Exhibit 4
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PRIMEDIA Inc.
and the Guarantors listed herein
8% Senior Notes due 2013
Series A and Series B
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INDENTURE
Dated as of May 15, 2003
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THE BANK OF NEW YORK
Trustee
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TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE...........................................................1
Section 1.01. Definitions..............................................................................1
Section 1.02. Other Definitions.......................................................................20
Section 1.03. Incorporation by Reference of Trust Indenture Act.......................................20
Section 1.04. Rules of Construction...................................................................20
ARTICLE 2 THE SECURITIES......................................................................................21
Section 2.01. Additional Securities; Form and Dating..................................................21
Section 2.02. Execution and Authentication............................................................22
Section 2.03. Registrar and Paying Agent..............................................................23
Section 2.04. Paying Agent to Hold Money in Trust.....................................................23
Section 2.05. Holder Lists............................................................................23
Section 2.06. Transfer and Exchange...................................................................24
Section 2.07. Replacement Securities..................................................................36
Section 2.08. Outstanding Securities..................................................................36
Section 2.09. Treasury Securities.....................................................................37
Section 2.10. Temporary Securities....................................................................37
Section 2.11. Cancellation............................................................................37
Section 2.12. Defaulted Interest......................................................................38
Section 2.13. CUSIP Numbers...........................................................................38
ARTICLE 3 OPTIONAL REDEMPTION AND OPTIONAL REDEMPTION UPON CHANGE OF CONTROL..................................38
Section 3.01. Notices to Trustee......................................................................38
Section 3.02. Selection of Securities to Be Redeemed..................................................39
Section 3.03. Notices to Holders......................................................................39
Section 3.04. Effect of Notice of Redemption..........................................................40
Section 3.05. Deposit of Redemption Price or Purchase Price...........................................40
Section 3.06. Securities Redeemed in Part.............................................................40
Section 3.07. Optional Redemption.....................................................................41
Section 3.08. Optional Redemption Upon Change of Control..............................................42
Section 3.09. Sinking Fund............................................................................42
ARTICLE 4 COVENANTS...........................................................................................42
Section 4.01. Payment of Securities...................................................................42
Section 4.02. Maintenance of Office or Agency.........................................................42
Section 4.03. SEC Reports; Financial Statements.......................................................43
Section 4.04. Compliance Certificate..................................................................44
Section 4.05. Compliance with Laws, Taxes.............................................................44
Section 4.06. Stay, Extension and Usury Laws..........................................................45
Section 4.07. Limitations on Restricted Payments......................................................45
Section 4.08. Dividends and Payment Restrictions Affecting Restricted Subsidiaries....................48
Section 4.09. Incurrence of Indebtedness..............................................................49
Section 4.10. Change of Control.......................................................................52
Section 4.11. Limitations on Asset Sales..............................................................53
Section 4.12. Transactions with Affiliates............................................................55
Section 4.13. Limitations on Liens....................................................................56
Section 4.14. Investments in Unrestricted Subsidiaries................................................56
Section 4.15. Payments for Consent....................................................................58
Section 4.16. Corporate Existence.....................................................................58
Section 4.17. Rule 144A Information Requirement.......................................................58
ARTICLE 5 SUCCESSORS..........................................................................................59
Section 5.01. Merger, Consolidation, or Sale of Assets................................................59
Section 5.02. Successor Corporation Substituted.......................................................59
ARTICLE 6 DEFAULTS AND REMEDIES...............................................................................59
Section 6.01. Events of Default.......................................................................59
Section 6.02. Acceleration............................................................................61
Section 6.03. Other Remedies..........................................................................62
Section 6.04. Waiver of Past Defaults.................................................................62
Section 6.05. Control by Majority.....................................................................62
Section 6.06. Limitations on Suits....................................................................63
Section 6.07. Rights of Holders to Receive Payment....................................................63
Section 6.08. Collection Suit by Trustee..............................................................63
Section 6.09. Trustee May File Proofs of Claim........................................................63
Section 6.10. Priorities..............................................................................64
Section 6.11. Undertaking for Costs...................................................................64
ARTICLE 7 TRUSTEE.............................................................................................65
Section 7.01. Duties of Trustee.......................................................................65
Section 7.02. Rights of Trustee.......................................................................66
Section 7.03. Individual Rights of Trustee............................................................66
Section 7.04. Trustee's Disclaimer....................................................................67
Section 7.05. Notice of Defaults......................................................................67
Section 7.06. Reports by Trustee to Holders...........................................................67
Section 7.07. Compensation and Indemnity..............................................................67
Section 7.08. Replacement of Trustee..................................................................68
Section 7.09. Successor Trustee by Merger, etc........................................................69
Section 7.10. Eligibility; Disqualification...........................................................69
Section 7.11. Preferential Collection of Claims Against Company.......................................69
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ARTICLE 8 LEGAL AND COVENANT DEFEASANCE.......................................................................70
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance................................70
Section 8.02. Legal Defeasance and Discharge..........................................................70
Section 8.03. Covenant Defeasance.....................................................................70
Section 8.04. Conditions to Legal or Covenant Defeasance..............................................71
Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions..............................................................................72
Section 8.06. Repayment to Company....................................................................72
Section 8.07. Reinstatement...........................................................................72
ARTICLE 9 AMENDMENTS..........................................................................................73
Section 9.01. Without Consent of Holders..............................................................73
Section 9.02. With Consent of Holders.................................................................73
Section 9.03. Compliance with Trust
Indenture Act.....................................................75
Section 9.04. Revocation and Effect of Consents.......................................................75
Section 9.05. Notation on or Exchange of Securities...................................................75
Section 9.06. Trustee to Sign Amendments, etc.........................................................76
ARTICLE 10 GUARANTEE..........................................................................................76
Section 10.01. Subsidiary Guarantee...................................................................76
Section 10.02. Execution and Delivery of Guarantee....................................................77
Section 10.03. Guarantors May Consolidate, etc., on Certain Terms.....................................78
Section 10.04. Releases Following Sale of Assets......................................................78
Section 10.05. "Trustee" to Include Paying Agent......................................................79
Section 10.06. Existing and Additional Subsidiary Guarantees..........................................79
ARTICLE 11 MISCELLANEOUS......................................................................................79
Section 11.01. Trust
Indenture Act Controls...........................................................79
Section 11.02. Notices................................................................................79
Section 11.03. Communication by Holders with Other Holders............................................81
Section 11.04. Certificate and Opinion as to Conditions Precedent.....................................81
Section 11.05. Statements Required in Certificate or Opinion..........................................81
Section 11.06. Rules by Trustee and Agents............................................................81
Section 11.07. Legal Holidays.........................................................................82
Section 11.08. No Recourse Against Others.............................................................82
Section 11.09. Governing Law..........................................................................82
Section 11.10. No Adverse Interpretation of Other Agreements..........................................82
Section 11.11. Successors.............................................................................82
Section 11.12. Severability...........................................................................82
Section 11.13. Counterpart Originals..................................................................82
Section 11.14. Trustee as Paying Agent and Registrar..................................................83
Section 11.15. Table of Contents, Headings, etc.......................................................83
Section 11.16. Bank of
New York Not Acting in Individual Capacity.....................................83
iii
Section 11.17. Additional Rights of Holders of Transfer Restricted Securities.........................83
ARTICLE 12 SECURITY...........................................................................................83
Section 12.01. Pledge Agreement.......................................................................83
Section 12.02. Release of Collateral..................................................................84
iv
SIGNATURES ...........................................................................................67, 68, 69
EXHIBIT A-1 FORM OF SECURITY
EXHIBIT A-2 FORM OF REGULATION S GLOBAL NOTE
EXHIBIT A-3 FORM OF GUARANTEE
EXHIBIT B FROM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF SECURITIES
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
v
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1).................................................................. 7.10
(a)(2).................................................................. 7.10
(a)(3).................................................................. N.A.
(a)(4).................................................................. N.A.
(a)(5).................................................................. 7.10
(b)..................................................................... 7.10
(c)..................................................................... N.A.
311(a)..................................................................... 7.11
(b)..................................................................... 7.11
(c)..................................................................... N.A.
312(a)..................................................................... 2.05
(b)..................................................................... 11.03
(c)..................................................................... 11.03
313(a)..................................................................... 7.06
(b)(1).................................................................. 11.03
(b)(2).................................................................. 7.06, 7.07
(c)..................................................................... 7.06, 11.02
(d)..................................................................... 7.06
314(a)..................................................................... 4.03, 11.02
(b)..................................................................... N.A.
(c)(1).................................................................. 11.04
(c)(2).................................................................. 11.04
(c)(3).................................................................. N.A.
(d)..................................................................... N.A.
(e)..................................................................... 11.05
(f)..................................................................... N.A.
315(a)..................................................................... 7.01
(b)..................................................................... 7.05, 11.02
(c)..................................................................... 7.01
(d)..................................................................... 7.01
(e)..................................................................... 6.11
316(a) (last sentence)..................................................... 2.09
(a)(1)(A)............................................................... 6.05
(a)(1)(B)............................................................... 6.04
(a)(2).................................................................. N.A.
(b)..................................................................... 6.07
(c)..................................................................... 2.12
317(a)(1).................................................................. 6.08
(a)(2).................................................................. 6.09
(b)..................................................................... 2.04
318(a)..................................................................... 11.01
(b)..................................................................... N.A.
(c)..................................................................... 11.01
N.A. means not applicable
*This Cross-Reference Table is not part of the
Indenture
vi
INDENTURE, dated as of May 15, 2003, among
PRIMEDIA Inc., a
Delaware corporation (the "COMPANY"), the corporations listed on Schedule I
hereto (each a "GUARANTOR" and collectively, the "GUARANTORS") and The Bank of
New York, a
New York banking corporation, as Trustee.
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders (as defined below) of the
8% Senior Notes due 2013 (the "SERIES A NOTES") and the 8% Senior Notes due 2013
to be issued in exchange for the Series A Notes (the "Series B Notes" and,
together with the Series A Notes, the "NOTES" or the "SECURITIES") issued by the
Company:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS
"144A GLOBAL NOTE" means a Global Note in the form of Exhibit A-1
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Securities sold in reliance on Rule 144A.
"ADDITIONAL INTEREST" means, with respect to any Securities, all
unpaid additional interest owing by the Company pursuant to the Registration
Rights Agreement for such Securities.
"ADJUSTED CONSOLIDATED NET INCOME" means, with respect to any
Person for any period, (i) the Consolidated Net Income of such Person for such
period, plus (ii) in the case of the Company and its Restricted Subsidiaries,
all cash received during such period by the Company or any Restricted Subsidiary
from its Unrestricted Subsidiaries from the payment of dividends or
distributions (including tax sharing payments and loans or advances which are
junior in right of payment to the Securities and have a longer Average Life than
the Securities), but only to the extent such cash payments are not otherwise
included in "Adjusted Consolidated Net Income." Each item of Adjusted
Consolidated Net Income will be determined in conformity with GAAP, except that,
for purposes of the application of Accounting Principles Board Opinions Nos. 16
and 17, such Person may select any amortization practice allowable by GAAP up to
40 years, notwithstanding the use of a different amortization in such Person's
consolidated financial statements. Any designation of a Subsidiary of the
Company as a Restricted Subsidiary or Unrestricted Subsidiary at or prior to the
time of the calculation of Adjusted Consolidated Net Income of a Subsidiary will
be treated as if it had occurred at the beginning of the applicable period.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. A Person shall be deemed to "control"
(including the correlative meanings, the terms "controlling," "controlled by,"
and "under common control with") another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies, of the controlled person, whether through ownership
of voting securities, by agreement or otherwise.
"AGENT" means any Registrar or Paying Agent.
"APPLICABLE PREMIUM" with respect to any Security being redeemed
pursuant to Section 3.08 shall equal the greater of (i) 1.0% of the then
outstanding principal amount of such Security and (ii) the excess of (A) the
present value of the required interest and principal payments due on such
Security, computed using a discount rate equal to the Treasury Rate plus the
Applicable Spread, over (B) the then outstanding principal amount of such
Security.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"APPLICABLE SPREAD" means one half of one percent.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by the referent Person of any of its
assets (including by way of a sale-and-leaseback and including the sale or other
transfer of any of the Capital Stock of any Subsidiary of the referent Person);
PROVIDED, that notwithstanding the foregoing, the term "Asset Sale" shall not
include the sale, lease, conveyance, disposition or other transfer of (i) with
respect to an Unrestricted Subsidiary, (A) any assets not constituting all or
substantially all of the assets of any Net Cash Flow Unrestricted Subsidiary and
(B) any Capital Stock or any assets of any Restricted Payment Unrestricted
Subsidiary, (ii) all or substantially all of the assets of the Company, as
permitted pursuant to Section 5.01 hereof, (iii) any assets between the Company,
any Restricted Subsidiary or any Unrestricted Subsidiary, (iv) (A) cash and cash
equivalents, (B) inventory in the ordinary course of business and (C) any other
tangible or intangible asset, in each case in the ordinary course of business of
the Company or its Restricted Subsidiaries, (v) the sale or discount, in each
case without recourse, of accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof or
(vi) Receivables and Other Assets pursuant to a Qualified Securitization
Transaction.
"AVERAGE LIFE" means, as of the date of determination, with
respect to any debt security, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment (assuming the exercise by the
obligor of such debt security of all unconditional (other than as to the giving
of notice) extension options of each such scheduled payment date) of such debt
security multiplied by the amount of such principal payment by (ii) the sum of
all such principal payments.
"BANK CREDIT FACILITIES" means the Credit Agreement dated as of
June 20, 2001 among the Company, various financial institutions from time to
time party thereto, Bank of America, N.A., as Syndication Agent, The Bank of
New
York and The Bank of Nova Scotia, as Co-Documentation Agents, and JPMorgan Chase
Bank, as Administrative Agent.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
2
"BOARD OF DIRECTORS" means the Board of Directors of the Company
or any authorized committee of the Board of Directors of the Company.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which banking institutions in The City of
New York or at a place of
payment are authorized or obligated by law, regulation or executive order to
remain closed.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
which would at such time be so required to be capitalized on the balance sheet
in accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock.
"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), other
than KKR and its Affiliates, becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of more than (A) 35 percent (35%) of the total
voting power of the then outstanding voting stock of the Company and (B) the
total voting power of the then outstanding voting stock of the Company
beneficially owned by KKR and its Affiliates or (ii) during any period of two
consecutive calendar years, individuals who at the beginning of such period
constituted the Company's Board of Directors (together with any new directors
whose election by the Company's Board of Directors or whose nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds of the Directors then still in office who either were Directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors then in office.
"CLASS D DEBENTURE
INDENTURE" means the
indenture governing the
Class D Subordinated Debentures.
"CLASS D SUBORDINATED DEBENTURES" means the 10% Class D
Subordinated Exchange Debentures due 2008 of the Company issuable in exchange
for the Series D Preferred Stock.
"CLASS F DEBENTURE INDENTURE" means the indenture governing the
Class F Subordinated Debentures.
"CLASS F SUBORDINATED DEBENTURES" means the 9.20% Class F
Subordinated Exchange Debentures due 2009 of the Company issuable in exchange
for the Series F Preferred Stock.
"CLASS H DEBENTURE INDENTURE" means the indenture governing the
Class H Subordinated Debentures.
"CLASS H SUBORDINATED DEBENTURES" means the 8?% Class H
Subordinated Exchange Debentures due 2010 of the Company issuable in exchange
for the Series H Preferred Stock.
3
"CLASS J SUBORDINATED NOTES" means the 12.5% Class J Subordinated
Notes issuable in exchange for the Series J Preferred Stock.
"CLEARSTREAM" means Clearstream Banking S.A.
"COLLATERAL" has the meaning assigned to such term in the Pledge
Agreement.
"COLLATERAL AGENT" means JPMorgan Chase Bank, in its capacity as
collateral agent and pledgee under the Pledge Agreement.
"COMMON STOCK" means the common stock, par value $0.01 per share,
of the Company.
"COMPANY" means (i)
PRIMEDIA Inc., a Delaware corporation, and
(ii) any successor of
PRIMEDIA Inc. pursuant to Article 5 hereof.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for
any period, the Adjusted Consolidated Net Income of such Person for such period
PLUS (a) (i) with respect to any Restricted Subsidiary other than a Partially
Owned Restricted Subsidiary, provision for taxes based on income or profits to
the extent such provision for taxes was included in computing Adjusted
Consolidated Net Income and (ii) with respect to any Partially Owned Restricted
Subsidiary, the Pro Rata Portion of any provision for taxes based on income or
profits to the extent such provision for taxes was included in computing
Adjusted Consolidated Net Income, PLUS (b) (i) with respect to any Restricted
Subsidiary other than a Partially Owned Restricted Subsidiary, consolidated
Interest Expense, whether paid or accrued, to the extent such expense was
deducted in computing Adjusted Consolidated Net Income (including amortization
of original issue discount and non-cash interest payments), and (ii) with
respect to any Partially Owned Restricted Subsidiary, the Pro Rata Portion of
consolidated Interest Expense, whether paid or accrued, to the extent such
expense was deducted in computing Adjusted Consolidated Net Income (including
amortization of original issue discount and non-cash interest payments), PLUS
(c) (i) with respect to any Restricted Subsidiary other than a Partially Owned
Restricted Subsidiary, depreciation, amortization and other non-cash charges to
the extent such depreciation, amortization and other non-cash charges were
deducted in computing Adjusted Consolidated Net Income (including amortization
of goodwill and other intangibles) and (ii) with respect to any Partially Owned
Restricted Subsidiary, the Pro Rata Portion of depreciation, amortization and
other non-cash charges to the extent such depreciation, amortization and other
non-cash charges were deducted in computing Adjusted Consolidated Net Income
(including amortization of goodwill and other intangibles); PROVIDED, with
respect to the calculation of a Person's Debt to Consolidated Cash Flow Ratio,
that if, during such period, (a) such Person or any of its Subsidiaries shall
have made any Asset Sales (other than, in the case of the Company and its
Restricted Subsidiaries, sales of the Capital Stock of or any assets of
Unrestricted Subsidiaries which constitute Asset Sales), Consolidated Cash Flow
of such Person for such period shall be reduced by an amount equal to the
Consolidated Cash Flow (if positive), to the extent such Consolidated Cash Flow
was included in computing Consolidated Cash Flow, directly attributable to the
assets or Capital Stock which are the subject of such Asset Sales for such
period or increased by an amount equal to the Consolidated Cash Flow (if
negative), to the extent such Consolidated Cash Flow was included in computing
Consolidated Cash Flow, directly attributable thereto for such period and (b)
such Person or any of its Subsidiaries (other
4
than, in the case of the Company and its Restricted Subsidiaries, Unrestricted
Subsidiaries) has made any acquisition of assets or Capital Stock (occurring by
merger or otherwise), including without limitation, any acquisition of assets or
Capital Stock occurring in connection with a transaction causing a calculation
to be made hereunder, Consolidated Cash Flow of such person shall be calculated
(notwithstanding clause (i) of the definition of Consolidated Net Income) as if
such acquisition of assets or Capital Stock (including the incurrence of any
Indebtedness in connection with any such acquisition and the application of the
proceeds thereof) took place on the first day of such period. Consolidated Cash
Flow of such Person shall be determined for any period without regard to changes
in Working Capital of such Person and its Subsidiaries during such period.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person
for any period, the (a) consolidated Interest Expense, whether paid or accrued,
to the extent such expense was deducted in computing Adjusted Consolidated Net
Income (including amortization of original issue discount and non-cash interest
payments) and (b) the amount of all cash dividend payments on all series of
preferred stock other than cash dividends on preferred stock of Unrestricted
Subsidiaries and cash dividends paid to such Person or its Subsidiaries;
PROVIDED that with respect to Partially Owned Restricted Subsidiaries, only the
Pro Rata Portion of any amounts covered by clauses (a) and (b) above shall be
included in calculating Consolidated Fixed Charges; PROVIDED FURTHER that if,
during such period, (i) such Person or any of its Subsidiaries shall have made
any Asset Sales (other than, in the case of the Company and its Restricted
Subsidiaries, sales of the Capital Stock of or any assets of Unrestricted
Subsidiaries which constitute asset sales), Consolidated Fixed Charges of such
Person for such period shall be reduced by an amount equal to the Consolidated
Fixed Charges directly attributable to the assets which are the subject of such
Asset Sales for such period and (ii) such Person or any of its Subsidiaries
(other than, in the case of the Company and its Restricted Subsidiaries,
Unrestricted Subsidiaries) has made any acquisition of assets or Capital Stock
(occurring by merger or otherwise), including, without limitation, any
acquisition of assets or Capital Stock occurring in connection with the
transaction causing a calculation to be made hereunder, Consolidated Fixed
Charges of such Person shall be calculated as if such acquisition of assets or
Capital Stock (including the incurrence of any Indebtedness in connection with
any such acquisition and the application of the proceeds thereof) took place on
the first day of such period.
