Exhibit 4.1
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METALLURG HOLDINGS, INC.
12.75% Senior Discount Notes due 2008
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INDENTURE
Dated as of July 13, 1998
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UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.02. Other Definitions . . . . . . . . . . . . . . . . . 24
SECTION 1.03. Incorporation by Reference of Trust Indenture Act . 24
SECTION 1.04. Rules of Construction . . . . . . . . . . . . . . . 25
ARTICLE 2 THE SECURITIES
SECTION 2.01. Amount of Securities. . . . . . . . . . . . . . . . 25
SECTION 2.02. Form and Dating . . . . . . . . . . . . . . . . . . 26
SECTION 2.03. Execution and Authentication. . . . . . . . . . . . 26
SECTION 2.04. Registrar and Paying Agent. . . . . . . . . . . . . 27
SECTION 2.05. Paying Agent To Hold Money in Trust . . . . . . . . 27
SECTION 2.06. Securityholder Lists. . . . . . . . . . . . . . . . 28
SECTION 2.07. Replacement Securities. . . . . . . . . . . . . . . 28
SECTION 2.08. Outstanding Securities. . . . . . . . . . . . . . . 28
SECTION 2.09. Temporary Securities. . . . . . . . . . . . . . . . 29
SECTION 2.10. Cancellation. . . . . . . . . . . . . . . . . . . . 29
SECTION 2.11. Defaulted Interest. . . . . . . . . . . . . . . . . 29
SECTION 2.12. CUSIP Numbers . . . . . . . . . . . . . . . . . . . 29
ARTICLE 3 REDEMPTION
SECTION 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . 30
SECTION 3.02. Selection of Securities To Be Redeemed. . . . . . . 30
SECTION 3.03. Notice of Redemption. . . . . . . . . . . . . . . . 30
SECTION 3.04. Effect of Notice of Redemption. . . . . . . . . . . 31
SECTION 3.05. Deposit of Redemption Price . . . . . . . . . . . . 31
SECTION 3.06. Securities Redeemed in Part . . . . . . . . . . . . 31
ARTICLE 4 COVENANTS
SECTION 4.01. Payment of Securities . . . . . . . . . . . . . . . 32
SECTION 4.02. SEC Reports . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.03. Limitation on Debt. . . . . . . . . . . . . . . . . 32
SECTION 4.04. Limitation on Restricted Payments . . . . . . . . . 33
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries . . . . . . . . . . . . . . 35
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SECTION 4.06. Limitation on Asset Sales . . . . . . . . . . . . . 36
SECTION 4.07. Limitation on Transactions with Affiliates. . . . . 38
SECTION 4.08. Change of Control . . . . . . . . . . . . . . . . . 39
SECTION 4.09. Compliance Certificate. . . . . . . . . . . . . . . 41
SECTION 4.10. Further Instruments and Acts. . . . . . . . . . . . 41
SECTION 4.11. Limitation on Liens . . . . . . . . . . . . . . . . 41
SECTION 4.12. Limitation on Sale and Leaseback Transactions . . . 41
SECTION 4.13. Limitation on Status as Investment Company. . . . . 42
SECTION 4.14. Designation of Restricted and Unrestricted
Subsidiaries. . . . . . . . . . . . . . . . . . . . 42
SECTION 4.15. Limitation on Lines of Business . . . . . . . . . . 43
ARTICLE 5 SUCCESSOR COMPANY
SECTION 5.01. When Company May Merge or Transfer Assets . . . . . 43
ARTICLE 6 DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . 44
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . 46
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . 46
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . 46
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . 46
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . 47
SECTION 6.07. Rights of Holders to Receive Payment. . . . . . . . 47
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . . 47
SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . . 48
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . 48
SECTION 6.12. Waiver of Stay or Extension Laws. . . . . . . . . . 49
ARTICLE 7 TRUSTEE
SECTION 7.01. Duties of Trustee . . . . . . . . . . . . . . . . . 49
SECTION 7.02. Rights of Trustee . . . . . . . . . . . . . . . . . 50
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . . 51
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . 51
SECTION 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . 51
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . 51
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . . 52
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . . 53
SECTION 7.09. Successor Trustee by Merger . . . . . . . . . . . . 53
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . 54
SECTION 7.11. Preferential Collection of Claims Against Company . 54
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ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Securities; Defeasance. . 54
SECTION 8.02. Conditions to Defeasance. . . . . . . . . . . . . . 55
SECTION 8.03. Application of Trust Money. . . . . . . . . . . . . 56
SECTION 8.04. Repayment to Company. . . . . . . . . . . . . . . . 56
SECTION 8.05. Indemnity for U.S. Government Obligations . . . . . 57
SECTION 8.06. Reinstatement . . . . . . . . . . . . . . . . . . . 57
