or Sunday
or a day on which banking institutions in New York City are authorized or
required by law or executive order to close.
"NOTES" has the meaning stated in the recital to this Indenture and
more particularly means any Notes authenticated and delivered under this
Indenture, as amended or supplemented from time to time pursuant to the terms of
this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedne/section/
"OFFER TO PURCHASE" means an offer by the Company to purchase Notes
from the Holders commenced by giving notice to the Trustee and each Holder (and,
in the event the Rule 144A Global Notes are not held by the Book-Entry
Depositary, by advertisement) stating: (i) the covenant pursuant to which the
offer is being made and that all Notes validly tendered will be accepted for
payment on a pro rata basis; (ii) the Payment Date; (iii) that any Note not
tendered will continue to accrue interest (or original issue discount) pursuant
to its terms; (iv) that, unless the Company defaults in the payment of the
purchase price, any Note accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest (or original issue discount) on and after the
Payment Date; (v) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase will be required to surrender the Note, together with the form
entitled "Option of the Holder to Elect Purchase" on the reverse side of the
Note completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the Business Day immediately preceding the Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a facsimile transmission or
letter setting forth the name of such Holder, the principal amount at maturity
of Notes delivered for purchase and a statement that such Holder is withdrawing
his election to have such Notes purchased; and (vii) that Holders whose Notes
are being purchased only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered; PROVIDED that each
Note purchased and each new note issued shall be in a principal amount at
maturity of $ 1,000 or integral multiples thereof. On the Payment Date, the
Company shall (i) accept for payment on a PRO RATA basis Notes or portions
thereof tendered pursuant to an Offer to Purchase; (ii) deposit with the Paying
Agent money sufficient to pay the purchase price of all Notes or portions
thereof so accepted; and (iii) deliver, or cause to be delivered, to the Trustee
all Notes or portions thereof so accepted together with an Officers' Certificate
specifying the Notes or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail to the Holders of Notes so accepted payment
in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Note equal in principal amount at
maturity to any unpurchased portion of the Note surrendered; PROVIDED that each
Note purchased and each new Note issued shall be in a principal amount at
12
maturity of $1,000 or integral multiples thereof. The Company will publicly
announce the results of an Offer to Purchase as soon as practicable after the
Payment Date. The Trustee shall act as the Paying Agent for an Offer to
Purchase. The Company will comply with Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase.
"OFFICER" means the Chairman of the Board, the President, the Chief
Executive Officer, the Chief Financial Officer, any Senior Vice President, the
Treasurer, the Secretary or any Director of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two of the
Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer
and the Secretary of the Company. Each Officers' Certificate (other than
certificates provided pursuant to TIA Section 314(a)(4)) shall include the
statements provided for in Section 11.5, if applicable.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee, which may include an individual employed
as counsel to the Company. Each such Opinion of Counsel shall include the
statements provided for in Section 11.5, if applicable.
"PARTICIPANT" means, with respect to DTC, Euroclear or Cedel Bank, a
Person who has an account with DTC, Euroclear or Cedel Bank, respectively (and,
with respect to DTC, shall include Euroclear and Cedel Bank).
"PAYING AGENT" means The Chase Manhattan Bank in its capacity as paying
agent, any successor thereof, and any other Person (including the Company acting
as Paying Agent) authorized by the Company to pay the principal of, premium, if
any, or interest on any Notes on behalf of the Company.
"PAYMENT DATE" means with respect to any Offer to Purchase, the date of
purchase of the Notes pursuant thereto, which shall be a Business Day no earlier
than 30 days or later than 60 days from the date a notice is given pursuant to
such Offer to Purchase.
"PERMITTED INVESTMENT" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be
13
merged or consolidated with or into or transfer or convey all or substantially
all its assets to, the Company or a Restricted Subsidiary; PROVIDED that such
Person's primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the date of such
Investment; (ii) a Temporary Cash Investment; (iii) commission, payroll, travel
and similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses in accordance with GAAP; and (iv)
stock, obligations or securities received in satisfaction of judgments.
"PERMITTED LIENS" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceeding promptly instituted and diligently conducted and for which a reserve
or other appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory and common law Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other
similar Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (v) easements, rights-of-way,
municipal and zoning ordinances and similar charges, encumbrances, title defects
or other irregularities that do not materially interfere with the ordinary
course of business of the Company or any of its Restricted Subsidiaries; (vi)
Liens (including extensions and renewals thereof) upon real or personal property
acquired after the Closing Date; PROVIDED that (a) such Lien is created solely
for the purpose of securing Indebtedness Incurred, in accordance with Section
4.8, (1) to finance the cost (including the cost of design, development,
construction, acquisition, installation or integration) of the item of property
or assets subject thereto and such Lien is created prior to, at the time of or
within six months after the later of the acquisition, the completion of
construction or the commencement of full operation of such property or (2) to
refinance any Indebtedness previously so secured, (b) the principal amount of
the Indebtedness secured by such Lien does not exceed 100% of such cost and (c)
any such Lien shall not extend to or cover any property or assets other than
such item of property or assets and any improvements on such item and any
proceeds thereof; (vii) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries, taken as a whole; (viii) Liens encumbering property or
assets under construction arising from progress or partial payments by a
customer of the Company or its Restricted Subsidiaries relating to such property
or assets; (ix) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease; (x) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (xi) Liens on property
of, or on shares of Capital Stock or Indebtedness of, any Person existing at the
time such Person becomes, or becomes a part of, any Restricted Subsidiary;
PROVIDED that such Liens do not extend to or cover any property or assets of the
Company or any Restricted Subsidiary other than the property or assets acquired
and any proceeds thereof; (xii) Liens in favor of the Company or any Restricted
Subsidiary; (xiii) Liens arising from the rendering of a
14
final judgment or order against the Company or any Restricted Subsidiary of the
Company that does not give rise to an Event of Default; (xiv) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (xv) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (xvi) Liens encumbering customary initial
deposits and margin deposits, and other Liens that are either within the general
parameters customary in the industry and incurred in the ordinary course of
business, in each case securing Indebtedness under Interest Rate Agreements and
Currency Agreements and forward contracts, options, future contracts, futures
options or similar agreements or arrangements designed solely to protect the
Company or any of its Restricted Subsidiaries from fluctuations in interest
rates, currencies or the price of commodities; (xvii) Liens arising out of
conditional sale, title retention, consignment or similar arrangements for the
sale of goods entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business in accordance with the past practices of the
Company and its Restricted Subsidiaries prior to the Closing Date; and (xviii)
Liens on or sales of receivables, including related intangible assets and
proceeds thereof.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PREFERRED STOCK" means, with respect to any Person any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
now outstanding or issued after the Closing Date, including, without limitation,
all series and classes of such preferred stock or preference stock.
"PRINCIPAL" of a debt security (including the Notes) means the
principal amount of the security due on the Stated Maturity as shown on such
debt security.
"PRIVATE PLACEMENT LEGEND" means the first legend appearing on the
cover of the form of U.S. Global Note attached as Exhibit A hereto.
"PUBLIC EQUITY OFFERING" means a public offer and sale of Common Stock
(which is Qualified Capital Stock) of the Company or, in accordance with the
terms of this Indenture, a successor to the Company that owns, directly or
indirectly, all of the Capital Stock of the Subsidiaries of the Company,
pursuant to an effective registration statement under the Securities Act.
"PURCHASE AGREEMENT" means the Purchase Agreement between the Company
and the Initial Purchasers named therein.
"QIB" means a "Qualified Institutional Buyer" under Rule 144A.
"QUALIFIED CAPITAL STOCK" of any Person means any and all Capital Stock
of such Person other than Redeemable Stock.
15
"RECORD DATE" means for the interest payable on any Interest Payment
Date the April 1 or October 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.
"REDEEMABLE STOCK" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; PROVIDED that any Capital
Stock that would not constitute Redeemable Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Redeemable Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable in any material respect
to the holders of such Capital Stock than the provisions contained in Sections
4.13 and 4.15 and such Capital Stock specifically provides that such Person will
not repurchase or redeem any such stock pursuant to such provision prior to the
Company's repurchase of such Notes as are required to be repurchased pursuant to
Sections 4.13 and 4.15.
"REDEMPTION DATE" means, with respect to any Note to be redeemed, the
date fixed for such redemption by or pursuant to the terms of this Indenture or
the Notes.
"REDEMPTION PRICE", when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this Indenture.
"REGISTRAR" shall mean the Trustee, in its capacity as registrar
hereunder, and any successor registrar.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
between the Company and the Initial Purchasers named therein, dated as of April
9, 1998, relating to the Notes.
"REGISTRATION STATEMENT" means the Registration Statement as defined in
the Registration Rights Agreement.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S GLOBAL NOTE" has the meaning specified in Section 2.1.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means any
officer of the Trustee with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"RESTRICTED PAYMENTS" has the meaning provided in Section 4.9.
16
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"RULE 144A GLOBAL NOTE" has the meaning specified in Section 2.1.
"SALE AND LEASEBACK TRANSACTION" means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person or any of its Restricted Subsidiaries of any property or asset of such
Person or any of its Restricted Subsidiaries which has been or is being sold or
transferred by such Person or such Restricted Subsidiary to such lender or
investor or to any Person to whom funds have been or are to be advanced by such
lender or investor on the security of such property or asset.
"SEC" or "COMMISSION" means the United States Securities and Exchange
Commission.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
"SECURITY REGISTER" has the meaning provided in Section 2.4.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"SPECIFIED DATE" means any redemption date, any Payment Date for an
Offer to Purchase pursuant to Section 4.13 or 4.15 or any date on which the
Notes are due and payable after an Event of Default.
"STATED MATURITY" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.
"STRATEGIC SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company
Incurred to finance the acquisition of a Person engaged in the Microcomputer
Products Distribution Business that by its terms, or by the terms of any
agreement or instrument pursuant to which such Indebtedness is Incurred is (i)
expressly made subordinate in right of payment to the Notes and (ii)
17
provides that no payment of principal, premium or interest on, or any other
payment with respect to, such Indebtedness may be made prior to the payment in
full of all of the Company's obligations under the Notes; PROVIDED that such
Indebtedness may provide for and be repaid at any time from the proceeds of the
sale of Capital Stock (other than Redeemable Stock) of the Company after the
Incurrence of such Indebtedne/section/
"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"SUBSIDIARY GUARANTEE" means any Guarantee of the Notes given by a
Subsidiary.
"SUBSIDIARY GUARANTORS" means each of CHS Electronics, Inc. (Nevada),
CHS Delaware Inc., CHS Delaware L.L.C. and CHS Americas, Inc., and each other
Person who executes a Subsidiary Guarantee pursuant to the terms of this
Indenture.
"TARGET COMPANY CONSOLIDATED EBITDA" means, for any Person acquired by
the Company for any period, the Consolidated EBITDA of such Person, calculated
as if such Person were the Company for purposes of the definition of
Consolidated EBITDA and other defined terms used or referred to therein.
"TARGET COMPANY CONSOLIDATED LEVERAGED RATIO" means, for any Person
acquired by the Company, on the date of acquisition of such Person by the
Company, the Consolidated Leverage Ratio of such Person, calculated as if such
Person were the Company for purposes of the definition of Consolidated Leverage
Ratio and other defined terms used or referred to therein.
"TEMPORARY CASH INVESTMENT" means (i) any evidence of Indebtedness with
a maturity of three years or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(PROVIDED that the full faith and credit of the United States of America is
pledged in support thereof); (ii) deposits, certificates of deposit or
acceptances with a maturity of three years or less of any financial institution
that is a member of the Federal Reserve System, in each case having combined
capital and surplus and undivided profits (or any similar capital concept) of
not less than $500 million or any commercial bank that is organized under the
laws of any country that is a member of the Organization for Economic
Cooperation Development and has total assets in excess of U.S.$500 million;
(iii) commercial paper with a maturity of not more than three years issued by a
corporation (other than an Affiliate of the Company) organized under the laws of
the United States or any state thereof or the District of Columbia and rated at
least "A-1" by Standard & Poor's Ratings Group or "P-1" by Xxxxx'x Investors
Service, Inc.; and (iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States Government, in each case maturing within one year from the
date of acquisition. For the avoidance of doubt, an Investment in an investment
fund which invests substantially all of its assets in Investments described
above in this definition or which is itself rated at least "AAA" or "A-1" by
Standard & Poor's Ratings Group or "Aaa" or "P-1" by Xxxxx'x Investors Service,
Inc. constitutes a Temporary Cash Investment.
18
"TIA" or "TRUST INDENTURE ACT" means the United States Trust Indenture
Act of 1939, as amended.
"TRADE PAYABLES" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation, including letters of
credit, to trade creditors created, assumed or Guaranteed by such Person or any
of its Subsidiaries arising in the ordinary course of business in connection
with the acquisition of goods or services.
"TRANSACTION DATE" means, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provision of this Indenture and
thereafter means such successor.
"UNRESTRICTED GLOBAL NOTE" means one or more Global Notes that do not
bear the Private Placement Legend.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; PROVIDED that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, that such designation would be permitted under
Section 4.9. The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; PROVIDED that (i) no Default or Event of Default
shall have occurred and be continuing at the time of or after giving effect to
such designation and (ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately after such designation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Indenture. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions. Subsidiary Guarantors
will not be permitted to be designated as Unrestricted Subsidiaries.
"VOTING STOCK" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"WHOLLY OWNED" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
19
SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, the provision shall be deemed
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
(a) "Commission" means the SEC;
(b) "indenture debenture" means the Notes;
(c) "indenture security holder" means a Holder;
(d) "indenture to be qualified" means this Indenture;
(e) "indenture trustee" or "institutional trustee" means the
Trustee; and
(f) "obligor" on the indenture debenture means the Company, each
Subsidiary Guarantor or any other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings so assigned to them therein.
SECTION 1.3 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) "or" is not exclusive;
(c) words in the singular include the plural, and words in the
plural include the singular;
(d) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
Subsection;
(e) unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP; and
(f) "U.S. Dollars," "United States Dollars," "U.S.$" and the
symbol "$" each refer to United States dollars, or such other money of the
United States that at the time of payment is legal tender for payment of public
and private debts.
20
ARTICLE II
THE NOTES
SECTION 2.1 FORM AND DATING . The Notes shall be known as the "9 7/8%
Senior Notes due 2005" of the Company. In addition to the $200,000,000 aggregate
principal amount of Notes initially issued hereunder, the Company reserves the
right to issue up to an additional $100,000,000 aggregate principal amount of
Notes under this Indenture, which Notes will have terms identical to the Notes
initially issued under this Indenture and form part of the same class of Notes
for purposes of this Indenture. The Initial Notes and the Exchange Notes will be
considered collectively to be a single class for all purposes under this
Indenture, including, without limitation, waivers, amendments, redemptions and
Offers to Purchase. The Notes may have such appropriate insertions, omissions,
substitutions and other variations as are required by law or permitted by this
Indenture, and may have such letters, notations, numbers or other marks of
identification and such legends or endorsements placed thereon as the Company
may deem appropriate (and as not prohibited by the terms of this Indenture) or
as may be required or appropriate to comply with any law or with the rules of
any securities exchange on which such Notes may be listed, or to conform to
general usage, or as may, consistently herewith, be determined by the officers
executing such Notes, as evidenced by their execution of the Notes. Each Note
shall be dated the date of its authentication. Any portion of the text of any
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The Global Notes shall be printed, lithographed or engraved or may be
produced in any other manner permitted by the rules under any applicable
securities laws or any securities exchange on which the Notes may be listed, all
as determined by the officers of the Company executing such Notes, as evidenced
by their execution of such Notes.
Initial Notes offered and sold in reliance on Rule 144A will be issued
in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Rule 144A Global Notes")
which shall be deposited on behalf of the purchasers of the Notes represented
thereby with the Book-Entry Depositary or its custodian, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Rule 144A Global Notes may be from time to time be
increased or decreased by adjustments made to the Security Register by
annotation made by the Registrar on behalf of the Company, in connection with a
corresponding decrease or increase in the aggregate principal amount of the Rule
144A Global Note, as hereinafter provided.
Initial Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of one or more permanent global Notes
in registered form substantially in the form set forth in Exhibit A (the
"Regulation S Global Notes"), which shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Book-Entry Depositary or
its custodian, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Regulation S Global
Notes may from time to time be increased or decreased by adjustments made to the
Security Register by annotation made
21
by the Registrar on behalf of the Company, in connection with a corresponding
decrease or increase in the aggregate principal amount of the Regulation S
Global Notes, as hereinafter provided.
Definitive Registered Notes may be issued from time to time in
accordance with the provisions of this Indenture, substantially in the form of
Exhibit B hereto.
SECTION 2.2 DENOMINATION AND TERMS . The Notes shall be issued without
coupons and only in denominations of $1,000 or any integral multiple thereof.
The Stated Maturity of the Notes shall be April 15, 2005, and, except as
otherwise set forth herein, they shall bear interest at the rate of 9 7/8% per
annum from April 9, 1998, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, payable semiannually in arrears on
April 15 and October 15 in each year and at said Stated Maturity, until the
principal thereof is paid or duly provided for.
The principal of the Notes shall be payable at the office of the
Trustee in New York City and, subject to any fiscal or other laws and
regulations applicable thereto, at the specified offices of any other Paying
Agents appointed by the Company pursuant to Section 4.2. Payment of principal of
and interest on the Notes shall be made by the Company in U.S. Dollars to the
Holder of the Rule 144A Global Notes and the Regulation S Global Notes and to
Holders of Definitive Registered Notes, if any. The amount of payments in
respect of interest on each Interest Payment Date to the Holder of the Global
Notes shall correspond to the aggregate principal amount of Notes represented by
the Regulation S Global Notes and the Rule 144A Global Notes, as established by
the Registrar at the close of business on the relevant Record Date. The amount
of payments in respect of interest on each Interest Payment Date to the Holders
of Definitive Registered Notes, if any, shall correspond to the aggregate
principal amounts of such Notes as established by the Registrar at the close of
business of the relevant Record Date. Payments of principal shall be made upon
surrender of the Regulation S Global Notes and the Rule 144A Global Notes, as
the case may be, and the Definitive Registered Notes, if any, to the Paying
Agent.
All payments made by the Company to, or to the order of, the Holder of
the Global Notes shall discharge the liability of the Company under the Notes to
the extent of the sums so paid.
SECTION 2.3 EXCUTION AND AUTHENTICATION. Two Officers shall execute the
Notes on behalf of the Company by manual or facsimile signature. If an Officer
whose signature is on a Note no longer holds that office at the time the Trustee
authenticates the Note or at any time thereafter, the Note shall be valid
neverthele/section/
A Note shall not be valid until an authorized officer of the Trustee
manually signs the certificate of authentication on the Note. Such signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate Initial Notes for original issue on the
Closing Date in an aggregate principal amount at maturity not to exceed
$200,000,000 upon receipt of an Officers'
22
Certificate signed by two Officers directing the Trustee to authenticate the
Initial Notes and certifying that all conditions precedent to the issuance of
the Initial Notes contained herein have been complied with. Following the
Closing Date, the Trustee shall authenticate additional Initial Notes from time
to time in an aggregate principal amount at maturity not to exceed $100,000,000
upon receipt of an Officers' Certificate signed by two Officers directing the
Trustee to authenticate such additional Initial Notes and certifying that all
conditions precedent to the issuance of such additional Initial Notes contained
herein have been complied with. The aggregate principal amount at maturity of
Notes outstanding at any time may not exceed $300,000,000 except as provided in
Section 2.8.
On Company Order, the Trustee shall authenticate for original issue
Exchange Notes in an aggregate principal amount at maturity not to exceed
$300,000,000; PROVIDED that such Exchange Notes shall be issuable only upon the
valid surrender for cancellation of Initial Notes of a like aggregate principal
amount in accordance with an Exchange Offer pursuant to the Registration Rights
Agreement. Such order shall specify the amount of Notes to be authenticated and
the date on which the original issue of Notes or Exchange Notes is to be
authenticated.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. Such authenticating agent shall have the same
rights as the Trustee in any dealings hereunder with the Company or with any of
the Company's Affiliates.