"CONSOLIDATED NET CASH FLOW" means, with respect to any Person
for any period, the aggregate Consolidated Cash Flow of such Person for such
period, MINUS (a) capital expenditures of such Person and its Subsidiaries (and
in the case of the Company and its Restricted Subsidiaries, excluding
Unrestricted Subsidiaries and, in the case of Partially Owned Restricted
Subsidiaries, including only the Pro Rata Portion thereof), MINUS (b) the
aggregate amount of all cash dividends paid by such Person and its Subsidiaries
(and in the case of the Company and its Restricted Subsidiaries, excluding
Unrestricted Subsidiaries and, in the case of Partially Owned Restricted
Subsidiaries, including only the Pro Rata Portion thereof) to holders of its
Capital Stock other than to such Person or its Subsidiaries, MINUS (c) the
aggregate amount of all taxes based on income or profits paid by such Person and
its Subsidiaries (and in the case of the Company and its Restricted
Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially
Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof)
other than to such Person or its Subsidiaries, MINUS (d) cash Interest Expense
of such Person and its Subsidiaries (and in the case of the Company and its
Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of
Partially Owned Restricted Subsidiaries, including
5
only the Pro Rata Portion thereof), MINUS (e) repayments of principal of
Indebtedness by such Person and its Subsidiaries (and in the case of the Company
and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the
case of Partially Owned Restricted Subsidiaries, including only the Pro Rata
Portion thereof), MINUS (f) any increases in Working Capital of such Person and
its Subsidiaries (and in the case of the Company and its Restricted
Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially
Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), and
PLUS (g) any decreases in Working Capital of such Person and its Subsidiaries
(and in the case of the Company and its Restricted Subsidiaries, excluding
Unrestricted Subsidiaries and, in the case of Partially Owned Restricted
Subsidiaries, including only the Pro Rata Portion thereof), in each case, for
such period and determined in accordance with GAAP; PROVIDED that in calculating
the amount referred to in clause (f) or (g) above, as the case may be, for any
period during which the Company or any of its Restricted Subsidiaries has
consummated an Asset Sale (other than, the case of the Company and its
Restricted Subsidiaries, sales of Capital Stock of, cash or any assets of
Unrestricted Subsidiaries which constitute Asset Sales), the portion of the
change in Working Capital for such period attributable to the entity or business
sold or purchased shall be based (x) in the case of such an Asset Sale, on the
change in Working Capital attributable to the entity or business sold from the
first day of such period to the date of the consummation of such sale and (y) in
the case of an acquisition, on the change in Working Capital attributable to the
entity or business acquired from the date of consummation of such acquisition to
the last day of such period.
"CONSOLIDATED NET INCOME" means, with respect to any Person for
any period, the aggregate net income (or loss) of such Person and its
Subsidiaries (and in the case of the Company and its Restricted Subsidiaries,
excluding Unrestricted Subsidiaries and, with respect to any Partially Owned
Restricted Subsidiary, including only the Pro Rata Portion of the net income (or
loss) of such Partially Owned Restricted Subsidiary as of any date of
determination of Consolidated Net Income for the Company and its Restricted
Subsidiaries) for such period, on a consolidated basis, determined in accordance
with GAAP, PROVIDED that (i) the net income (or loss) of any Person which is not
a Subsidiary or is accounted for by the equity method of accounting shall be
included only to the extent of the amount of cash dividends or distributions
(including tax sharing payments and loans or advances which are junior in right
of payment to the Securities and have a longer Average Life than the Securities)
paid to the referent Person or a Subsidiary of the referent Person, (ii) except
to the extent includable pursuant to the foregoing clause (i), the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of such
Person or is merged into or consolidated with such Person or any of its
Subsidiaries or that Person's assets are acquired by such Person or any of its
Subsidiaries shall be excluded, (iii) any gains or losses attributable to Asset
Sales net of related tax costs or tax benefits, as the case may be, shall be
excluded and (iv) the net income of any Unrestricted Subsidiary (and, solely for
purposes of Section 4.07 hereof, the net income of any Partially Owned
Restricted Subsidiary) shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Unrestricted Subsidiary
(or, solely for the purposes of Section 4.07 hereof, any Partially Owned
Restricted Subsidiary) of that net income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders that, in each such
case, has not been legally waived or otherwise satisfied.
In addition, "Consolidated Net Income" will not include, without
limitation:
6
(A) any non-capitalized transaction costs and expenses incurred
in connection with financings, investments or acquisitions,
including, but not limited to, financing and refinancing
fees;
(B) any extraordinary or nonrecurring charges relating to any
premium or penalty paid, write-off of deferred financing
costs or other financial recapitalization charges in
connection with the redemption or retirement of any
Indebtedness prior to its stated maturity; and
(C) any non-recurring charges arising out of the restructuring
or consolidation of the operations of any persons or
business either alone or together with the Company or any
Restricted Subsidiary, incurred within 18 months following
the acquisition of those persons or businesses by the
Company or any Restricted Subsidiary.
"CONSOLIDATED NET WORTH" means, for purposes of this Indenture,
at any date of determination, the sum of the Capital Stock and additional
paid-in capital plus retained earnings (or minus accumulated deficit) of the
referent Person and its Subsidiaries on a consolidated basis, less amounts
attributable to Redeemable Stock, each item to be determined in conformity with
GAAP (excluding the effects of foreign currency exchange adjustments under
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 52), except that all effects of the application of Accounting Principles
Board Opinions Nos. 16 and 17 and related interpretations shall be disregarded.
"CORPORATE TRUST OFFICE" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and
Agency Group.
"CREDIT FACILITIES" means, with respect to the Company or any of
its Restricted Subsidiaries, one or more debt facilities (including, without
limitation, the Bank Credit Facilities) or commercial paper facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"CURRENCY AGREEMENT" means the obligations of any Person pursuant
to any foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in currency values.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"DEBT TO CONSOLIDATED CASH FLOW RATIO" means the ratio of all
Indebtedness of the Company and its Restricted Subsidiaries to Consolidated Cash
Flow.
"DEFAULT" means any event, act or condition that is, or after
notice or the passage of time or both would be, an Event of Default.
7
"DEFINITIVE NOTE" means a certificated Security registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A hereto except that such Security shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"DEPOSITARY" means, with respect to the Securities issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Securities, and any and all
successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provision of this Indenture.
"EQUITY INTERESTS" means Capital Stock, warrants, options or
other rights to acquire Capital Stock (but excluding any debt security which is
convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERING" means any public or private offering of Equity
Interests (other than Redeemable Stock) of the Company.
"EUROCLEAR" means Xxxxxx Guaranty Trust Company of
New York,
Brussels office, as operator of the Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" means the offer which may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series A Notes for the
Series B Notes.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth
in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries (other than the Bank Credit Facilities and the Outstanding Notes)
in existence on the date of this Indenture, until such amounts are repaid.
"FIXED CHARGE COVERAGE RATIO" means the ratio of Consolidated
Cash Flow to Consolidated Fixed Charges.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of this Indenture.
"GLOBAL NOTES" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
8
"GUARANTEE" means, individually and collectively, the guarantees
given by the Guarantors pursuant to Article 10 hereof, including a notation in
the Securities substantially in the form attached hereto as Exhibit A-3.
"GUARANTEE DATE" means the date upon which a Guarantor executes a
Guarantee.
"GUARANTOR" means each domestic Restricted Subsidiary of the
Company, other than any Securitization Subsidiary, which is wholly owned,
directly or indirectly, by the Company.
"HOLDER" means a Person in whose name a Security is registered.
"IAI GLOBAL NOTE" means the Global Note in the form of Exhibit
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Securities sold to Institutional Accredited Investors.
"INDEBTEDNESS" of any Person means any indebtedness, contingent
or otherwise, in respect of borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement obligations with respect thereto) or
representing the balance deferred and unpaid of the purchase price of any
property (including pursuant to financing leases), if and to the extent any of
the foregoing indebtedness would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP (except that any such balance that
constitutes a trade payable and/or an accrued liability arising in the ordinary
course of business shall not be considered Indebtedness), and shall also
include, to the extent not otherwise included, any Capital Lease Obligations,
the maximum fixed repurchase price of any Redeemable Stock, indebtedness secured
by a Lien to which the property or assets owned or held by such Person is
subject, whether or not the obligations secured thereby shall have been assumed,
guarantees of items that would be included within this definition to the extent
of such guarantees (exclusive of whether such items would appear upon such
balance sheet), and net liabilities in respect of Currency Agreements and
Interest Rate Agreements. For purposes of the preceding sentence, the maximum
fixed repurchase price of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture, PROVIDED that if such Redeemable Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Redeemable
Stock. The amount of Indebtedness of any Person at any date shall be without
duplication (i) the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any such contingent
obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of the Indebtedness
secured. For the purpose of determining the aggregate Indebtedness of the
Company and its Restricted Subsidiaries, such Indebtedness shall exclude (a) the
Indebtedness of any Unrestricted Subsidiary of the Company or any Unrestricted
Subsidiary of a Restricted Subsidiary and (b) with respect to any Partially
Owned Restricted Subsidiary, the Pro Rata
9
Portion of any Indebtedness of any Partially Owned Restricted Subsidiary of the
Company or any Partially Owned Restricted Subsidiary of a Restricted Subsidiary
pursuant to which the lender thereunder does not have recourse to any of the
assets of the Company or any of its Restricted Subsidiaries.
"INDENTURE" means this Indenture as amended from time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INITIAL PURCHASER" means X.X. Xxxxxx Securities Inc., Banc of
America Securities LLC, Citigroup Global Markets Inc., Xxxxxx Brothers Inc., BNY
Capital Markets, Scotia Capital (USA) Inc. and Fleet Securities, Inc.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"INTEREST EXPENSE" means, with respect to any Person, for any
period, the aggregate amount of interest in respect of Indebtedness (including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and the net cost (benefit)
associated with Interest Rate Agreements, and excluding amortization of deferred
finance fees and interest recorded as accretion in the carrying value of
liabilities (other than Indebtedness) recorded at a discounted value) and all
but the principal component of rentals in respect of Capital Lease Obligations,
paid, accrued or scheduled to be paid or accrued by such Person during such
period.
"INTEREST PAYMENT DATE" has the meaning assigned to such term in
the Securities.
"INTEREST RATE AGREEMENTS" means the obligations of any Person
pursuant to any interest rate swap agreement, interest rate collar agreement or
other similar agreement or arrangement designed to protect such Person or any of
its subsidiaries against fluctuations in interest rates.
"INVESTMENT" means any direct or indirect advance, loan (other
than advances to customers in the ordinary course of business, which are
recorded as accounts receivable on the balance sheet of any Person or its
Subsidiaries) or other extension of credit 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 securities issued by any other
Person. For the purposes of Sections 4.07 and 4.14 hereof, (i) "Investment"
shall include and be valued at the fair market value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary and shall exclude the fair market value of the net
assets of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at fair market
value at the time of such transfer, in each case as determined by the Board of
Directors of the Company in good faith.
"KKR" means Kohlberg Kravis Xxxxxxx & Co., L.P.
10
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Securities for use by
such Holders in connection with the Exchange Offer.
"LIEN" means any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"NET CASH FLOW UNRESTRICTED SUBSIDIARY" means an Unrestricted
Subsidiary which is not a Restricted Payment Unrestricted Subsidiary.
"NET PROCEEDS" means, with respect to any Asset Sale, the
aggregate cash proceeds (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, and including
any amounts received as disbursement or withdrawals from any escrow or similar
account established in connection with any such Asset Sale, but, in either such
case, only as and when so received) received by the Company or any of its
Subsidiaries in respect of such Asset Sale, net of (i) the cash expenses of such
sale (including, without limitation, the payment of principal, premium, if any,
and interest on Indebtedness required to be paid as a result of such Asset Sale
(other than the Outstanding Notes and the Securities and amounts repaid pursuant
to the Credit Facilities) and legal, accounting and investment banking fees and
sales commissions), (ii) taxes paid or payable as a result thereof, (iii) any
portion of cash proceeds which the Company determines in good faith should be
reserved for post-closing adjustments, it being understood and agreed that on
the day that all such post-closing adjustments have been determined, the amount
(if any) by which the reserved amount in respect of such Asset Sale exceeds the
actual post-closing adjustments payable by the Company or any of its
Subsidiaries shall constitute Net Proceeds on such date and (iv) any relocation
expenses and pension, severance and shutdown costs incurred as a result thereof.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness (i) as to which
neither the Company nor any Restricted Subsidiary (other than a Securitization
Subsidiary) (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable (as a guarantor or otherwise) or (c) constitutes the lender,
(ii) as to which no default (including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary (other than a Securitization Subsidiary) to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity and (iii) as to which the
lenders have been notified in writing they will not have recourse to the shares
or assets of the Company or any Restricted Subsidiary (other than a
Securitization Subsidiary).
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
11
"OFFICERS" means the President, the Treasurer, any Assistant
Treasurer, Controller, Secretary or any Vice President of the Company or any
Guarantor, as applicable.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers, one of whom must be the Company's chief executive officer, chief
financial officer or controller financial accounting.
"OPINION OF COUNSEL" means an opinion from legal counsel that
meets the requirements of Section 11.05 hereof. The counsel may be an employee
of or counsel to the Company or any Subsidiary of the Company.
"OUTSTANDING NOTES" means the 8 1/2% Senior Notes due 2006, the
7?% Senior Notes due 2008 and the 8?% Senior Notes due 2011 of the Company, as
each may be amended, supplemented or otherwise modified from time to time.
"OUTSTANDING NOTE INDENTURES" means the Indenture, dated as of
January 24, 1996, among the Company, the guarantors listed therein and The Bank
of
New York, as trustee, relating to the 8 1/2% Senior Notes due 2006 and the
Indenture, dated as of February 17, 1998, among the Company, the guarantors
listed therein and The Bank of
New York, as trustee, relating to the 7?% Senior
Notes due 2008, and the Indenture, dated as of May 8, 2001, among the Company,
the guarantors listed therein and The Bank of
New York, as trustee, relating to
the 8?% Senior Notes due 2011, as each may be amended, supplemented or otherwise
modified from time to time.
"PARTIALLY OWNED RESTRICTED SUBSIDIARY" means any Restricted
Subsidiary other than a wholly owned Restricted Subsidiary.
"PARTICIPANT" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"PARTICIPATING BROKER-DEALER" has the meaning set forth in the
Registration Rights Agreement.
"PERMITTED LIENS" means (i) Liens for taxes, assessments,
governmental charges or claims which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (ii) statutory Liens of landlords and
carriers', warehousemen's, mechanics', suppliers', materialmen's, repairmen's,
or other like Liens arising in the ordinary course of business and with respect
to amounts not yet delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor; (iii) Liens
incurred 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 obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (v) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not
12
interfering in any material respect with the business of the Company or any of
its Subsidiaries incurred in the ordinary course of business; (vi) Liens
(including extensions and renewals thereof) upon real or tangible personal
property acquired after the date of this Indenture, PROVIDED that (a) any such
Lien is created solely for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost (including the cost of
construction) of the item of property subject thereto, (b) the principal amount
of the Indebtedness secured by such Lien does not exceed 100% of such cost, (c)
such Lien does not extend to or cover any other property other than such item of
property and any improvements on such item and (d) the incurrence of such
Indebtedness is permitted by Section 4.09 hereof; (vii) Liens securing
reimbursement obligations with respect to letters of credit which encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; (viii) 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; (ix) judgment and attachment Liens not giving
rise to an Event of Default; (x) leases or subleases granted to others not
interfering in any material respect with the business of the Company or any of
its Subsidiaries; (xi) Liens encumbering customary initial deposits and margin
deposits, and other Liens incurred in the ordinary course of business and which
are within the general parameters customary in the industry, in each case
securing Indebtedness under Interest Rate Agreements and Currency Agreements;
(xii) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company or
its Subsidiaries; (xiii) Liens arising out of consignment or similar
arrangements for the sale of goods entered into by the Company or any of its
Subsidiaries in the ordinary course of business of the Company and its
Subsidiaries; (xiv) any interest or title of a lessor in the property subject to
any Capital Lease Obligation or operating lease; (xv) Liens arising from filing
Uniform Commercial Code financing statements regarding leases; (xvi) Liens
permitted by the Credit Facilities as in effect on the date of this Indenture;
(xvii) Liens securing Indebtedness described in clause (xii) of the second
paragraph of Section 4.09 hereof; (xviii) Liens between the Company and any
Restricted Subsidiary or between Restricted Subsidiaries; (xix) Liens securing
letters of credit in an amount not to exceed $75 million in the aggregate at any
one time; (xx) Liens in an amount not to exceed $50 million in the aggregate at
any one time; (xxi) Liens incurred by Partially Owned Restricted Subsidiaries
which do not exceed 10% of Total Assets in the aggregate at any one time; and
(xxii) Liens on assets of a Securitization Subsidiary arising in connection with
a Qualified Securitization Transaction. Notwithstanding anything to the contrary
in the foregoing, for purposes of Section 4.13, "Permitted Liens" shall not
include Liens created under the Pledge Agreement.
"PERSON" means any individual, corporation, partnership, joint
venture, incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of June
20, 2001, made by the Company in favor of the Collateral Agent for the benefit
of certain secured creditors defined therein, as in effect on the date hereof.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in Section
2.06(g)(i) to be placed on all Securities issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
13
"PRO RATA PORTION" means, with respect to any Partially Owned
Restricted Subsidiary, the percentage of such Partially Owned Restricted
Subsidiary's outstanding Equity Interests beneficially owned by the Company and
its Restricted Subsidiaries.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"QUALIFIED SECURITIZATION TRANSACTION" means any transaction or
series of transactions that may be entered into by the Company or any Restricted
Subsidiary pursuant to which the Company or any Restricted Subsidiary may sell,
convey or otherwise transfer to (a) a Securitization Subsidiary (in the case of
a transfer by the Company or of any Restricted Subsidiary) and (b) any other
person (in the case of a transfer by a Securitization Subsidiary), or may grant
a security interest, in Receivables and Other Assets.
"RECEIVABLES AND OTHER ASSETS" means, with respect to any Person,
all of the following property and interests in property of such Person, whether
now existing or existing in the future or hereafter acquired or arising:
(1) accounts;
(2) accounts receivable or other similar rights to future
payments in respect of assets sold or to be sold, rights
granted or to be granted or services rendered or to be
rendered, including, without limitation, all rights to
payment created by or arising from sales of goods, lease of
goods or the rendition of services no matter how evidenced,
whether or not earned by performance;
(3) all unpaid seller's or lessor's rights, including, without
limitation, recession, replevin, reclamation and stoppage in
transit, relating to any of the foregoing or arising
therefrom;
(4) all rights to any goods or merchandise represented by any of
the foregoing, including, without limitation, returned or
repossessed goods;
(5) all reserves and credit balances with respect to any such
accounts receivable or account debtors;
(6) all letters of credit, security or guarantees of any of the
foregoing;
(7) all insurance policies or reports relating to any of the
foregoing;
(8) all collection or deposit accounts relating to any of the
foregoing;
(9) all proceeds of any of the foregoing; and
(10) all books and records relating to any of the foregoing.
"REDEEMABLE STOCK" means any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable before the stated maturity of the Securities), or upon the
happening of any event, matures or is mandatorily
14
redeemable, in whole or in part, prior to the stated maturity of the Securities,
or is, by its terms or upon the happening of any event, redeemable at the option
of the holder thereof, in whole or in part, at any time prior to the stated
maturity of the Securities except for Equity Interests of the Company issued to
present and former members of management of the Company and its Subsidiaries
pursuant to subscription and option agreements in effect on the date hereof or
under any stock option plan of Xxxxx.xxx, Inc. existing on the date hereof and
common stock and options of the Company issued to future members of management
of the Company and its Subsidiaries pursuant to subscription agreements executed
subsequent to the date hereof containing provisions for the repurchase of such
common stock and options upon death, disability or termination of employment of
such persons which are substantially identical to those contained in the
subscription agreements in effect on the date hereof; PROVIDED that for purposes
of Section 4.07 hereof and that for purposes of the definition of Indebtedness,
Redeemable Stock does not include the Series D Preferred Stock, the Series F
Preferred Stock or the Series H Preferred Stock or any other preferred stock
issued by the Company prior to the date hereof but not outstanding on the date
hereof.
"REGISTRATION RIGHTS AGREEMENT" means (a) the registration rights
agreement, dated May 15, 2003, among the Company, the Guarantors X.X. Xxxxxx
Securities Inc., Banc of America Securities LLC and Citigroup Global Markets
Inc., as representatives of the Initial Purchasers and (b) with respect to each
issuance of Additional Securities issued in a transaction exempt from the
registration requirements of the Securities Act, the registration rights
agreement, if any, among the Company and the persons purchasing such Additional
Securities under the related purchase agreement.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a Regulation S Temporary Global
Note or Regulation S Permanent Global Note, as appropriate.
"REGULATION S PERMANENT GLOBAL NOTE" means a permanent Global
Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"REGULATION S TEMPORARY GLOBAL NOTE" means a temporary Global
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Securities initially sold in reliance on Rule 903 of Regulation S.
"RESPONSIBLE OFFICER" means, when used with respect to the
Trustee, any officer within the Corporate Trust and Agency Group (or any
successor group thereto) of the Trustee, including any Vice President, Assistant
Vice President or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.
15
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the
Private Placement Legend.
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private
Placement Legend.
"RESTRICTED PAYMENT UNRESTRICTED SUBSIDIARY" means an
Unrestricted Subsidiary which was capitalized exclusively with a permitted
Restricted Payment or the proceeds from the issuance of an Equity Interest by
the Company or with the proceeds of the sale of stock or substantially all of
the assets of any other Unrestricted Subsidiary which was capitalized with such
funds to the extent that a liquidating dividend is paid to the Company or any
Restricted Subsidiary from the proceeds of such sale.