ARTICLE 9 AMENDMENTS
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . . 57
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . 58
SECTION 9.03. Compliance with Trust Indenture Act . . . . . . . . 59
SECTION 9.04. Revocation and Effect of Consents and Waivers . . . 59
SECTION 9.05. Notation on or Exchange of Securities . . . . . . . 60
SECTION 9.06. Trustee To Sign Amendments. . . . . . . . . . . . . 60
SECTION 9.07. Payment for Consent . . . . . . . . . . . . . . . . 60
ARTICLE 10 SECURITY
SECTION 10.01. Security Interest. . . . . . . . . . . . . . . . . 60
SECTION 10.02. Recording; Opinions of Counsel . . . . . . . . . . 61
SECTION 10.03. Disposition of Certain Collateral. . . . . . . . . 62
SECTION 10.04. Certain Releases of Collateral . . . . . . . . . . 62
SECTION 10.05. Payment of Expenses. . . . . . . . . . . . . . . . 63
SECTION 10.06. Suits to Protect the Collateral. . . . . . . . . . 63
SECTION 10.07. Trustee's Duties . . . . . . . . . . . . . . . . . 63
ARTICLE 11 MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls . . . . . . . . . . . 64
SECTION 11.02. Notices. . . . . . . . . . . . . . . . . . . . . . 64
SECTION 11.03. Communication by Holders with Other Holders. . . . 65
SECTION 11.04. Certificate and Opinion as to Conditions Precedent 65
SECTION 11.05. Statements Required in Certificate or Opinion. . . 65
SECTION 11.06. When Securities Disregarded. . . . . . . . . . . . 65
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar . . . 66
SECTION 11.08. Legal Holidays . . . . . . . . . . . . . . . . . . 66
SECTION 11.09. Governing Law. . . . . . . . . . . . . . . . . . . 66
SECTION 11.10. No Recourse Against Others . . . . . . . . . . . . 66
SECTION 11.11. Successors . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.12. Multiple Originals . . . . . . . . . . . . . . . . 66
SECTION 11.13. Table of Contents; Headings. . . . . . . . . . . . 66
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Appendix A - Provisions Relating to Initial Securities, Private Exchange
Securities and Exchange Securities
Exhibit 1 to Appendix A - Form of Initial Security
Exhibit A - Form of Exchange Security and Private Exchange Security
Exhibit B - Form of Collateral Pledge Agreement
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08; 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.06
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 10.02
(d) 7.06
314(a) 4.02; 10.02
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) N.A.
315(a) 7.01
(b) 7.05; 10.02
(c) 7.01
(d) 7.01
(e) 6.11
316(a)(last sentence) 10.06
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.05
318(a) 10.01
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
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INDENTURE dated as of July 13, 1998, between METALLURG
HOLDINGS, INC., a Delaware corporation (the "Company"), and
UNITED STATES TRUST COMPANY OF NEW YORK, a New York banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of each of the other
parties and for the equal and ratable benefit of the Holders of the
Company's 12.75% Senior Discount Notes Due 2008 (the "Initial Securities") and,
if and when issued pursuant to a registered exchange offer for the Initial
Securities, the Company's 12.75% Senior Discount Exchange Notes Due 2008 (the
"Exchange Securities") and, if and when issued pursuant to a Private Exchange
for the Initial Securities, the Company's 12.75% Senior Discount Private
Exchange Notes due 2008 (the "Private Exchange Securities," and together with
the Initial Securities and the Exchange Securities, the "Securities").
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Accreted Value" means, as of any date of determination prior to July
15, 2003, the sum of (a) the initial offering price of each Security and (b) the
portion of the excess of the principal amount of each Security over such initial
offering price which shall have been accreted thereon through such date, such
amount to be so accreted on a daily basis at the rate of 12.75% per annum of the
initial offering price of the Initial Securities, compounded semi-annually on
each January 15 and July 15, commencing January 15, 1999, from the date of
issuance of the Initial Securities through the date of determination, computed
on the basis of a 360-day year of twelve 30-day months.
"ADDITIONAL ASSETS" means (a) any Property (other than cash, cash
equivalents and securities) to be owned by the Company or any Restricted
Subsidiary and used in a Related Business; (b) the costs of improving or
developing any Property owned by the Company or a Restricted Subsidiary which is
used in a Related Business; or (c) Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by
the Company or another Restricted Subsidiary from any Person other than an
Affiliate of the Company; PROVIDED, HOWEVER, that, in the case of clause (c),
such Restricted Subsidiary is primarily engaged in a Related Business.