SECTION 2.4 REGISTRAR AND SECURITY REGISTER. Subject to any applicable
laws and such reasonable regulations as it may prescribe, the Company shall
keep, or shall cause to be kept, a register (the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of ownership, exchange, and transfer of the Notes.
Included in the books and records for the Notes shall be notations as to whether
such Notes have been paid, exchanged or transferred and canceled or lost,
stolen, mutilated or destroyed and whether such Notes have been replaced. In the
case of the replacement of any of the Notes, the Registrar shall keep a record
of the Note so replaced and the Note issued in replacement thereof. In the case
of the cancellation of any of the Notes, the Registrar shall keep a record of
the Note so canceled and the date on which such Note was canceled.
Upon presentation for exchange or registration of transfer of any Note
at the office of the Registrar as permitted by the terms of this Indenture and
any legend appearing on such Note, such Note shall be exchanged or the transfer
thereof shall be registered upon the Security Register by means of book-entry
transfer, and one or more new Notes shall be authenticated and issued in the
name of the Holder (in the case of exchanges only) or the transferee, as the
case may be. No exchange or transfer of a Global Note shall be effective under
this Indenture or the Notes unless and until such Note has been registered in
the name of such Person in the Security Register. Furthermore, the exchange or
registration of transfer of any Global Note shall not be effective under this
Indenture or the Notes unless the request for such exchange or registration of
transfer is made by the Holder or by a duly authorized attorney-in-fact at the
office of the Registrar.
23
Furthermore, any Holder of a Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interests in such Global Note
may be effected only through a book-entry system maintained by the Holder of
such Global Note (or its agent), and that ownership of a beneficial interest in
the Note shall be required to be reflected in a book entry.
At the option of the Holder, Notes may be exchanged for other Notes of
any authorized denomination and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange (including an exchange of Notes for
Exchange Notes), the Company shall execute, and the Trustee shall authenticate
and deliver, the Notes which the Holder making the exchange is entitled to
receive; PROVIDED that no exchange of Notes for Exchange Notes shall occur until
an Exchange Offer Registration Statement shall have been declared effective by
the Commission and that the Notes to be exchanged for the Exchange Notes shall
be canceled by the Trustee.
Every Note presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
SECTION 2.5 HOLDERS TO BE TREATED AS OWNERS; PAYMENTS OF INTEREST. The
Company, the Trustee, the Paying Agent, the Registrar and any agent of the
Company or the Trustee may deem and treat each Holder of a Note as the owner of
such Note for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Sections 2.7 and 2.13) interest on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and none of the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. All such payments so made to any such
Holder, or upon his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for money's payable
upon any Note.
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
the Holders of Definitive Registered Notes. If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least five Business Days before each
Interest Payment Date, and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of the Holders of Definitive Registered
Notes, if any.
SECTION 2.6 PAYING AGENT TO HOLD MONEY IN TRUST. Each Paying Agent
shall hold in trust for the benefit of the Holders or the Trustee all money held
by the Paying Agent for the payment of principal of or interest on the Notes
(whether such money has been paid to it by the Company or any other obligor on
the Notes), and the Company and the Paying Agent shall notify the Trustee of any
default by the Company (or any other obligor on the Notes) in making any such
payment. Money held in trust by the Paying Agent need not be segregated except
as required by law and in no event shall the Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the Paying Agent to pay all money held by it to the Trustee and
24
account for any funds disbursed and the Trustee may at any time during the
continuance of any Event of Default specified in Section 6.1(a)(i) or (ii), upon
written request to the Paying Agent, require such Paying Agent to pay forthwith
all money so held by it to the Trustee and to account for any funds disbursed.
Upon making such payment, the Paying Agent shall have no further liability for
the money delivered to the Trustee.
SECTION 2.7 TRANSFER AND EXCHANGE.(a) TRANSFER AND EXCHANGE OF
BOOK-ENTRY INTERESTS. The transfer and exchange of Book-Entry Interests shall be
effected through the Book-Entry Depositary, in accordance with this Indenture
and the Applicable Procedures. Book-Entry Interests in the Global Notes shall be
subject to restrictions on transfer comparable to those set forth herein to the
extent required by the Securities Act. Transfers of Book-Entry Interests shall
also require compliance with subparagraph (i) below, as well as one or more of
the other following subparagraphs as applicable:
(i) ALL TRANSFERS AND EXCHANGES OF BOOK-ENTRY INTERESTS. In
connection with all transfers and exchanges of Book-Entry Interests
(other than transfers of Book-Entry Interests in a Global Note to
Persons who take delivery thereof in the form of a Book-Entry Interest
in the same Global Note), the transferor of such Book-Entry Interest
must deliver to the Registrar (1) instructions given in accordance with
the Applicable Procedures directing the applicable Book-Entry
Depositary to credit or cause to be credited a Book-Entry Interest in
the specified Global Note in an amount equal to the Book-Entry Interest
to be transferred or exchanged, (2) a written order given in accordance
with the Applicable Procedures containing information regarding the
participant account to be credited with such increase and (3)
instructions given by the Holder of the Global Note to effect the
transfer referred to in (1) and (2) above. In the case of a transfer of
Book-Entry Interests to an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act (an
"Institutional Accredited Investor"), such Institutional Accredited
Investor shall furnish a letter to the Book-Entry Depositary in the
form of Exhibit F to this Indenture.
(ii) TRANSFER OF BOOK-ENTRY INTERESTS WITHIN THE RULE 144A
GLOBAL NOTES. Book-Entry Interests in a Rule 144A Global Note may be
transferred to Persons who take delivery thereof in the form of a
Book-Entry Interest in a Rule 144A Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend.
(iii) TRANSFER OF BOOK-ENTRY INTERESTS IN THE REGULATION S
GLOBAL NOTE TO A RULE 144A GLOBAL NOTE. Book-Entry Interests in a
Regulation S Global Note may be transferred to Persons who take
delivery in the form of a Book-Entry Interest in a Rule 144A Global
Note if the Registrar receives a certificate from the transferee in the
form of Exhibit E.
(iv) TRANSFER AND EXCHANGE OF BOOK-ENTRY INTERESTS IN A RULE
144A GLOBAL NOTE FOR BOOK-ENTRY INTERESTS IN AN UNRESTRICTED GLOBAL
NOTE. Book-Entry Interests in a Rule 144A Global Note or a Regulation S
Global Note may be exchanged by the holder thereof
25
for a Book-Entry Interest in an Unrestricted Global Note or transferred
to a Person who takes delivery thereof in the form of a Book-Entry
Interest in an Unrestricted Global Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Participating
Broker-Dealer (as defined in the Registration Rights
Agreement) pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the holder of such Book-Entry Interest in a Rule
144A Global Note proposes to transfer such Book-Entry Interest
to a Person who shall take delivery thereof in the form of a
Book-Entry Interest in a Regulation S Global Note and the
Registrar receives a certificate in the form of Exhibit D.
(v) NOTATION BY THE REGISTRAR OF TRANSFER OF BOOK-ENTRY
INTERESTS AMONG GLOBAL NOTES. Upon satisfaction of the requirements for
transfer of Book-Entry Interests pursuant to clause (iii) or (iv)
above, the Registrar shall reduce or cause to be reduced the aggregate
principal amount of the relevant Global Note from which the Book-Entry
Interest is being transferred, and increase or cause to be increased
the aggregate principal amount of the Global Note to which the
Book-Entry Interest is being transferred, in each case, by the
principal amount of the Book-Entry Interest being transferred and shall
direct the applicable Book-Entry Depositary to make corresponding
adjustments in its book-entry system of the corresponding Depositary
Interests. No transfer of Book-Entry Interests shall be effected until,
and any transferee pursuant thereto shall succeed to the rights of a
holder of Book-Entry Interests only when, the requirements for transfer
of Book-Entry Interests pursuant to clauses (iii) or (iv) above shall
have been satisfied and the Registrar has made appropriate adjustments
to the applicable Global Note in accordance with this paragraph.
(vi) TRANSFER OF BOOK-ENTRY INTERESTS IN A RULE 144A GLOBAL
NOTE OR A REGULATION S GLOBAL NOTE TO AN INSTITUTIONAL ACCREDITED
INVESTOR. Book-Entry Interests in a Rule 144A Global Note or a
Regulation S Global Note may be transferred by the holder thereof to an
Institutional Accredited Investor if the Registrar receives a
certificate from the transferee in the form of Exhibit F hereto. Any
Note issued to an Institutional Accredited Investor may only be issued
in the form of a Definitive Registered Note. Upon satisfaction of the
requirements for transfer of Book-Entry Interests pursuant to this
clause (vi), the Registrar shall reduce or cause to be reduced the
aggregate principal amount of the relevant Global Note from which the
Book-Entry Interest is being transferred.
26
(b) DEFINITIVE REGISTERED NOTES. (i) When Definitive Registered Notes
are presented to the Registrar or a co-registrar with a request from the Holder
of such Definitive Registered Notes to register a transfer, the Registrar shall
register the transfer as requested, subject to the provisions of any restrictive
legend on the face of such Note. Every Definitive Registered Note presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar, duly executed by the Holder thereof or his attorneys
duly authorized in writing.
At the option of the Holder, Definitive Registered Notes may be
exchanged for other Definitive Registered Notes in denominations of $1,000
principal amount at maturity and integral multiples thereof evidencing an
equivalent aggregate principal amount at maturity, upon surrender of the
Definitive Registered Notes to be exchanged at the office or agency maintained
for such purpose pursuant to Section 2.3.
(ii) If at any time DTC notifies the Trustee that it is
unwilling or unable to continue as depositary for the holders of
beneficial interests in the Global Notes or the Company or the Trustee
becomes aware that the Book-Entry Depositary has ceased to be a
clearing agency registered under the Exchange Act, the Company shall
appoint a successor depositary within 120 days thereafter and give
notice of such appointment to the Book-Entry Depositary and the Trustee
within five Business Days of such appointment. If a successor
depositary for the holders of beneficial interests in Global Notes has
not been appointed within 120 days after the Company or the Trustee
receives such notice or becomes aware of such ineligibility, the
Company shall execute, and the Trustee, upon receipt of an Officers'
Certificate for the authentication and delivery of Definitive
Registered Notes, shall authenticate and deliver, in accordance with
instructions supplied by the Company, Definitive Registered Notes, in
any authorized denominations, in an aggregate principal amount at
maturity equal to the principal amount at maturity evidenced by the
Global Notes, in exchange for the Global Notes. The Company shall
reimburse the Registrar, the Book-Entry Depositary and the Trustee for
expenses they incur in documenting such exchanges and issuances of
Definitive Registered Notes.
(iii) Definitive Registered Notes will also be issued in
exchange for beneficial interests in the Global Notes (i) if an Event
of Default occurs, upon the request delivered in writing to the
Book-Entry Depositary of the owner of a beneficial interest in a Global
Notes and (ii) at any time if the Company in its sole discretion
determines that the DTC Global Note (in whole but not in part) should
be exchanged for Definitive Registered Notes. In any such event,
(A) the Company shall execute, and the Trustee, upon
receipt of an Officers' Certificate for the authentication and
delivery of Definitive Registered Notes, shall authenticate
and deliver, without service charge, to the Persons specified
by the Book-Entry Depositary, Definitive Registered Notes each
evidencing $1,000 principal amount at maturity or integral
multiples thereof and registered in such names as the
Book-Entry Depositary shall instruct the Trustee evidencing an
aggregate principal amount at maturity equal to and in
exchange for the beneficial
27
interests in the Global Notes held by the Persons supplying
such instructions to the Book-Entry Depositary; and
(B) if the principal amount at maturity evidenced by
the surrendered Global Notes is greater than the aggregate
principal amount at maturity evidenced by all of the
Definitive Registered Notes authenticated and delivered
pursuant to clause (i) above, the Trustee shall not cancel the
Global Notes, but shall make a notation on Schedule A thereof
to decrease the principal amount at maturity evidenced by the
Global Notes by an amount equal to the aggregate principal
amount at maturity evidenced by all such Definitive Registered
Notes and shall deliver the Global Notes back to the
Book-Entry Depositary or its custodian.
Upon the exchange of the Global Notes for Definitive
Registered Notes evidencing an aggregate principal amount of
indebtedness at maturity equal to that of the Global Notes, the Global
Notes shall be canceled by the Trustee or an agent of the Company or
the Trustee.
The Company shall reimburse the Registrar, the Book-Entry
Depositary and the Trustee for reasonable expenses they incur in
documenting such exchanges and issuances of Definitive Registered
Notes.
(iv) All Definitive Registered Notes issued upon any exchange
of beneficial interests in the Global Notes shall be valid obligations
of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes evidenced by the Global
Notes surrendered upon such exchange.
Any Person receiving Definitive Registered Notes other than at its own
request will not be obligated to pay or otherwise bear the cost of any tax or
governmental charge or any cost or expense of the Book-Entry Depositary relating
to insurance, postage, transportation or any similar charge, which will be
solely the responsibility of the Company.
(c) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer
in accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.3, the
Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Global Notes and any
Definitive Registered Notes tendered for acceptance by Persons that are not (x)
broker-dealers, (y) Persons participating in the distribution of the Exchange
Notes or (z) Persons who are affiliates (as defined in Rule 144) of the Company
and accepted for exchange in the Exchange Offer. Concurrently with the issuance
of such Notes, the Trustee shall cause the aggregate principal amount of the
Rule 144A Global Note or Regulation S Global Note to be reduced accordingly and
direct the U.S. Book-Entry Depositary to make a corresponding reduction in its
book-entry system of the corresponding Depositary Interests.
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(d) GENERAL PROVISIONS RELATING TO ALL TRANSFERS AND
EXCHANGES. (i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes upon the Company's
order or at the Registrar's request. Unless and until it is exchanged in whole
or in part for Definitive Registered Notes, a Global Note may not be transferred
except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or any such nominee to a successor depositary
or a nominee of such successor depositary.
(ii) No service charge shall be made for any registration of
transfer or exchange or redemption of Notes, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes, other than exchanges
pursuant to Sections 2.11, 3.7, 4.13, 4.15 or 9.5 not involving any
transfer.
(iii) All Global Notes issued upon any registration of
transfer or exchange of Global Notes shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Global Notes surrendered upon
such registration of transfer or exchange.
(iv) The Company shall not be required (A) to issue, to
register the transfer of or to exchange Notes during a period beginning
at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.2 hereof and ending at the close
of business on the day of selection, (B) to register the transfer of or
to exchange any Note so selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part or (C)
to register the transfer of or to exchange a Book-Entry Interest
between a Regulation S Global Note and a Rule 144A Global Note between
a Record Date and the next succeeding Interest Payment Date.
(v) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
neither the Trustee, any Agent nor the Company shall be affected by
notice to the contrary.
(vi) The Trustee shall authenticate Global Notes in accordance
with the provisions of Section 2.3 hereof.
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SECTION 2.8 REPLACEMENT NOTES.
If a mutilated Definitive Registered Note is surrendered to the
Registrar or the Trustee or if a Global Note is surrendered to the Company or if
the Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Note in such form as the Notes mutilated, lost, destroyed or wrongfully taken
if, in the case of a lost, destroyed or wrongfully taken Note, the Holder of
such Note furnishes to the Company, the Trustee and the Registrar (in the case
of a Definitive Registered Note) evidence reasonably acceptable to them of the
ownership and the destruction, loss or theft of such Note. If required by the
Trustee, the Registrar or the Company, an indemnity bond shall be posted,
sufficient in the judgment of each to protect the Company, the Registrar (in the
case of a Definitive Registered Note), the Trustee or any Paying Agent from any
loss that any of them may suffer if such Note is replaced. The Company may
charge such Holder for the Company's exceptional out-of-pocket expenses in
replacing such Note and the Trustee may charge the Company for the Trustee's
expenses in replacing such Note. Every replacement Note shall constitute an
additional obligation of the Company.
SECTION 2.9 OUTSTANDING NOTES. The Notes outstanding at any time are
all Notes that have been authenticated by the Trustee except for (a) those
canceled by it, (b) those delivered to it for cancellation and (c) those
described in this Section 2.9 as not outstanding. Subject to Section 2.10, a
Note does not cease to be outstanding because the Company or one of its
Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.8, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser in whose hands such Note is a
legal, valid and binding obligation of the Company.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds, in its capacity as such, on the maturity date or on any optional
redemption date, money sufficient to pay all principal, premium, if any, and
accrued interest with respect to Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture or otherwise, then on and after that date such Notes cease to
be outstanding and interest on them ceases to accrue.
Notes, or portions thereof, for the payment or redemption of which
monies or United States Government Obligations (as provided for in Article VIII)
in the necessary amount shall have been deposited in trust with the Trustee or
with any Paying Agent (other than the Company) or shall have been set aside,
segregated and held in trust by the Company for the Holders of such Notes (if
the Company shall act as its own Paying Agent), on and after that time shall
cease to be outstanding and, in the case of redemption, interest on such Notes
shall cease to accrue, PROVIDED that if such Notes, or portions thereof, are to
be redeemed prior to the maturity thereof, notice of such redemption shall have
been given as herein provided, or provision satisfactory to the Trustee shall
have been made for giving such notice
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SECTION 2.10 TREASURY NOTES. In determining whether the Holders of the
required principal amount at maturity of Notes have concurred in any declaration
of acceleration or notice of default or request, direction, authorization,
demand, notice, waiver or consent hereunder or any amendment, modification or
other change to this Indenture, Notes owned by the Company or an Affiliate of
the Company shall be disregarded as though they were not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such request, direction, authorization, demand, notice, waiver or
consent or any amendment, modification or other change to this Indenture, only
Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded. Notes so owned which have been pledged in good faith
may be regarded as outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Notes and that
the pledgee is not the Company or any other obligor with respect to the Notes or
any Affiliate of the Company or any such other obligor.
SECTION 2.11 TEMPORARY NOTES. Until permanent Global Notes are
prepared and ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of Global Notes but may have variations that the Company considers appropriate
for temporary Notes. Without unreasonable delay, at the Company's cost, the
Company shall prepare and the Trustee shall authenticate and deliver Global
Notes in exchange for temporary Notes. Until such exchange, temporary Notes
shall be entitled to the same rights, benefits and privileges as Global Notes.
SECTION 2.12 CANCELLATION. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment or purchase. The Trustee shall cancel all Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation or
purchase and shall dispose of such Notes in accordance with its customary
procedures unless the Company directs the Trustee in writing to return such
Notes to the Company. The Company may not reissue or resell, or issue new Notes
to replace, Notes that the Company has redeemed or paid or purchased, or that
have been delivered to the Trustee for cancellation.
SECTION 2.13 DEFAULTED INTEREST. If the Company defaults on a payment
of interest on the Notes, it shall pay the defaulted interest, plus (to the
extent permitted by law) any interest payable on the defaulted interest, in
accordance with the terms hereof, to the Holder of the Global Notes. The Company
shall fix such special record date and payment date in a manner satisfactory to
the Trustee. At least 15 days before such special record date, the Company shall
mail to the Book-Entry Depositary a notice that states the special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.14 CUSIP, CINS AND ISIN. The Company in issuing the Notes may
use a "CUSIP", "CINS" and "ISIN" number, and if so, such CUSIP, CINS and ISIN
number shall be included in notices of redemption or exchange as a convenience
to Holders; PROVIDED, HOWEVER, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP, CINS and
ISIN number printed in the notice or on the Notes, and that reliance may be
placed only on the other identification numbers printed on the Notes. The
Company will promptly notify the Trustee of any change in the CUSIP, CINS and
ISIN number.
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SECTION 2.15 DEPOSIT OF MONEYS. Prior to 10:00 a.m, New York time on
the second Business Day preceding each Interest Payment Date and or the Stated
Maturity of the Notes and on the Business Day immediately following any
acceleration of the Notes pursuant to Section 6.2, the Company shall deposit
with the Paying Agent in immediately available funds money, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, sufficient to make
cash payments, if any, due on such Interest Payment Date, maturity date or
Business Day, as the case may be, in a timely manner which permits the Trustee
to remit payment to the Holders on such Interest Payment Date, maturity date or
Business Day, as the case may be.