"RESTRICTED PERIOD" means the 40-day restricted period as defined
in Regulation S.
"RESTRICTED SUBSIDIARY" means, for the purposes of this
Indenture, a Subsidiary of the Company which at the time of determination is not
an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 144A" means Rule 144A promulgated under the Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Securities described above issued under
this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIZATION SUBSIDIARY" means any Person to which the Company
or any Restricted Subsidiary transfers Receivables and Other Assets and that
engages in no activities other than in connection with financing of Receivables
and Other Assets and that is designated by the Board of Directors as a
Securitization Subsidiary and
(A) no portion of the Indebtedness or any other Obligations
(contingent or otherwise) of which
(i) is guaranteed by the Company or any Restricted
Subsidiary (excluding guarantees of Obligations (other
than the principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings);
(ii) is recourse to or obligates the Company or any
Restricted Subsidiary (other than such Securitization
Subsidiary) in any way other than pursuant to Standard
Securitization Undertakings;
16
(iii) subjects any property or asset of the Company or any
Restricted Subsidiary (other than such Securitization
Subsidiary), directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings;
(B) with which neither the Company nor any Restricted Subsidiary
(other than such Securitization Subsidiary) has any material
contract, agreement, arrangement or understanding other than
on terms no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time
from Persons that are not Affiliates of the Company, other
than fees payable in the ordinary course of business in
connection with servicing Receivables and Other Assets of
such entity, and
(C) to which neither the Company nor any Restricted Subsidiary
(other than such Securitization Subsidiary) has any
obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of
operating results.
Any designation of a Securitization Subsidiary shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors of the Company giving effect to the designation and an
Officers' Certificate certifying that the designation complied with the
preceding conditions and was permitted by this Indenture.
"SERIES D PREFERRED STOCK" means the Company's $10.00 Series D
Exchangeable Preferred Stock Redeemable 2008, par value $0.01 per share.
"SERIES F PREFERRED STOCK" means the Company's $9.20 Series F
Exchangeable Preferred Stock Redeemable 2009, par value $0.01 per share.
"SERIES H PREFERRED STOCK" means the Company's $8.625 Series H
Exchangeable Preferred Stock Redeemable 2010, par value $0.01 per share.
"SERIES J PREFERRED STOCK" means the Company's Series J
Convertible Exchangeable Preferred Stock, par value $0.01 per share.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of the Indenture.
"STANDARD SECURITIZATION UNDERTAKINGS" means representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary that are reasonably customary in a Qualified
Securitization Transaction.
"SUBSIDIARY" of any Person means any corporation, association or
other business entity of which more than 50% of the total voting power of shares
of Capital Stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors,
17
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb).
"TOTAL ASSETS" means the total consolidated assets of the Company
and its Restricted Subsidiaries.
"TRANSFER RESTRICTED SECURITIES" means each Security, until the
earliest to occur of (a) the date on which such Security is exchanged in the
Exchange Offer and entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Securities
Act, (b) the date on which such Security has been disposed of in accordance with
a Shelf Registration Statement, (c) the date on which such Security is disposed
of by any broker or dealer registered under the Exchange Act pursuant to the
"Plan of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Security is distributable to the public pursuant to Rule 144 under
the Securities Act.
"TRANSFERS" means (i) any payment of interest on Indebtedness,
dividends or repayments of loans or advances and (ii) any other transfers of
assets, in each case from an Unrestricted Subsidiary to the Company or any of
its Restricted Subsidiaries.
"TREASURY RATE" means, for the purposes of this Indenture, the
yield to maturity at the time of computation of United States Treasury
securities with a constant maturity (as compiled by and published in the most
recent Federal Reserve Statistical Release H.15 (519) which has become publicly
available at least two Business Days prior to the date fixed for prepayment (or,
if such Statistical Release is no longer published, any publicly available
source of similar market data)) most nearly equal to the then remaining Average
Life of the Securities; PROVIDED that if the Average Life of the Securities is
not equal to the constant maturity of a United States Treasury security for
which a weekly average yield is given, the Treasury Rate shall be obtained by
linear interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such yields
are given, except that if the Average Life of the Securities is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"UNRESTRICTED GLOBAL NOTE" means a permanent Global Note in the
form of Exhibit A attached hereto that bears the Global Note Legend and that has
the "Schedule of Exchanges of Interests in the Global Note" attached thereto,
and that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Securities that do not bear the Private
Placement Legend.
18
"UNRESTRICTED SUBSIDIARY" means, for the purposes of this
Indenture, (i) each of the following Subsidiaries of the Company, unless and
until such Subsidiary ceases to be a Subsidiary of the Company or is designated
as a Restricted Subsidiary pursuant to the terms hereof: PRIMEDIANet Inc.,
PRIMEDIA Ventures, Inc., PRIMEDIA Teenclick Corp., PRIMEDIA Digital Video
Holdings LLC, About, Inc., HPC Interactive, LLC, Media Central Acquisition, LLC,
Kagan World Media Limited, Kagan Asia Media, Ltd., PRIMEDIA California Digital
Inc., Media Central LLC, PRIMEDIA Youth Entertainment LLC, PRIMEDIA Investment
LLC, PRIMEDIA PRISM LLC, PRIMEDIA Enterprises, Inc., Distributech LLC, and
PRIMEDIA International, Inc., (ii) any other Subsidiary of the Company which at
the time of determination is an Unrestricted Subsidiary (as designated by the
Board of Directors, as provided below) and (iii) any subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns, or holds any Lien on, any property of, any other Subsidiary of the Company
which is not a Subsidiary of the Subsidiary to be so designated; PROVIDED that
(a) the Company certifies that such designation complies with Section 4.07 and
4.14 hereof, and (b) the Subsidiary to be so designated has not at the time of
designation, and does not thereafter, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable with respect to any Indebtedness
pursuant to which the lender has recourse to any of the assets of the Company or
any of its Restricted Subsidiaries. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that immediately
after giving effect to such designation, the Company could incur at least $1.00
of additional Indebtedness pursuant to the first paragraph of Section 4.09
hereof (without giving effect to clauses (i) through (xvi) of the second
paragraph thereof), on a PRO FORMA basis taking into account such designation.
"U.S. GOVERNMENT OBLIGATIONS" means direct noncallable
obligations of or guaranteed by the United States of America.
"U.S. PERSON" means a U.S. person as defined in Rule 902(k) under
the Securities Act.
"WORKING CAPITAL" means, with respect to any Person for any
period, the current assets of such Person and its Subsidiaries (and in the case
of the Company and its Restricted Subsidiaries, excluding Unrestricted
Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries,
including only the Pro Rata Portion thereof) on a consolidated basis, after
excluding therefrom cash and cash equivalents and deferred income taxes, less
the current liabilities of such person and its Subsidiaries (and in the case of
the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries
and, in the case of Partially Owned Restricted Subsidiaries, including only the
Pro Rata Portion thereof) on a consolidated basis, after excluding therefrom, in
each case to the extent otherwise included therein, all short-term Indebtedness
for borrowed money, the current portion of any long-term Indebtedness,
liabilities arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts, which will not be, and will not be deemed to be,
inadvertent) drawn against insufficient funds in the ordinary course of
business, PROVIDED that such liabilities are extinguished within three business
days of this incurrence, and deferred income taxes of such Person and its
Subsidiaries (and in the case of the Company and its Restricted Subsidiaries,
excluding Unrestricted Subsidiaries and, in the case of Partially Owned
Restricted Subsidiaries, including only the Pro Rata Portion thereof).
19
SECTION 1.02. OTHER DEFINITIONS
Defined in
Term Section
---- ----------
"Additional Securities"..........................................2.01
"Affiliate Transaction"..........................................4.12
"Change of Control Offer"........................................4.10
"Change of Control Payment"......................................4.10
"Change of Control Payment Date".................................4.10(2)
"Event of Default"...............................................6.01
"Legal Holiday".................................................11.07
"Paying Agent"...................................................2.03
"Registrar"......................................................2.03
"Refinancing Indebtedness".......................................4.09
"Restricted Payments"............................................4.07
"Retired Capital Stock"..........................................4.07
"Refunding Capital Stock"........................................4.07
"Successor"......................................................5.01(i)
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Securities and the Guarantees.
"INDENTURE SECURITY HOLDER" means a Holder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
and
"OBLIGOR" on the Securities means the Company, any other obligor
upon the Securities or any successor obligor upon the Securities or any
Guarantor.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
20
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.01. ADDITIONAL SECURITIES; FORM AND DATING
(a) ISSUANCE OF ADDITIONAL SECURITIES. The Company may, subject
to Section 4.09 hereof, issue additional Securities (the "Additional
Securities") under this Indenture which will have identical terms as the
Securities issued on the date hereof other than with respect to their date of
issuance, issue price and first payment of interest. The Securities issued on
the date hereof and any Additional Securities subsequently issued shall be
treated as a single class for all purposes under this Indenture.
(b) GENERAL. The Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Security shall be dated the date of its
authentication. The Securities shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Security conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(c) GLOBAL NOTES. Securities issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Securities issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such of the
outstanding Securities as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Securities from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Securities represented thereby shall
be made by the Trustee or the Note Custodian, at
21
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06 hereof.
(d) TEMPORARY GLOBAL NOTES. Securities offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Securities represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or the nominee of the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Restricted Period shall be terminated upon the receipt
by the Trustee of (i) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream certifying that they have
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Note (except to
the extent of any beneficial owners thereof who acquired an interest therein
during the Restricted Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Note or an IAI Global Note bearing a Private Placement
Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an
Officers' Certificate from the Company. Following the termination of the
Restricted Period, beneficial interests in the Regulation S Temporary Global
Note shall be exchanged for beneficial interests in Regulation S Permanent
Global Notes pursuant to the Applicable Procedures. Simultaneously with the
authentication of Regulation S Permanent Global Notes, the Trustee shall cancel
the Regulation S Temporary Global Note. The aggregate principal amount of the
Regulation S Temporary Global Note and the Regulation S Permanent Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
(e) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in the Regulation S Global Notes that are held
by Participants through Euroclear or Clearstream.
SECTION 2.02. EXECUTION AND AUTHENTICATION
One Officer shall sign the Securities for the Company by manual
or facsimile signature. The Company's seal may be reproduced on the Securities
and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time a Note is authenticated, the Security shall nevertheless
be valid.
A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by
two Officers (an "Authentication Order"), authenticate Securities for original
issue.
22
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where Securities
may be presented for registration of transfer or for exchange ("REGISTRAR") and
an office or agency where Securities may be presented for payment ("PAYING
AGENT"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Company may appoint one or more co-registrars and one
or more additional paying agents. The term "Registrar" includes any co-registrar
and the term "Paying Agent" includes any additional paying agent. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company shall notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes ("NOTE CUSTODIAN").
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal, premium or Additional Interest, if any, or interest on the
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Securities.
SECTION 2.05. HOLDER LISTS
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may
23
reasonably require of the names and addresses of the Holders of Securities and
the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 90 days after the date of such
notice from the Depositary or (ii) the Company in its sole discretion determines
that the Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the Trustee.
Upon the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.11 hereof. Every Security authenticated
and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Security other than as provided in this Section 2.06(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b), (c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL
NOTES. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted 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 beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL
NOTE. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance with
the transfer restrictions set forth in the Private Placement Legend;
PROVIDED, that prior to the expiration of the Restricted Period transfers
of beneficial interests in the Regulation S Global Note may not be made
to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any Unrestricted
Global Note may be transferred only to Persons who take delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note. No
written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL
INTERESTS IN GLOBAL NOTES. In connection with all transfers and exchanges
of beneficial interests (other than a
24
transfer of a beneficial interest in a Global Note to a Person who takes
delivery thereof in the form of a beneficial interest in the same Global
Note), the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Note in an amount equal
to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited
with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above; PROVIDED, that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Global Note prior to (x) the expiration of
the Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities Act. Upon
an Exchange Offer by the Company in accordance with Section 2.06(f)
hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to
have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests
in Global Notes contained in this Indenture, the Securities and otherwise
applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Temporary Global
Note or the Regulation S Permanent Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form
of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications and certificates and Opinion
of Counsel required by item (3) thereof, if applicable, and the
transferee must deliver a certificate in the form of Exhibit D
hereto.
25
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, 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 Securities 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 pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
(2) if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance
with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of
beneficial interests transferred pursuant to subparagraph (B) or
(D) above.
26
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE
NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest for
a Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Definitive Note, then, upon
receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in
item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable, and a certificate in
the form of Exhibit D hereto;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Person
27
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from the Depositary and
the Participant or Indirect Participant. The Trustee shall make available
for delivery such Definitive Notes to the Persons in whose names such
Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be subject
to all restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the case
of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it 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) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act and
that the
28
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
make available for delivery such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this section 2.06(c)(iii)
shall not bear the Private Placement Legend. A beneficial interest in an
Unrestricted Global Note cannot be exchanged for a Definitive Note
bearing the Private Placement Legend or transferred to a Person who takes
delivery thereof in the form of a Definitive Note bearing the Private
Placement Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL
INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in
29
accordance with Rule 144 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof;
(F) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof; or
(G) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, and a certificate in the
form of Exhibit D hereto,
the Trustee shall cancel the Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B)
above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note and in the case of clause (G) above, the IAI
Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Restricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note only 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 pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; and
30
(2) if the Holder of such Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof;
in each such case set forth in this subparagraph (D), an Opinion of
Counsel in form reasonably acceptable to the Company to the effect that
such exchange or transfer is in compliance with the Securities Act, that
the restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act, and such Definitive Notes are being exchanged or
transferred in compliance with any applicable blue sky securities laws of
any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS
IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange
or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate
principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of beneficial interests transferred pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE
NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Restricted Definitive Notes may be transferred to and registered
in the name of Persons who take delivery thereof if the Registrar
receives the following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
31
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof;
(C) if the transfer will be made pursuant to an
exemption from the registration requirements of the Securities
Act to an Institutional Accredited Investor, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications and certificates and Opinion of
Counsel required by item (3) thereof, if applicable, and the
transferee must deliver a certificate in the form of Exhibit D
hereto; and
(D) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver (x) a certificate in the
form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof,
if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted
Definitive 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 pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive
Notes proposes to exchange such Notes for an Unrestricted
Definitive Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (1)(a)
thereof;
(2) if the Holder of such Restricted Definitive
Notes proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act, that the
32
restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance
with the Securities Act, and such Restricted Definitive Note is
being exchanged or transferred in compliance with any applicable
blue sky securities laws of any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer
such Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request for such a
transfer, the Registrar shall register the Unrestricted Definitive Notes
pursuant to the instructions from the Holder thereof. Unrestricted
Definitive Notes cannot be exchanged for or transferred to Persons who
take delivery thereof in the form of a Restricted Definitive Note.
(f) 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 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global 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 and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrent with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(g) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (b) below,
each Global Note and each Definitive Note (and all Notes issued
in exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE
COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF
(OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT THE TIME DURING THREE MONTHS PRECEDING THE
DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2)
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A
33
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN INSTITUTION THAT
IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY) THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION, AND A CERTIFICATE WHICH MAY BE OBTAINED FROM THE
COMPANY OR THE TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND
THE TRUSTEE, (5) PURSUANT TO ANY EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES
ACT, OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY
AND THE TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY
REASONABLY REQUIRE TO CONFIRM THAT TRANSFER BY IT OF THIS SECURITY
COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A OR (2) PURCHASING FROM A PERSON NOT PARTICIPATING IN THE
INITIAL DISTRIBUTION OF THIS SECURITY (OR ANY PREDECESSOR SECURITY), THAT
IT IS AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR
(3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i) OF RULE 902
UNDER) REGULATION S UNDER THE SECURITIES ACT."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to
this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement
Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a
legend in substantially the following form:
34
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE Trustee MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Securities represented by such Global Note shall
be reduced accordingly and an endorsement shall be made on such Global Note, by
the Trustee or by the Depositary at the direction of the Trustee, to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note, by
the Trustee or by the Depositary at the direction of the Trustee, to reflect
such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note
for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06, 4.08, and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Security selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in
part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this
35
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange Securities during a period
beginning at the opening of business 15 days before the day of mailing of
a notice of redemption under Section 3.02 hereof and ending at the close
of business on the day of selection, (B) to register the transfer of or
to exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part or
(C) to register the transfer of or to exchange a Security between a
record date and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Security, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Securities and for all other purposes,
and none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a transfer or exchange may be submitted by
facsimile.
SECTION 2.07. REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Trustee or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon receipt of an Authentication Order, shall authenticate a
replacement Security if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Security is replaced. The Company may charge for its
expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Securities duly issued hereunder.
SECTION 2.08. OUTSTANDING SECURITIES.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Security does not cease to be outstanding because the Company or
an Affiliate of the Company
36
holds the Security; however, Securities held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Security is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Securities payable on that date, then on and after that date
such Securities shall be deemed to be no longer outstanding and shall cease to
accrue interest.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities that a Responsible Officer of
the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until certificates representing Securities are ready for
delivery, the Company may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of certificated Securities but may
have variations that the Company considers appropriate for temporary Securities
and as shall be reasonably acceptable to the Trustee. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Securities in exchange for temporary Securities.
Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered for
registration of transfer, exchange, payment, replacement or cancellation. The
Company may not issue new Securities to replace Securities that it has paid or
that have been delivered to the Trustee for cancellation.
37
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, in each case at the rate
provided in the Securities and in Section 4.01 hereof. The Company shall notify
the Trustee in writing of the amount of defaulted interest proposed to be paid
on each Security and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date, PROVIDED that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. At least 15 days before the special
record date, the Company (or, upon the written request of the Company, the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice that states the special record date, the related
payment date and the amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of redemption
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company will promptly notify the Trustee of
any change in the "CUSIP" numbers.
ARTICLE 3
OPTIONAL REDEMPTION AND
OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
SECTION 3.01. NOTICES TO TRUSTEE
(a) If the Company elects to redeem Securities pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth that such redemption shall occur pursuant to
Section 3.07 hereof and setting forth the redemption date, the principal amount
of Securities to be redeemed and the redemption price.
(b) If the Company elects to redeem Securities pursuant to the
provisions of Section 3.08 hereof, it shall furnish to the Trustee, at least 45
days but not more than 60 days before the redemption date, an Officers'
Certificate setting forth that a Change of Control has occurred and the date of
such Change of Control and that such redemption shall occur pursuant to Section
3.08 hereof, and further setting forth the principal amount of Securities to be
redeemed, the redemption price of such Securities and the intended redemption
date.
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SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED
If less than all of the Securities are to be redeemed at any
time, selection of the Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed, or, if the Securities are not listed
on a national securities exchange, on a PRO RATA basis, by lot or by such method
as the Trustee shall deem fair and appropriate; PROVIDED that no Security in
denominations of $1,000 or less shall be redeemed in part. The Trustee may
select for redemption any portion (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed. The particular
Securities to be redeemed shall be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption date by the
Trustee from the outstanding Securities not previously called for redemption.
SECTION 3.03. NOTICES TO HOLDERS
(a) If the Company elects to redeem Securities pursuant to
either of Section 3.07 or 3.08 hereof, notice of redemption shall be mailed by
first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Securities to be redeemed at its registered
address.
The notice shall identify the Securities to be redeemed
(including CUSIP number) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and
that, after the redemption date, upon surrender of such
Security, a new Security or Securities in principal amount
equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to
collect the redemption price;
(6) that interest on Securities or portions of them called for
redemption ceases to accrue on and after the redemption
date;
39
(7) the paragraph of the Securities pursuant to which the
Securities are being redeemed; and
(8) the aggregate principal amount of Securities that are being
redeemed.
(b) At the Company's timely request, the Trustee shall give the
notice required in Section 3.03(a) hereof above in the Company's name and at its
expense and setting forth the information to be stated in such notice as
provided in Section 3.03(a) hereof.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed (after the Trustee has
received the notice provided for in Section 3.01 hereof), Securities called for
redemption become due and payable on the redemption date at the redemption price
and shall cease to bear interest from and after the redemption date (unless the
Company shall fail to make payment of the redemption price or accrued interest
on the redemption date). Upon surrender to the Paying Agent, such Securities
shall be paid at the redemption price, plus premium and Additional Interest, if
any, plus accrued interest, if any, to the redemption date, but interest
installments whose maturity is on the redemption date and Additional Interest
which become payable on the redemption date will be payable to the Holder of
record at the close of business on the relevant record dates referred to in the
Securities.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE OR PURCHASE PRICE
Prior to 10:00 a.m. on the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money (in same-day funds)
sufficient to pay the redemption price of, premium and Additional Interest, if
any, and accrued interest on, all Securities to be redeemed on that date other
than Securities or portions thereof called for redemption on that date which
previously have been delivered by the Company to the Trustee for cancellation.
The Trustee or the Paying Agent shall return to the Company any such money not
required for that purpose.
If the Company complies with the preceding paragraph, interest on
the Securities or portions thereof to be redeemed, whether or not such
Securities are presented for payment, will cease to accrue on the applicable
redemption date. If any Security called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, then interest will be paid on the unpaid principal from
the redemption date until such principal is paid and on any interest not paid on
such unpaid principal, in each case, at the rate provided in the Securities and
in Section 4.01 hereof.
SECTION 3.06. SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part, the
Company shall issue and the Trustee, upon the written order of the Company,
shall authenticate for the Holder at the expense of the Company a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
40
SECTION 3.07. OPTIONAL REDEMPTION
At any time prior to May 15, 2006, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount of Securities
(which includes Additional Securities, if any) issued hereunder at a redemption
price of 108% of the principal amount of such Securities, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds of one or
more Equity Offerings; PROVIDED that:
(1) at least 65% of the aggregate principal amount of Securities
(which includes Additional Securities, if any) issued
remains outstanding immediately after the occurrence of each
of those redemptions (excluding Securities held by the
Company and its Subsidiaries); and
(2) any redemption must occur within 60 days of the date of
closing of such Equity Offering.
Except as provided in the preceding paragraph and other than in
connection with a Change of Control pursuant to Section 3.08 herein, the Company
may not redeem the Securities prior to May 15, 2008. On or after May 15, 2008,
the Company may, at its option, redeem the Securities, in whole or in part, at
the redemption prices (expressed as percentages of the principal amount) set
forth in the immediately succeeding paragraph, plus accrued and unpaid interest
thereon to the applicable redemption date.
The redemption price as a percentage of the principal amount
shall be as follows, if the Securities are redeemed during the twelve-month
period beginning May 15 of the years indicated below:
Year Percentage
---- ----------
2008.........................................104.000%
2009.........................................102.667%
2010.........................................101.333%
2011 and thereafter..........................100.000%
If the optional redemption date is on or after an interest record
date and on or before the related interest payment date, the accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on that record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
Notwithstanding the foregoing, upon the occurrence at any time of
a Change in Control, the Securities will be redeemable, at the option of the
Company, in whole or in part, pursuant to the provisions of Section 3.08 hereof.
Any redemption pursuant to this Section 3.07 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
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SECTION 3.08. OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
In addition to any redemption pursuant to Section 3.07 hereof,
the Company may, at its option, redeem the Securities, in whole or in part, at
any time within 160 days after a Change of Control upon not less than 30 nor
more than 60 days' prior notice to each Holder of Securities to be redeemed, at
a redemption price equal to the sum of (i) the then outstanding principal amount
of the Securities being redeemed plus (ii) accrued and unpaid interest, if any,
to the redemption date plus (iii) the Applicable Premium.
Any redemption pursuant to this Section 3.08 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
hereof.
SECTION 3.09. SINKING FUND
The Securities will not be entitled to any sinking fund payments.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities, and shall
pay Additional Interest, if any, on the dates and in the manner provided in the
Registration Rights Agreement. Principal and interest shall be considered paid
on the date due if the Paying Agent, other than the Company or a Subsidiary of
the Company, holds on that date money deposited by the Company in available
funds and designated for and sufficient to pay all principal and interest then
due.
The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, at the same rate per annum on the Securities to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain, in the Borough of Manhattan, The City
of New York, an office or agency (which may be an office of the Trustee or the
Registrar) where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of 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.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and
42
may from time to time rescind such designations; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
SECTION 4.03. SEC REPORTS; FINANCIAL STATEMENTS
(a) The Company and the Guarantors shall file with the Trustee,
within 15 days after it files the same with the SEC, copies of the annual
reports and the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company and/or the Guarantors are required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is not
subject to the requirements of such Section 13 or 15(d), the Company shall file
with the Trustee, within 15 days after it would have been required to file the
same with the SEC, financial statements, including any notes thereto (and with
respect to annual reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of Financial Condition
and Results of Operations," both comparable to that which the Company would have
been required to include in such annual reports, information, documents or other
reports if the Company had been subject to the requirements of such Section 13
or 15(d). Any Guarantor not required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act shall not be required to file such reports with the
SEC or Trustee. The Company and the Guarantors shall also comply with the other
provisions of TIA Section 314(a).
(b) If the Company is required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, the Company shall
cause any annual report furnished to its stockholders generally and any
quarterly or other financial reports furnished by it to its stockholders
generally to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Registrar.
If the Company is not required to furnish annual or quarterly reports to its
stockholders pursuant to the Exchange Act, so long as at least 5% of the
original principal amount of the Securities remain outstanding, the Company
shall cause its financial statements referred to in Section 4.03(a) hereof,
including any notes thereto (and with respect to annual reports, an auditors'
report by a firm of established national reputation), and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" to be
so mailed to the Holders within 90 days after the end of each of the Company's
fiscal years and within 60 days after the end of each of the Company's first
three fiscal quarters. The Company will cause to be disclosed in a statement
accompanying any annual report or comparable information as of the date of the
most recent financial statements in each such report or comparable information
the amount available for payments pursuant to Section 4.07 hereof. As of the
date hereof, the Company's fiscal year ends on December 31. Any Guarantor not
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act shall not be required to file such reports with the SEC or Trustee.
Delivery of such reports, information and documents to the
Trustee is for information purposes only and the Trustee's receipt of such shall
not constitute constructive
43
notice of any information contained therein or determinable from information
contained therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 4.04. COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, an Officers' Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the best
of his knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the
Securities are prohibited or, if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.03 hereof shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Articles 4 or 5 of this Indenture 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.
(c) The Company shall, so long as any of the Securities are
outstanding, (i) deliver to the Trustee, forthwith (and in any event within five
Business Days) upon any Officer becoming aware of any Default or Event of
Default under this Indenture, an Officers' Certificate specifying such Default
or Event of Default and what action the Company is taking or proposes to take
with respect thereto and (ii) promptly notify the Trustee of any Change of
Control.
SECTION 4.05. COMPLIANCE WITH LAWS, TAXES
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, noncompliance with which would materially adversely
affect the business, earnings, properties, assets or condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole.
The Company shall, and shall cause each of its Subsidiaries to,
pay prior to delinquency all taxes, assessments, and governmental levies except
as contested in good faith and by appropriate proceedings.
44
SECTION 4.06. STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
Company's obligation to pay the Securities; and the Company (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law insofar as such law applies to the Securities, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 4.07. LIMITATIONS ON RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Capital Stock or other Equity Interests (other than (A) dividends
or distributions payable in Equity Interests (other than Redeemable Stock) of
the Company or such Restricted Subsidiary, (B) dividends or distributions
payable to the Company or any of its Restricted Subsidiaries or (C) dividends or
distributions by a Partially Owned Restricted Subsidiary so long as, in the case
of any dividend or distribution payable on or in respect of any class or series
of securities issued by that Partially Owned Restricted Subsidiary, the Company
or a Restricted Subsidiary receives at least its pro rata share of that dividend
or distribution in accordance with its Equity Interests in that class or series
of securities), (ii) (A) voluntarily purchase, redeem or otherwise acquire or
retire for value any preferred stock of the Company or any of its Restricted
Subsidiaries, which by its terms, is exchangeable for any Indebtedness
("Exchangeable Preferred Stock") that is pari passu with or subordinated in
right of payment to the Securities or (B) purchase, redeem or otherwise acquire
or retire for value any Equity Interests (other than Exchangeable Preferred
Stock) of the Company or any of its Restricted Subsidiaries (other than any such
Equity Interests purchased from the Company or any of its Restricted
Subsidiaries), (iii) voluntarily purchase, repay, redeem, defease (including,
but not limited to, covenant or legal defeasance) or otherwise acquire or retire
for value any Indebtedness that is subordinated in right of payment to the
Securities (other than in connection with the refunding or refinancing of such
Indebtedness), except a payment of interest or principal at the stated maturity
of such Indebtedness or in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of
such payment, and other than Indebtedness between and among the Company and its
Restricted Subsidiaries or (iv) make Investments in Restricted Payment
Unrestricted Subsidiaries (the foregoing actions set forth in clauses (i)
through (iv) being referred to as "Restricted Payments"), if, at the time of
such Restricted Payment:
(a) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; or
(b) the Company could not incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 4.09 hereof
(without giving effect to clauses (i) through (xvi) of the second
paragraph thereof), which calculation shall be made on a PRO FORMA basis
deducting from Adjusted Consolidated Net Income the amount of any
45
Investment the Company has made in an Unrestricted Subsidiary during the
relevant period and any Investment the Company intends to make in an
Unrestricted Subsidiary, to the extent that such Investment is made with
amounts included in Adjusted Consolidated Net Income as a result of
Transfers described in clause (c)(x) of this Section 4.07 or clause
(c)(y) of Section 4.14 hereof; or
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made after May 13, 1992, exceeds the sum of the
following: (w) 50% of the amount of the Adjusted Consolidated Net Income
(other than amounts included in the next succeeding clause (c)(x)) of the
Company for the period (taken as one accounting period) from the
beginning of the first quarter commencing immediately after May 13, 1992
through the end of the Company's fiscal quarter ending immediately prior
to the time of such Restricted Payment (or, if Adjusted Consolidated Net
Income for such period is a deficit, 100% of such deficit); PLUS (x) 100%
of the amount of all Transfers from a Restricted Payment Unrestricted
Subsidiary up to the aggregate amount of the Investment (after taking
into account all prior Transfers from such Restricted Payment
Unrestricted Subsidiary) in such Restricted Payment Unrestricted
Subsidiary (valued in each case as provided in the definition of
"Investment"); PLUS (y) in the event of a designation of a Restricted
Payment Unrestricted Subsidiary as a Restricted Subsidiary, 100% of an
amount equal to the greater of (A) the fair market value of such
Subsidiary as determined by the Board of Directors of the Company in good
faith (or, if such fair market value may exceed $25.0 million, as
determined in writing by an independent investment banking firm of
nationally recognized standing) at the time of the redesignation of such
Restricted Payment Unrestricted Subsidiary as a Restricted Subsidiary and
(B) the Consolidated Net Cash Flow generated by such Subsidiary for the
period (taken as one accounting period) from the beginning of its first
fiscal quarter commencing immediately after the date of its designation
as a Restricted Payment Unrestricted Subsidiary through such Subsidiary's
fiscal quarter ending immediately prior to its designation as a
Restricted Subsidiary (or if such Consolidated Net Cash Flow for such
period is a deficit, 100% of such deficit); PLUS (z) 100% of the
aggregate net cash proceeds received by the Company from (i) the issuance
or sale of Equity Interests of the Company (other than such Equity
Interests issued or sold to a Restricted Subsidiary of the Company and
other than Redeemable Stock) or (ii) the sale of the stock of an
Unrestricted Subsidiary or the sale of all or substantially all of the
assets of an Unrestricted Subsidiary to the extent that a liquidating
dividend is paid to the Company or any Restricted Subsidiary from the
proceeds of such sale;
PROVIDED, HOWEVER, that for purposes of making Investments in Unrestricted
Subsidiaries, if the amount determined in accordance with clauses (w) or (y)
above is a deficit, such deficit shall be excluded from the computation of this
clause (c); and PROVIDED, FURTHER, that all such amounts applied pursuant to
this clause (c) shall not be available for application under clause (c) of
Section 4.14 hereof.
The foregoing provisions shall not prohibit (i) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (ii) (A) the retirement of any shares of the Company's Capital Stock
(the "Retired Capital Stock") either (1) in exchange for or (2) out of the net
proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary) of
46
other shares of the Company's Capital Stock (the "Refunding Capital Stock")
other than any Redeemable Stock, and (B) if immediately prior to such retirement
of such Retired Capital Stock the declaration and payment of dividends thereon
was permitted under either clause (iii) or (vii) of this paragraph, the
declaration and payment of dividends on the Refunding Capital Stock in an
aggregate amount per year no greater than the aggregate amount of dividends per
year that was declarable and payable on such Retired Capital Stock immediately
prior to such retirement; (iii) the declaration and payment of dividends to the
holders of the Series D Preferred Stock, Series F Preferred Stock and the Series
H Preferred Stock; (iv) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company issued to present
and former members of management of the Company and its Subsidiaries pursuant to
subscription and option agreements in effect on the date hereof or under any
stock option plan of Xxxxx.xxx, Inc. existing on the date hereof and Equity
Interests of the Company issued to future members of management pursuant to
subscription agreements executed subsequent to the date hereof, containing
provisions for the repurchase of such Equity Interests upon death, disability or
termination of employment of such persons which are substantially identical to
those contained in the subscription agreements in effect on the date hereof; (v)
the declaration and payment of dividends on the Company's Common Stock of up to
$25.0 million per annum plus 6% per annum of the net proceeds received at any
time by the Company from (a) the issue or sale of Common Stock or (b)(1) the
issuance of securities convertible into Common Stock (other than any such
convertible securities issued to (A) members of the Company's management or its
Board of Directors and (B) any Subsidiary of the Company) and (2) the conversion
of such convertible securities into Common Stock, in both cases at the time of
such conversion into Common Stock; (vi) the repurchase, redemption or other
acquisition or retirement for value of Indebtedness of the Company or any
Guarantor which is subordinated in right of payment to the Securities either (A)
in exchange for or (B) with the proceeds of the issuance of, Equity Interests
(other than Redeemable Stock) of the Company; (vii) the declaration and payment
of dividends to holders of any class or series of the Company's preferred stock
issued after the date hereof (including, without limitation, the declaration and
payment of dividends on Refunding Capital Stock in excess of the dividends
declarable and payable thereon pursuant to clause (ii) of this paragraph),
PROVIDED that at the time of such issuance the Company's Fixed Charge Coverage
Ratio, after giving effect to such issuance, would be greater than 1.25 to 1;
(viii) the redemption, repurchase or other acquisition or retirement for value
of any Indebtedness of the Company or any Guarantor which is subordinated in
right of payment to the Securities (A) with the proceeds of, or in exchange for,
Indebtedness incurred pursuant to clause (vii) of the second paragraph of
Section 4.09 hereof or (B) if, after giving effect to such redemption,
repurchase or retirement, the Company could incur at least $1.00 of Indebtedness
under the first paragraph of Section 4.09 hereof (without giving effect to
clauses (i) through (xvi) of the second paragraph thereof); (ix) the retirement
of the Series D Preferred Stock, Series F Preferred Stock, Series H Preferred
Stock and Series J Preferred Stock in exchange for the issuance of the Class D
Subordinated Debentures, Class F Subordinated Debentures, Class H Subordinated
Debentures and Class J Subordinated Notes, respectively, pursuant to the
respective certificates of designations relating thereto, (x) the purchase of
Class D Subordinated Debentures, Class F Subordinated Debentures and Class H
Subordinated Debentures in accordance with the Change of Control covenants in
the Class D Debenture Indenture, the Class F Debenture Indenture and the Class H
Debenture Indenture, respectively; (xi) Investments in Unrestricted Subsidiaries
having an aggregate fair market value, when taken together with all other
Investments made pursuant to this clause (xi) that are at that time outstanding,
not to exceed $50.0 million at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
47
effect to subsequent changes in value); (xii) the repurchase, retirement or
other acquisition for value of Equity Interests of the Company which are not
held by KKR or any of its Affiliates; PROVIDED, that (A) the aggregate
Restricted Payments made under this clause (xii) in any calendar year shall not
exceed $75 million and (B) immediately after giving effect to each Restricted
Payment made pursuant to this clause (xii) on a pro forma basis, the Company
could incur at least $1.00 of additional Indebtedness pursuant to the first
paragraph of Section 4.09 hereof (without giving effect to clauses (i) through
(xvi) of the second paragraph of Section 4.09), (xiii) other Restricted Payments
in an aggregate amount not to exceed $50.0 million and (xiv) any Investment made
in a Securitization Subsidiary in connection with a Qualified Securitization
Transaction, which Investment consists of the transfer of Receivables and Other
Assets; PROVIDED that in determining the aggregate amount expended for
Restricted Payments in accordance with paragraph (c) above, (1) no amounts
expended under clauses (ii)(A)(1), (vi)(A), (viii), (ix) and (xiv) of this
paragraph will be included, (2) 100% of the amounts expended under clauses
(ii)(A)(2), (iv), (v), (vi)(B), (vii), (x), (xi), (xii) and (xiii) of this
paragraph will be included, (3) 50% of the amounts expended under clause (iii)
of this paragraph will be included, (4) amounts expended under clause (ii)(B) of
this paragraph will be included to the extent previously included for the
Retired Capital Stock and (5) 100% of the amounts expended under clause (i) to
the extent not included under subclauses (1) through (4) of this proviso will be
included. For the purposes of determining compliance with this Section 4.07, in
the event that a Restricted Payment meets the criteria of more than one of the
categories of permitted Restricted Payments described in clauses (i) through
(xiv) above or is entitled to be incurred pursuant to the first paragraph of
this Section 4.07 (including clauses (a), (b) and (c) thereof), the Company
shall, in its sole discretion, classify such Restricted Payment in any manner
that complies with the covenants described above and such Restricted Payment
will be treated as having been made pursuant to only one of such clauses or
pursuant to the first paragraph of this Section 4.07.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officer's Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations may
be based on the Company's latest available internal financial statements.
SECTION 4.08. DIVIDENDS AND PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock, or any other interest or participation in, or measured by,
its profits, owned by the Company or any of its Restricted Subsidiaries, or pay
any Indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii)
make loans or advances to the Company or any of its Restricted Subsidiaries or
(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of: (A) the terms (as in effect on the date hereof) of the
Existing Indebtedness, (B) the terms (as in effect on the date hereof) of the
Bank Credit Facilities and the Outstanding Notes and Outstanding Note
Indentures, (C) the terms of Indebtedness of the Company incurred in accordance
with Section 4.09 hereof; PROVIDED that such terms of any such Indebtedness
constitute no greater encumbrance or restriction on the
48
ability of any Restricted Subsidiary to pay dividends or make distributions,
make loans or advances or transfer properties or assets than is permitted by
this Section 4.08, (D) the terms of this Indenture and the Securities, (E)
applicable law, (F) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices, (G) the terms of
purchase money obligations for property acquired in the ordinary course of
business, but only to the extent that such purchase money obligations restrict
or prohibit the transfer of the property so acquired, (H) the terms of the Class
D Subordinated Debentures, the Class D Debenture Indenture, the Class F
Subordinated Debentures, the Class F Debenture Indenture, the Class H
Subordinated Debentures and the Class H Debenture Indenture and the Class J
Subordinated Notes, (I) any encumbrance or restriction with respect to a
Subsidiary of the Company that is not a Subsidiary of the Company on the date of
this Indenture, which encumbrance or restriction is in existence at the time
such Person becomes a Subsidiary of the Company or is created on the date it
becomes a Subsidiary of the Company, (J) any encumbrance or restriction with
respect to a Subsidiary of the Company imposed pursuant to an agreement which
has been entered into for the sale or disposition of all or substantially all
the Capital Stock or assets of such Subsidiary, (K) customary provisions in
joint venture agreements and other similar agreements entered into in the
ordinary course of business, (L) customary provisions contained in leases and
other agreements entered into in the ordinary course of business, (M) the terms
of any Indebtedness for borrowed money of any Partially Owned Restricted
Subsidiary, (N) in the case of clause (iii) of the first sentence of this
Section 4.08, any encumbrance or restriction contained in mortgages, pledges or
other security agreements permitted under the Indenture securing Indebtedness of
the Company or a Restricted Subsidiary of the Company to the extent that
encumbrance or restriction restricts the transfer of the property subject to
those mortgages, pledges or other security agreements, (O) any contractual
requirements incurred with respect to Qualified Securitization Transactions
relating exclusively to a Securitization Subsidiary that, in the good faith
determination of the Board of Directors of the Company, are customary in
Qualified Securitization Transactions or (P) any encumbrance or restriction
existing under any agreement which refinances or replaces the agreements
described in clauses (A), (B), (D), (H), (K), (L) and (M), PROVIDED that the
terms and conditions of any such encumbrances or restrictions contained in any
such agreements constitute no greater encumbrance or restriction on the ability
of any Restricted Subsidiary to pay dividends or make distributions, make loans
or advances or transfer properties or assets than those under or pursuant to the
agreement evidencing the Indebtedness or obligations refinanced. Nothing
contained in this Section 4.08 shall prevent the Company or a Restricted
Subsidiary from entering into any agreement permitting or providing for the
incurrence of Liens otherwise permitted by Section 4.13 hereof.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to any
Indebtedness unless the Company's Debt to Consolidated Cash Flow Ratio for its
four full fiscal quarters ending immediately prior to the date such additional
Indebtedness is created, incurred, issued, assumed or guaranteed would have been
no greater than 6.0 to 1, and such Indebtedness is not senior in right of
payment to the Securities; PROVIDED that such calculation shall give effect to
(A) the incurrence of any Indebtedness (after giving effect to the application
of the proceeds thereof) in connection with the simultaneous acquisition of any
person, business, property or assets and (B) the Consolidated Cash Flow
generated by such acquired person, business, property or assets, giving effect
in each case to
49
such incurrence of Indebtedness, application of proceeds and Consolidated Cash
Flow as if such acquisition had occurred at the beginning of such four quarter
period. For purposes of the foregoing provision, cash flow generated by any
acquired person, business, property or asset shall be determined on the same
basis as the definition of Consolidated Cash Flow and shall be based on the
actual earnings before interest, taxes, depreciation and amortization of such
acquired person, business, property or asset during the immediately preceding
four full fiscal quarters PLUS (y)(i) the savings in cost of goods sold that
would have resulted during that period from the effect of using the Company's
actual costs for comparable goods and services during that period and (ii) other
savings in cost of goods sold or eliminations of selling, general and
administrative expenses as determined by the Company in good faith in its
consideration of such acquisitions and consistent with the Company's experiences
in acquisitions of similar businesses MINUS (z) the incremental expenses that
would be included in cost of goods sold and selling, general and administrative
expenses that would have been incurred by the Company in the operation of such
acquired person, business, property or assets during such period.