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ARTICLE III
REDEMPTION
SECTION 3.1 RIGHT OF REDEMPTION. (a) The Notes will be redeemable, at
the Company's option, in whole or in part, at any time or from time to time, on
or after April 15, 2002 and prior to maturity, upon not less than 30 nor more
than 60 days' prior notice mailed by first class mail to each Holder's last
address, as it appears in the Register (in the case of Definitive Registered
Notes) and to the Holders of the Global Notes, at the following Redemption
Prices (expressed in percentages of principal amount at maturity), plus accrued
and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Record Date that is prior to the Redemption
Date to receive interest due on an Interest Payment Date), if redeemed during
the 12-month period commencing April 15, of the years set forth below:
YEAR REDEMPTION PRICE
---- ----------------
2002.............................................. 104.938%
2003.............................................. 102.469%
2004 and thereafter............................... 100.000%
(b) At any time prior to April 15, 2001, the Company may
redeem up to 35% of the aggregate principal amount of the Notes originally
issued (Notes issued in connection with any increase in aggregate principal
amount from $200,000,000 to $300,000,000 will be deemed Notes "originally
issued" for the purposes of this paragraph) with the net cash proceeds of one or
more Public Equity Offerings at a Redemption Price equal to 109.875% of the
principal amount thereof, together with accrued interest, if any, to the date of
redemption for such Notes; PROVIDED that immediately after giving effect to any
such redemptions, at least $125,000,000 of the aggregate principal amount of the
Notes originally issued remains outstanding; PROVIDED, FURTHER that any such
redemption occurs within 30 days of the date of closing of each such Public
Equity Offering.
(c) In addition, the Notes may be redeemed as a whole, but not
in part, at the option of the Company, at 100% of their principal amount at
maturity, together with accrued interest thereon, if any, to the Redemption
Date, in the event the Company has become or would become obligated to pay, on
the next date on which any amount would be payable with respect to the Notes,
any Additional Amounts as a result of a change in laws (including any
regulations promulgated thereunder), or change in any official position
regarding the application or interpretation or such laws or regulations, which
change is announced or becomes effective on or after the Closing Date.
SECTION 3.2 ELECTION TO REDEEM; NOTICES TO TRUSTEE. If the Company
elects to redeem Notes pursuant to Section 3.1, it shall notify the Trustee and
the Paying Agent in writing of the Redemption Date and the principal amount at
maturity of Notes to be redeemed. The Company shall give each notice provided
for in this Section 3.2 at least 45 days before the Redemption Date (unless a
shorter notice shall be agreed to by the Trustee in writing), together with an
Officers' Certificate stating that such redemption will comply with the
conditions contained herein and in the Notes.
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SECTION 3.3 SELECTION OF NOTES TO BE REDEEMED. If less than all of the
Notes are to be redeemed at any time, the Trustee will select the Notes, or
portions thereof, for redemption in compliance with the requirements of the
principal U.S. national securities exchange, if any, on which the Notes are
listed or, if the Notes are not listed on a U.S. national securities exchange,
on a PRO RATA basis, by lot or by such other method as the Trustee in its sole
discretion shall deem to be fair and appropriate; provided that no Note of
$1,000 in principal amount at maturity or less shall be redeemed in part. The
Trustee shall make the selection from the Notes outstanding and not previously
called for redemption. The Trustee shall promptly notify the Company in writing
of such Notes selected for redemption and, in the case of Notes selected for
partial redemption, the principal amount at maturity to be redeemed. The Trustee
may select for redemption portions of the principal amount at maturity of Notes
that have denominations equal to or larger than $1,000 principal amount at
maturity. Notes and portions of them the Trustee selects shall be in amounts of
$1,000 principal amount at maturity or integral multiples thereof. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
SECTION 3.4 NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail or cause the mailing of a
notice of redemption by first-class mail to each Holder of Notes to be redeemed
and to the Trustee and any Paying Agent. The notice shall identify the Notes to
be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the name and address of the Paying Agent;
(d) that Notes called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price and accrued
interest, if any;
(e) that, unless the Company defaults in making the
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the Redemption Date and the only remaining right of
the Holders of such Notes is to receive payment of the Redemption Price
upon surrender to the Paying Agent of the Notes redeemed;
(f) if any Note is to be redeemed in part, the portion of
the principal amount at maturity (equal to $1,000 or any integral
multiple thereof) of such Note to be redeemed and that, on or after the
Redemption Date, upon surrender and cancellation of such Note, a new
Note or Notes in aggregate principal amount at maturity equal to the
unredeemed portion thereof will be issued without charge to the Holder;
and
(g) the CUSIP, CINS or ISIN number, if any, pursuant to
Section 2.14.
At the Company's request made not less than 15 days prior to the latest
date notice to Holders may be mailed pursuant to this Section 3.4, the Trustee
shall give the notice of redemption in the Company's name and at the Company's
expense. Notice of redemption shall be deemed to be given
34
when mailed, whether or not the Holder receives the notice. In any
event, failure to give such notice, or any defect therein, shall not
affect the validity of the proceedings for the redemption of Notes held
by Holders to whom such notice was properly given.
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price and interest on Notes called for redemption
will cease to accrue from and after the Redemption Date (unless the Company
defaults in providing the funds for such redemption) and such Notes will then
cease to be outstanding. Upon surrender to the Paying Agent, such Notes shall be
paid at the Redemption Price plus accrued interest, if any, to the Redemption
Date subject to the right of Holders of record on the relevant Record Date that
is prior to the Redemption Date to receive interest due on an Interest Payment
Date.
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m. New York
time on the second Business Day preceding any Redemption Date, the Company shall
deposit with the Paying Agent in immediately available funds money, in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, sufficient to pay the
Redemption Price of and accrued and unpaid interest, if any, on all Notes or
portions thereof to be redeemed on that date.
If any Note surrendered for redemption in the manner provided in the
Notes shall not be so paid on the Redemption Date due to the failure of the
Company to deposit sufficient funds with the Paying Agent, the principal amount
at maturity thereof, premium, if any, and accrued and unpaid interest thereon
shall, until paid, bear interest, as provided in Section 4.1 with respect to any
payment default.
SECTION 3.6 NOTES TO BE REDEEMED IN PART. Upon the surrender to the
Paying Agent and cancellation of a Note that is redeemed in part only, the
Company shall execute and the Trustee shall authenticate for the Holder a new
Note equal in principal amount at maturity to the principal amount at maturity
of the unredeemed portion of the Note surrendered.
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ARTICLE IV
COVENANTS
SECTION 4.1 PAYMENT OF NOTES The Company shall pay the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture.
An installment of principal, premium or interest shall be considered
paid on the date due if the Trustee or the Paying Agent (other than the Company
or an Affiliate of the Company) holds on such date immediately available funds
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts
designated for and sufficient to pay such installment.
The principal of the Notes shall bear interest from the original
issuance date. The Company shall pay interest on overdue principal and premium,
if any, and interest on overdue installments of interest, to the extent lawful,
at the rate of 9_% per annum. Any such interest shall be payable on demand and
shall be compounded semiannually on each April 15 and October 15, commencing
October 15, 1998.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
in New York City an office or agency where Notes may be presented or surrendered
for payment, where Notes may be surrendered for transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The office of the Trustee shall be such office or
agency of the Company in New York City, unless the Company shall designate and
maintain some other office or agency for one or more of such purposes. The
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee or at the
specified office of the Paying Agent, and the Company hereby appoints the
Trustee and the Paying Agent as its agent to receive all such presentations,
surrenders, notices and demands. The Company may have one or more co-registrars
and one or more additional paying agents. The term "Paying Agent" includes any
additional paying agent. Neither the Company nor any Affiliate thereof may act
as Paying Agent with respect to an Offer to Purchase.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of New York City) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; PROVIDED, HOWEVER, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in New York City for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and any change in the location of any such other office or agency.
SECTION 4.3 CORPORATE EXISTENCE. Subject to Article V, the Company
shall do or cause to be done, at its own cost and expense, all things necessary
to, and will cause each of its Restricted Subsidiaries to, preserve and keep in
full force and effect the corporate or partnership existence and
36
rights (charter and statutory), licenses and/or franchises of the Company and
each of its Restricted Subsidiaries; PROVIDED that neither the Company nor any
of its Restricted Subsidiaries shall be required to preserve any such rights,
licenses or franchises if such rights, licenses or franchises will be replaced
or if the Board of Directors of the Company shall reasonably determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company or such Restricted Subsidiary, as the case may be, and the loss
thereof is not adverse in any material respect to the Holders; PROVIDED,
FURTHER, that any Restricted Subsidiary may be merged into or wound up on and
liquidated into the Company or any other Restricted Subsidiary.
SECTION 4.4 PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon its or its Subsidiaries' income, profits or property and (b) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a Lien upon its property; PROVIDED that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate negotiations or proceedings and for which disputed
amounts any reserves required in accordance with GAAP have been made.
SECTION 4.5 MAINTANANCE OF PROPERTIES; INSURANCE; BOOKS AND RECORDS;
COMPLIANCE WITH LAW. (a) The Company shall, and shall cause each of its
Restricted Subsidiaries to, at all time cause all properties used or useful in
the conduct of its business to be maintained and kept in good condition, repair
and working order (reasonable wear and tear excepted) and supplied with all
necessary equipment, and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereto.
(b) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain insurance (which may include self-insurance) in such
amounts and covering such risks as are usually and customarily carried with
respect to similar facilities according to their respective locations.
(c) The Company shall, and shall cause each of its Subsidiaries to,
keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of the Company
and each Subsidiary of the Company, in accordance with GAAP consistently applied
to the Company and its Subsidiaries taken as a whole.
(d) The Company shall, and shall cause each of its Subsidiaries to,
comply with all statutes, laws, ordinances, or government rules and regulations
to which it is subject, non-compliance with which would materially adversely
affect the business, prospects, earnings, properties, assets or financial
condition of the Company and its Subsidiaries taken as a whole.
SECTION 4.6 COMPLIANCE CERTIFICATES. (a) The Company and each
Subsidiary Guarantor shall deliver to the Trustee within 90 days after the end
of each fiscal year, an Officers' Certificate of the Company (one of the
signatories to which shall be either the principal executive officer, principal
financial officer or principal accounting officer of the Company) stating that a
review has been conducted of the activities of the Company and its Restricted
Subsidiaries under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed,
37
performed and fulfilled its obligations under this Indenture, and that, to the
best knowledge of each Officer signing such certificate, the Company has kept,
observed, performed and fulfilled each and every covenant and condition
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions, conditions and covenants hereof (or,
if a Default or Event of Default shall have occurred, specifying each such
Default or Event of Default and describing its status and what action the
Company is taking or proposes to take with respect thereto).
(b) The Company shall deliver to the Trustee a copy of annual financial
statements to be filed pursuant to Section 4.7 accompanied by a written
statement of the Company's independent public accountants that in making the
examination necessary for certification of such annual financial statements
nothing as to which such accountants have professional competence has come to
their attention that would lead them to believe that the Company has violated
any provisions of this Indenture as to which such accountants have professional
competence, 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 that would not be disclosed in the course of an
audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination.
(c) The Company shall deliver to the Trustee, promptly after any
Officer of the Company becomes 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 4.7 COMMISSION REPORTS AND REPORTS TO HOLDERS. The Company
shall file with the Commission the annual, quarterly and other reports and other
information required by Section 13(a) or 15(d) of the Exchange Act, regardless
of whether such sections of the Exchange Act are applicable to the Company, and
shall mail or cause to be mailed copies of such reports to Holders and the
Trustee within 15 days after the date it would have been required to file such
reports with the Commission had it been subject to such sections; PROVIDED,
HOWEVER, that the copies of such reports mailed to Holders may omit exhibits,
which the Company will supply to any Holder at such Holder's request. In
addition, the Company and the Subsidiary Guarantors will make such information
available to prospective purchasers of the Notes, securities analysts and
broker-dealers who request it in writing. The Company and the Subsidiary
Guarantors have agreed that, for so long as any Notes remain outstanding, they
will furnish to the Holders and beneficial holders of Notes and to prospective
purchasers of Notes designated by the Holders and to broker-dealers, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
SECTION 4.8 LIMITATION ON INDEBTEDNESS. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(other than the Notes and Indebtedness existing on the Closing Date); PROVIDED
that the Company may Incur Indebtedness if, after giving effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, the Company's Consolidated Leverage Ratio would be no greater than 5 to
1.
Notwithstanding the foregoing, the Company, and (except as specified
below), any Restricted Subsidiary, may incur each and all of the following:
38
(i) Indebtedness in an aggregate principal amount outstanding
or available at any time not to exceed $10 million, less any amount of
such Indebtedness permanently repaid as provided in Section 4.13.
(ii) Indebtedness (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any of its Restricted
Subsidiaries; provided that any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than a company or
another Restricted Subsidiary) shall be deemed, in each case, to
constitute an Incurrence of such Indebtedness not permitted by this
clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding Indebtedness
Incurred under this clause (i), (ii), (iv), (viii) or (ix) of this
paragraph, and any refinancings thereof in an amount not to exceed the
amount so refinanced or refunded (plus premiums, accrued interest, fees
and expenses); PROVIDED that Indebtedness the proceeds of which are
used to refinance or refund the Notes or Indebtedness that is pari
passu with, or subordinated in right of payment to, the Notes shall
only be permitted under this clause (iii) if (A) in case the Notes are
refinanced in part or the Indebtedness to be refinanced is pari passu
with the Notes, such new Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made pari passu with, or subordinate in right
of payment to, the remaining Notes, (B) in case the Indebtedness to be
refinanced is subordinated in right of payment to the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the
Notes at least to the extent that the Indebtedness to be refinanced is
subordinated to the Notes and (C) such new Indebtedness, determined as
of the date of Incurrence of such new Indebtedness, does not mature
prior to the Stated Maturity of the Indebtedness to be refinanced or
refunded and the Average Life of such new Indebtedness is at least
equal to the remaining Average Life of the Indebtedness to be
refinanced or refunded; and PROVIDED FURTHER that in no event may
Indebtedness of the Company be refinanced by means of any Indebtedness
of any Restricted Subsidiary of the Company pursuant to this clause
(iii).
(iv) Indebtedness (A) in respect of performance, surety or
appeal bonds provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; PROVIDED that such
agreements (a) are designed solely to protect the Company or its
Subsidiaries against fluctuations in foreign currency exchange rates or
interest rates and (b) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates by reason of fees,
indemnities and compensation payable thereunder and (C) arising from
agreements providing for indemnification, adjustment of purchase price
or similar obligations, or from the Guarantees or letters of credit,
surety bonds or performance bonds securing any obligations of the
Company or any of its Restricted Subsidiaries pursuant to such
agreements, in each case Incurred in connection with the disposition of
any business, assets or Restricted Subsidiary of the Company (other
than Guarantees of Indebtedness Incurred by any Person
39
acquiring all or any portion of such business, assets or Restricted
Subsidiary of the Company for the purpose of financing such
acquisition), in a principal amount not to exceed the gross proceeds
actually received by the Company or any Restricted Subsidiary in
connection with such disposition;
(v) Indebtedness of the Company, to the extent the net
proceeds thereof are promptly (A) used to purchase Notes tendered in an
Offer to Purchase made as a result of a Change in Control or (B)
deposited to defease the Notes as described in Article VIII;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of
the Company by any Restricted Subsidiary provided the Guarantee of such
Indebtedness is permitted by and made in accordance with Section 4.11;
(vii) Indebtedness of the Company, not to exceed $40 million
at any time outstanding, Incurred to finance the cost of acquisitions
of companies or assets engaged primarily in the Microcomputer Products
Distribution Business and Acquired Indebtedness relating thereto;
PROVIDED that the Target Company Consolidated Leveraged Ratio of such
acquired company is no greater than 5 to 1;
(viii) Indebtedness of the Company or any Restricted
Subsidiary Incurred to provide working capital (but not to finance
acquisitions), not to exceed in aggregate at any one time outstanding,
the sum of (A) 80% of the accounts receivable and (B) 60% of the
inventory of the Company and its Restricted Subsidiaries on a
consolidated basis as set forth on the balance sheet of the Company
most recently filed with the Commission pursuant to Section 4.7; and
(ix) Strategic Subordinated Indebtedne/section/
(b) Notwithstanding any other provisions of this Section 4.8, the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
Incur pursuant to this Section 4.8 shall not be deemed to be exceeded due solely
to the result of fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.8, (1) Guarantees, Liens or obligations of a Person with
respect to letters of credit supporting Indebtedness of such Person otherwise
included in the determination of such particular amount shall not be included
and (2) any Liens granted pursuant to the equal and ratable provisions referred
to in Section 4.10 shall not be treated as Indebtedne/section/ For purposes of
determining compliance with this Section 4.8, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses, the Company, in its sole discretion, shall
classify such item of Indebtedness and only be required to include the amount
and type of such Indebtedness in one of such clauses.
SECTION 4.9 LIMITATION ON RESTRICTED PAYMENTS. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make
40
any distribution on or with respect to its Capital Stock (other than (x)
dividends or distributions payable solely in shares of its Capital Stock (other
than Redeemable Stock) or in options, warrants or other rights to acquire shares
of such Capital Stock and (y) pro rata dividends or distributions on Common
Stock of Restricted Subsidiaries held by minority stockholders, provided that
such dividends do not in the aggregate exceed the minority stockholders' pro
rata share of such Restricted Subsidiaries' net income from the first day of the
fiscal quarter beginning immediately following the Closing Date) held by Persons
other than the Company or any of its Restricted Subsidiaries, (ii) purchase,
redeem, retire or otherwise acquire for value any shares of Capital Stock of (A)
the Company or an Unrestricted Subsidiary (including options, warrants or other
rights to acquire such shares of Capital Stock) held by any Person or (B) a
Restricted Subsidiary (including options, warrants or other rights to acquire
such shares of Capital Stock) any Affiliate of the Company (other than a Wholly
Owned Restricted Subsidiary) or any holder (or any Affiliate of such holder) of
5% or more of the Capital Stock of the Company, (iii) make any voluntary or
optional principal payment, or voluntary or optional redemption, repurchase,
defeasance, or other acquisition or retirement for value, of Indebtedness of the
Company that is subordinated in right of payment to the Notes or (iv) make any
Investment, other than a Permitted Investment, in any Person (such payments or
any other actions described in clauses (i) through (iv) being collectively
"Restricted Payments") if, at the time of, and after giving effect to, the
proposed Restricted Payment; (A) a Default or Event of Default shall have
occurred and be continuing, (B) the Company could not Incur at least $1.00 of
Indebtedness under the first paragraph of Section 4.8(a) or (C) the aggregate
amount of all Restricted Payments (the amount, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) made after the Closing Date
shall exceed the sum of (1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss,
minus 100% of the amount of such loss) (determined by excluding income resulting
from transfers of assets by the Company or a Restricted Subsidiary to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the fiscal quarter
immediately following the Closing Date and ending on the last day of the last
fiscal quarter preceding the Transaction Date for which reports have been filed
pursuant to Section 4.7 PLUS (2) the aggregate Net Cash Proceeds received by the
Company after the Closing Date from the issuance and sale permitted by the
Indentures to a Person who is not a Subsidiary of the Company of (a) its Capital
Stock (other than Redeemable Stock), (b) any options, warrants or other rights
to acquire Capital Stock of the Company (in each case, exclusive of any
Redeemable Stock or any options, warrants or other rights that are redeemable at
the option of the holder, or are required to be redeemed, prior to the Stated
Maturity of the Notes) and (c) Indebtedness of the Company that has been
exchanged for or converted into Capital Stock of the Company (other than
Redeemable Stock), in each case except to the extent such Net Cash Proceeds are
used to Incur Indebtedness pursuant to clause (vii) of the second paragraph of
Section 4.8(a), PLUS (3) an amount equal to the net reduction in Investments
(other than reductions in Permitted Investments and reductions in Investments
made pursuant to clause (vi) of the second paragraph of this Section 4.9) in any
Person resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other transfers of assets, in each case to
the Company or any Restricted Subsidiary or from the Net Cash Proceeds from the
sale of any such investment (except, in each case, to the extent any such
payment or proceeds is included in the calculation of Adjusted Consolidated Net
Income), or from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the
41
definition of "Investments"), not to exceed, in each case, the amount of
Investments previously made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of: (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 the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of payment to
the Notes including premium, if any, and accrued and unpaid interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under clause (iii) of the
second paragraph of Section 4.8(a); (iii) the repurchase, redemption or other
acquisition of Capital Stock of the Company (or options, warrants or other
rights to acquire such Capital Stock) in exchange for, or out of the proceeds of
a substantially concurrent offering of, shares of Capital Stock (other than
Redeemable Stock) of the Company (or options, warrants or other rights to
acquire such Capital Stock); (iv) the making of any principal payment or the
repurchase, redemption, retirement, defeasance, or other acquisition for value
of Indebtedness of the Company which is subordinated in right of payment to the
Notes in exchange for, or out of the proceeds of, a substantially concurrent
offering of, shares of Capital Stock of the Company (other than Redeemable
Stock); (v) payments or distributions to dissenting stockholders pursuant to
applicable law in connection with a consolidation, merger or transfer of assets
that complies with the provisions of this Indenture applicable to mergers,
consolidations and transfers of all or substantially all of the property and
assets of the Company; (vi) Investments in any Person the primary business of
which is related, ancillary or complementary to the business of the Company and
its Restricted Subsidiaries on the date of such Investments; PROVIDED that the
aggregate amount of Investments made pursuant to this clause (vi) does not
exceed the sum of (x) $50 million plus (y) the net reduction in Investments made
pursuant to this clause (vi) resulting from distributions on or repayments of
such Investments or from the Net Cash Proceeds from the sale of any such
Investment (except in each case to the extent any such payment or proceeds is
included in the calculation of Adjusted Consolidated Net Income) or from such
Person becoming a Restricted Subsidiary (valued in each case as provided in the
definition of "Investments"); PROVIDED that the net reduction in any Investment
shall not exceed the amount of such Investment.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof and an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and the Net Cash Proceeds from any issuance of
Capital Stock referred to in clauses (iii), (iv) and (vi), shall be included in
calculating whether the conditions of clause (C) of the first paragraph to this
Section 4.9 have been met with respect to any subsequent Restricted Payments. In
the event the proceeds of an issuance of Capital Stock of the Company are used
for the redemption, repurchase or other acquisition of the Notes, or
Indebtedness that is pari passu with the Notes, then the Net Cash Proceeds of
such issuance shall be included in clause (C) of the first paragraph of this
Section 4.9 only to the extent such proceeds are not used for such redemption,
repurchase or other acquisition of Indebtedne/section/
SECTION 4.10 LIMITATION ON LIENS; NEGATIVE PLEDGES. The Company will
not, and will not permit any Restricted Subsidiary to, create, incur, assume or
suffer to exist any Lien on any of its assets or properties of any character, or
any shares of Capital Stock or Indebtedness of any Restricted Subsidiary,
without making effective provisions for all of the Notes and all other amounts
due under
42
the Indentures to be directly secured equally and ratably with (or, if the
obligation or liability to be secured by such Lien is subordinated in right of
payment to the Notes, prior to) the obligation or liability secured by such
Lien.
The foregoing limitation does not apply to (i) Liens existing on the
Closing Date or arising thereafter in connection with the New Credit Facility;
(ii) Liens granted after the Closing Date on any assets or Capital Stock of the
Company or its Restricted Subsidiaries created in favor of the Holders; (iii)
Liens with respect to the assets of a Restricted Subsidiary granted by such
Restricted Subsidiary to the Company or a Wholly Owned Restricted Subsidiary to
secure Indebtedness owing to the Company or such other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance secured
Indebtedness which is permitted to be Incurred under clause (iii) of the second
paragraph of Section 4.8(a); PROVIDED that such Liens do not extend to or cover
any property or assets of the company or any Restricted Subsidiary other than
the property or assets securing the Indebtedness being financed; (v) Liens
securing Indebtedness Incurred under clause (i), (iv), (viii) and (ix) of the
second paragraph of Section 4.8(a); or (vi) Permitted Liens;
The Company, CHS Delaware, Inc. and CHS Delaware L.L.C. hereby provide
Negative Pledges to the Trustee for the benefit of the Holders of 100% of the
partnership interests in, and all of the assets of, CHS Cayman L.P., except for
its shares in CHS Logistic Services B.V., which will be pledged only as security
for the New Credit Facility.
SECTION 4.11 LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company which is pari passu
with or subordinate in right of payment to the Notes ("Guaranteed
Indebtedness"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers pursuant to Section 10.2 a supplemental indenture to this Indenture
providing for a Guarantee (a "Subsidiary Guarantee") of payment of the Notes by
such Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will
not in any manner whatsoever claim or take the benefit of or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights against
the Company or any other Restricted Subsidiary under its Subsidiary Guarantee;
PROVIDED that this paragraph shall not be applicable to (x) any Guarantee of any
Restricted Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not Incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or (y) any Guarantee or any Restricted
Subsidiary of Indebtedness Incurred (I) under a revolving credit or working
capital facility pursuant to clause (i) of the second paragraph of Section
4.8(a) or (II) pursuant to clause (vii) of the second paragraph of Section
4.8(a). If the Guaranteed Indebtedness is (A) pari passu with the Notes, then
the Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Notes, then
the Guarantee of such Guaranteed Indebtedness shall be subordinated to the
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes.
SECTION 4.12 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance of any kind on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions
permitted
43
by applicable law on any Capital Stock of such Restricted Subsidiary owned by
the Company or any other Restricted Subsidiary, (ii) pay any Indebtedness owed
to the Company or any other Restricted Subsidiary, (iii) make loans or advances
to the Company or any other Restricted Subsidiary or (iv) transfer any of its
property or assets to the Company or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in this Indenture or any other
agreements in effect on the Closing Date, and any extensions, refinancings,
renewals or replacements of such agreements; PROVIDED that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements are
no less favorable in any material respect to the Holders than those encumbrances
or restrictions that are then in effect and that are being extended, refinanced,
renewed or replaced; (ii) existing under or by reason of applicable law; (iii)
existing with respect to any Person or the property or assets of such Person
acquired by the Company or any Restricted Subsidiary and existing at the time of
such acquisition and not incurred in contemplation thereof, which encumbrances
or restrictions are not applicable to any Person or the property or assets of
any Person other than such Person or the property or assets of such Person so
acquired; (iv) in the case of the clause (iv) of the first paragraph of this
Section 4.12, (A) that restrict in a customary manner the subletting, assignment
or transfer of any property or asset that is a lease, license, conveyance,
contract or similar property or asset, (B) existing by virtue of any transfer
of, agreement to transfer option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary not otherwise
prohibited by this Indenture, or (C) arising or agreed to in the ordinary course
of business, not relating to any Indebtedness, and that do not, individually or
in the aggregate, detract from the value of property or assets of the Company or
any Restricted Subsidiary in any manner material to the Company or any
Restricted Subsidiary; (v) with respect to a Restricted Subsidiary and imposed
pursuant to an agreement that has been entered into for the sale or disposition
of all or substantially all of the Capital Stock of, or property or assets of,
such Restricted Subsidiary; or (vi) contained in the New Credit Facility or any
other financing or credit agreement entered into by any Restricted Subsidiary
after the Closing Date; PROVIDED that unless and until an event of default
thereunder has occurred and is continuing any such Restricted Subsidiaries are
permitted thereunder to pay dividends or otherwise make payments as necessary
for the Company to make interest payments on the Notes when due (subject to the
conditions contained in the New Credit Facility) and the Board of Directors of
the Company determines that such restrictions, together with restrictions
contained in agreements relating to other Indebtedness, will not materially
affect the Company's ability to make payments of principal, premium, if any, or
interest on the Notes when due. Nothing contained in this Section 4.12 shall
prevent the Company or any Restricted Subsidiary from (1) creating, incurring,
assuming or suffering to exist any Liens otherwise permitted in Section 4.10 or
(2) restricting the sale or other disposition of property or assets of the
Company or any of its Restricted Subsidiaries that secure Indebtedness of the
Company or any of its Restricted Subsidiaries.
SECTION 4.13 LIMITATION ON ASSET SALES. The Company will not, and will
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i)
the consideration received by the Company or such Restricted Subsidiary is at
least equal to the Fair Market Value of the assets sold or disposed of; PROVIDED
that the aggregate Fair Market Value of the consideration received from any
Asset Sale that is not in the form of cash or Temporary Cash Investments shall
not, when aggregated with the Fair Market Value of all other non-cash
consideration received by the Company and its
44
Restricted Subsidiaries from all previous Asset Sales since the Closing Date
that have not, prior to such date, been converted to cash or Temporary Cash
Investments, exceed five percent of the Adjusted Consolidated Net Tangible
Assets of the Company at the time of the Asset Sale under consideration; and
PROVIDED, FURTHER that, with respect to any Asset Sales to Affiliates, the
Company receives consideration consisting of no less then 85% cash or Temporary
Cash Investments and (ii) the Company delivers to the Trustee an Officers'
Certificate certifying that such Asset Sale complies with clause (i).
In the event and to the extent that the Net Cash Proceeds received by
the Company or any of its Restricted Subsidiaries from one or more Asset Sales
occurring on or after the Closing Date in any period of 12 consecutive months
exceeds 5% of Adjusted Consolidated Net Tangible Assets (determined as of the
date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries have been filed
pursuant to Section 4.7), then the Company shall or shall cause the relevant
Restricted Subsidiary to (i) within twelve months after the date Net Cash
Proceeds so received exceed 5% of Adjusted Consolidated Net Tangible Assets (A)
apply an amount equal to such excess Net Cash Proceeds permanently to repay
unsubordinated Indebtedness of the Company or any Restricted Subsidiary
providing a Subsidiary Guarantee pursuant to Section 4.11 or Indebtedness of any
other Restricted Subsidiary, in each case owing to a Person other than the
Company or any of its Subsidiaries or (B) invest an equal amount, or the amount
not so applied pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within twelve months after the date of such agreement),
in capital assets of a nature or type or that are used in a business (or in a
Company having capital assets of a nature or type, or engaged in a business)
similar or related to the nature or type of the property and assets of, or the
business of, the Company and its Restricted Subsidiaries existing on the date of
such investment (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board Resolution) and (ii)
apply (no later than the end of the twelve month period referred to in clause
(i)) such Excess Cash Proceeds (to the extent not applied to clause (i)) as
provided in the following paragraph of this Section 4.13. The amount of such
excess Net Cash Proceeds required to be applied (or to be committed to be
applied) during such twelve-month period as set forth in clause (i) of the
preceding sentence and not applied as so required by the end of such period
shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.13 totals at least $5.0 million, the Company must commence not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate principal amount of
Notes on the Relevant Date equal to the Excess Proceeds on such date, at a
purchase price equal to 100% of the principal amount of the Notes on the
relevant Payment Date, plus, in each case, accrued interest (if any) to the
Payment Date.
SECTION 4.14 LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND
AFFILIATES. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company
45
or any Restricted Subsidiary, except upon fair and reasonable terms no less
favorable in any material respect to the Company or such Restricted Subsidiary
than could be obtained, at the time of such transaction or, if such transaction
is pursuant to a written agreement, at the time of the execution of the
agreement providing therefor, in a comparable arm's-length transaction with a
Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to: (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; (ii) any transaction
solely between the Company and any of its Wholly Owned Restricted Subsidiaries
or solely between the Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular fees to directors of the Company who are not
employees of the Company; (iv) any payments or other transactions pursuant to
any tax-sharing agreement between the Company and any other Person with which
the Company files a consolidated tax return or with which the Company is part of
a consolidated group for tax purposes; or (v) any Restricted Payments not
prohibited by Section 4.9. Notwithstanding the foregoing, any transaction
covered by the first paragraph of this Section 4.14 and not covered by clauses
(ii) through (v) of this paragraph, the aggregate amount of which exceeds $1.0
million in value, must be approved or determined to be fair in the manner
provided for in clause (i)(A) or (B) above.
SECTION 4.15 REPURCHASE OF NOTES UPON A CHANGE IN CONTROL. The Company
shall commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest (if any) to the date of purchase.
SECTION 4.16 LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary, (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law, (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 4.9 if made on the date of such issuance
or sale or (iv) issuances or sales of Common Stock of a Restricted Subsidiary to
minority investors, provided the Company or such Restricted Subsidiary applies
the Net Cash Proceeds, if any, of any such sale in accordance with clause (A) or
(B) of Section 4.13.
SECTION 4.17 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into, renew or extend any Sale and Leaseback Transaction
unless (i) the Company or such Restricted Subsidiary would be entitled under
Section 4.8 to Incur Indebtedness in an amount equal to the Attributable
Indebtedness with respect to such Sale and Leaseback Transaction, (ii) such Sale
and Leaseback
46
Transaction would not result in a violation of Section 4.10; and (iii) the Net
Cash Proceeds from any such Sale and Leaseback Transaction are applied in a
manner consistent with the provisions described in Section 4.13.
SECTION 4.18 WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent permitted by law) 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 or extension law or any usury law or other law that would prohibit
or forgive the Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or that may affect the covenants or the performance of
this Indenture; and (to the extent permitted by law) the Company hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not 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 had been enacted.
SECTION 4.19 ADDITIONAL SUBSIDIARY GUARANTEES AND PLEDGES. If the
Company or any of its Restricted Subsidiaries shall acquire or create another
Restricted Subsidiary that is incorporated in any state or territory of the
United States, then such newly acquired or created Restricted Subsidiary will be
required to execute a Subsidiary Guarantee within 120 days after the date of
such acquisition or creation, in accordance herewith, unless it has been
designated as an Unrestricted Subsidiary. If the lenders under the New Credit
Facility require that the newly acquired or created U.S. Subsidiary guarantee
the borrowers' obligations under the New Credit Facility, the Subsidiary
Guarantees issued pursuant to this Section 4.19 will be subordinated in right of
payment to Indebtedness under the New Credit Facility, Guarantees or
refinancings thereof and Indebtedness incurred pursuant to clause (viii) of the
second paragraph of Section 4.8(a). Additionally, the parent company of any such
newly acquired or created non-U.S. Restricted Subsidiary shall give a Negative
Pledge with respect to the remainder of its capital stock.
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ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 CONSOLIDATION, MERGER AND SALE OF ASSETS. The Company shall
not consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless:
(i) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which
the Company is merged or that acquired or leased such property and
assets of the Company shall be a corporation organized and validly
existing under the laws of any EU Country or the United States of
America, and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of the
Company on all of the Notes and under this Indenture, including the
submission to jurisdiction in Section 11.7 hereof;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a
pro forma basis, the Company or any Person becoming the successor
obligor of the Notes shall have a Consolidated Net Worth equal to or
greater than the Consolidated Net Worth of the Company immediately
prior to such transaction; PROVIDED, HOWEVER, that this clause (iii)
shall not apply to an acquisition accounted for as a pooling of assets
in accordance with GAAP;
(iv) immediately after giving effect to such transaction on a
pro forma basis the Company, or any Person becoming the successor
obligor of the Notes, as the case may be, could Incur at least $1.00 of
Indebtedness under the first paragraph of Section 4.8(a) (calculated,
solely for the purpose of this Section 5.1, without any pro forma
adjustment with respect to the acquisition of Santech Micro Group ASA
for any period prior to the acquisition thereof); PROVIDED, HOWEVER,
that this clause (iv) shall not apply to a consolidation or merger with
or into a Wholly Owned Restricted Subsidiary with a positive net worth;
PROVIDED that, in connection with any such merger or consolidation, no
consideration (other than Common Stock in the surviving Person or the
Company (or a Person that owns directly or indirectly all of the
Capital Stock of the surviving Person or the Company immediately
following such transaction)) shall be issued or distributed to the
shareholders of the Company; and
(v) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate
compliance with clauses (iii) and (iv)) and Opinion of Counsel, in each
case stating that such consolidation, merger or transfer and such
supplemental indenture comply with this provision, that all conditions
precedent provided for herein relating to such transaction have been
complied with and, in the event that the continuing Person is organized
under the laws of an EU Country other than England and
48
Wales or Scotland, that the indenture and the Notes constitute legal,
valid and binding obligations of the continuing Person, enforceable in
accordance with their terms;
PROVIDED, HOWEVER, that clauses (iii) and (iv) above do not apply if, in the
good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company; and
PROVIDED, FURTHER that any such transaction shall not have as one of its
purposes the evasion of the foregoing limitations.
SECTION 5.2 SUCCESSOR ENTITY SUBSTITUTED. Upon any consolidation,
combination, merger or any transfer of all or substantially all of the assets of
the Company in accordance with Section 5.1, the surviving entity formed by such
consolidation or combination or into which the Company is merged or to which
such transfer is made 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 surviving entity had been named as the Company herein, and
thereafter, the predecessor company (except in the case of a lease) shall be
released from all obligations and covenants under this Indenture and the Notes.
49
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT. (a) Each of the following events is an
"Event of Default":
(i) a default in the payment of principal of (or premium, if
any, on) any Note when the same becomes due and payable at maturity,
upon acceleration, redemption or otherwise;
(ii) a default in the payment of interest on any Note when the
same becomes due and payable, and such default continues for a period
of 30 days;
(iii) the failure to perform or comply with the provisions of
Article V or the failure to make or consummate an Offer to Purchase in
accordance with Section 4.13 or 4.15;
(iv) any default in the performance of or breach of any other
covenant or agreement of the Company in this Indenture or under the
Notes (other than a default specified in clause (i), (ii) or (iii)
above), which default or breach continues for a period of 30
consecutive days after written notice by the Trustee to the Company or
by the Holders of 25% or more in aggregate principal amount at maturity
of the Notes outstanding to the Company and the Trustee;
(v) the occurrence of, with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $10.0 million or more in the aggregate
for all such issues of all such Persons, whether such Indebtedness now
exists or shall hereafter be created, (I) an event of default that has
caused the holders thereof to declare such Indebtedness to be due and
payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or
annulled within 60 days following such acceleration and/or (II) the
failure to make a principal payment at the final (but not any interim)
fixed maturity and such defaulted payment shall not have been made,
waived or extended within 30 days of such payment default;
(vi) any final judgment or order (not covered by insurance)
for the payment of money in excess of $10.0 million in the aggregate
for all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so
covered) shall be rendered against the Company or any Significant
Subsidiary and shall not be paid or discharged, and there shall be any
period of 30 consecutive days following entry of the final judgment or
order that causes the aggregate amount for all such final judgments or
orders outstanding and not paid or discharged against all such Persons
to exceed $10.0 million during which a stay of enforcement of such
final judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect;
(vii) a court of competent jurisdiction enters a Bankruptcy
Order under any Bankruptcy Law that:
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(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case or proceeding,
(B) appoints a Custodian of the Company or any
Significant Subsidiary for all or substantially all of its
properties, or
(C) orders the liquidation of the Company or any
Significant Subsidiary,
and in each case such order or decree remains unstayed and in effect
for 30 days; and
(viii) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of a Bankruptcy Order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors or files a proposal or scheme of arrangement involving the
rescheduling or composition of its indebtedness,
(E) consents to the filing against it of a petition in
bankruptcy, or
(F) shall generally not pay its debts when such debts become
due or shall admit in writing its inability to pay its debts generally.
(b) For purposes of this Article VI, the term "Custodian" means any
custodian, receiver, interim receiver, receiver and manager, trustee, assignee,
liquidator, sequestrator or similar official charged with maintaining possession
or control over property for one or more creditors, whether under any Bankruptcy
Law or otherwise. The term "Bankruptcy Order" means any court order made in a
proceeding pursuant to or within the meaning of any Bankruptcy Law, containing
an adjudication of bankruptcy or insolvency, or providing for liquidation,
winding up, dissolution or reorganization, or appointing a Custodian of a debtor
or of all or any substantial part of a debtor's property, or providing for the
staying, arrangement, adjustment or composition of indebtedness or other relief
of a debtor.