The foregoing limitations shall not apply to the incurrence of
(i) Indebtedness pursuant to the Credit Facilities (provided that the principal
amount of such Indebtedness shall not exceed $1.3 billion, less the amount of
all repayments made in respect of term loans and of all permanent commitment
reductions with respect to revolving loans (except to the extent, and only to
the extent, that any required repayments of principal in connection with such
commitment reduction are not made) made under the Credit Facilities (excluding
such repayments and commitment reductions which occur substantially
contemporaneously with a refinancing or a refunding thereof)), PLUS any amounts
then available under clause (vi) of this paragraph; (ii) Existing Indebtedness;
(iii) Indebtedness represented by the Outstanding Notes and the Securities (but
not any Additional Securities); (iv) Indebtedness represented by the Class D
Subordinated Debentures issued in exchange for all the outstanding Series D
Preferred Stock, the Class F Subordinated Debentures issued in exchange for all
the outstanding Series F Preferred Stock, the Class H Subordinated Debentures
issued in exchange for all the outstanding Series H Preferred Stock and the
Class J Subordinated Notes issued in exchange for all the outstanding Series J
Preferred Stock; (v) Capital Lease Obligations in an aggregate principal amount
which, when aggregated with the principal amount of all other Capital Lease
Obligations then outstanding and incurred pursuant to this clause (v) and
including all Refinancing Indebtedness (as defined below) incurred to refund,
refinance or replace any other Indebtedness incurred pursuant to this clause
(v), does not exceed 5% of Total Assets; (vi) Indebtedness in an aggregate
principal amount equal to the greater of (A) $225.0 million in the aggregate at
any one time outstanding for the Company and its Restricted Subsidiaries or (B)
Indebtedness created, incurred, issued, assumed or guaranteed (x) by the Company
at any one time outstanding not in excess of 7% of the Consolidated Net Worth of
the Company at the time of such creation, incurrence, issuance, assumption or
guarantee or (y) by any Restricted Subsidiary of the Company at any one time
outstanding not in excess of 7% of the Consolidated Net Worth of such Restricted
Subsidiary at the time of such creation, incurrence, issuance, assumption or
guarantee; (vii) Indebtedness created, incurred, issued, assumed or guaranteed
in exchange for or the proceeds of which are used to extend, refinance, renew,
replace, substitute or refund Indebtedness referred to in clauses (i) through
(vi) above, including additional Indebtedness incurred to pay premiums and fees
in connection therewith (the "Refinancing Indebtedness"); PROVIDED, that (A) the
principal amount of such Refinancing Indebtedness shall not exceed the principal
amount of Indebtedness (including unused commitments and additional Indebtedness
incurred to pay premiums and fees in connection therewith) so extended,
refinanced, renewed,
50
replaced, substituted or refunded PLUS any amounts then available under clause
(vi) of this paragraph, (B) in the case of Refinancing Indebtedness for
Indebtedness permitted under clauses (ii) and (iv) of this paragraph, the
Refinancing Indebtedness permitted under clauses (ii) and (iv) of this paragraph
shall have an Average Life equal to or greater than the Average Life of the
Indebtedness being extended, refinanced, renewed, replaced, substituted or
refunded and (C) the Refinancing Indebtedness for Indebtedness permitted under
clauses (ii) and (iv) of this paragraph shall rank, in right of payment, no more
senior than such Indebtedness being extended, refinanced, renewed, replaced,
substituted or refunded and the Refinancing Indebtedness for Indebtedness
permitted under clauses (i), (iii), (v) and (vi) of this paragraph shall rank,
in right of payment, PARI PASSU with or junior to the Securities; (viii)
intercompany Indebtedness incurred in connection with Investments in
Unrestricted Subsidiaries; PROVIDED that such Investments are permitted by
Section 4.07 or Section 4.14 hereof; (ix) Indebtedness under Currency Agreements
and Interest Rate Agreements, PROVIDED that in the case of Currency Agreements
which relate to other Indebtedness, such Currency Agreements do not increase the
Indebtedness of the Company outstanding other than as a result of fluctuations
in foreign currency exchange rates; (x) Indebtedness arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any Restricted
Subsidiary of the Company pursuant to such agreements, incurred or assumed by
the acquired Subsidiary in connection with the acquisition or disposition of any
business, assets or Restricted Subsidiary of the Company, other than guarantees
or similar credit support by the Company of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Restricted Subsidiary
for the purpose of financing such acquisition; PROVIDED that the maximum
aggregate liability in respect of all such Indebtedness in the nature of such
guarantees shall at no time exceed the gross proceeds actually received from the
sale of such business, assets or Restricted Subsidiary; (xi) Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts, which will not be, and will not be deemed to be, inadvertent) drawn
against insufficient funds in the ordinary course of business, PROVIDED that
such Indebtedness is extinguished within three Business Days of its incurrence;
(xii) Indebtedness of an entity at the time it is acquired as a Restricted
Subsidiary, PROVIDED that such Indebtedness was not incurred or assumed by such
entity in connection with or in anticipation of such acquisition; (xiii)
Indebtedness between the Company and any Restricted Subsidiary; PROVIDED that
any subsequent transfer of any Capital Stock which results in any Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of
such Indebtedness (other than to the Company or another Restricted Subsidiary)
shall be deemed in each case to constitute the incurrence of such Indebtedness
by the obligor thereon; (xiv) [Intentionally omitted]; (xv) the Company's
Obligations arising from the repurchase, redemption or other acquisitions of
Capital Stock from management investors to the extent permitted by Section 4.07
hereof and (xvi) Indebtedness incurred by a Securitization Subsidiary in
connection with a Qualified Securitization Transaction that is Non-Recourse
Indebtedness with respect to the Company and its Restricted Subsidiaries (except
for Standard Securitization Undertakings); PROVIDED that in the event such
Securitization Subsidiary ceases to qualify as a Securitization Subsidiary or
such Indebtedness ceases to constitute such Non-Recourse Indebtedness, such
Indebtedness will be deemed, in each case, to be incurred at such time. For the
purposes of determining the aggregate Indebtedness of any referent Person,
Indebtedness shall not include guarantees by any other Person of such
Indebtedness. For the purposes of determining compliance with this Section 4.09,
(1) any Indebtedness outstanding under the Bank Credit Facilities on the date
hereof will be
51
treated as having been incurred on the date hereof under clause (i) above and
(2) in the event that an item of Indebtedness meets the criteria of more than
one of the categories of permitted Indebtedness described in clauses (i) through
(xvi) of this Section 4.09 or is entitled to be incurred pursuant to the first
paragraph of this Section 4.09, (A) the Company shall, in its sole discretion,
classify such item of Indebtedness in any manner that complies with the
covenants described above; PROVIDED that any Indebtedness classified as incurred
pursuant to clause (vi) above may later be reclassified as having been incurred
pursuant to the first paragraph of this covenant to the extent such reclassified
Indebtedness could be incurred pursuant to the first paragraph at the time of
such reclassification; and (B) such item of Indebtedness will be treated as
having been incurred pursuant to only one of such clauses or pursuant to the
first paragraph of this Section 4.09 except as otherwise set forth in clause
(A). Accrual of interest, the accretion of accreted value and the payment of
interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section 4.09.
SECTION 4.10. CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall
have the right to require the Company to repurchase all or any part of such
Holder's Securities pursuant to the offer described below (the "Change of
Control Offer") at a purchase price equal to 101% of the aggregate principal
amount of such Securities plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment"). Within 40 days following any
Change of Control, the Company shall mail a notice to each Holder stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.10 and that all Securities tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Securities accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have any Securities purchased
pursuant to a Change of Control Offer will be required to surrender the
Securities, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
Business Day preceding the Change of Control Payment Date;
(6) 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 preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Securities delivered for
purchase, and a statement that such Holder is withdrawing his election to
have such Securities purchased; and
52
(7) that Holders whose Securities are being purchased only in
part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; PROVIDED that each
Holder shall tender Securities, and each Security purchased and each such
new Security issued by the Company shall be in a principal amount of
$1,000 or integral multiples thereof.
If the Change of Control Payment Date is on the related interest
payment date, any accrued interest will be paid to the person in whose name a
Security is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Securities pursuant to
the Change of Control Offer.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Securities or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee, the Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof were tendered to the Company. The
Paying Agent shall promptly mail to each Holder of Securities so accepted,
payment in an amount equal to the purchase price for such Securities, and the
Trustee shall promptly authenticate and mail to such Holder a new Security equal
in principal amount to any unpurchased portion of the Securities surrendered;
PROVIDED that each such new Security shall be in a principal amount of $1,000 or
integral multiples thereof. The Company will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements included in this Section 4.10 applicable to a Change of Control
Offer made by the Company and purchases all Securities validly tendered and not
withdrawn under that Change of Control Offer.
SECTION 4.11. LIMITATIONS ON ASSET SALES
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale
(including the sale of any of the stock of any Subsidiary) unless at least 100%
of the Net Proceeds from such Asset Sale (or, in the case of a Partially Owned
Restricted Subsidiary, the Company's Pro Rata Portion thereof, after repayment
by such Partially Owned Restricted Subsidiary of its Indebtedness) are applied
first to repay Obligations or reduce commitments under the Credit Facilities in
accordance with the terms thereof, second to offer to redeem at par the
Outstanding Notes and third to offer to redeem at par the Securities. The
foregoing application of Net Proceeds from Asset Sales is not required in the
case of (i) sales or dispositions generating cash proceeds of less than, with
respect to the Company and its Restricted Subsidiaries, $2.5 million and (ii)
sales and dispositions as to which the Company delivers a reinvestment notice
and the proceeds are so reinvested in one or more communications, publishing,
information, education or media assets or businesses within 12 months of the
date the relevant Asset Sale is consummated. Notwithstanding the foregoing
provisions of this Section 4.11, neither the Company nor its Restricted
Subsidiaries shall be required to apply the Net Proceeds from any Asset Sale (i)
to the extent that the aggregate Net Proceeds from such Asset Sale, together
with the Net Proceeds, if any, of any other Asset Sale
53
which have not been previously applied, are less than $25.0 million or (ii) to
the extent that, and for so long as, such Net Proceeds cannot be so applied as a
result of an encumbrance or restriction permitted pursuant to Section 4.13
hereof.
(b) At least 15 days prior to the Company's mailing of a notice
of a Net Proceeds Offer, the Company shall notify the Trustee of the Company's
obligation to make such Net Proceeds Offer. Notice of a Net Proceeds Offer shall
be mailed by the Company not less than 30 Business Days nor more than 40 days
before the Net Proceeds Payment Date to the Holders of the Securities at their
last registered addresses with a copy to the Trustee and the Paying Agent. The
Net Proceeds Offer shall remain open from the time of mailing until the close of
business on the Business Day prior to the Net Proceeds Payment Date. The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Net Proceeds Offer. The notice, which shall
govern the terms of the Net Proceeds Offer, shall state:
(1) that the Net Proceeds Offer is being made pursuant to
this Section 4.11 and that the Securities will be accepted for
payment on a PRO RATA basis (rounded down to the nearest $1,000),
if necessary;
(2) the Purchase Price and the Net Proceeds Payment Date;
(3) that any Security not tendered or accepted for payment
will continue to accrue interest;
(4) that any Security accepted for payment pursuant to the
Net Proceeds Offer shall cease to accrue interest after the Net
Proceeds Payment Date;
(5) that each Holder of a Security electing to have such
Security purchased pursuant to a Net Proceeds Offer will be
required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Trustee at the address specified in
the notice prior to the close of business on the Business Day
prior to the Net Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Trustee receives, not later than the close of
business on the fifth Business Day next preceding the Net
Proceeds Payment Date, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Securities
the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Securities
purchased; and
(7) that Holders whose Securities are purchased only in
part will be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered.
The Trustee shall notify the Company at the opening of business
on the Net Proceeds Payment Date as to the principal amount of each of the
Securities or portions thereof which have been surrendered to the Trustee in
connection with the Net Proceeds Offer. On the Net Proceeds Payment Date, the
Company shall (i) accept for payment on a PRO RATA basis (if
54
necessary) Securities or portions thereof tendered pursuant to the Net Proceeds
Offer, (ii) deposit with the Paying Agent money sufficient to pay the purchase
price of all Securities or portions thereof so accepted and (iii) deliver or
cause to be delivered to the Trustee all Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof accepted for
payment by the Company and any other information that the Trustee may reasonably
request in order to make the payments required to be made on the Net Proceeds
Payment Date. The Paying Agent shall promptly mail to Holders of Securities so
accepted, payment in an amount equal to the Purchase Price, and the Trustee
shall promptly authenticate and mail to such Holders a new Security equal in
principal amount to any unpurchased portion of the Security surrendered. Any
Securities not so accepted shall be promptly mailed by the Trustee to the Holder
thereof. The Company will publicly announce the results of the Net Proceeds
Offer on or as soon as practicable after the Net Proceeds Payment Date. For
purposes of this Section 4.11, the Trustee shall act as the Paying Agent.
SECTION 4.12. TRANSACTIONS WITH AFFILIATES
Neither the Company nor any of its Restricted Subsidiaries shall
make any loan, advance, guarantee or capital contribution to, or for the benefit
of, or sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or for the benefit of, or purchase or lease any property or assets
from, or enter into or amend any contract, agreement or understanding (each an
"Affiliate Transaction") with, or for the benefit of, (i) any Person (or any
Affiliate of such Person) holding 10% or more of any class of Capital Stock of
the Company or any of its Restricted Subsidiaries or (ii) any Affiliate of the
Company or any of its Restricted Subsidiaries, in each case involving aggregate
payments or consideration in excess of $5.0 million, unless (a) such Affiliate
Transaction is on terms that are not materially less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (b) the Company delivers to the Trustee with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution adopted by the
majority of the Board of Directors approving such Affiliate Transaction and set
forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (a) of this Section 4.12.
The foregoing restriction shall not apply to (i) the payment of
an annual fee to KKR for the rendering of management consulting and financial
services to the Company and its Restricted Subsidiaries in an aggregate amount
which is reasonable in relation thereto, (ii) the payment of transaction fees to
KKR in amounts which are in accordance with past practices for the rendering of
financial advice and services in connection with acquisitions, dispositions and
financings by the Company and its Subsidiaries, (iii) loans to officers,
directors and employees of the Company and its Subsidiaries for business or
personal purposes and other loans and advances to such officers, directors and
employees for travel, entertainment, moving and other relocation expenses made
in the ordinary course of business of the Company and its Subsidiaries, (iv) any
Restricted Payments not prohibited by Section 4.07 hereof or any Investment not
prohibited by Section 4.14 hereof, (v) transactions between or among any of the
Company and its Restricted Subsidiaries, (vi) allocation of corporate overhead
to Unrestricted Subsidiaries on a basis not materially less favorable to the
Company than such allocations to Restricted Subsidiaries, (vii) the payment of
reasonable and customary fees paid to, and indemnity provided on behalf of,
officers, directors, employees or consultants of the Company or any Restricted
55
Subsidiary or (viii) sales or other transfers or dispositions of Receivables and
Other Assets transferred to a Securitization Subsidiary in a Qualified
Securitization Transaction.
SECTION 4.13. LIMITATIONS ON LIENS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) on any of its assets or any income
or profits therefrom or assign or convey any right to receive income therefrom
unless the Securities are equally and ratably secured with the Indebtedness
secured by such Lien for so long as such Indebtedness is so secured. Upon the
release and discharge of the initial Lien, any Lien created in favor of the
Securities as a result of the initial Lien shall be automatically released.
The Securities are secured by the Pledge Agreement equally and
ratably with the Outstanding Notes, the indebtedness under the Bank Credit
Facilities and all other Obligations as defined in the Pledge Agreement.
Notwithstanding anything to the contrary contained in the definition of
Permitted Liens, the pledge provided under the Pledge Agreement securing the
Securities on the date hereof is required pursuant to this Section 4.13, and the
Lien under the Pledge Agreement on the date hereof securing indebtedness under
the Bank Credit Facilities, the Outstanding Notes and all other Obligations as
defined in the Pledge Agreement shall be deemed to be the initial Lien giving
rise to the requirement to equally and ratably secure the Securities pursuant to
this Section 4.13. Upon the release and discharge of either the collateral under
the Pledge Agreement or the initial Lien, any Lien created in favor of the
Securities as a result of the Pledge Agreement or the initial Lien will be
automatically released.
SECTION 4.14. INVESTMENTS IN UNRESTRICTED SUBSIDIARIES
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Investment in any Unrestricted
Subsidiary, if at the time of such Investment:
(a) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; or
(b) immediately before such Investment, the Company would not be
permitted to incur at least $1.00 of Indebtedness pursuant to the first
paragraph of Section 4.09 hereof (without giving effect to clauses (i)
through (xvi) of the second paragraph thereof), which calculation shall
be made on a PRO FORMA basis deducting from Adjusted Consolidated Net
Income the amount of any Investment the Company has made in an
Unrestricted Subsidiary during the relevant period and any Investment the
Company intends to make in an Unrestricted Subsidiary, to the extent that
such Investment is made with amounts included in Adjusted Consolidated
Net Income as a result of Transfers described in clause (c)(x) of Section
4.07 hereof or clause (c)(y) of this Section 4.14; or
(c) such Investment, together with the aggregate of all other
Investments in Unrestricted Subsidiaries made after May 13, 1992, exceeds
(w) the aggregate Consolidated Net Cash Flow of the Company for the
period (taken as one accounting period) from the beginning of the first
quarter immediately after May 13, 1992 to the end of the Company's most
recently ended fiscal quarter at the time of such Investment; PLUS
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(x) 100% of the aggregate net cash proceeds received by the Company from
(i) the issue or sale of Equity Interests of the Company (other than such
Equity Interests issued or sold to a Restricted Subsidiary of the Company
and other than Redeemable Stock) or (ii) the sale of the stock of an
Unrestricted Subsidiary or the sale of all or substantially all of the
assets of an Unrestricted Subsidiary to the extent that a liquidating
dividend is paid to the Company or any Restricted Subsidiary from the
proceeds of such sale; PLUS (y) 100% of the amount of all Transfers from
a Net Cash Flow Unrestricted Subsidiary up to the aggregate Investment
(after taking into account all prior Transfers from such Net Cash Flow
Unrestricted Subsidiary) in such Net Cash Flow Unrestricted Subsidiary
resulting from such payments or transfers of assets (valued in each case
as provided in the definition of "Investment"); PLUS (z) in the event of
a designation of a Net Cash Flow Unrestricted Subsidiary as a Restricted
Subsidiary, 100% of an amount equal to the greater of (A) the fair market
value of such Subsidiary as determined by the Board of Directors in good
faith (or, if such fair market value may exceed $25.0 million, as
determined in writing by an independent investment banking firm of
nationally recognized standing) at the time of the redesignation of such
Net Cash Flow Unrestricted Subsidiary as a Restricted Subsidiary and (B)
the Consolidated Net Cash Flow generated by such Subsidiary for the
period (taken as one accounting period) from the beginning of its first
fiscal quarter commencing immediately after the date of its designation
as Net Cash Flow an Unrestricted Subsidiary through such Subsidiary's
fiscal quarter ending immediately prior to its designation as a
Restricted Subsidiary (or if such Consolidated Net Cash Flow for such
period is a deficit, 100% of such deficit);
PROVIDED, that all such amounts applied pursuant to this clause (c) shall not be
available for application under clause (c) of Section 4.07 hereof.
The foregoing limitations shall not apply to (i) an Investment to
the extent that it is to capitalize a Restricted Payment Unrestricted Subsidiary
permitted pursuant to Section 4.07 hereof; (ii) an Investment to the extent that
it is funded by the issuance of Equity Interests of the Company to the extent
net proceeds are not used to fund an optional redemption of Securities, (iii)
any Investment made in a Securitization Subsidiary in connection with a
Qualified Securitization Transaction, which Investment consists of the transfer
of Receivables and Other Assets and (iv) Investments in Unrestricted
Subsidiaries having an aggregate fair market value, when taken together with all
other Investments made pursuant to this clause (iv) that are at that time
outstanding, not to exceed $50.0 million at the time of such Investment (with
the fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value). For the purposes of
determining compliance with this Section 4.14, in the event that the making of
an Investment in an Unrestricted Subsidiary meets the criteria of more than one
of the categories of permitted Investments in Unrestricted Subsidiaries
described in clauses (i) through (iv) above or is entitled to be incurred
pursuant to the first paragraph of this Section 4.14 (including clauses (a), (b)
and (c) thereof), the Company shall, in its sole discretion, classify such
Investment in an Unrestricted Subsidiary in any manner that complies with this
Section 4.14 and Investment in an Unrestricted Subsidiary will be treated as
having been made pursuant to only one of such clauses or pursuant to the first
paragraph of this Section 4.14.