SECTION 6.2 ACCELERATION. If an Event of Default (other than an Event
of Default specified in Section 6.1(a)(vii) or (viii) that occurs with respect
to the Company) occurs and is continuing under this Indenture, the Trustee or
the Holders of at least 25% in aggregate principal amount at maturity of the
Notes then outstanding, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the
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principal amount of, premium, if any, and accrued interest on the Notes to be
immediately due and payable. Upon a declaration of acceleration, such principal
amount, premium, if any, and accrued interest shall be immediately due and
payable. If an Event of Default specified in Section 6.1(a)(vii) or (viii)
occurs with respect to the Company, the principal amount of, premium, if any,
and accrued interest on the Notes then outstanding shall IPSO FACTO become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holder.
The Holders of at least a majority in principal amount at maturity of
the outstanding Notes by written notice to the Company and to the Trustee may
waive all past Defaults and rescind and annul such declaration of acceleration
and its consequences if (a) the Company has paid or deposited with the Trustee a
sum sufficient to pay (i) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 7.7, (ii) all overdue interest on all Notes, (iii) the principal of and
premium, if any, on any Notes that have become due otherwise than by such
declaration or occurrence of acceleration and interest thereon at the rate
prescribed therefor by such Notes, and (iv) to the extent that payment of such
interest is lawful, interest upon overdue interest, if any, at the rate
prescribed therefor by such Notes, (b) all existing Events of Default, other
than the non-payment of principal, premium, if any, or interest on the Notes
that have become due solely by such declaration of acceleration, have been cured
or waived and (c) the rescission would not conflict with any judgment or decree
of a court of competent jurisdiction.
SECTION 6.3 OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue, in its own name or as trustee of an express
trust, any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.
SECTION 6.4 WAIVER OF PAST DEFAULT. Subject to Sections 6.2, 6.7 and
9.2, the Holders of at least a majority in principal amount at maturity of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Note as specified in Section
6.1(a)(i) or (ii) or in respect of a covenant or provision of this Indenture
which cannot pursuant to Section 9.2 be modified or amended without the consent
of the Holder of each outstanding Note 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; but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto.
SECTION 6.5 CONTROL BY MAJORITY. Subject to the provisions of Section
7.2(f), the Holders of at least a majority in principal amount at maturity of
the outstanding 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; PROVIDED, HOWEVER, that the Trustee may refuse to follow
any direction that (i) conflicts with law or this Indenture, (ii) may involve
the Trustee in personal liability, or (iii) that the Trustee determines in good
faith may be unduly prejudicial to the rights of
52
Holders of Notes not joining in the giving of such direction; and PROVIDED,
FURTHER, that the Trustee may take any other action it deems proper that is not
inconsistent with any such direction received from Holders of Notes.
SECTION 6.6 LIMITATION ON SUITS. A Holder may not pursue any remedy
with respect to this Indenture or the Notes unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal
amount at maturity of outstanding Notes make a written request to the
Trustee to pursue the remedy;
(c) such Holder or Holders offer the Trustee indemnity
satisfactory to the Trustee against any costs, liability or expense
(including the reasonable fees and expenses of its counsel);
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period, the Holders of a majority
in principal amount at maturity of the outstanding 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 such Holder.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of, premium, if any, or interest on a Note or to bring suit for the
enforcement of any such payment, on or after the due date for such payment
expressed in the Notes, is absolute and unconditional and shall not be impaired
or affected without the consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.1(a)(i) or (ii) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal,
premium, if any, and accrued interest remaining unpaid, together with interest
on overdue principal, premium, if any, and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest, in each case
at 9_%, which interest shall be compounded semiannually each April 15 and
October 15, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 7.7.
53
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee shall be
entitled and empowered to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and any other
amounts due the Trustee under Section 7.7 and the Holders allowed in any
judicial proceedings relative to the Company or the Subsidiaries of the Company
(or any other obligor on the Notes), its creditors or its property and shall be
entitled and empowered to collect and receive any monies, securities or other
property payable or deliverable upon conversion or exchange of the Notes or upon
any such claims and to distribute the same, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.7. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to, or accept or adopt on behalf of any Holder, any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES. If the Trustee collects any money pursuant to
this Article VI, it shall pay out such money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: to Holders for amounts then due and unpaid for
principal of, premium, if any, and interest on the Notes in respect of
which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal, premium, if any,
and interest, respectively; and
Third: to the Company or any other obligors of the Notes, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior written notice to the Company, may fix a Record
Date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.7, or a suit by Holders of
more than 10% in aggregate principal amount at maturity of outstanding Notes.
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding
54
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then, and in every such case,
subject to any determination in such proceeding, the Company, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Company,
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 6.13 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.8, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14 DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article VI or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
55
ARTICLE VII
TRUSTEE
SECTION 7.1. (a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee undertakes to perform such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(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; PROVIDED, HOWEVER, that in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Trustee 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 paragraph
(b) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts;
(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 received by it pursuant to Section 6.2, 6.5 or 6.6; and
(iv) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.1.
56
(e) The Trustee may refuse to perform any duty or exercise any right or
remedy unless it is provided adequate funds to enable it to do so and it
receives indemnity satisfactory to it in its sole discretion against any loss,
liability, fee or expense.
SECTION 7.2 RIGHTS OF TRUSTEE. Subject to TIA Sections 315(a) through
(d), and except as provided in Section 7.1:
(a) The Trustee may rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person.
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, in its discretion, may 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.
(b) Before the Trustee acts or refrains from acting with
respect to any matter contemplated by this Indenture, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to
the provisions of Section 11.5. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
(other than the negligence or willful misconduct of an agent who is an
employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers; PROVIDED that the Trustee's
conduct does not constitute negligence or bad faith.
(e) The Trustee may consult with counsel of its selection and
the advice or opinion of such counsel as to matters of law shall be
full and complete authorization in respect of any action taken, omitted
or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
capacity or any other capacity may become the owner or pledgee of Notes and may
otherwise deal with the Company, or its Subsidiaries and Affiliates with the
same rights it would have if it were not Trustee.
57
Any Agent may do the same with like rights. However, the Trustee is subject to
TIA Sections 310(b) and 311 pursuant to which the Trustee shall resign if it
acquires and does not eliminate a conflicting interest as defined therein.
SECTION 7.4 TRUSTEE'S DISCLAIMER. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Notes; it shall not be
accountable for the Company's use of the proceeds from the issuance of the
Notes; and it shall not be responsible for any statement of the Company in the
Notes other than the Trustee's certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS. If any Default or any Event of Default
with respect to the Notes occurs and is continuing and is known to the Trustee,
the Trustee shall give notice of the Default or Event of Default within 45 days
after the occurrence thereof to the Holders of the Notes, unless such Default
shall have been cured or waived before the mailing of such notice. Except in the
case of a Default or an Event of Default in the payment of principal, premium,
if any, or interest on any Note, the Trustee may withhold the notice to the
Holders if a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interest of Holders.
Subject to the provisions of Sections 7.1 and 7.2, the Trustee shall
not be deemed to have knowledge of any Default, Event of Default, Change of
Control or Asset Sale except (i) a default described in Section 6.1(a)(i) or
(ii) so long as the Trustee is the Paying Agent, or (ii) any Default, Event of
Default, Change of Control or Asset Sale of which the Trustee shall have
received written notification at its Corporate Trust Office or a Responsible
Officer charged with the administration of this Indenture shall have obtained
actual knowledge, and such notification shall not be deemed to include receipt
of information obtained in any report or other reports and documents furnished
under Section 4.7 of this Indenture which reports and documents the Trustee
shall have no duty to examine.
SECTION 7.6 REORTS BY TRUSTEE TO HOLDERS. To the extent required by TIA
/section/313(a), within 60 days after May 15 of each year commencing with 1998
and for as long as there are Notes outstanding hereunder, the Trustee shall mail
to the Holder of the Rule 144A Global Note and the Holder of the Regulation S
Global Note the Trustee's brief report dated as of such date that complies with
TIA /section/ 313(a). The Trustee also shall comply with TIA /section/ 313(b)
and TIA /section/ 313(c) and (d). A copy of such report at the time of its
mailing to Holders shall be filed with the SEC, if required, and each stock
exchange, if any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA /section/
313(d).
SECTION 7.7 COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket disbursements, expenses and advances
(including reasonable fees and expenses of counsel) incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, out-of-pocket disbursements and expenses of the
Trustee's agents and counsel.
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The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability or expense incurred by it without negligence or
bad faith on its part in connection with the acceptance or administration of
this Indenture and its duties under this Indenture and the Notes in its capacity
as Trustee, Paying Agent or Registrar, including the costs and expenses of
investigating or defending itself against any claim or liability and of
complying with any process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties under this
Indenture and the Notes. The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek indemnity. The Company
need not reimburse any expense or indemnify against any loss or liability
incurred by the Trustee, the Paying Agent or the Registrar through the
Trustee's, the Paying Agent's or the Registrar's, as the came may be, own
willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by it, in its capacity as Trustee, Paying Agent or Registrar, except
money or property held in trust to pay principal of, premium, if any, and
interest on particular Notes. Such lien shall survive the termination of this
Indenture.
Subject to any other rights available to the Trustee under any
applicable Bankruptcy Law, when the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.1(a)(vii) or (viii) occurs, the
parties hereto and the Holders, by acceptance of the Notes, hereby agree that
the expenses and the compensation for the services are intended to constitute
expenses of administration under any applicable Bankruptcy Law.
The Trustee's rights under this Section 7.7 shall survive the
resignation or removal of the Trustee, the redemption of the Notes and the
termination of this Indenture.
SECTION 7.8 REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.8.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount at maturity of the
outstanding Notes may remove the Trustee by so notifying the Trustee in writing
and may appoint a successor Trustee with the Company's consent, which consent
shall not be unreasonably withheld. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged as bankrupt or insolvent;
(c) a receiver or other public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount at maturity of the Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after such
delivery, the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee (subject to the lien provided in Section 7.7), 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. A successor Trustee shall mail notice of its succession to
each Holder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of the majority in principal amount at maturity of the outstanding 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 who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee
provided such corporation shall be otherwise qualified and eligible under this
Article VII.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. This Indenture shall always
have a Trustee who satisfies the requirements of TIA /section/ 310(a)(1). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Trustee may
not be an obligor upon the Notes of an Affiliate of any such obligor.
SECTION 7.11 MONEY HELD IN TRUST. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law and except for money held in
trust under Article VIII of this Indenture.
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ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1 TERMINATION OF COMPANY'S OBLIGATIONS. The Company may, at
its option, terminate its obligations under the Notes and this Indenture, except
those obligations referred to in the last paragraph of this Section 8.1, if
(a) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes which have been replaced or paid) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder; or
(b) (i) the Notes have become due and payable, mature within one year
or all of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of redemption,
(ii) the Company irrevocably deposits in trust with the Trustee during such
one-year period, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds solely for the benefit of
the Holders for that purpose, money or United States Government Obligations
sufficient (in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee), without consideration of any reinvestment of any interest thereon, to
pay principal, premium, if any, and interest on the Notes to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder, (iii) no Default or Event of Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit, (iv) such deposit
will not result in a breach or violation of, or constitute a default under, this
Indenture or any other agreement or instrument to which the Company is a party
or by which it is bound, and (v) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture have been complied with.
With respect to the foregoing Section 8.1(a), the Company's obligations
under Section 7.7 shall survive. With respect to the foregoing Section 8.1(b)
the Company's obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.8, 2.13, 4.1, 4.2,
7.7, 7.8, 8.3, 8.4 and 8.5 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.7, 8.4 and
8.5 shall survive. After any such irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations specified
above.
SECTION 8.2 LEGAL DEFEASANCE AND COVENANT DEFEASANCE. (a) DEFEASANCE
AND DISCHARGE OF INDENTURE. The Company will be deemed to have paid and will be
discharged from any and all obligations in respect of the Notes on the first day
following six months after the date of the deposit referred to in clause (A) of
this Section 8.2 if:
(A) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee and has conveyed all right,
title and interest for the benefit of the Holders, under the terms of
an irrevocable trust agreement in form satisfactory to the Trustee as
trust funds in trust, specifically pledged to the Trustee for the
benefit of the Holders as security
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for payment of the principal of, premium, if any, and interest, if any,
on the Notes, and dedicated solely to, the benefit of the Holders, in
and to (i) money in an amount, (ii) United States Government
obligations that, through the payment of interest, premium, if any, and
principal in respect thereof in accordance with their terms, will
provide, not later than one day before the due date of any payment
referred to in this clause (a), money in an amount or (iii) a
combination thereof in an amount sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest
and after payment of all federal, state and local taxes or other
charges and assessments in respect thereof payable by the Trustee, the
principal of, premium, if any, and accrued interest on the outstanding
Notes at the Stated Maturity of such principal or interest or upon
earlier redemption; PROVIDED that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such
United States Government obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes and to give any
related notice of redemption;
(B) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(C) immediately after giving effect to such deposit on a PRO
FORMA basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit; and no Default or Event of
Default shall occur during the period ending on the first day following
six months after such date of deposit;
(D) the Company shall have delivered to the Trustee either (i)
a ruling based on relevant law and practice at the time directed to the
Trustee from the Internal Revenue Service or other relevant tax
authority to the effect that the Holders will not recognize income,
gain or loss for United States federal income tax or other tax purposes
as a result of the Company's exercise disregarding income tax on any
amounts that would have been received but for such exercise of its
option under this Section 8.2 and will be subject to income tax on the
same amount and in the same manner and at the same time as would have
been the case if such option had not been exercised or (ii) an Opinion
of Counsel to the same effect as the ruling described in clause (i)
above;
(E) the Company shall have delivered to the Trustee (i) either
(A) a ruling directed to the Trustee received from the Internal Revenue
Service to the effect that the Holders will not recognize additional
income, gain or loss for federal income tax purposes as a result of the
Company's exercise of its option under this Section 8.2 and will be
subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such option had
not been exercised or (B) an Opinion of Counsel to the same effect as
the ruling described in clause (A) above accompanied by a ruling to
that effect published by the Internal Revenue Service, unless there has
been a change in the applicable federal income tax law since the date
of this Indenture such that a ruling from the Internal Revenue Service
is no longer required and (ii) an Opinion of Counsel to the effect
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that the creation of the defeasance trust does not violate the
Investment Company Act of 1940;
(F) if at such time the Notes are listed on a national
securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Notes will not be delisted as
a result of such deposit, defeasance and discharge; and
(G) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.2 have been complied with.
Notwithstanding the foregoing, prior to the end of the post
deposit period referred to in clause (C) of this Section 8.2(a), none of the
Company's obligations under this Indenture shall be discharged. Subsequent to
the end of such period with respect to this Section 8.2(a), the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.14, 4.1, 7.7, 7.8,
8.3, 8.4 and 8.5 shall survive until the Notes mature or are redeemed.
Thereafter, only the Company's obligations in Sections 7.7, 8.4 and 8.5 shall
survive. If and when a ruling from the Internal Revenue Service or an Opinion of
Counsel referred to in clause (E)(i) of this Section 8.2(a) may be provided
specifically without regard to, and not in reliance upon, the continuance of the
Company's obligations under the first sentence of Section 4.1, then the
Company's obligations under such sentence shall cease upon delivery to the
Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance contemplated
by this Section 8.2(a).
After any such irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations identified
in the immediately preceding paragraph.
(b) DEFEASANCE OF CERTAIN OBLIGATIONS. The Company may omit to comply
with any term, provision or condition set forth in clauses (iii) and (iv) under
Section 5.1 and Section 4.4 through 4.17, and clause (iv) under Section 6.1(a)
with respect to such covenants and clauses (iii) and (iv) under Section 5.1 and
clauses (v) and (vi) under Section 6.1(a) shall be deemed not to be Events of
Default if:
(A) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee and conveyed all right, title
and interest to the Trustee for the benefit of the Holders, under the
terms of an irrevocable trust agreement in form and satisfactory to the
Trustee as trust funds in trust, specifically pledged to the Trustee
for the benefit of the Holders as security for payment of the principal
of, premium, if any, and interest, if any, on the Notes, and dedicated
solely to, the benefit of the Holders, in and to (i) money in an
amount, (ii) United States Government obligations that, through the
payment of interest and principal in respect thereof in accordance with
their terms, will provide, not later than one day before the due date
of any payment referred to in this clause (a), or (iii) a combination
thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay
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and discharge, without consideration of the reinvestment of such
interest and after payment of all federal, state and local taxes or
other charges and assessments in respect thereof payable by the
Trustee, the principal of, premium, if any, and interest on the
outstanding Notes on the Stated Maturity or upon earlier redemption of
such principal or interest; PROVIDED that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such
United States Government obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes and to give any
related notice of redemption;
(B) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(C) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(D) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (i) the creation of the defeasance trust
does not violate the Investment Company Act of 1940, and (ii) the
Holders will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such deposit and the defeasance of the
obligations referred to in the first paragraph of this Section 8.3 and
will be subject to U.S. federal income tax on the same amount and in
the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred Notes;
(E) if at such time the Notes are listed on a national
securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that the Notes will not be delisted as
a result of such deposit, defeasance and discharge; and
(F) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.2(b) have been complied with.
SECTION 8.3 APPLICATION OF TRUST MONEY. Subject to Section 8.4 and 8.5,
the Trustee shall hold in trust money or United States Government obligations
deposited with it pursuant to Sections 8.1 and 8.2, and shall apply the
deposited money and the money from United States Government obligations in
accordance with the Notes and this Indenture to the payment of principal of,
premium, if any, and interest on the Notes.
SECTION 8.4 REPAYMENT TO COMPANY. Subject to Sections 7.7, 8.1 and 8.2,
the Trustee and the Paying Agent shall promptly pay to the Company upon receipt
by the Trustee and the Paying Agent of an Officers' Certificate stating the
amount to which the Company is entitled, any excess money held by them at any
time. The Trustee and the Paying Agent shall pay to the Company upon receipt by
the Trustee or the Paying Agent, as the case may be, of an Officers' Certificate
stating the amount to which the Company is entitled, any money held by it for
the payment of principal, premium, if any, or interest that remains unclaimed
for two years after payment to the Holders is
64
required; PROVIDED, HOWEVER, that the Trustee and the Paying Agent before being
required to make any payment may, but need not, at the expense of the Company,
mail by first-class mail to the Holder of the Rule 144A Global Notes and the
Holder of the Regulation S Global Notes notice that such money remains unclaimed
and that after a date specified therein, which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance of such money
then remaining will be repaid to the Company. After payment to the Company,
Holders entitled to money must look solely to the Company for payment as general
creditors unless an applicable law designates another Person, and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 8.5 REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or United States Government obligations in accordance with
Section 8.1 or 8.2, as the case may be, 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, then and only
then shall the Company's obligations under this Indenture and the Notes be
revived and reinstated as though no deposit had been made pursuant to Section
8.1 or 8.2, as the case may be, until such time as the Trustee or Paying Agent
is permitted to apply all such money or United States Government obligations in
accordance with this Indenture; PROVIDED that if the Company has made any
payment of principal of, premium, if any, or interest on any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
United States Government obligations held by the Trustee or Paying Agent.
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ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS. The Company, when authorized by
a Board Resolution of its Board of Directors, and the Trustee may amend or
supplement this Indenture and the Notes without notice to or consent of any
Holder:
(a) to cure any ambiguity, defect or inconsistency, PROVIDED
that such amendment or supplement does not adversely affect the rights
of any Holder;
(b) to comply with any requirements of the SEC in connection
with the qualification of this Indenture under the TIA;
(c) to evidence the succession in accordance with Article V
hereof of another Person to the Company and the assumption by any such
successor of the covenants of the Company herein and in the Notes;
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(e) to make any change that, in the opinion of the Board of
Directors as evidenced by a Board Resolution, does not adversely affect
the rights of any Holder.
SECTION 9.2 WITH CONSENT OF HOLDERS. Subject to Section 6.7 and the
provisions of this Section 9.2, the Company, when authorized by a Board
Resolution of its Board of Directors, and the Trustee may modify or amend this
Indenture or the Notes in any respect with the written consent of the Holders of
not less than a majority in aggregate principal amount at maturity of the Notes
then outstanding. Subject to Section 6.7 and the provisions of this Section 9.2,
the Holders of, in the aggregate, at least a majority in aggregate principal
amount at maturity of the outstanding Notes affected may waive compliance by the
Company with any provision of this Indenture or the Notes.
Notwithstanding the foregoing, without the consent of each Holder
affected, a modification, amendment, or waiver, including a waiver pursuant to
Section 6.4, may not:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note;
(b) reduce the principal amount of, or the rate of interest
on, or any premium payable upon the redemption or repurchase of, any
Note;
(c) change the place or currency of payment of principal of,
or premium, if any, or interest on, any Note;
(d) adversely affect any right of repayment at the option of
any Holder of any Note;
66
(e) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of a
redemption, on or after the Redemption Date) of any Note (including by
adversely affecting the ranking of the Notes);
(f) alter the Company's obligation to purchase Notes in
accordance with this Indenture following the occurrence of a Change of
Control or an Asset Sale or waive any default in the performance
thereof;
(g) reduce the percentage of outstanding Notes the consent of
whose Holders is necessary to modify or amend this Indenture or the
Notes;
(h) reduce the percentage or aggregate principal amount at
maturity of outstanding Notes the consent of whose Holders is necessary
for waiver of compliance with certain provisions of this Indenture or
certain defaults and their consequences provided for in this Indenture;
or
(i) modify this Section 9.2 or Sections 6.4 or 6.7.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders 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 amendment or waiver.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to or
supplement of this Indenture or the Notes shall comply with the TIA as then in
effect.
SECTION 9.4 REVOCATION AND EFFECT OF AMENDMENTS AND CONSENTS. Until an
amendment or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of that Note or
portion of that Note that evidences the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to its Note or portion of
a Note. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes. Notwithstanding the above, nothing
in this paragraph shall impair the right of any Holder under /section/ 316(b) of
the TIA.
The Company may, but shall not be obligated to, fix a Record Date for
the purpose of determining the Holders of Notes entitled to consent to any
amendment, supplement or waiver. If a Record Date is fixed, then notwithstanding
the last three sentences of the immediately preceding paragraph, those Persons
who were Holders of Notes at such Record Date (or their duly designated
67
proxies), and only those Persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders of Notes after such Record
Date. Such consent shall be effective only for actions taken within 90 days
after such Record Date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder (and every subsequent Holder), unless it is of the type
described in any of clauses (a) through (i) of Section 9.2, in which case it
shall bind every Holder consenting thereto and every subsequent Holder of a Note
or portion of a Note that evidences the same debt as the consenting Holder's
Note.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee shall (in
accordance with the specific direction of the Company) require the Holder of the
Note to deliver it to the Trustee. The Trustee shall (in accordance with the
specific direction of the Company) place an appropriate notation on the Note
about the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Note shall
issue and the Trustee shall authenticate a new Note that reflects the changed
terms. Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6 TRUSTEE TO SIGN AND NOTIFY HOLDERS OF AMENDMENTS, ETC. The
Trustee shall execute any amendment, supplement or waiver authorized pursuant to
this Article IX if the amendment, supplement or waiver does not adversely affect
the rights, duties or immunities of the Trustee. The Trustee may, but shall not
be obligated to, execute any amendment, supplement or waiver that affects the
rights, duties or immunities of the Trustee under this Indenture or otherwise.
In executing any amendment, supplement or waiver, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
meeting the requirements of Section 11.5 and stating that the execution of any
proposed amendment, supplement or waiver is authorized or permitted by this
Indenture.
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ARTICLE X
SUBSIDIARY GUARANTEES
SECTION 10.1 SUBSIDIARY GUARANTEE. (a) Each of the Subsidiary
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that: (a) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of the time of payment or renewal of any Notes or any such
other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extensions or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the
Subsidiary Guarantors will be jointly and severally obligated to pay the same
immediately. The Subsidiary Guarantors hereby agree that their obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of Notes with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Subsidiary
Guarantee will not be discharged except by complete performance of the
obligations contained in the Notes and this Indenture. If any Holder of Notes or
the Trustee is required by any court or otherwise to return to the Company or
Subsidiary Guarantors, or any Custodian, Trustee, liquidator or other similar
official acting in relation to either the Company or the Subsidiary Guarantors,
any amount paid by either the Trustee or such Holder of Notes, this Subsidiary
Guarantee, to the extent therefore discharged, shall be reinstated in full force
and effect. Each Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders of Notes in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article VI for the purpose of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article VI,
such obligations (whether or not due and payable) shall forthwith become due and
payable by the Subsidiary Guarantors for the purpose of this Subsidiary
Guarantee. The Subsidiary Guarantors shall have the right to seek contribution
from any non-paying Subsidiary Guarantor so long as the exercise of such right
does not impair the rights of the Holders of Notes under the Subsidiary
Guarantee.
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(b) For purposes of this Indenture, each Subsidiary Guarantor's
liability will be that amount from time to time equal to the aggregate liability
of such Subsidiary Guarantor pursuant to its Subsidiary Guarantee, but shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Notes and the Indenture and (ii) the amount, if any, which
would not have (A) rendered such Subsidiary Guarantor "insolvent" (as such term
is defined in the federal Bankruptcy Law and in the Debtor and Creditor Law of
the State of New York) or (B) left it with unreasonably small capital at the
time its Subsidiary Guarantee of the Notes was entered into, after giving effect
to the incurrence of existing indebtedness immediately prior to such time;
PROVIDED that, it shall be a presumption in any lawsuit or other proceeding in
which such Subsidiary Guarantor is a party that the amount guaranteed pursuant
to its Subsidiary Guarantee is the amount set forth in clause (i) above unless
any creditor, or representative of creditors, of such Subsidiary Guarantor, or
debtor in possession or trustee in bankruptcy of such Subsidiary Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of such
Subsidiary Guarantor is limited to the amount set forth in clause (ii). In
making any determination as to the solvency or sufficiency of capital of a
Subsidiary Guarantor in accordance with the previous sentence, the right of such
Subsidiary Guarantor to contribution from other Subsidiary Guarantors and any
other rights such Subsidiary Guarantor may have, contractual or otherwise, shall
be taken into account.
SECTION 10.2 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE. To
evidence its Subsidiary Guarantee set forth in Section 10.1, each Subsidiary
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form of Exhibit C shall be endorsed by an officer of such
Subsidiary Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Subsidiary Guarantor by
its President or one of its Vice-Presidents.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee
set forth in Section 10.1 shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an officer or Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid neverthele/section/
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantor .
Notwithstanding the provisions of Section 4.11, any Subsidiary
Guarantee by a Restricted Subsidiary shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer, to any Person not an Affiliate of the Company, of all of
the Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited hereby) or (ii) the release or discharge
of the Guarantee which resulted in the creation of such Subsidiary Guarantee,
except a discharge or release by or as a result of payment under such Guarantee.
70
SECTION 10.3 SUBSIDIARY GUARANTORS MAY CONSOLIDATED ETC, ON CERTAIN
TERMS. (a) except as set forth in Articles IV and V, nothing contained in this
Indenture or in the Notes shall prevent any consolidation , amalgamation or
merger of a Subsidiary Guarantor with or into the Company, another Subsidiary
Guarantor or Wholly Owned Restricted Subsidiary of a Subsidiary Guarantor, or
shall prevent any amalgamation, consolidation or merger if the surviving
corporation is no longer a Restricted Subsidiary of the Company.
(b) Except as set forth in Article IV and V, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation, amalgamation
or merger of a Subsidiary Guarantor with or into (whether or not such Subsidiary
Guarantor is the surviving Person), another corporation, Person or entity
whether or not affiliated with such Subsidiary Guarantor or successive
consolidations, amalgamations, or mergers in which a Subsidiary Guarantor or its
successors shall be a party or parties, or shall prevent any sale or conveyance
of the property of a Subsidiary Guarantor as an entirety or substantially as an
entirety or any sale or other disposition of all the capital stock of any
Subsidiary Guarantor, to a corporation other than the Company (whether or not
affiliated with the Guarantor) authorized to acquire and operate the same;
PROVIDED, HOWEVER, (i) that each Subsidiary Guarantor hereby covenants and
agreed that, upon any such consolidation, amalgamation, merger, sale or
conveyance, the Subsidiary Guarantee endorsed on the Notes, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by such Subsidiary Guarantor, shall be expressly
assumed (in the event that the Subsidiary Guarantor is not the surviving
corporation in the merger), by supplemental indenture satisfactory in form and
substance to the Trustee, executed and delivered or into which the Subsidiary
Guarantor shall have been merged, or by the corporation which shall have
acquired such property; (ii) that such Subsidiary Guarantor, or any Person
formed by or surviving any such consolidation, amalgamation, or merger, would
have Consolidated Net Worth (immediately after giving effect to such
transaction), equal to or greater then the Consolidated Net Worth of such
Subsidiary Guarantor immediately preceding the transaction; PROVIDED, HOWEVER,
that this clause (ii) shall not apply to an acquisition accounted for as a
pooling of interests in accordance with GAAP; and (iii) the Company would be
permitted by virtue of its pro forma Consolidated Leveraged Ratio immediately
after giving effect to such transaction, to incur at least US$1.00 of additional
Indebtedness pursuant to the Consolidated Leverage Ratio test set forth in
Section 4.8. In case of any such consolidation, amalgamation, merger, sale or
conveyance and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form and
substance to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes
and the due and punctual performance of all the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor
corporation shall succeed to and be substituted for the Subsidiary Guarantor
with the same effect as if it had been named herein as a Subsidiary Guarantor.
Such successor corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.
71
SECTION 10.4 RELEASES FOLLOWING SALE OF ASSETS. Concurrently with any
Asset Sale (including, if applicable, all of the capital stock of any Subsidiary
Guarantor), any Liens in favor of the Trustee in the assets sold thereby shall
be released; provided that in the event of an Asset Sale, the Net Proceeds of
such sale or other disposition are applied in accordance with the provisions of
Section 4.3. If the assets sold in such sale or other disposition include all or
substantially all of the assets of any Subsidiary Guarantor or all of the
capital stock of any Subsidiary Guarantor, then such Subsidiary Guarantor (in
the event of a sale or other disposition of all of the capital stock of such
Subsidiary Guarantor) or the corporation acquiring the property (in the event of
a sale of other disposition of all or substantially all of the assets of a
Subsidiary Guarantor) shall be released and relieved of its obligations under
its Subsidiary Guarantee or Section 10.3, as the case may be; PROVIDED that in
the event of an Asset Sale, the Net Proceeds from such sale or the disposition
are treated in accordance with the provisions of Section 4.3. Upon delivery by
the Company of an Officers' Certificate and an Opinion of Counsel to the effect
that such sale or other disposition was made by the Company in accordance with
the provisions of this Indenture, including without limitation Section 4.3, the
Trustee shall execute any documents reasonably required in order to evidence the
release of any Subsidiary Guarantor from its obligations under its Subsidiary
Guarantee. Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Subsidiary Guarantor
under this Indenture as provided in this Article X;
SECTION 10.5 TRUSTEE TO INCLUDE PAYING AGENT. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company,
and be acting hereunder, the term "trustee" as used in this Article X shall in
such case (unless the contest shall otherwise require) be construed as extending
to and including such Paying Agent within its meaning as fully and for all
intents and purposes as if such Paying Agent were named in this Article X in
place of the Trustee.
SECTION 10.6 RANKING OF SUBSIDIARY GUARANTEES. The Subsidiary
Guarantees of CHS Electronics, Inc. (Nevada), CHS Delaware, Inc., CHS Delaware
L.L.C. and CHS Americas, Inc. will be senior and unsubordinated obligations of
such Subsidiary Guarantors. Any future Subsidiary Guarantees by a Subsidiary
Guarantor that (a) is required to be a guarantor of the New Credit Facility or
any refinancing thereof or (b) becomes a borrower or guarantor of certain other
Indebtedness (referred to herein as the "Subordinated Subsidiary Guarantees")
will be subordinated, as described below, in right of payment to the prior
fulfillment of such obligations of such Subordinated Subsidiary Guarantors.
To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
set off or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then the obligations so declared
fraudulent, invalid or otherwise set aside (and all other amounts that would
come due with respect thereto had such obligations not been so affected) shall
be deemed to be reinstated and outstanding as Senior Indebtedness for all
purposes of the Subsidiary Guarantees as if such declaration, invalidity or
setting aside had not occurred. Upon any payment or distribution of assets or
securities of the Company of any kind or character, whether in cash, property or
securities, upon any dissolution or winding-up
72
or total or partial liquidation or reorganization of the Company whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, all amounts due or to become due upon all Senior Indebtedness
(including any interest accruing subsequent to an event of bankruptcy, whether
or not such interest is an allowed claim enforceable against the debtor under
applicable bankruptcy laws) shall first be paid in full, in cash, before the
Holders or the Trustee on behalf of the Holders shall be entitled to receive any
payment by or on behalf of the Company on account of the Subordinated Subsidiary
Guarantees upon any such dissolution, winding-up, liquidating or reorganization,
any payment or distribution of assets or securities of the Company of any kind
or character, whether in cash, property or securities, to which the Holders or
the Trustee on behalf of the Holders would be entitled, but for the
subordination of the Subordinated Subsidiary Guarantees, shall be made by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person making such payment or distribution, or by the Holders or
the Trustee if received by them or it, directly to the holders of the Senior
Indebtedness (PRO RATA to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders), to the extent necessary to pay all
such Senior Indebtedness in full, in cash, after giving effect to any concurrent
payment distribution or provision therefor, to or for the holders of such Senior
Indebtedne/section/
No direct or indirect payment by or on behalf of the Company pursuant
to the Subordinated Subsidiary Guarantees shall be made, and no enforcement
action may be taken under any Subordinated Subsidiary Guarantee, whether
pursuant to the terms of the Notes or upon acceleration or otherwise, if, at the
time of such payment or action, there exists a default in the payment of all or
any portion of the obligations on any Senior Indebtedness and such default shall
not have been cured or waived or the benefits of this sentence waived by or on
behalf of the holders of such Senior Indebtedne/section/ In addition, during the
continuance of any other event of default with respect to the New Credit
Facility pursuant to which the maturity thereof may be accelerated and (a) upon
receipt by the Trustee of written notice from the Representative under the New
Credit Facility or (b) if such event of default under the New Credit Facility
results from the aceleration of the Notes, from and after the date of such
acceleration, no payment pursuant to the Subordinated Subsidiary Guarantees may
be made by or on behalf of the Company upon or in respect of the Notes and no
enforcement action may be taken under any Subordinated Subsidiary Guarantee for
a period (a "Payment Blockage Period") commencing on the earlier of the date of
receipt of such notice or the date of such acceleration and ending 179 days
thereafter (unless such payment Blockage Period shall be terminated by written
notice to the Trustee from the Representative under the New Credit Facility or
such event of default has been cured or waived). No more than one Payment
Blockage Period may be commenced with respect to the Notes during any period of
360 consecutive days. Notwithstanding anything in this Indenture to the
contrary, there must be 180 consecutive days in any 360-day period in which no
Payment Blockage Period is in effect. No event of default (other than an event
of default pursuant to the financial maintenance covenants under the New Credit
Facility) that existed or was continuing on the date of the commencement of any
Payment Blockage Period by the Representative for, or the holders of, Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such event of default shall have been cured or waived and shall have occurred
again.
Not later than five business days before a declaration of acceleration
being notified to the Company in accordance with the Article VI or any other
enforcement action being taken under a
73
Subordinated Subsidiary Guarantee, the Company shall send a written notice of
such declaration to the Representative of the lenders under the New Credit
Facility.
"Representative" means the bank agent or other trustee, agent or
representative in respect of the lenders under the New Credit Facility; PROVIDED
THAT if, and for so long as, the lenders under the New Credit Facility lack such
a representative, then the Representative for the lenders under the New Credit
Facility shall at all times constitute the holders of a majority in outstanding
principal amount of indebtedness in respect of the New Credit Facility.
"Senior Indebtedness" is defined to mean the obligation of the Company
and/or any of its Subsidiaries (including, in the event the Company or any
Subsidiary merges, or consolidates with, another Person in compliance with
Section 5.1 obligations of the successor Person) to pay all Indebtedness and
other monetary obligations of the Company under (or in respect of) the New
Credit Facility and any refinancing thereof and amounts permitted under cluase
(viii) of the second paragraph of Section 4.8(a).
74
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS. If and to the extent that
any provision of this Indenture limits, qualifies, or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the TIA, such
imposed duties or incorporated provision shall control.
SECTION 11.2 NOTICES. Any notice or communication shall be deemed given
if in writing and delivered in Person or mailed by first-class mail, overnight
courier or telecopier communication, addressed as follows, and received by the
addressee:
(a) if to the Company:
CHS Electronics, Inc.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Chief Financial Officer
(b) if to the Trustee:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Global Trust Services
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Copies of any such communication or notice to a Holder shall also be
mailed to the Trustee and each Agent at the same time. To the extent required by
the Trust Indenture Act, any notice or communication shall also be mailed to any
Person described in TIA Section 313(c).
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. Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
75
SECTION 11.3 COMMUNICATIONS WITH HOLDERS WITH OTHER HOLDERS. Holders
may communicate pursuant to TIA /section/ 312(b) with other Holders with respect
to their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and any other Person shall have the protection of TIA /section/
312(c).
SECTION 11.4 CERTIFICATE AND OPINION OF COUNSEL 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 stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (b) an Opinion of Counsel stating that,
in the opinion of counsel, all such conditions have been complied with and (c)
where applicable, a certificate or opinion by an accountant that complies with
TIA /section/ 314(c).
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE AND OPINION OF COUNSEL.
Each certificate and Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or
Opinion of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in
such certificate or Opinion of Counsel are based;
(c) 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
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with, and such
other opinions as the Trustee may reasonably request; PROVIDED,
HOWEVER, that, with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
SECTION 11.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR. The Trustee may
make reasonable rules for action by or at a meeting of Holders of the Notes. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.7 AGENT FOR SERVICE; SUBMISSION TO JURISDICTION; WAIVER OF
IMMUNITIES. By the execution and delivery of this Indenture, the Company and
each of the Subsidiary Guarantors (i) acknowledges that it has, by separate
written instrument, irrevocably designated and appointed the Corporation Service
Company, 00 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxx Xxxx 00000-0000, as its
authorized agent upon which process may be served in any suit, action or
proceeding arising out of or relating to the Notes or this Indenture that may be
instituted in any federal or state court in the State of New York, Borough of
Manhattan, or brought under federal or state securities laws or brought by the
Trustee (whether in its individual capacity or in its capacity as Trustee
hereunder),
76
and acknowledges that the Corporation Service Company has accepted such
designation, (ii) submits to the non-exclusive jurisdiction of any such court in
any such suit, action or proceeding, and waives any objection which it may now
or hereafter have to the laying of venue of any such proceeding or any claim of
inconvenient forum and (iii) agrees that service of process upon the Corporation
Service Company and written notice of said service to the Company (mailed or
delivered to its Chief Financial Officer at its principal office as specified in
Section 12.2), shall be deemed in every respect effective service of process
upon it in any such suit or proceeding. The Company and each Subsidiary
Guarantor further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments as may be necessary to
continue such designation and appointment of the Corporation Service Company in
full force and effect so long as this Indenture shall be in full force and
effect or any of the Notes shall be outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its obligations
under this Indenture and the Notes, to the extent permitted by law.
SECTION 11.8 CONVERSION OF CURRENCY. The Company covenants and agrees
that the following provisions shall apply to conversion of currency in the case
of the Notes and this Indenture:
(a) (i) If for the purposes of obtaining judgment in, or
enforcing the judgment of, any court in any country, it becomes
necessary to convert into any other currency (the "judgment currency")
an amount due in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of
public and private debts, then the conversion shall be made at the rate
of exchange prevailing on the Business Day before the day on which the
judgment is given or the order of enforcement is made, as the case may
be (unless a court shall otherwise determine).