Each Net Cash Flow Unrestricted Subsidiary of the Company shall
at all times remain (1) wholly owned, directly or indirectly, by the Company or
a wholly owned Restricted
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Subsidiary of the Company or (2) a Subsidiary of the Company so long as there is
no encumbrance or restriction on the ability of that Subsidiary to pay dividends
or make any other distributions on its Capital Stock, or pay any Indebtedness or
other obligations to, the Company or any Restricted Subsidiary.
Not later than the date of making any Investment described above,
the Company shall deliver to the Trustee an Officer's Certificate stating that
such Investment is permitted (including, without limitation, whether such
Investment is capitalizing a Net Cash Flow Unrestricted Subsidiary or a
Restricted Payment Unrestricted Subsidiary) and setting forth the basis upon
which the calculations required by this Section 4.14 were computed, which
calculations may be based on the Company's latest available internal financial
statements.
SECTION 4.15. PAYMENTS FOR CONSENT
Neither the Company nor any of its Subsidiaries shall, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or agreed to be paid to all Holders of the Securities which so consent,
waive or agree to amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
SECTION 4.16. CORPORATE EXISTENCE
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each Restricted Subsidiary and the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; PROVIDED that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any Restricted Subsidiary,
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.17. RULE 144A INFORMATION REQUIREMENT
The Company will furnish to the Holders or beneficial holders of
the Securities and prospective purchasers of the Securities designated by the
holders of Transfer Restricted Securities, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
until such time as the Company consummates the Exchange Offer or has registered
the Securities for resale under the Securities Act.
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ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Company may not consolidate with, merge with or into, or
transfer all or substantially all of its assets (as an entirety or substantially
as an entirety in one transaction or a series of related transactions), to any
Person (except a wholly owned Restricted Subsidiary, PROVIDED that in connection
with any merger of the Company with a Restricted Subsidiary of the Company, no
consideration (other than common stock in the surviving corporation or the
Company) shall be issued or distributed to the shareholders of the Company) or
permit any person to merge with or into it 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 to which the properties and assets of the
Company are transferred (collectively, the "Successor") shall be a
corporation organized and existing under the laws of the United States or
any State thereof or the District of Columbia and shall expressly assume,
by a supplemental indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all of the obligations of the Company
under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction on
a pro forma basis, (a) no Default and no Event of Default under this
Indenture shall have occurred and be continuing and (b) the Company could
incur at least $1.00 of additional Indebtedness pursuant to the first
paragraph of Section 4.09 hereof (without giving effect to clauses (i)
through (xvi) of the second paragraph thereof) or the Debt to
Consolidated Cash Flow Ratio equals or is less than the Debt to
Consolidated Cash Flow Ratio immediately prior to such transaction.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger, or any sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company or
any assignment of its obligations under this Indenture or the Securities in
accordance with Section 5.01 hereof, the Successor formed by such consolidation
or into or with which the Company is merged or to which such sale, lease,
conveyance or other disposition or assignment 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 Successor has been named as the
Company herein and the predecessor Company, in the case of a sale, lease,
conveyance or other disposition or assignment, shall be released from all
obligations under this Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT
Each of the following constitutes an "EVENT OF DEFAULT":
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(1) the Company fails to make any payment of interest on any
Security when the same shall become due and payable and the Default
continues for a period of 30 days;
(2) the Company fails to make any payment of the principal or
premium of any Security when the same shall become due and payable at
maturity, or upon acceleration, redemption or otherwise;
(3) the Company fails to comply with any of its other agreements
or covenants in, or provisions of, the Securities or this Indenture and
such failure continues for the period and after the notice specified
below;
(4) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such Indebtedness
or guarantee is now existing or thereafter created in the future, if
either (A) such default is the failure to pay the final scheduled
principal installment in an amount of at least $10.0 million in respect
of any such Indebtedness on the stated maturity date thereof (after
giving effect to any extension of such maturity date by the holder of
such Indebtedness and after the expiration of any grace period in respect
of such final scheduled principal installment contained in the instrument
under which such Indebtedness is outstanding) or (B) as a result of such
default the maturity of such Indebtedness has been accelerated prior to
its express maturity and the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness the
maturity of which has been accelerated, aggregates $20.0 million or more;
PROVIDED that an Event of Default shall not be deemed to occur with
respect to any accelerated Indebtedness which is repaid or prepaid within
20 days after such declaration;
(5) a final judgment that exceeds $15 million individually, or
final judgments that exceed $25 million in the aggregate, for the payment
of money are entered by a court or courts of competent jurisdiction
against the Company, or any of its Significant Subsidiaries and such
judgment or judgments shall not be discharged, satisfied, stayed,
annulled or rescinded within 60 days of being entered;
(6) the Company or any of its Significant Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(d) makes a general assignment for the benefit of its creditors;
or
(7) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
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(a) is for relief against the Company, or any of its Significant
Subsidiaries as debtor in an involuntary case,
(b) appoints a Custodian of the Company, or any of its
Significant Subsidiaries or a Custodian for all or
substantially all of the property of the Company, or any of
its Significant Subsidiaries, or
(c) orders the liquidation of the Company, or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days; and
(8) except as permitted by this Indenture and the Securities, the
Guarantees shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect
with respect to any Guarantor or any Guarantor shall deny or disaffirm
its obligations under its Guarantee.
The Company is required, pursuant to Section 4.04(a) hereof, to
deliver to the Trustee annually a statement regarding compliance with this
Indenture, and the Company is required, pursuant to Section 4.04(c) hereof, upon
becoming aware of any Default or Event of Default to deliver a statement to the
Trustee specifying such Default or Event of Default. The Trustee shall not be
deemed to know of a Default unless a Responsible Officer has actual knowledge of
such Default or receives written notice of such Default with specific reference
to such Default.
In the case of any Event of Default pursuant to the provisions of
this Section 6.01 occurring by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium, if any, which the Company would have had to pay if the
Company then had elected to redeem the Securities pursuant to Section 3.07
hereof, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law, anything in this Indenture or in the
Securities contained to the contrary notwithstanding.
A Default under clause (3) is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 30% in principal amount
of the then outstanding Securities notify the Company and the Trustee, in
writing, of the Default and the Company does not cure the Default within 30 days
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default."
SECTION 6.02. ACCELERATION
If an Event of Default (other than an Event of Default with
respect to the Company specified in clauses (6) or (7) of Section 6.01 hereof)
occurs and is continuing, the Trustee by written notice to the Company, or the
Holders of at least 30% in principal amount of the then outstanding Securities
by written notice to the Company and the Trustee, may and the Trustee at the
request of such Holders shall, declare all unpaid principal of, premium and
Additional Interest, if any, and accrued interest on the Securities to be due
and payable immediately. Upon such declaration of acceleration such principal
of, premium and Additional Interest, if any, and accrued interest, due and
payable on the Securities, as determined in the next
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succeeding paragraph, shall be due and payable immediately. If an Event of
Default with respect to the Company specified in clause (6) or (7) of Section
6.01 hereof occurs, all unpaid principal of, premium and Additional Interest, if
any, and accrued interest on the Securities then outstanding shall IPSO FACTO
become and be immediately due and payable without any declaration, notice or
other act on the part of the Trustee or any Holder. The Holders of at least a
majority in aggregate principal amount of the then outstanding Securities by
written notice to the Trustee may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, premium and
Additional Interest, if any, or interest on the Securities that has become due
solely as a result of such acceleration) have been cured or waived.
In the event that the maturity of the Securities is accelerated
pursuant to this Section 6.02, 100% of the principal amount thereof and premium
or Additional Interest, if any, plus accrued interest to the date of payment
shall become due and payable.
SECTION 6.03. OTHER REMEDIES
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium and
Additional Interest, if any, or interest then due on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS
The Holders of at least a majority in principal amount of the
then outstanding Securities by notice to the Trustee may waive an existing
Default or Event of Default and its consequences (including waivers obtained in
connection with a tender offer or exchange offer for Securities), except a
continuing Default or Event of Default in the payment of the principal of,
premium or Additional Interest, if any, or interest on any Security (including,
without limitation, pursuant to any mandatory or optional redemption obligation
hereunder). 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 impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY
The Holders of a majority in principal amount of the then
outstanding Securities 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. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders, or that may involve the
Trustee in personal liability.
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SECTION 6.06. LIMITATIONS ON SUITS
A Holder may not pursue a remedy with respect to this Indenture,
the Securities or any Guarantee unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense
(including, without limitation, fees and expenses of counsel);
(4) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer of indemnity; and
(5) during such 30-day period the Holders of a majority in
principal amount of the then outstanding Securities do not give the
Trustee a direction which is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Security to receive payment of principal of, premium and
Additional Interest, if any, and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 6.01(1) or (2) or (3)
(with respect to the Company's obligations under Section 4.10 or 4.11 hereof)
hereof occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company or any
Guarantor for the amount of principal, premium, if any, and interest remaining
unpaid on the Securities, determined in accordance with Section 6.02 hereof and
interest on overdue principal, premium and Additional Interest, if any, and, to
the extent lawful, interest, 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.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee is authorized 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
63
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims 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 agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders of the
Securities may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10. PRIORITIES
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to Holders for amounts due and unpaid on the Securities
for principal, premium and Additional Interest, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal, premium, if any,
and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Article 6.
SECTION 6.11. UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, 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 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
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ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE
(1) 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 such exercise, as
a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and
no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee pursuant
to and conforming to the requirements of this Indenture.
(3) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(a) this paragraph does not limit the effect of paragraph (2) of
this Section 7.01;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or other
officer, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Sections 6.02 or 6.05
hereof.
(4) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (1), (2), (3) and (5) of this Section 7.01.
(5) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee is not
obligated to perform any duty or exercise any right or power under this
Indenture at the request of the Holders of the Securities unless it
receives an offer from such Holders of security and indemnity
satisfactory to it against any loss, liability or expense (including,
without limitation, fees of counsel).
(6) 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.
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SECTION 7.02. RIGHTS OF TRUSTEE
(1) The Trustee may conclusively rely on any document (whether in
its original or facsimile form) believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may
require receipt of an Officers' Certificate or an Opinion of Counsel or
both. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or Opinion
of Counsel. The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder and in reliance thereon.
(3) The Trustee may act through agents, attorneys, custodians and
nominees and shall not be responsible for the misconduct or negligence of
any such agent, attorney, custodian or nominee appointed with due care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Guarantor
shall be sufficient if signed by an Officer of the Company or such
Guarantor.
(6) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is
in fact such a default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Securities in this
Indenture.
(7) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed to act hereunder.
(8) 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 security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or
direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
any of its Affiliates with the
66
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee is subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities or any money paid to the
Company or upon the Company's direction under any provision hereof, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee and it shall not be responsible for any statement
or recital herein or any statement in the Securities other than its certificate
of authentication.
SECTION 7.05. NOTICE OF DEFAULTS
If a Default or Event of Default occurs and is continuing and if
it is actually known to a Responsible Officer of the Trustee, the Trustee shall
mail to each Holder a notice of the Default or Event of Default within 90 days
after it occurs or, if later, within ten days after such Default or Event of
Default becomes so known to the Trustee unless such Default or Event of Default
has been cured. Except in the case of a Default or Event of Default in payment
of principal of, premium and Additional Interest, if any, or interest on any
Security or that resulted from a failure to comply with Section 4.10 hereof, the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers determines in good faith that withholding the notice is in the
interests of the Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS
Within 60 days after each May 15 beginning with May 15, 2001, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA Section
313(b). The Trustee also shall transmit by mail all reports as required by TIA
Section 313(c).
A copy of each report at the time of its mailing to Holders shall
be filed with the SEC and each stock exchange on which the Securities are listed
in accordance with TIA Section 313(d). The Company shall notify the Trustee when
the Securities are listed on any stock exchange or delisted therefrom.
SECTION 7.07. COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
parties shall agree from time to time in writing. The Trustee's compensation
shall not be limited by any law relating to compensation of a trustee of an
express trust. The Company shall reimburse the Trustee promptly upon request for
all disbursements, advances and expenses incurred by it. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall fully indemnify and hold harmless the Trustee
and its directors, officers, employees and agents against any loss, liability,
claim, damage or expense
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(including without limitation fees and expenses of counsel) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture including, without limitation, costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of its powers and duties hereunder, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The Company need not reimburse any expense or indemnify against
any loss or liability determined by a court of competent jurisdiction to have
been caused or incurred as a result of the Trustee's own negligence or willful
misconduct.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay principal of,
premium and Additional Interest, if any, and interest on particular Securities.
Such Lien shall survive the satisfaction and discharge of the Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE
The Trustee may resign and be discharged from the trust hereby
created by so notifying the Company. The Holders of a majority in principal
amount of the then outstanding Securities may remove the Trustee by so notifying
the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee
under any Bankruptcy Law;
(3) a Custodian or public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
The foregoing notwithstanding, 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 7.08,
and thereafter the Trustee shall have no liability for any acts or omissions of
any successor Trustee.
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If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding
Securities may petition at the expense of the Company any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
Subject to Section 7.10 hereof, if the Trustee consolidates,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation or national banking association, the
successor entity without any further act shall be the successor Trustee. In case
any Securities have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation of such
authenticating trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor trustee had itself
authenticated such Securities.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any state thereof or the District of Columbia authorized under such
laws to exercise corporate trust powers, shall be subject to supervision or
examination by Federal or state (or the District of Columbia) authority and
shall have a combined capital and surplus of at least $50 million as set forth
in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
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ARTICLE 8
LEGAL AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article
8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Securities, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Securities to receive solely from the trust
fund described in Section 8.04 hereof, and as more fully set forth in such
Section, payments in respect of the principal of, premium on, if any, and
interest on such Securities when such payments are due, (b) the Company's
obligations with respect to such Securities under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof with respect to the
outstanding Securities on and after the date the conditions set forth in Section
8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Securities
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Securities shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other
70
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(5)
and 6.01(8) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company irrevocably deposits, or causes to be deposited,
in trust with the Trustee or the Paying Agent, or, at the option of the Trustee,
with a trustee satisfactory to the Trustee and the Company under the terms of an
irrevocable trust agreement in form and substance satisfactory to the Trustee,
money or U.S. Government Obligations in an amount sufficient (without
reinvestment thereof) to pay principal and interest on the Securities to
maturity or redemption, as the case may be, as such amounts become due, and to
pay all other sums payable by it hereunder; PROVIDED that (i) the trustee of the
irrevocable trust shall have been irrevocably instructed to pay such money or
the proceeds of such U.S. Government Obligations to the Trustee and (ii) the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of said principal,
premium and Additional Interest, if any, and interest with respect to the
Securities;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States acceptable to the Trustee or an Internal Revenue Service ruling to the
effect that the Holders of the outstanding Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States acceptable to the Trustee confirming that the Holders of the outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing (A) on the date of such deposit or (B) insofar as Sections 6.01(6) or
6.01(7) hereof is concerned, at any time in the period ending on the 91st day
after the date of deposit; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
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SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to Section 8.06 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal,
premium on, if any, and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the written
request of the Company any money or non-callable U.S. Government Obligations
held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium on,
if any, or interest on any Security and remaining unclaimed for two years after
such principal, and premium, if any, or interest has become due and payable
shall be paid to the Company on its written request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as a secured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such paying agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT
If the Trustee or paying agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining,
72
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or paying agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium on, if any, or interest on any Security following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
paying agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS
The Company and the Trustee may amend this Indenture, the
Securities or the Guarantee or waive any provision hereof or thereof without the
consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(3) to comply with Section 5.01 hereof;
(4) to make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect
the rights hereunder of any Holder; or
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company, accompanied by a resolution of
the Board of Directors authorizing the execution of any such supplemental
indenture, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and make any further appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into any supplemental
indenture that, in its reasonable discretion, affects its own rights, duties or
immunities under this Indenture or otherwise. After an amendment or waiver under
this Section 9.01 becomes effective, the Company shall mail to the Holders of
each Security affected thereby a notice briefly describing the amendment or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.02. WITH CONSENT OF HOLDERS
Except as provided below in this Section 9.02, this Indenture,
the Securities or the Guarantee may be amended or supplemented, with the written
consent of the Holders of at least a
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majority in principal amount of the then outstanding Securities (including
consents obtained in connection with a tender offer or exchange offer for
Securities).
Upon the request of the Company, accompanied by a resolution of
the Board of Directors authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
the Holders as aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
The Holders of at least a majority in principal amount of the
Securities then outstanding may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Securities (including
waivers obtained in connection with a tender offer for Securities) or any
existing default. However, without the consent of each Holder affected, an
amendment or waiver under this Section may not (with respect to any Securities
held by a non-consenting Holder):
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any
Security or alter the provisions with respect to the
redemption or purchase price in connection with repurchases
under Sections 3.07, 3.08, 4.10 or 4.11 hereof;
(3) reduce the rate of or change the time for payment of
interest on any Security;
(4) waive a Default or Event of Default in the payment of
principal of or premium and Additional Interest, if any, or
interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a
majority in aggregate principal amount of the Securities as
provided in Section 6.02 hereof);
(5) make any Securities payable in money other than that stated
in the Securities;
(6) make any change in Section 6.04 or 6.07 hereof;
(7) waive a redemption payment with respect to any Security; or
(8) make any change in the foregoing.
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The right of any Holder to participate in any consent required or
sought pursuant to any provision of this Indenture (and the obligation of the
Company to obtain any such consent otherwise required from such Holder) may be
subject to the requirement that such Holder shall have been the Holder of record
of any Securities with respect to which such consent is required or sought as of
a date identified by the Trustee in a notice furnished to Holders in accordance
with the terms of this Indenture.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture or the Securities shall comply
in form and substance with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS
Until an amendment (which includes any supplement) or waiver
becomes effective, a consent to it by a Holder of a Security is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent is not made on any Security. However, any such Holder
or subsequent Holder may revoke the consent as to his or her Security or portion
of a Security if the Trustee receives written notice of revocation before the
date the amendment or waiver becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment
or waiver. If the Company elects to fix a record date for such purpose, the
record date shall be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation pursuant to Section 2.05
hereof, or (ii) such other date as the Company shall designate. If a record date
is fixed, then notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to consent to
such amendment or waiver or to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date. No consent shall
be valid or effective for more than 90 days after such record date unless
consents from Holders of the principal amount of Securities required hereunder
for such amendment or waiver to be effective shall have also been given and not
revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind
every Holder, unless it is of the type described in any of clauses (1) through
(8) of Section 9.02 hereof. In such case, the amendment or waiver shall bind
each Holder of a Security who has consented to it and every subsequent Holder of
a Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation about the changed
terms and return it to the Holder and the Trustee may place an appropriate
notation on any Security thereafter authenticated. Alternatively, if the
75
Company or Trustee so determines, the Company in exchange for all Securities
shall issue and the Trustee shall authenticate new Securities that reflect the
changed terms.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not, in the
Trustee's reasonable discretion, adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but need
not, sign it. In signing or refusing to sign such amendment or supplemental
indenture, the Trustee shall be provided with and, subject to Section 7.01
hereof, shall be fully protected in relying upon, an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that such amendment or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms.
ARTICLE 10
GUARANTEE
SECTION 10.01. SUBSIDIARY GUARANTEE
Each of the Guarantors hereby, jointly and severally, fully and
unconditionally guarantees to each Holder of a Security 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
Securities or the obligations of the Company hereunder or thereunder, that: (a)
the principal of, and premium and Additional Interest, if any, and interest on
the Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of,
premium and Additional Interest, if any, and interest on the Securities, 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 time of payment or renewal of any Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise; PROVIDED, HOWEVER, that the maximum
liability of a Guarantor pursuant to this Guarantee shall in no event exceed the
Maximum Guaranteed Amount (as defined below). Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors will be jointly and severally obligated to pay the same immediately.
The Guarantors hereby agree that their obligations hereunder shall be absolute
and unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Securities 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 other than
the defense that payment has been made or that the other relevant obligations
have been paid or performed. Each Guarantor hereby waives diligence,
presentment, demand of payment, claim of fraud, 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 covenant that this Guarantee will not be discharged except by complete
76
performance of the obligations contained in the Securities and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to return to
the Company or Guarantors, or any Custodian, trustee, liquidator or other
similar official acting in relation to either the Company or Guarantors, any
amount paid by either to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to any right of subrogation
in relation to the Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby. Each Guarantor further
agrees that, as between the 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 6 for the purposes of this
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 declaration of acceleration of such obligations as provided in
Article 6, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of this Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee.
The "Maximum Guaranteed Amount" means, with respect to any
Guarantor, the amount which allows the Guarantee to be enforceable to the
fullest extent permitted by law, limited only to the extent necessary for the
Guarantee to not constitute a fraudulent conveyance.
Each Guarantor shall be subrogated to all rights of each Holder
of any Securities against the Company in respect of any amounts paid to the
Holders by such Guarantor pursuant to the provisions of this Guarantee; PROVIDED
that the Guarantors shall not be entitled to enforce, or to receive, any
payments arising out of or based upon, such right of subrogation until the
principal of, premium and Additional Interest, if any, and interest on all the
Securities shall have been paid in full and nothing remains owed to the Trustee
pursuant to this Indenture.
The Guarantee set forth in this Section 10.01 shall not be valid
or become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been signed by or on
behalf of the Trustee.
No Unrestricted Subsidiary shall become a guarantor of any
Indebtedness of the Company or any Restricted Subsidiaries unless such
Unrestricted Subsidiary becomes a guarantor of the Securities.
SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE
To evidence its Guarantee set forth in Section 10.01 hereof, each
Guarantor hereby agrees that a notation of such Guarantee substantially in the
form of Exhibit A-1 shall be endorsed by an officer of such Guarantor on each
Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by its President or one of its
Vice Chairmen or Vice Presidents.
Each Guarantor hereby agrees that its Guarantee set forth in
Section 10.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee.
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If an officer or Officer whose signature is on this Indenture of
on the Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which a Guarantee is endorsed, the Guarantee shall
be valid, binding and enforceable nevertheless.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of the Guarantors.
SECTION 10.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety, to the Company or another
Guarantor. Upon any such consolidation, merger, sale or conveyance, the
Guarantee given by such Guarantor shall no longer have any force or effect.
(b) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture or in any of the Securities shall prevent any
consolidation or merger of a Guarantor with or into a corporation or
corporations other than the Company or another Guarantor (whether or not
affiliated with the Guarantor), or successive consolidations or mergers in which
a Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to a corporation other than the Company or another
Guarantor (whether or not affiliated with the Guarantor) authorized to acquire
and operate the same; PROVIDED that each such Guarantor is sold or disposed of
for fair market value, evidenced by a resolution of the Board of Directors set
forth in an Officer's Certificate delivered to the Trustee; and PROVIDED,
FURTHER, that the foregoing proviso shall not apply to the sale or disposition
of a Guarantor in a foreclosure proceeding to the extent that such proviso would
be inconsistent with the Uniform Commercial Code. Upon any such consolidation,
merger, sale or conveyance, the Guarantee given by such Guarantor shall no
longer have any force or effect.
SECTION 10.04. RELEASES FOLLOWING SALE OF ASSETS
Concurrently with any sale of assets (including, if applicable,
all of the capital stock of any Guarantor), any Liens in favor of the Trustee in
the assets sold thereby shall be released; PROVIDED that any such assets are
sold or disposed of for fair market value, evidenced by a resolution of the
Board of Directors set forth in an Officer's Certificate delivered to the
Trustee and, PROVIDED, FURTHER, that, the foregoing proviso shall not apply to
the sale or disposition of a Guarantor in a foreclosure proceeding to the extent
that such proviso would be inconsistent with the Uniform Commercial Code. If the
assets sold in such sale or other disposition include all or substantially all
of the assets of any Guarantor or all of the capital stock of any Guarantor,
then such Guarantor (in the event of a sale or other disposition of all of the
capital stock of such Guarantor) or the corporation acquiring the property and
such Guarantor (in the event of a sale or other disposition of all or
substantially all of the assets of a Guarantor) shall automatically be released
and relieved of its obligations under this Article 10, PROVIDED that any such
sale or disposition of all or substantially all of the assets of a Guarantor is
sold or disposed of for fair market value, evidenced by a resolution of the
Board of Directors set forth in an
78
Officer's Certificate delivered to the Trustee and, PROVIDED, FURTHER, that the
foregoing proviso shall not apply to the sale or disposition of a Guarantor in a
foreclosure proceeding to the extent that such proviso would be inconsistent
with the Uniform Commercial Code. Upon delivery by the Company to the Trustee 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, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Guarantor from its obligations under its
Guarantee. Any Guarantor not released from its obligations under its Guarantee
shall remain liable for the full amount of principal of and interest on the
Securities and for the other obligations of any Guarantor under the Indenture as
provided in this Article 10.
SECTION 10.05. "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 then acting hereunder, the term
"Trustee" as used in this Article 10 shall in such case (unless the context
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 10 in place of the Trustee.
SECTION 10.06. EXISTING AND ADDITIONAL SUBSIDIARY GUARANTEES
The Company shall (a) cause each Subsidiary which, after the date
of this Indenture (if not then a Guarantor), becomes a Restricted Subsidiary to
execute a Guarantee of the Obligations of the Company hereunder in the form set
forth in this Article 10 hereof and Exhibit A-1 hereto, PROVIDED that no
Subsidiary organized outside of the United States of America, Unrestricted
Subsidiary, Partially Owned Restricted Subsidiary or Securitization Subsidiary
shall be required to be a Guarantor, and (b) deliver to the Trustee an Opinion
of Counsel, in form reasonably satisfactory to the Trustee, that such Subsidiary
Guarantee is a valid, binding and enforceable obligation of such Restricted
Subsidiary, subject to customary exceptions for bankruptcy, fraudulent
conveyance and equitable principles and the implied covenant of good faith and
fair dealing.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.02. NOTICES
Any notice or communication by the Company, the Guarantors or the
Trustee to the other is duly given if in writing and delivered in person or
mailed by first-class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the other's address:
79
If to the Company or the Guarantors:
PRIMEDIA INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx -- 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000
The Company, the Guarantors or the Trustee by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first-class mail, certified or registered, return receipt requested, to the
Holder's address shown on the register kept by the Registrar. Any notice or
communication shall also be mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
80
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company and/or any
Guarantors to the Trustee to take any action under this Indenture except for the
initial issuance of the Securities dated May 15, 2003, the Company and/or such
Guarantor as the case may be shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements
set forth in Section 11.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(1) a statement that the Person making such certificate or
opinion has read and understands such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with; PROVIDED that
with respect to matters of fact Opinions of Counsel may rely on an
Officers' Certificate or certificates of public officials.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
81
SECTION 11.07. LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment are
authorized or obligated by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.08. NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or shareholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Securities, this Indenture or the Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of the Securities by accepting the Securities waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Securities.
SECTION 11.09. GOVERNING LAW
This Indenture, the Securities and the Guarantee shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to principles of conflicts of law.
SECTION 11.10. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.11. SUCCESSORS
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 11.12. SEVERABILITY
In case any provision in this Indenture or in the Securities
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 11.13. COUNTERPART 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.
82
SECTION 11.14. TRUSTEE AS PAYING AGENT AND REGISTRAR
The Company initially appoints the Trustee as Paying Agent and
Registrar. The provisions regarding the indemnification of the Trustee set forth
in Section 7.07 shall also apply to the Trustee in its capacity as Paying Agent
and Registrar hereunder.
SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 11.16. BANK OF NEW YORK NOT ACTING IN INDIVIDUAL CAPACITY
Notwithstanding anything to the contrary contained herein, this
Indenture has been accepted by The Bank of New York not in its individual
capacity but solely as Trustee and in no event shall The Bank of New York have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Company herein or in any of the certificates, notices
or agreements delivered by the Company pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Company, and under no
circumstances shall The Bank of New York be personally liable for the payment of
any indebtedness or expenses of the Company.
SECTION 11.17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES
In addition to the rights provided to Holders of Securities under
the Indenture, Holders of Transfer Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement.
ARTICLE 12
SECURITY
SECTION 12.01. PLEDGE AGREEMENT
(a) To secure the due and punctual payment of the obligations of
the Company under this Indenture and the Securities, together with the other
obligations secured thereby, the Company and the Collateral Agent entered into
the Pledge Agreement to create the security interest in the Collateral and
related matters. The Trustee and the Company hereby acknowledge and agree that
the Collateral Agent holds the Collateral in trust for the equal and ratable
benefit of the Holders and the Trustee and the other parties secured under the
Pledge Agreement pursuant to the terms of the Pledge Agreement.
(b) Each Holder, by accepting a Security, agrees to all of the
terms and provisions of the Pledge Agreement, as the same may be amended from
time to time pursuant to the provisions of the Pledge Agreement and this
Indenture, and authorizes and directs the Collateral Agent to perform its
obligations and exercise its rights under the Pledge Agreement in accordance
therewith; PROVIDED, HOWEVER, that if any provisions of the Pledge Agreement
limit, qualify or conflict with the duties imposed by the provisions of the TIA,
the TIA will control.
83
SECTION 12.02. RELEASE OF COLLATERAL.
The Collateral may be released from the security interest
created by the Pledge Agreement at any time or from time to time in accordance
with the provisions of the Pledge Agreement and as provided by Section 4.13 of
this Indenture. To the extent applicable, the Company and each obligor on the
Securities shall cause Section 314(d) of the TIA relating to the release of
property or securities from the Lien hereof and of the Pledge Agreement to be
complied with. Any certificate or opinion required by Section 314(d) of the TIA
may be made by an officer of the Company, except in cases which Section 314(d)
of the TIA requires that such certificate or opinion be made by an independent
person.
[Signatures on Following Pages]
SIGNATURES
PRIMEDIA INC.
Dated as of May 15, 2003 By: /s/ Xxxxxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Senior Vice President
AgriClick LLC
Canoe & Kayak, Inc.
Channel One Communications Corporation
Cover Concepts Marketing Services LLC
CSK Publishing Company Incorporated
Films for The Humanities & Sciences, Inc.
Xxxx Publishing Companies, Inc.
Hacienda Productions, Inc.
HPC Brazil, Inc.
IntelliChoice, Inc.
Kagan Media Appraisals, Inc.
Kagan Seminars, Inc.
Kagan World Media, Inc.
XxXxxxxx Argus Publishing, Inc.
Media Central IP Corp.
Motor Trend Auto Shows Inc.
Xxxx Xxxxx Associates, Inc.
PRIMEDIA Business Magazines & Media Inc.
PRIMEDIA Companies Inc.
PRIMEDIA Enthusiast Publications, Inc.
PRIMEDIA Finance Shared Services, Inc.
PRIMEDIA Holdings III Inc.
PRIMEDIA Information Inc.
PRIMEDIA Leisure Group Inc.
PRIMEDIA Magazines Inc.
PRIMEDIA Magazine Finance, Inc.
PRIMEDIA Special Interest Publications Inc.
PRIMEDIA Specialty Group Inc.
PRIMEDIA Workplace Learning, LLC
PRIMEDIA Workplace Learning LP
Simba Information Inc.
The Virtual Flyshop, Inc.
Dated as of May 15, 2003 By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK,
as Trustee
Dated as of May 15, 2003 By: /s/ Xxxxx Xxxxxxxxx-Xxxxxx
---------------------------
Vice President
EXHIBIT A-1
[__]% SENIOR NOTES DUE 2013
No. _________________ CUSIP _________________
$______________________
PRIMEDIA INC., a Delaware corporation (herein called the "COMPANY"), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of _______________________________
on [_____________] [__], 2013.
INTEREST PAYMENT DATES: [_____________] and [_________________]
RECORD DATES: [_____________] and [_______________________]
Reference is hereby made to the further provisions of this Senior Note due 2013
set forth on the reverse side hereof and such further provisions shall for all
purposes have the same effect as if set forth on the front side hereof.
IN WITNESS WHEREOF, the Company has caused this certificate to be signed
manually or by facsimile.
DATED: [_____________] [__], 2003
CERTIFICATE OF AUTHENTICATION:
This is one of the Global Notes referred
to in the within mentioned Indenture.
THE BANK OF NEW YORK,
PRIMEDIA INC.
as Trustee
By: By:
---------------------------------- ---------------------------------
Authorized Signatory Name:
Title:
[___]% SENIOR NOTES DUE 2013
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A
PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT THE TIME DURING THREE MONTHS PRECEDING THE
DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY,
(2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO
AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5) PURSUANT TO ANY
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE
A-1-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE
SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) PURCHASING FROM A PERSON NOT PARTICIPATING IN THE INITIAL
DISTRIBUTION OF THIS SECURITY (OR ANY PREDECESSOR SECURITY), THAT IT
IS AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION
OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i)
OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
Capitalized terms used herein have the meaning assigned to them
in the Indenture unless otherwise indicated.
1. INTEREST; ADDITIONAL INTEREST. The Company promises to pay
interest on the principal amount of this Security at [__]% per annum from the
date of issuance until maturity and shall pay the Additional Interest payable
pursuant to the Registration Rights Agreement. The Company will pay interest and
Additional Interest, if any, semi-annually on [_____________] and [____________]
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Securities will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of issuance; PROVIDED that if there is no
existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest
Payment Date shall be [_____________] [__], 200[]. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at the same rate per annum on the Securities to the extent lawful; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) and premium and Additional Interest, if
any, to the Persons who are registered Holders of Securities at the close of
business on the [____________] and [_________] next preceding the Interest
Payment Date, even if such Securities are cancelled after such record
A-1-3
date and on or before such Interest Payment Date. The Securities will be payable
as to principal, premium, interest and Additional Interest at the office or
agency of the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest,
premium and Additional Interest may be made by check mailed to the Holders of
the Securities at their addresses set forth in the register of Holders of
Securities.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-registrar without notice to
any Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of [_____________] [__], 2003 (the "Indenture"), among the
Company, the Guarantors and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the TIA (15 U.S. Code xx.xx. 77aaa-77bbbb). The Securities are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Securities are senior obligations of the Company
initially limited to $[____] million in aggregate principal amount, plus
premiums and Additional Interest, if any, plus amounts, if any, sufficient to
pay interest on outstanding Securities as set forth in Paragraph 2 hereof.
Additional Securities may be issued from time to time subject to Section 4.09 of
the Indenture. The Securities and any Additional Securities subsequently issued
would be treated as a single class for all purposes under the Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase.
5. OPTIONAL REDEMPTION.
At any time prior to [____________] [__], 2006, the Company may
on any one or more occasions redeem up to 35% of the aggregate principal amount
of Securities (which includes Additional Securities, if any) issued hereunder at
a redemption price of [__]% of the principal amount of such Securities, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; PROVIDED that:
(1) at least 65% of the aggregate principal amount of Securities
(which includes Additional Securities, if any) issued
remains outstanding immediately after the occurrence of each
of those redemptions (excluding Securities held by the
Company and its Subsidiaries); and
(2) any redemption must occur within 60 days of the date of
closing of such Equity Offering.
Except as provided in the preceding paragraph and other than in
connection with a Change of Control pursuant to Section 3.08 of the Indenture,
the Company may not redeem the Securities prior to [______________] [__], 2008.
On or after [_____________] [__], 2008, the Company may, at its option, redeem
the Securities, in whole or in part, at the redemption prices (expressed as
percentages of the principal amount) set forth in the immediately succeeding
paragraph, plus accrued and unpaid interest thereon to the applicable redemption
date.
A-1-4
The redemption price as a percentage of the principal amount
shall be as follows, if the Securities are redeemed during the twelve-month
period beginning [_________] [__] of the years indicated below:
Year Percentage
---- ----------
2008...............................................[_____]%
2009...............................................[_____]%
2010...............................................[_____]%
2011 and thereafter................................100.000%
If the optional redemption date is on or after an interest record
date and on or before the related interest payment date, the accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on that record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
Notwithstanding the foregoing, upon the occurrence at any time of
a Change in Control, the Securities will be redeemable, at the option of the
Company, in whole or in part, pursuant to the provisions of Section 3.08 of the
Indenture.
Any redemption pursuant to this Section 3.07 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
of the Indenture.
6. MANDATORY OFFERS TO REPURCHASE; ASSET SALES.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require the Company to repurchase all or any part of
such Holder's Securities pursuant to the offer described below (the
"Change of Control Offer") at a purchase price equal to 101% of the
aggregate principal amount of such Securities plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control
Payment"). On the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment Securities or portions
thereof tendered pursuant to the Change of Control Offer, (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment
in respect of all Securities or portions thereof so tendered and (3)
deliver or cause to be delivered to the Trustee, the Securities so
accepted together with an Officers' Certificate stating the Securities
or portions thereof were tendered to the Company. The Paying Agent
shall promptly mail to each Holder of Securities so accepted, payment
in an amount equal to the purchase price for such Securities, and the
Trustee shall promptly authenticate and mail to such Holder a new
Security equal in principal amount to any unpurchased portion of the
Securities surrendered; PROVIDED that each such new Security shall be
in a principal amount of $1,000 or integral multiples thereof. The
Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment
Date.
A Holder of Securities may tender all or any portion of his
Securities at his discretion by completing the form entitled "OPTION
OF HOLDER TO ELECT PURCHASE" appearing on this Security.
A-1-5
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate an
Asset Sale (including the sale of any of the stock of any Subsidiary)
unless at least 100% of the Net Proceeds from such Asset Sale (or, in
the case of a Partially Owned Restricted Subsidiary, the Company's Pro
Rata Portion thereof, after repayment by such Partially Owned
Restricted Subsidiary of its Indebtedness) are applied first to repay
Obligations or reduce commitments under the Credit Facilities in
accordance with the terms thereof, second to offer to redeem at par
the Outstanding Notes and third to offer to redeem at par the
Securities. The foregoing application of Net Proceeds from Asset Sales
is not required in the case of (i) sales or dispositions generating
cash proceeds of less than, with respect to the Company and its
Restricted Subsidiaries, $2.5 million and (ii) sales and dispositions
as to which the Company delivers a reinvestment notice and the
proceeds are so reinvested in one or more communications, publishing,
information, education or media assets or businesses within 12 months
of the date the relevant Asset Sale is consummated. Notwithstanding
the foregoing provisions of this paragraph (b), neither the Company
nor its Restricted Subsidiaries shall be required to apply the Net
Proceeds from any Asset Sale (i) to the extent that the aggregate Net
Proceeds from such Asset Sale, together with the Net Proceeds, if any,
of any other Asset Sale which have not been previously applied, are
less than $25.0 million or (ii) to the extent that, and for so long
as, such Net Proceeds cannot be so applied as a result of an
encumbrance or restriction permitted pursuant to Section 4.13 of the
Indenture.
7. NOTICE OF REDEMPTION. Notice of any redemption pursuant to
Section 3.07 or 3.08 of the Indenture will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Securities held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Securities or portions thereof called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption, except the unredeemed portion of any Security being
redeemed in part. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before the mailing of a Notice of Redemption
and ending on the date of such mailing or during the period between a record
date and the corresponding Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Security may
be treated as its owner for all purposes.
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture, the Securities or the Guarantee may be amended or supplemented and
any existing Default under, or compliance with any provision of, the Indenture
may be waived with the consent of the Holders
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of at least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for Securities). Without the consent of any Holder, the Company and the Trustee
may amend or supplement the Indenture or the Securities to cure any ambiguity,
defect or inconsistency; to provide for uncertificated Securities in addition to
or in place of certificated Securities; to comply with Section 5.01 of the
Indenture; to make any change that would provide any additional rights or
benefits to the Holders of the Securities or that does not adversely affect the
legal rights under the Indenture of any such Holder; or to comply with
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA.
Without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Securities held by a non-consenting Holder
of Securities) (i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the principal of or
change the fixed maturity of any Security or alter the provisions with respect
to the redemption or purchase price in connection with repurchases under
Sections 3.07, 3.08, 4.10 or 4.11 of the Indenture, (iii) reduce the rate of or
change the time for payment of interest on any Security, (iv) waive a Default or
Event of Default in the payment of principal of or premium or Additional
Interest, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities as provided in Section 6.02 of the
Indenture), (v) make any Securities payable in money other than that stated in
the Securities, (vi) make any change in Section 6.04 or 6.07 of the Indenture,
(vii) waive a redemption payment with respect to any Security or (viii) make any
change in the foregoing.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture or this Security (and the
obligation of the Company to obtain any such consent otherwise required from
such Holder) may be subject to the requirement that such Holder shall have been
the Holder of record of any Securities with respect to which such consent is
required or sought as of a date identified by the Trustee in a notice furnished
to Holders in accordance with the terms of the Indenture.
11. DEFAULTS AND REMEDIES. Events of Default include: default in
payment of interest or Additional Interest on the Securities for 30 days;
default in payment of the principal or premium of any Security at maturity, or
upon acceleration, redemption or otherwise; failure by the Company for 30 days
after written notice to it from the Trustee, or after written notice to it and
the Trustee from Holders of at least 30% in principal amount of the then
outstanding Securities, to comply with any of its other agreements in the
Indenture or the Securities; certain defaults under other Indebtedness; certain
final judgments that remain undischarged for 60 days after being entered;
certain events of bankruptcy or insolvency; and, except as permitted by the
Indenture and the Securities, the Guarantees are held in any judicial proceeding
to be unenforceable or invalid or otherwise cease for any reason to be in full
force and effect with respect to any Guarantor or any Guarantor denies or
disaffirms its obligations under its Guarantee. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 30% in principal
amount of the then outstanding Securities may declare all the Securities to be
immediately due and payable for an amount equal to 100% of the principal amount
of the Securities plus premium and Additional Interest, if any, and accrued
interest to the date of payment, except that in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, all outstanding
Securities become due and payable immediately without further
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action or notice. Holders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity satisfactory to
it before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except a Default or an Event of Default in payment of principal,
premium or Additional Interest, if any, or interest or that resulted from a
failure to comply with Section 4.10 of the Indenture) if and so long as a
committee of its Responsible Officers determines in good faith that withholding
notice is in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
12. 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.
13. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or shareholder of the Company, as such, shall have any liability
for any obligations of the Company under the Securities, this Indenture or the
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of the Securities by accepting the
Securities waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Securities.
14. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
16. GUARANTORS. Payment of principal, premium and Additional
Interest, if any, and interest (including interest on overdue principal of,
premium, if any, and interest, if lawful) is unconditionally guaranteed by each
of the Guarantors.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
PRIMEDIA INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Treasurer
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ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and transfer
this Security to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date:
Your Signature:
------------------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee.*
-----------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section or 4.10 or 4.11 of the Indenture, check the appropriate box:
/ / Section 4.10 / / Section 4.11
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.10 or 4.11 of the Indenture, state the amount you
elect to have purchased: $___________
Date: Your Signature:
------------------------------ ----------------------------
(Sign exactly as your name
appears on the Security)
Signature Guarantee.*
-------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
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SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
Amount of Principal Amount of this
Amount of decrease in increase in Global Note Signature of
Date of Principal Amount of Principal Amount of following such decrease Authorized
Exchange this Global Note this Global Note (or increase) Signatory
-------- ---------------- ---------------- ------------- ---------
X-0-00
XXXXXXX X-0
[__]% SENIOR NOTES DUE 2013
No. _________________ CUSIP _________________
$______________________
PRIMEDIA INC., a Delaware corporation (herein called the "COMPANY"), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of _______________________________
on [_____________] [__], 2003.
INTEREST PAYMENT DATES: [_____________] and [_________________]
RECORD DATES: [_____________] and [_______________________]
Reference is hereby made to the further provisions of this Senior Note due 2013
set forth on the reverse side hereof and such further provisions shall for all
purposes have the same effect as if set forth on the front side hereof.
IN WITNESS WHEREOF, the Company has caused this certificate to be signed
manually or by facsimile.
DATED: [_____________] [__], 2003
CERTIFICATE OF AUTHENTICATION:
This is one of the Global Notes referred
to in the within mentioned Indenture.
THE BANK OF NEW YORK, PRIMEDIA INC.
as Trustee
By: By:
------------------------------- -------------------------------
Authorized Signatory Name:
Title:
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[_______]% SENIOR NOTES DUE 2013
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT
THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X)
PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A
PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN
AFFILIATE OF THE COMPANY AT THE TIME DURING THREE MONTHS PRECEDING THE
DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY,
(2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE
A-2-2
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON
THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION, AND A CERTIFICATE WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE IS DELIVERED BY THE
TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5) PURSUANT TO ANY
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS
SECURITY AGREES THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE
SUCH CERTIFICATES AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE
TO CONFIRM THAT TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE
FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
OR (2) PURCHASING FROM A PERSON NOT PARTICIPATING IN THE INITIAL
DISTRIBUTION OF THIS SECURITY (OR ANY PREDECESSOR SECURITY), THAT IT
IS AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION
OR (3) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2)(i)
OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT.
Capitalized terms used herein have the meaning assigned to them
in the Indenture unless otherwise indicated.
1. INTEREST; ADDITIONAL INTEREST. The Company promises to pay
interest on the principal amount of this Security at [__]% per annum from the
date of issuance until maturity and shall pay the Additional Interest payable
pursuant to the Registration Rights Agreement. The Company will pay interest and
Additional Interest, if any, semi-annually on [_____________] and [____________]
of each year, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Securities will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of issuance; PROVIDED that if there is no
existing Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest
Payment Date shall be
A-2-3
[_____________] [__], 200[]. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at the same rate per
annum on the Securities to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) and premium and Additional Interest, if
any, to the Persons who are registered Holders of Securities at the close of
business on the [____________] and [_________] next preceding the Interest
Payment Date, even if such Securities are cancelled after such record date and
on or before such Interest Payment Date. The Securities will be payable as to
principal, premium, interest and Additional Interest at the office or agency of
the Company maintained for such purpose within or without the City and State of
New York, or, at the option of the Company, payment of interest, premium and
Additional Interest may be made by check mailed to the Holders of the Securities
at their addresses set forth in the register of Holders of Securities.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-registrar without notice to
any Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of [_____________] [__], 2003 (the "Indenture"), among the
Company, the Guarantors and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the TIA (15 U.S. Code xx.xx. 77aaa-77bbbb). The Securities are subject to all
such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Securities are senior obligations of the Company
initially limited to $[____] million in aggregate principal amount, plus
premiums and Additional Interest, if any, plus amounts, if any, sufficient to
pay interest on outstanding Securities as set forth in Paragraph 2 hereof.
Additional Securities may be issued from time to time subject to Section 4.09 of
the Indenture. The Securities and any Additional Securities subsequently issued
would be treated as a single class for all purposes under the Indenture,
including, without limitation, waivers, amendments, redemptions and offers to
purchase.
5. OPTIONAL REDEMPTION.
At any time prior to [____________] [__], 2006, the Company may
on any one or more occasions redeem up to 35% of the aggregate principal amount
of Securities (which includes Additional Securities, if any) issued hereunder at
a redemption price of [__]% of the principal amount of such Securities, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
of one or more Equity Offerings; PROVIDED that:
(3) at least 65% of the aggregate principal amount of Securities
(which includes Additional Securities, if any) issued
remains outstanding immediately after the occurrence of each
of those redemptions (excluding Securities held by the
Company and its Subsidiaries); and
A-2-4
(4) any redemption must occur within 60 days of the date of
closing of such Equity Offering.
Except as provided in the preceding paragraph and other than in
connection with a Change of Control pursuant to Section 3.08 of the Indenture,
the Company may not redeem the Securities prior to [______________] [__], 2008.
On or after [_____________] [__], 2008, the Company may, at its option, redeem
the Securities, in whole or in part, at the redemption prices (expressed as
percentages of the principal amount) set forth in the immediately succeeding
paragraph, plus accrued and unpaid interest thereon to the applicable redemption
date.
The redemption price as a percentage of the principal amount
shall be as follows, if the Securities are redeemed during the twelve-month
period beginning [_________] [__] of the years indicated below:
Year Percentage
---- ----------
2008.................................................[_____]%
2009.................................................[_____]%
2010.................................................[_____]%
2011 and thereafter..................................100.000%
If the optional redemption date is on or after an interest record
date and on or before the related interest payment date, the accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on that record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
Notwithstanding the foregoing, upon the occurrence at any time of
a Change in Control, the Securities will be redeemable, at the option of the
Company, in whole or in part, pursuant to the provisions of Section 3.08 of the
Indenture.
Any redemption pursuant to this Section 3.07 shall be made, to
the extent applicable, pursuant to the provisions of Sections 3.01 through 3.06
of the Indenture.
6. MANDATORY OFFERS TO REPURCHASE; ASSET SALES.
(c) Upon the occurrence of a Change of Control, each Holder shall
have the right to require the Company to repurchase all or any part of
such Holder's Securities pursuant to the offer described below (the
"Change of Control Offer") at a purchase price equal to 101% of the
aggregate principal amount of such Securities plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control
Payment"). On the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment Securities or portions
thereof tendered pursuant to the Change of Control Offer, (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment
in respect of all Securities or portions thereof so tendered and (3)
deliver or cause to be delivered to the Trustee, the Securities so
accepted together with an Officers' Certificate stating the Securities
or portions thereof were tendered to the Company. The Paying Agent
shall promptly mail to each Holder of Securities so accepted, payment
in an amount equal to the purchase price for such Securities, and the
Trustee shall promptly
A-2-5
authenticate and mail to such Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered;
PROVIDED that each such new Security shall be in a principal amount of
$1,000 or integral multiples thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
A Holder of Securities may tender all or any portion of his
Securities at his discretion by completing the form entitled "OPTION
OF HOLDER TO ELECT PURCHASE" appearing on this Security.
(d) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate an
Asset Sale (including the sale of any of the stock of any Subsidiary)
unless at least 100% of the Net Proceeds from such Asset Sale (or, in
the case of a Partially Owned Restricted Subsidiary, the Company's Pro
Rata Portion thereof, after repayment by such Partially Owned
Restricted Subsidiary of its Indebtedness) are applied first to repay
Obligations or reduce commitments under the Credit Facilities in
accordance with the terms thereof, second to offer to redeem at par
the Outstanding Notes and third to offer to redeem at par the
Securities. The foregoing application of Net Proceeds from Asset Sales
is not required in the case of (i) sales or dispositions generating
cash proceeds of less than, with respect to the Company and its
Restricted Subsidiaries, $2.5 million and (ii) sales and dispositions
as to which the Company delivers a reinvestment notice and the
proceeds are so reinvested in one or more communications, publishing,
information, education or media assets or businesses within 12 months
of the date the relevant Asset Sale is consummated. Notwithstanding
the foregoing provisions of this paragraph (6), neither the Company
nor its Restricted Subsidiaries shall be required to apply the Net
Proceeds from any Asset Sale (i) to the extent that the aggregate Net
Proceeds from such Asset Sale, together with the Net Proceeds, if any,
of any other Asset Sale which have not been previously applied, are
less than $25.0 million or (ii) to the extent that, and for so long
as, such Net Proceeds cannot be so applied as a result of an
encumbrance or restriction permitted pursuant to Section 4.13 of the
Indenture.
7. NOTICE OF REDEMPTION. Notice of any redemption pursuant to
Section 3.07 or 3.08 of the Indenture will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address. Securities
in denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Securities held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Securities or portions thereof called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and Securities
may be exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption, except the unredeemed portion of any Security being
redeemed in part. Also, it need not exchange or
A-2-6
register the transfer of any Securities for a period of 15 days before the
mailing of a Notice of Redemption and ending on the date of such mailing or
during the period between a record date and the corresponding Interest Payment
Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Security may
be treated as its owner for all purposes.
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture, the Securities or the Guarantee may be amended or supplemented and
any existing Default under, or compliance with any provision of, the Indenture
may be waived with the consent of the Holders of at least a majority in
principal amount of the Securities then outstanding (including consents obtained
in connection with a tender offer or exchange offer for Securities). Without the
consent of any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Securities to cure any ambiguity, defect or inconsistency; to
provide for uncertificated Securities in addition to or in place of certificated
Securities; to comply with Section 5.01 of the Indenture; to make any change
that would provide any additional rights or benefits to the Holders of the
Securities or that does not adversely affect the legal rights under the
Indenture of any such Holder; or to comply with requirements of the SEC in order
to effect or maintain the qualification of the Indenture under the TIA.
Without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Securities held by a non-consenting Holder
of Securities) (i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver, (ii) reduce the principal of or
change the fixed maturity of any Security or alter the provisions with respect
to the redemption or purchase price in connection with repurchases under
Sections 3.07, 3.08, 4.10 or 4.11 of the Indenture, (iii) reduce the rate of or
change the time for payment of interest on any Security, (iv) waive a Default or
Event of Default in the payment of principal of or premium or Additional
Interest, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the Securities as provided in Section 6.02 of the
Indenture), (v) make any Securities payable in money other than that stated in
the Securities, (vi) make any change in Section 6.04 or 6.07 of the Indenture,
(vii) waive a redemption payment with respect to any Security or (viii) make any
change in the foregoing.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture or this Security (and the
obligation of the Company to obtain any such consent otherwise required from
such Holder) may be subject to the requirement that such Holder shall have been
the Holder of record of any Securities with respect to which such consent is
required or sought as of a date identified by the Trustee in a notice furnished
to Holders in accordance with the terms of the Indenture.
11. DEFAULTS AND REMEDIES. Events of Default include: default in
payment of interest or Additional Interest on the Securities for 30 days;
default in payment of the principal or premium of any Security at maturity, or
upon acceleration, redemption or otherwise; failure by the Company for 30 days
after written notice to it from the Trustee, or after written notice to it and
the Trustee from Holders of at least 30% in principal amount of the then
outstanding Securities, to comply with any of its other agreements in the
Indenture or the Securities; certain defaults under other Indebtedness; certain
final judgments that remain undischarged for 60 days
A-2-7
after being entered; certain events of bankruptcy or insolvency; and, except as
permitted by the Indenture and the Securities, the Guarantees are held in any
judicial proceeding to be unenforceable or invalid or otherwise cease for any
reason to be in full force and effect with respect to any Guarantor or any
Guarantor denies or disaffirms its obligations under its Guarantee. If an Event
of Default occurs and is continuing, the Trustee or the Holders of at least 30%
in principal amount of the then outstanding Securities may declare all the
Securities to be immediately due and payable for an amount equal to 100% of the
principal amount of the Securities plus premium and Additional Interest, if any,
and accrued interest to the date of payment, except that in the case of an Event
of Default arising from certain events of bankruptcy or insolvency, all
outstanding Securities become due and payable immediately without further action
or notice. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default or Event of
Default (except a Default or an Event of Default in payment of principal,
premium or Additional Interest, if any, or interest or that resulted from a
failure to comply with Section 4.10 of the Indenture) if and so long as a
committee of its Responsible Officers determines in good faith that withholding
notice is in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
12. 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.
13. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or shareholder of the Company, as such, shall have any liability
for any obligations of the Company under the Securities, this Indenture or the
Guarantees or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of the Securities by accepting the
Securities waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Securities.
14. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
16. GUARANTORS. Payment of principal, premium and Additional
Interest, if any, and interest (including interest on overdue principal of,
premium, if any, and interest, if lawful) is unconditionally guaranteed by each
of the Guarantors.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
A-2-8
PRIMEDIA INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Treasurer
A-2-9
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and transfer
this Security to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date:
------------------------------
Your Signature:
------------------------------
(Sign exactly as your name appears
on the face of this Security)
Signature Guarantee.*
----------------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-2-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section or 4.10 or 4.11 of the Indenture, check the appropriate box:
/ / Section 4.10 / / Section 4.11
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.10 or 4.11 of the Indenture, state the amount you
elect to have purchased: $___________
Date: Your Signature:
------------------------------ ------------------------
(Sign exactly as your name
appears on the Security)
Signature Guarantee.*
-------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-2-11
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary
Global Note for an interest in another Global Note, or of other Restricted
Global Notes for an interest in this Regulation S Temporary Global Note, have
been made:
Principal Amount
Amount of of this Global Note Signature of
decrease in Amount of increase following such authorized officer
Principal Amount in Principal Amount decrease (or of Trustee or
Date of Exchange of this Global Note of this Global Note increase) Note Custodian
---------------- ------------------- ------------------- ------------------- --------------------
X-0-00
XXXXXXX X-0
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
Each of the corporations listed below (hereinafter referred to as
the "Guarantors", which term includes any successor or additional Guarantor
under the Indenture (the "Indenture") referred to in the Security upon which
this notation is endorsed) (i) has jointly and severally, unconditionally
guaranteed that (a) the principal of, and premium, if any, and interest on the
Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of,
premium, if any, and interest on the Securities, if any, if lawful, and all
other obligations of the Company to the Holders or the Trustee will be promptly
paid in full or performed, all in accordance with the terms hereof and as set
forth in the Indenture; and (b) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration, or otherwise;
PROVIDED, HOWEVER, that the maximum liability of a Guarantor pursuant to this
Guarantee shall in no event exceed the Maximum Guaranteed Amount (as defined
below). Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.
The "Maximum Guaranteed Amount" means, with respect to any
Guarantor, the amount which allows this Guarantee to be enforceable to the
fullest extent permitted by law, limited only to the extent necessary for this
Guarantee to not constitute a fraudulent conveyance.
No stockholder, officer, director, employer or incorporator,
past, present or future, of the Guarantors, as such, shall have any personal
liability under this Guarantee by reason of his or its status as such
stockholder, officer, director, employer or incorporator.
This Guarantee shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder 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 Guarantee shall not be valid or obligatory for any purpose
with respect to a Security until the certificate of authentication on the
Security upon which this Guarantee is noted shall have been executed by or on
behalf of the Trustee under the Indenture by the manual signature of one of its
authorized signatories.
AgriClick LLC
Canoe & Kayak, Inc.
Channel One Communications Corporation
Cover Concepts Marketing Services LLC
CSK Publishing Company Incorporated
Films for The Humanities & Sciences, Inc.
Xxxx Publishing Companies, Inc.
Hacienda Productions, Inc.
HPC Brazil, Inc.
IntelliChoice, Inc.
Kagan Media Appraisals, Inc.
Kagan Seminars, Inc.
Kagan World Media, Inc.
XxXxxxxx Argus Publishing, Inc.
Media Central IP Corp.
Motor Trend Auto Shows Inc.
Xxxx Xxxxx Associates, Inc.
PRIMEDIA Business Magazines & Media Inc.
PRIMEDIA Companies Inc.
PRIMEDIA Enthusiast Publications, Inc.
PRIMEDIA Finance Shared Services, Inc.
PRIMEDIA Holdings III Inc.
PRIMEDIA Information Inc.
PRIMEDIA Leisure Group Inc.
PRIMEDIA Magazines Inc.
PRIMEDIA Magazine Finance, Inc.
PRIMEDIA Special Interest Publications Inc.
PRIMEDIA Specialty Group Inc.
PRIMEDIA Workplace Learning, LLC
PRIMEDIA Workplace Learning LP
Simba Information Inc.
The Virtual Flyshop, Inc.
Name:
Title:
A-3-2
SCHEDULE I
AgriClick LLC
Canoe & Kayak, Inc.
Channel One Communications Corporation
Cover Concepts Marketing Services LLC
CSK Publishing Company Incorporated
Films for The Humanities & Sciences, Inc.
Xxxx Publishing Companies, Inc.
Hacienda Productions, Inc.
HPC Brazil, Inc.
IntelliChoice, Inc.
Kagan Media Appraisals, Inc.
Kagan Seminars, Inc.
Kagan World Media, Inc.
XxXxxxxx Argus Publishing, Inc.
Media Central IP Corp.
Motor Trend Auto Shows Inc.
Xxxx Xxxxx Associates, Inc.
PRIMEDIA Business Magazines & Media Inc.
PRIMEDIA Companies Inc.
PRIMEDIA Enthusiast Publications, Inc.
PRIMEDIA Finance Shared Services, Inc.
PRIMEDIA Holdings III Inc.
PRIMEDIA Information Inc.
PRIMEDIA Leisure Group Inc.
PRIMEDIA Magazines Inc.
PRIMEDIA Magazine Finance, Inc.
PRIMEDIA Special Interest Publications Inc.
PRIMEDIA Specialty Group Inc.
PRIMEDIA Workplace Learning, LLC
PRIMEDIA Workplace Learning LP
Simba Information Inc.
The Virtual Flyshop, Inc.
A-3-3
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: 8% Senior Notes Due 2013
Reference is hereby made to the Indenture, dated as of May 15,
2003 (the "INDENTURE"), between PRIMEDIA Inc., as issuer (the "COMPANY"), and
The Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
______________, (the "TRANSFEROR") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "TRANSFER"),
to __________ (the "TRANSFEREE"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither
such Transferor nor any Person acting on its behalf knows that the transaction
was prearranged with a buyer in the United States, (ii) no directed selling
efforts have been made in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S under the Securities Act and, (iii) the transaction
is not part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note, the Temporary
Regulation S Global Note and/or the Definitive Note and in the Indenture and the
Securities Act.
3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE
SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that the
Transfer complies with the transfer restrictions applicable to
Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture
and (2) if such Transfer is in respect of a principal amount of Notes
at the time of transfer of less than $100,000, an Opinion of Counsel
provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed transfer in accordance with the terms of
the Indenture, the transferred Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
B-2
printed on Definitive Notes and in the Indenture and the Securities
Act.
4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(b) / / CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any state of the United States and (ii)
the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(c) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act
other than Rule 144, Rule 903 or Rule 904 and in compliance with the
transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any State of the United States and (ii)
the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject
to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes or Restricted Definitive
Notes and in the Indenture.
B-3
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
--------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------
Name:
Title:
Dated: ________, ___
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(b) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ____), or
(ii) / / Regulation S Global Note (CUSIP ____), or
(iii) / / IAI Global Note (CUSIP_____), or
(c) / / a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ____), or
(ii) / / Regulation S Global Note (CUSIP ____), or
(iii) / / Unrestricted Global Note (CUSIP ____); or
(b) / / a Restricted Definitive Note; or
(c) / / an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: 8% Senior Notes 2013
(CUSIP __________)
Reference is hereby made to the Indenture, dated as of May 15,
2003 (the "INDENTURE"), between PRIMEDIA Inc., as issuer (the "COMPANY"), and
The Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
_____________, (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"),
(iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and
(iv) the Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Owner's Exchange of a Restricted Definitive Note for a beneficial
interest in an Unrestricted Global Note, the Owner hereby certifies
(i) the beneficial interest is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange
of a Restricted Definitive Note for an Unrestricted Definitive Note,
the Owner hereby certifies (i) the Unrestricted Definitive Note is
being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend
are not required in order to maintain compliance with the Securities
Act and (iv) the Unrestricted Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state
of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note
is being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of
the Indenture, the Restricted Definitive Note issued will continue to
be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the
Indenture and the Securities Act.
(b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with
the Exchange of the Owner's Restricted Definitive Note for a
beneficial interest in the [CHECK ONE] ? 144A Global Note, ?
Regulation S Global Note or ? IAI Global Note with an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance
C-2
with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, and
in compliance with any applicable blue sky securities laws of any
state of the United States. Upon consummation of the proposed Exchange
in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global
Note and in the Indenture and the Securities Act.
C-3
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-------------------------------
[Insert Name of Owner]
By:
----------------------------
Name:
Title:
Dated: ________, __
C-4
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: 8% Senior Notes Due 2013
Reference is hereby made to the Indenture, dated as of May 15,
2003 (the "INDENTURE"), between PRIMEDIA Inc., as issuer (the "COMPANY"), and
The Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $100,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144 under the
Securities Act or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing the
Definitive Note or beneficial interest in a Global Note from us in a transaction
meeting the requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion and we are acquiring the Notes for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act or other applicable securities law.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
---------------------------------------
[Insert Name of Accredited Investor]
By:
------------------------------------
Name:
Title:
Dated: ________, ___
D-2