(ii) If there is a change in the rate of exchange
prevailing between the Business Day before the day on which the
judgment is given or an order of endorsement is made, as the case may
be (or such other date as a court shall determine), and the date of
receipt of the amount due, the Company will pay such additional (or, as
the case may be, such lesser) amount, if any, as may be necessary so
that the amount paid in the judgment currency when converted at the
rate of exchange prevailing on the date of receipt will produce the
amount in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts as originally due.
(b) In the event of the winding-up of the Company at any time
while any amount or damages owing under the Notes and this Indenture, or any
judgment or order rendered in respect thereof, shall remain outstanding, the
Company shall indemnify and hold the Holders of Notes and the Trustee harmless
against any deficiency arising or resulting from any variation in rates of
exchange between (1) the date as of which the equivalent of the amount in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public
77
and private debts due or contingently due under the Notes and this Indenture
(other than under this paragraph (b)) is calculated for the purposes of such
winding-up and (2) the final date for the filing of proofs of claim in such
winding-up. For the purpose of this paragraph (b) the final date for the filing
of proofs of claim in the winding-up of the Company shall be the date fixed by
the liquidator or otherwise in accordance with the relevant provisions of
applicable law as being the latest practicable date as at which liabilities of
the Company may be ascertained for such winding-up prior to payment by the
liquidator or otherwise in respect thereto.
(c) The obligations contained in paragraphs (a)(ii) and (b) of this
Section 11.8 shall constitute separate and independent obligations of the
Company from its other obligations under the Notes and this Indenture, shall
give rise to separate and independent causes of action against the Company,
shall apply irrespective of any waiver or extension granted by any Holder or the
Trustee from time to time and shall continue in full force and effect
notwithstanding any judgment or order or the filing of any proof of claim in the
winding-up of the Company for a liquidated sum in respect of amounts due
hereunder (other than under paragraph (b) above) or under any such judgment or
order. Any such deficiency as aforesaid shall be deemed to constitute a loss
suffered by the Holders or the Trustee, as the case may be, and no proof or
evidence of any actual loss shall be required by the Company or its liquidator.
In the case of paragraph (b) above, the amount of such deficiency shall not be
deemed to be reduced by any variation in rates of exchange occurring between the
said final date and the date of any liquidating distribution.
(d) The term "rate(s) of exchange" shall mean the noon buying
rate in New York City as certified for customs purposes by the Federal Reserve
Bank of New York on the relevant date for cable transfers in the judgment
currency other than such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts referred to in paragraphs (a) and (b) above and shall include any premiums
and costs of exchange payable.
SECTION 11.9 LEGAL HOLIDAYS. If any 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 11.10 GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. UPON THE ISSUANCE OF THE EXCHANGE
NOTES OR THE EFFECTIVENESS OF THE SHELF REGISTRATION STATEMENT, THIS INDENTURE
SHALL BE SUBJECT TO THE PROVISIONS OF THE TRUST INDENTURE ACT OF 1939, AS
AMENDED, THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO THE EXTENT
APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.
SECTION 11.11 NO RECOURSE AGAINST OTHERS. No recourse for the payment
of the principal of, premium, if any, or interest on any Notes or for any claim
based thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in this Indenture, or in any
Note or because of the creation of any Indebtedness represented thereby, shall
be had against any incorporator, shareholder, officer, director, employee or
controlling person of the Company or of any successor Person thereof. Each
Holder, by accepting the Notes, waives and
78
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 11.12 SUCCESSORS. All agreements of the Company in this
Indenture and the Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 11.13 DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 11.14 SEPARABILITY. In case any provision in this Indenture or
in the 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. 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, and are not to be considered a part hereof, and
shall in no way modify or restrict any of the terms or provisions hereof.
SECTION 11.16 This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any Subsidiary of the
Company. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
79
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
CHS ELECTRONICS, INC.
By____________________________________
Xxxxxxx Xxxxxx
Chief Executive Officer,
President and Chairman
CHS ELECTRONICS, INC. (NEVADA)
By____________________________________
Xxxxxxx Xxxxxx
President
CHS DELAWARE, INC.
By____________________________________
Xxxxxxx Xxxxxx
President
CHS DELAWARE L.L.C.
By____________________________________
Xxxxxxx Xxxxxx
Management Committee Member
CHS AMERICAS, INC.
By____________________________________
Xxxxxxx Xxxxxx
President
THE CHASE MANHATTAN BANK
By____________________________________
Name:
Title:
EXHIBIT A
FORM OF GLOBAL NOTE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS (OR SUCH OTHER PERIOD OF TIME AS MAY BE PERMITTED UNDER RULE
144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE
LATER OF THE ORIGINAL CLOSING DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS AN OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO
AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A) (1), (2), (3) OR (7)
UNDER THE SECURITIES ACT OR (E) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.1
----------
1
This Private Placement Legend is to be on the faace of the Global Note
until (i) the Global Note is sold under an effective Registration Statement or
(ii) the Global Note is exchanged for an Exchange Note in connection with an
effective Registration Statement, in each case pursuant to the Registration
Rights Agreement.
(continued...)
A-2
UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
CHS ELECTRONICS, INC.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
9 7/8% Senior Note due 2005
No. [______] CUSIP Xx. 00000XXX0
XXXX Xx. XXX0000XXX00
GLOBAL REGISTERED NOTE
representing a principal amount of
up to /bulleet/ United States Dollars
$ /bullet/
of the 9 7/8% Senior Notes due 2005 (the "Notes") in the aggregate principal
amount of 200,000,000 United States Dollars ($200,000,000) issued by CHS
Electronics, Inc., a Florida corporation (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred to).
----------
1(...continued)
A-3
This Global Note represents up to /bullet/ securities in the
principal amount of $1,000 each. The Company, for value received, hereby
promises to pay to Cede & Co., or its registered assigns, upon surrender hereof,
the principal sum of the Notes represented hereby on April 15, 2005.
Interest Payment Dates: April 15 and October 15, commencing
October 15, 1998
Record Dates: April 1 and October 1
This Global Note has been issued by the Company as a
registered global note to Cede & Co., as nominee of The Depository Trust Company
("DTC"), and been deposited with DTC in order to permit delivery and transfer of
Notes within the DTC depositary and clearing system.
The actual number of Notes represented from time to time by
this Global Note shall be evidenced by the records of DTC, which in turn shall
be based on the register (the "Security Register") maintained by the Trustee, or
any successor acting in such capacity appointed by the Company, acting as
Registrar (the "Registrar") on behalf of the Company. In the case of any
inconsistency between the Security Register and the records of DTC, the Security
Register prevails, except in the case of manifest error.
This Global Note may not be transferred except as a whole by
DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of DTC
or by DTC or any such nominee to a successor depositary or nominee of such
successor depositary. Any transfer shall be effective only if registered upon
the books maintained for that purpose by the Registrar.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof and to the provisions of the Indenture
which is attached hereto and made a part hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee or the Authenticating Agent referred to on the reverse
hereof by manual signature, this Note shall not be entitled to any benefit under
the Indenture, or be valid or obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
April 9, 1998 CHS ELECTRONICS, INC.
By_______________________________________
Xxxxxxx Xxxxxx
Chief Executive Officer,
President and Chairman
By_______________________________________
Xxxxx Toll
Chief Financial Officer
A-5
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By_______________________________________
Authorized Officer
A-6
[REVERSE OF NOTE]
CHS ELECTRONICS, INC.
SENIOR NOTE DUE 2005
1. PRINCIPAL AND INTEREST. The Company will pay the principal of this
Note on April 15, 2005.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate of [9_% per
annum (subject to adjustment as provided below)]2 [9_% per annum, except that
interest accrued on this Note pursuant to the penultimate paragraph of this
Section 1 for periods prior to the applicable Exchange Date (as such term is
defined in the Registration Rights Agreement referred to below) will accrue at
the rate or rates borne by the predecessor Note hereto from time to time during
such periods].3
Interest will be payable semiannually on each Interest Payment Date,
commencing October 15, 1998. The amount of payments to the registered holder of
the Regulation S Global Note and to the registered holder of the Rule 144A
Global Notes shall correspond to the aggregate principal amount of Global Notes
represented by the Regulation S Global Notes and the Rule 144A Global Notes (or
any predecessor Notes), as established by the Registrar at the close of business
on the April 15 or October 15 immediately preceding the Interest Payment Date.
[The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of April 9, 1998 (the "Registration
Rights Agreement"), between the Company and the Initial Purchasers named
therein. In the event that either (a) an Exchange Offer Registration Statement
(as such term is defined in the Registration Rights Agreement) is not filed with
the Securities and Exchange Commission on or prior to the 60th day following the
date of original issue of the Notes, (b) such Exchange Offer Registration
Statement has not been declared effective on or prior to the 120th day following
the date of original issue of the Notes or (c) the Exchange Offer (as such term
is defined in the Registration Rights Agreement) is not consummated on or prior
to the 150th day following the date of original issue of the Notes or a Shelf
Registration Statement (as such term is defined in the Registration Rights
Agreement) with respect to the Notes is not declared effective on or prior to
the 135th day following the date of original issue of the Notes (each such event
referred to in clauses (a) through (c) above a "Registration Default"), then the
Company will pay liquidated damages ("Liquidated Damages") to each Holder,
during the first 90-day period
----------
2 Include only for Initial Notes.
3 Include only for Exchange Notes.
A-7
immediately following the occurrence of such Registration Default in an amount
equal to $.05 per week per $1,000 principal amount of Notes held by such Holder.
The amount of the Liquidated Damages will increase an additional $.05 per week
per $1,000 principal amount for each subsequent 90-day period until the
applicable Registration Default has been cured, up to a maximum amount of
Liquidated Damages of $.30 per week per $1,000 principal amount of Notes. All
accrued Liquidated Damages will be paid by the Company on each interest payment
date to the Global Note Holder by wire transfer of immediately available funds
or by federal funds check and to the Holders of certificated securities by
mailing a check to such Holders' registered addresses. Following the cure of all
Registration Defaults, the accrual of Liquidated Damages will cease.]4
Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
herefor]5 or, if no interest has been paid, from April 9, 1998; PROVIDED that,
if there is no existing default in the payment of interest and if this Note is
authenticated between a Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such Interest
Payment Date. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum equal to the rate of interest applicable to the Notes.
Each Holder of this Note, by accepting the same, (a) agrees to and
shall be bound by the Indenture, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
2. METHOD OF PAYMENT. The principal of this Note shall be payable at
the office of the Trustee in New York City and, subject to any fiscal or other
laws and regulations applicable thereto, at the specified offices of any other
Paying Agents appointed by the Company. Payment of principal of and interest on
this Note shall be made by the Company in U.S. Dollars through the Paying Agent
to the registered Holders of the Notes. Payments of principal shall be made upon
surrender of the Notes, to the Paying Agent.
All payments made by the Company to, or to the order of, the registered
Holders of the Notes, shall discharge the liability of the Company under the
Notes to the extent of the sums so paid.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice in accordance
----------
4 Include only for Initial Notes.
5 Include only for Exchange Notes.
A-8
with the Indenture. Neither the Company nor any of its Affiliates may act as
Paying Agent with respect to an Offer to Purchase.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of April 9, 1998 (the "Indenture") between the Company, the Subsidiary
Guarantors named therein and The Chase Manhattan Bank, as trustee (the
"Trustee"). This Note is one of an issue of Notes of the Company issued, or to
be issued, under the Indenture. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended from time to time. The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of all such terms. Capitalized and certain other terms used herein and
not otherwise defined have the meanings set forth in the Indenture. To the
extent permitted by applicable law, in the event of any inconsistency between
the terms of this Note and the terms of the Indenture, the terms of the
Indenture shall control.
The Notes are guaranteed obligations of the Company limited in
aggregate principal amount at maturity to $300,000,000.
5. RESTRICTIVE COVENANTS. The Indenture limits, among other things, the
Incurrence of Indebtedness by the Company and the Restricted Subsidiaries, the
payment of dividends and other Restricted Payments, the incurrence of
restrictions affecting dividends and other payments by Restricted Subsidiaries,
the issuance and sale of Capital Stock of Restricted Subsidiaries, the issuance
of Guarantees by Restricted Subsidiaries, transactions by the Company and the
Restricted Subsidiaries with their respective Affiliates, sale-leaseback
transactions, Liens, the use of proceeds from Asset Sales and the ability of the
Company to merge with or into another entity or transfer substantially all of
its assets. The limitations are subject to a number of important qualifications
and exceptions. The Company must report to the Trustee annually on compliance
with the limitations contained in the Indenture.
6. REDEMPTION. (a) The Notes will be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, on or after April
15, 2002 and prior to maturity, upon not less than 30 nor more than 60 days'
prior notice, at the following Redemption Prices (expressed in percentages of
principal amount at maturity), plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Record Date that is prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing April
15 of the years set forth below:
A-9
YEAR REDEMPTION PRICE
---- ----------------
2002..................................... 104.938%
2003..................................... 102.469%
2004 and thereafter...................... 100.000%
(b) At any time prior to April 15, 2001, the Company may
redeem up to 35% of the aggregate principal amount of the Notes
originally issued with the net proceeds of one or more Public Equity
Offerings at a Redemption Price equal to 109.875% of the principal
amount thereof, together with accrued interest, if any, to the
Redemption Date (subject to the right of Holders on relevant Record
Dates to receive interest due on relevant Interest Payment Dates);
PROVIDED that immediately after giving effect to any such redemption,
at least $125,000,000 of the aggregate principal amount of the Notes
originally issued remains outstanding; PROVIDED, FURTHER, that such
redemption occurs within 30 days of the date of closing of each such
Public Equity Offering.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to the Holder of
this Global Note. Notes in denominations greater than $1,000 in principal amount
at maturity may be redeemed in part. On and after the Redemption Date, unless
the Company defaults in making the redemption payment, interest on Notes called
for redemption will cease to accrue.
8. REPURCHASE UPON CHANGE IN CONTROL. The Company shall commence,
within 30 days of the occurrence of a Change of Control, and consummate an Offer
to Purchase for all Notes then outstanding, at a purchase price equal to 101% of
the aggregate principal amount of the Notes outstanding, plus accrued interest
(if any) to the Payment Date.
9. DENOMINATIONS. This Global Note is in certificated registered form
and is denominated in an amount equal to $1,000 principal amount or an integral
multiple thereof. The transfer of registered Notes may be registered and the
Notes may be exchanged as provided in the Indenture.
10. PERSONS DEEMED OWNERS. The Holder of this Note shall be treated as
the owner of this Note for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
12. AMENDMENT, SUPPLEMENT, WAIVER, ETC. The Company and the Trustee (if
a party thereto) may, without the consent of the Holders of any outstanding
Notes, amend, waive or
A-10
supplement the Indenture or the Notes for certain specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies, maintaining
the qualification of the Indenture under the United States Trust Indenture Act
of 1939, as amended, and making any change that does not adversely affect the
rights of any Holder. Other amendments and modifications of the Indenture or the
Notes may be made by the Company and the Trustee with the consent of the Holders
of not less than a majority of the aggregate principal amount at maturity of the
outstanding Notes, subject to certain exceptions requiring the consent of the
Holders of the particular Notes to be affected.
13. SUCCESSOR CORPORATION. When a successor corporation assumes all the
obligations of its predecessor under the Notes and the Indenture and the
transaction complies with the terms of Article V of the Indenture, the
predecessor corporation will, except as provided in such Article V, be released
from those obligations.
14. DEFAULTS AND REMEDIES. The following events will be defined as
"Events of Default" in the Indenture: (i) a default in the payment of principal
of (or premium, if any, on) any Note when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise; (ii) a default in the
payment of interest on any Note when the same becomes due and payable, and such
default continues for a period of 30 days; (iii) the failure to perform or
comply with the provisions of Article V of the Indenture or the failure to make
or consummate an Offer to Purchase in accordance with Section 4.13 or 4.15
thereof; (iv) any default in the performance of or breach of any other covenant
or agreement of the Company in the Indenture or under the Notes (other than a
default specified in clause (i), (ii) or (iii) above), which default or breach
continues for a period of 30 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount at maturity
of the Notes outstanding; (v) the occurrence of, with respect to any issue or
issues of Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $10.0 million or more in the aggregate for all
such issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holders
thereof to declare such Indebtedness to be due and payable prior to its Stated
Maturity and such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled within 30 days following such
acceleration and/or (II) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default; (vi) any
final judgment or order (not covered by insurance) for the payment of money in
excess of $10.0 million in the aggregate for all such final judgments or orders
against all such Persons (treating any deductibles, self-insurance or retention
as not so covered) shall be rendered against the Company or any Restricted
Subsidiary and shall not be paid or discharged, and there shall be any period of
30 consecutive days following entry of the final judgment or order that causes
the aggregate amount for all such final judgments or orders outstanding and not
paid or discharged against all such Persons to exceed $10.0 million during which
a stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; and (vii) certain events of
bankruptcy, insolvency, reorganization or administration affecting the Company
or any Significant Subsidiary.
A-11
Subject to certain limitations in the Indenture, if an Event of Default
(other than an Event of Default specified in Section 6.1(a)(vii) or (viii) of
the Indenture that occurs with respect to the Company) occurs and is continuing,
then the Trustee or the Holders of not less than 25% in aggregate principal
amount at maturity of the outstanding Notes may declare the Notes to be due and
payable immediately. If an Event of Default specified in Section 6.1(a)(vii) or
(viii) of the Indenture occurs with respect to the Company, the principal of,
premium, if any, and any interest on all of the 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 Holder. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount at maturity of
the then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. The Company must furnish an annual
compliance certificate to the Trustee.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS. A trustee, director, officer, employee,
stockholder or incorporator, as such, of the Company shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability.
17. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. The Company's
obligations pursuant to the Indenture may be discharged, except for obligations
pursuant to certain sections thereof, subject to the terms of the Indenture,
upon the payment of all the Notes or upon the irrevocable deposit with the
Trustee of United States Government obligations sufficient to pay when due
principal of and interest on the Notes to maturity or redemption, as the case
may be.
18. AUTHENTICATION. This Note shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Note.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
CHS ELECTRONICS, INC.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS
EVIDENCED BY THIS NOTE
The initial principal amount of indebtedness evidenced by this Note
shall be $__, __,__. The following decreases/increases in the principal amount
evidenced by this Note have been made:
DECREASE IN INCREASE IN
PRINCIPAL PRINCIPAL TOTAL PRINCIPAL NOTATION MADE
DATE OF AMOUNT OF AMOUNT OF AMOUNT OF THIS GLOBAL BY OR ON
DECREASE/ THIS GLOBAL THIS GLOBAL NOTE FOLLOWING SUCH BEHALF OF
INCREASE NOTE NOTE DECREASE/INCREASE TRUSTEE
-------- ---- ---- ----------------- -------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
-------- -------- -------- ---------------- ----------------
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.13 or 4.15 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.13 or 4.15 of the Indenture, state the amount (in
principal amount at maturity):
$______________
Date: ________________________
Your Signature: ________________________
(Sign exactly as your name appears on the other side of this Note.)
Signature Guarantee: ___________________________
B-1
EXHIBIT B
FORM OF DEFINITIVE REGISTERED NOTE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS (OR SUCH OTHER PERIOD OF TIME AS MAY BE PERMITTED UNDER RULE
144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE
LATER OF THE ORIGINAL CLOSING DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS AN OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO
AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A) (1), (2), (3) OR (7)
UNDER THE SECURITIES ACT OR (E) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.1
----------
1 This Private Placement Legend is to be on the face of the Definitive
Registered Note until (i) the Definitive Registered Note is sold under an
effective Registration Statement or (ii) the Definitive Registered Note is
exchanged for an Exchange Note in connection with an effective Registration
Statement, in each case purusant to the Registration Rights Agreement.
(continued...)
B-2
CHS ELECTRONICS, INC.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
9 7/8% Senior Note due 2005
No. [______] CUSIP No. [00000XXX0]
ISIN No. [USU1712PAA67]
DEFINITIVE REGISTERED NOTE
representing a principal amount of
up to /bullet/ United States Dollars
$ /bullet/
of the 9 7/8% Senior Notes due 2005 (the "Notes") in the aggregate principal
amount of 200,000,000 United States Dollars ($200,000,000) issued by CHS
Electronics, Inc., a Florida corporation (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred to).
This Definitive Registered Note represents up to /bullet/
securities in the principal amount of $1,000 each. The Company, for value
received, hereby promises to pay to the Holder, or its registered assigns, upon
surrender hereof, the principal sum of the Notes represented hereby on April 15,
2005.
Interest Payment Dates: April 15 and October 15, commencing
October 15, 1998
Record Dates: April 1 and October 1
Any transfer of this Definitive Registered Note shall be
effective only if registered upon the books maintained for that purpose by the
Registrar.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof and to the provisions of the Indenture
which is attached hereto and made a part
----------
(continued...)
B-3
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been duly
executed by the Trustee or the Authenticating Agent referred to on the reverse
hereof by manual signature, this Note shall not be entitled to any benefit under
the Indenture, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
Dated: CHS ELECTRONICS, INC.
By_________________________________________
Name:
Title:
By_________________________________________
Name:
Title:
B-4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By_______________________________________
Authorized Officer
B-5
[REVERSE OF NOTE]
CHS ELECTRONICS, INC.
SENIOR NOTE DUE 2005
1. PRINCIPAL AND INTEREST. The Company will pay the principal of this
Note on [April 15], 2005.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate of [9_% per
annum (subject to adjustment as provided below)]2 [9_% per annum, except that
interest accrued on this Note pursuant to the penultimate paragraph of this
Section 1 for periods prior to the applicable Exchange Date (as such term is
defined in the Registration Rights Agreement referred to below) will accrue at
the rate or rates borne by the predecessor Note hereto from time to time during
such periods].3
Interest will be payable semiannually on each Interest Payment Date,
commencing October 15, 1998. The amount of payments to the registered holders of
the Definitive Registered shall correspond to the aggregate principal amount of
such Note, as established by the Registrar at the close of business on the April
15 or October 15 immediately preceding the Interest Payment Date.
[The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of April 9, 1998 (the "Registration
Rights Agreement"), between the Company and the Initial Purchasers named
therein. In the event that either (a) an Exchange Offer Registration Statement
(as such term is defined in the Registration Rights Agreement) is not filed with
the Securities and Exchange Commission on or prior to the 60th day following the
date of original issue of the Notes, (b) such Exchange Offer Registration
Statement has not been declared effective on or prior to the 120th day following
the date of original issue of the Notes or (c) the Exchange Offer (as such term
is defined in the Registration Rights Agreement) is not consummated on or prior
to the 150th day following the date of original issue of the Notes or a Shelf
Registration Statement (as such term is defined in the Registration Rights
Agreement) with respect to the Notes is not declared effective on or prior to
the 135th day following the date of original issue of the Notes (each such event
referred to in clauses (a) through (c) above a "Registration Default"), then the
Company will pay liquidated damages ("Liquidated Damages") to each Holder,
during the first 90-day period immediately following the occurrence of such
Registration Default in an amount equal to $.05 per
----------
2 Include only for Initial Notes.
3 Include only for Exchange Notes.
B-6
week per $1,000 principal amount of Notes held by such Holder. The amount of the
Liquidated Damages will increase an additional $.05 per week per $1,000
principal amount for each subsequent 90-day period until the applicable
Registration Default has been cured, up to a maximum amount of Liquidated
Damages of $.30 per week per $1,000 principal amount of Notes. All accrued
Liquidated Damages will be paid by the Company on each interest payment date to
the Note Holder by wire transfer of immediately available funds or by federal
funds check and to the Holders of certificated securities by mailing a check to
such Holders' registered addresses. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will cease.]4
Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
herefor]5 or, if no interest has been paid, from April 9, 1998; PROVIDED that,
if there is no existing default in the payment of interest and if this Note is
authenticated between a Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such Interest
Payment Date. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum equal to the rate of interest applicable to the Notes.
Each Holder of this Note, by accepting the same, (a) agrees to and
shall be bound by the Indenture, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
2. METHOD OF PAYMENT. The principal of this Note shall be payable at
the Global Trust Services office of The Chase Manhattan Bank in New York City
and, subject to any fiscal or other laws and regulations applicable thereto, at
the specified offices of any other Paying Agents appointed by the Company.
Payment of principal of and interest on this Note shall be made by the Company
in U.S. Dollars through the Paying Agent to the registered Holders of the Notes.
Payments of principal shall be made upon surrender of the Notes, to the Paying
Agent.
All payments made by the Company to, or to the order of, the registered
Holders of the Notes, shall discharge the liability of the Company under the
Notes to the extent of the sums so paid.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice in accordance
----------
4 Include only for Initial Notes.
5 Include only for Exchange Notes.
B-7
with the Indenture. Neither the Company nor any of its Affiliates may act as
Paying Agent with respect to an Offer to Purchase.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of April 9, 1998 (the "Indenture") between the Company and The Chase Manhattan
Bank, as trustee (the "Trustee"). This Note is one of an issue of Notes of the
Company issued, or to be issued, under the Indenture. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended from time to time. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of all such terms. Capitalized and certain other
terms used herein and not otherwise defined have the meanings set forth in the
Indenture. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
The Notes are guaranteed obligations of the Company limited in
aggregate principal amount at maturity to $300,000,000.
5. RESTRICTIVE COVENANTS. The Indenture limits, among other things, the
Incurrence of Indebtedness by the Company and the Restricted Subsidiaries, the
payment of dividends and other Restricted Payments, the incurrence of
restrictions affecting dividends and other payments by Restricted Subsidiaries,
the issuance and sale of Capital Stock of Restricted Subsidiaries, the issuance
of Guarantees by Restricted Subsidiaries, transactions by the Company and the
Restricted Subsidiaries with their respective Affiliates, sale-leaseback
transactions, Liens, the use of proceeds from Asset Sales and the ability of the
Company to merge with or into another entity or transfer substantially all of
its assets. The limitations are subject to a number of important qualifications
and exceptions. The Company must report to the Trustee annually on compliance
with the limitations contained in the Indenture.
6. REDEMPTION. (a) The Notes will be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, on or after April
15, 2002 and prior to maturity, upon not less than 30 nor more than 60 days'
prior notice, at the following Redemption Prices (expressed in percentages of
principal amount at maturity), plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Record Date that is prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing April
15 of the years set forth below:
B-8
YEAR REDEMPTION PRICE
---- ----------------
2002..................................... 104.938%
2003..................................... 102.469%
2004 and thereafter...................... 100.000%
(b) At any time prior to April 15, 2001, the Company may
redeem up to 35% of the aggregate principal amount of the Notes
originally issued with the net proceeds of one or more Public Equity
Offerings at a Redemption Price equal to 109.875% of the principal
amount thereof, together with accrued interest, if any, to the
Redemption Date (subject to the right of Holders on relevant Record
Dates to receive interest due on relevant Interest Payment Dates);
PROVIDED that immediately after giving effect to any such redemption,
at least $125,000,000 of the aggregate principal amount of the Notes
originally issued remains outstanding; PROVIDED, FURTHER, that such
redemption occurs within 30 days of the date of closing of each such
Public Equity Offering.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to the Holder of
this Note. Notes in denominations greater than $1,000 in principal amount at
maturity may be redeemed in part. On and after the Redemption Date, unless the
Company defaults in making the redemption payment, interest on Notes called for
redemption will cease to accrue.
8. REPURCHASE UPON CHANGE IN CONTROL. The Company shall commence,
within 30 days of the occurrence of a Change of Control, and consummate an Offer
to Purchase for all Notes then outstanding, at a purchase price equal to 101% of
the aggregate principal amount of the Notes outstanding, plus accrued interest
(if any) to the Payment Date.
9. DENOMINATIONS. This Note is in definitive registered form and is
denominated in an amount equal to $1,000 principal amount or an integral
multiple thereof. The transfer of registered Notes may be registered and the
Notes may be exchanged as provided in the Indenture.
10. PERSONS DEEMED OWNERS. The Holder of this Note shall be treated as
the owner of this Note for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent will pay the money
back to the Company at its request. After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
12. AMENDMENT, SUPPLEMENT, WAIVER, ETC. The Company and the Trustee (if
a party thereto) may, without the consent of the Holders of any outstanding
Notes, amend, waive or supplement the Indenture or the Notes for certain
specified purposes, including, among other things,
B-9
curing ambiguities, defects or inconsistencies, maintaining the qualification of
the Indenture under the United States Trust Indenture Act of 1939, as amended,
and making any change that does not adversely affect the rights of any Holder.
Other amendments and modifications of the Indenture or the Notes may be made by
the Company and the Trustee with the consent of the Holders of not less than a
majority of the aggregate principal amount at maturity of the outstanding Notes,
subject to certain exceptions requiring the consent of the Holders of the
particular Notes to be affected.
13. SUCCESSOR CORPORATION. When a successor corporation assumes all the
obligations of its predecessor under the Notes and the Indenture and the
transaction complies with the terms of Article V of the Indenture, the
predecessor corporation will, except as provided in such Article V, be released
from those obligations.
14. DEFAULTS AND REMEDIES. The following events will be defined as
"Events of Default" in the Indenture: (i) a default in the payment of principal
of (or premium, if any, on) any Note when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise; (ii) a default in the
payment of interest on any Note when the same becomes due and payable, and such
default continues for a period of 30 days; (iii) the failure to perform or
comply with the provisions of Article V of the Indenture or the failure to make
or consummate an Offer to Purchase in accordance with Section 4.13 or 4.15
thereof; (iv) any default in the performance of or breach of any other covenant
or agreement of the Company in the Indenture or under the Notes (other than a
default specified in clause (i), (ii) or (iii) above), which default or breach
continues for a period of 30 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount at maturity
of the Notes outstanding; (v) the occurrence of, with respect to any issue or
issues of Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $10.0 million or more in the aggregate for all
such issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holders
thereof to declare such Indebtedness to be due and payable prior to its Stated
Maturity and such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled within 30 days following such
acceleration and/or (II) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default; (vi) any
final judgment or order (not covered by insurance) for the payment of money in
excess of $10.0 million in the aggregate for all such final judgments or orders
against all such Persons (treating any deductibles, self-insurance or retention
as not so covered) shall be rendered against the Company or any Restricted
Subsidiary and shall not be paid or discharged, and there shall be any period of
30 consecutive days following entry of the final judgment or order that causes
the aggregate amount for all such final judgments or orders outstanding and not
paid or discharged against all such Persons to exceed $10.0 million during which
a stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; and (vii) certain events of
bankruptcy, insolvency, reorganization or administration affecting the Company
or any Significant Subsidiary.
Subject to certain limitations in the Indenture, if an Event of Default
(other than an Event of Default specified in Section 6.1(a)(vii) or (viii) of
the Indenture that occurs with respect to the
B-10
Company) occurs and is continuing, then the Trustee or the Holders of not less
than 25% in aggregate principal amount at maturity of the outstanding Notes may
declare the Notes to be due and payable immediately. If an Event of Default
specified in Section 6.1(a)(vii) or (viii) of the Indenture occurs with respect
to the Company, the principal of, premium, if any, and any interest on all of
the 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 Holder. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of a majority in
principal amount at maturity of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS. A trustee, director, officer, employee,
stockholder or incorporator, as such, of the Company shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Noteholder by accepting a Note waives and releases all such
liability.
17. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. The Company's
obligations pursuant to the Indenture may be discharged, except for obligations
pursuant to certain sections thereof, subject to the terms of the Indenture,
upon the payment of all the Notes or upon the irrevocable deposit with the
Trustee of United States Government obligations sufficient to pay when due
principal of and interest on the Notes to maturity or redemption, as the case
may be.
18. AUTHENTICATION. This Note shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Note.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
CHS ELECTRONICS, INC.
0000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.13 or 4.15 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.13 or 4.15 of the Indenture, state the amount (in
principal amount at maturity):
$______________
Date: ________________________
Your Signature: ________________________
(Sign exactly as your name appears on the other side of this Note.)
Signature Guarantee: ___________________________
EXHIBIT C
SUBSIDIARY GUARANTEE
CHS ELECTRONICS, INC. (NEVADA)
CHS DELAWARE, INC.
CHS DELAWARE L.L.C.
CHS AMERICAS, INC.
Each Subsidiary Guarantor, hereby, jointly and severally with the other
Subsidiary Guarantors, unconditionally guarantees to each Holder of Notes
authenticated and delivered by the Trustee and to the Trustee and its sucessors
and assigns, irrespective of the validity and enforceability of the Indenture,
the Notes or the Obligations of the Company to the Holders or the Trustee under
the Notes or under the Indenture that: (a) the principal of, and premium, if
any, and interest on the Notes shall be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on overdue
principal of interest on the Notes, if any, if lawful and all other Obligations
of the Company to the Holders or the Trustee under the Indenture or under the
Notes shall be promptly paid in full or performed all in accordance with the
terms thereof; and (b) in case of any extension of time of payment or renewal of
any Notes or any such other Obligations, the same will be promptly paid in full
when due in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed, for whatever reason, the Guarantors will be jointly and
severally obligated to pay the same immediately.
The Obligations of the Subsidiary Guarantors to the Holders of Notes
and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are
expressly set forth in Article X of the Indenture, and reference is hereby made
to such Indenture for the precise terms of this Subsidiary Guarantee. The terms
of Article X of the Indenture are incorporated herein by reference.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Subsidiary Guarantor shall have any personal liability
under this Subsidiary Guarantee by reason of his or its status as such
stockholder, officer, director or incorporator.
This is a continuing Subsidiary Guarantee and shall remain in full
force and effect and shall be binding upon each Subsidiary Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's Obligations under the Notes and
the Indenture and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders of Notes and, in the event of any transfer or
assignment of rights by any Holder of Notes or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof. This is a Subsidiary Guarantee of payment and not a guarantee of
collection.
In certain circumstances more fully described in the Indenture, any
Subsidiary Guarantee may be released from its liability under this Subsidiary
Guarantee, and any such release will be effective whether or not noted hereon.
C-2
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Subsidiary Guarantor's liability will be that
amount from time to time equal to the aggregate liability of such Subsidiary
Guarantor hereunder, but shall be limited to the lesser of (i) the aggregate
amount of the Obligations of the Company under the Notes and the Indenture and
(ii) the amount, if any, which would not have (A) rendered such Subsidiary
Guarantor "insolvent" (as such term is defined in the federal Bankruptcy Law and
in the Debtor and Creditor Law of the State of New York) or (B) left it with
unreasonably small capital at the time its Subsidiary Guarantee of the Notes was
entered into, after giving effect to the incurrence of existing indebtedness
immediately prior to such time; PROVIDED that, it shall be a presumption in any
lawsuit or other proceeding in which such Subsidiary Guarantor is a party that
the amount guaranteed pursuant to its Subsidiary Guarantee is the amount set
forth in clause (i) above unless any creditor, or representative of creditors of
such Subsidiary Guarantor, or debtor in possession or trustee in bankruptcy of
such Subsidiary Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of such Subsidiary Guarantor is limited to the amount set forth in
clause (ii). The Indenture provides that, in making any determination as to the
solvency or sufficiency of capital of a Subsidiary Guarantor in accordance with
the previous sentence, the right of such Subsidiary Guarantor to contribution
from other Subsidiary Guarantors and any other rights such Subsidiary Guarantor
may have, contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
CHS ELECTRONICS, INC. (NEVADA)
By:_____________________________
Xxxxxxx Xxxxxx
President
CHS DELAWARE, INC.
By:_____________________________
Xxxxxxx Xxxxxx
President
CHS DELAWARE L.L.C.
By:_____________________________
Xxxxxxx Xxxxxx
Management Committee Member
CHS AMERICAS, INC.
By:_____________________________
Xxxxxxx Xxxxxx
President
EXHIBIT D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
REGULATION S CERTIFICATE
To: The Chase Manhattan Bank
as Trustee (the "Trustee")
Attention:
Re: INDENTURE (THE "INDENTURE") DATED AS OF APRIL 9, 1998 AMONG
CHS ELECTRONICS, INC. (THE "COMPANY"), THE SUBSIDIARY GUARANTORS
NAMED THEREIN AND THE TRUSTEE
Ladies and Gentlemen:
This Certificate relates to our proposed transfer of $____
principal amount of Notes issued under the Indenture. Terms are used in this
Certificate as defined in Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act"). We hereby certify as follows:
1. The offer of the Notes was not made to a person in the
United States (unless such person or the account held by it for which
it is acting is excluded from the definition of "U.S. person" pursuant
to Rule 902(o) of Regulation S under the circumstances described in
Rule 902(i)(3) of Regulation S) or specifically targeted at an
identifiable group of U.S. citizens abroad.
2. Either (a) at the time the buy order was originated, the
buyer was outside the United States or we and any person acting on our
behalf reasonably believed that the buyer was outside the United States
or (b) the transaction was executed in, on or through the facilities of
a designated offshore securities market, and neither we nor any person
acting on our behalf knows that the transaction was pre-arranged with a
buyer in the United States.
3. Neither we, any of our affiliates, nor any person acting on
our or their behalf has made any directed selling efforts in the United
States.
4. The proposed transfer of Notes is not part of a plan or
scheme to evade the registration requirements of the Securities Act.
D-2
5. If we are an officer or director of the Company or a
distributor, we certify that the proposed transfer is being made in
accordance with the provisions of Rule 904(c) of Regulation S.
Details of the relevant accounts at /bullet/ and The
Depository Trust Company to be credited and debited, respectively, are as
follows: [insert details]
You and the Company are entitled to rely upon this Certificate
and are irrevocably authorized to produce this Certificate or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
[NAME OF SELLER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: __________ __
EXHIBIT E
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO RULE 144A
RULE 144A CERTIFICATE
To: The Chase Manhattan Bank
as Trustee (the "Trustee")
Attention: Corporate Trust Administration
Re: INDENTURE (THE "INDENTURE") DATED AS OF APRIL 9, 1998 AMONG
CHS ELECTRONICS, INC. (THE "COMPANY"), THE SUBSIDIARY GUARANTORS
NAMED THEREIN AND THE TRUSTEE
Ladies and Gentlemen:
This Certificate relates to our proposed purchase of $____
principal amount of Notes issued under the Indenture. We and, if applicable,
each account for which we are acting, are "qualified institutional buyers"
within the meaning of Rule 144A ("Rule 144A") under the United States Securities
Act of 1933, as amended (the "Securities Act"). We are aware that the transfer
of Notes to us is being made in reliance on the exemption from the provisions of
Section 5 of the Securities Act provided by Rule 144A. Prior to the date of this
Certificate we have been given the opportunity to obtain from the Company the
information referred to in Rule 144A(d)(4), and have either declined such
opportunity or have received such information.
Details of the relevant accounts at /bullet/ and The
Depository Trust Company to be credited and debited, respectively, are as
follows: [insert details]
You and the Company are entitled to rely upon this Certificate
and are irrevocably authorized to produce this Certificate or a copy hereof to
any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: __________ __
EXHIBIT F
FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER
We are delivering this letter in connection with a proposed purchase of
9 7/8% Senior Notes due 2005 (the "Notes" of CHS Electronics, Inc. (the
"Company").
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of rule 501
(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501 (a)(1), (2), (3) or (7) under the
Securities Act (an "Institutional Accredited Investor");
(ii) any purchase of Notes by us will be for our own account or for the
account of one or more other Institutional Accredited Investors;
(iii) in the event that we purchase any Notes, we will acquire Notes
having a minimum purchase price of at least $100,000 for our own account and for
each separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
Notes;
(v) we are not acquiring 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
(vi) 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 Notes.
We understand that the notes are being offered in a transaction not
involving any public offering within the meaning of the Securities Act and that
the 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 Notes,
that such 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 meeting the
requirements of Rule 144, 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 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 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 acknowledge that you 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.