"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. For the purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. For purposes of the
covenants contained in Section 4.06, Section 4.07 and the definition of
"Additional Assets" only, "Affiliate" shall also mean any beneficial owner of
shares representing 10% or more of the total voting power of the Voting Stock
(on a fully diluted basis) of the Company or of rights or warrants to purchase
such Voting Stock (whether or not currently exercisable) and any Person who
would be an Affiliate of any such beneficial owner pursuant to the first
sentence hereof.
"AGENT MEMBER" means any member of, or participant in, the Depositary.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depositary for such Global
Security, Euroclear and Cedel, in each case to the extent applicable to such
transaction and as in effect from time to time.
"ASSET SALE" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) (other than the grant of a security interest) by the Company or
any Restricted Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the purposes of this
definition as a "disposition"), of (a) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares) or (b) any other
assets of the Company or any Restricted Subsidiary outside of the ordinary
course of business of the Company or such Restricted Subsidiary (other than, in
the case of clauses (a) and (b) above, (i) any disposition by a Restricted
Subsidiary to the Company or by the Company or a Restricted Subsidiary to a
Restricted Subsidiary, (ii) for purposes of Section 4.06 only, any disposition
that constitutes a Permitted Investment or Restricted Payment permitted by
Section 4.04, (iii) any disposition effected in compliance with Section 5.01(a),
(iv) any disposition of Property or equipment that has become obsolete or
otherwise unsuitable for use in connection with the business of the Company or
such Restricted Subsidiary or (v) any disposition or series of related
dispositions of assets having a Fair Market Value and sale price of less than
$500,000).
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction
means, at any date of determination, (a) if such Sale and Leaseback Transaction
is a Capital Lease Obligation, the amount of Debt represented thereby according
to the definition of "Capital Lease Obligation" and (b) in all other instances,
the present value (discounted at the interest rate borne by the Securities
(whether or not cash interest is then accruing), compounded annually), of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale and Leaseback Transaction (including any period
for which such lease has been extended).
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"AVERAGE LIFE" means, as of any date of determination, with respect to
any Debt or Preferred Stock, the quotient obtained by dividing (a) the sum of
the product of the numbers of years (rounded to the nearest one-twelfth of one
year) from the date of determination to the dates of each successive scheduled
principal payment of such Debt or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (b) the sum of
all such payments.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"BOARD RESOLUTION" means, with respect to the Company, a copy of a
resolution certified by the Secretary or an Assistant Secretary of the Company
to have been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, and delivered to the Trustee.
"BUSINESS DAY" means each day which is not a Legal Holiday.
"CAPITAL LEASE OBLIGATIONS" means any obligation under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP; and the amount of Debt represented by such obligation shall be the
capitalized amount of such obligations determined in accordance with GAAP; and
the Stated Maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty. For purposes of
Section 4.11, a Capital Lease Obligation shall be deemed secured by a Lien on
the Property being leased.
"CAPITAL STOCK" means, with respect to any Person, any shares or other
equivalents (however designated) of corporate stock, partnership interests,
membership interests in limited liability companies or any other participations,
rights, warrants, options or other interests in the nature of an equity interest
in such Person, including Preferred Stock, but excluding any debt security
convertible or exchangeable into such equity interest.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate cash proceeds
received by the Company from the issuance or sale (other than to a Subsidiary of
the Company or an employee stock ownership plan or trust established by the
Company or any of its Subsidiaries for the benefit of their employees) by the
Company of any class of its Capital Stock (other than Disqualified Stock) after
the Issue Date, net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"CEDEL" means Cedel Bank, S.A., or any successor securities clearing
agency.
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"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(a) if (i) any "Person" or "group" (as such terms are used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provisions to
either of the foregoing) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act, except that a Person will be deemed to have
"beneficial ownership" of all shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 35% or more of the voting
power of the Voting Stock of the Company and (ii) the Permitted Holders are
"beneficial owners" (as defined in Rule 13d-3 under the Exchange Act except
that a Person will be deemed to have "beneficial ownership" of all shares
that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, in the aggregate of a lesser percentage of the total voting
power of all classes of the Voting Stock of the Company than such other
Person or group referred to in clause (i) (for purposes of this clause (a),
such Person or group, and the Permitted Holders, shall be deemed to
beneficially own any Voting Stock of a corporation (the "specified
corporation") held by any other corporation (the "parent corporation") so
long as such Person or group beneficially owns, directly or indirectly, in
the aggregate a majority of the voting power of the Voting Stock of such
parent corporation); or
(b) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets
of the Company and the Restricted Subsidiaries, considered as a whole
(other than a disposition of such assets as an entirety or virtually as an
entirety to a Wholly Owned Subsidiary) shall have occurred, or the Company
merges, consolidates or amalgamates with or into any other Person or any
other Person merges, consolidates or amalgamates with or into the Company,
in any such event pursuant to a transaction in which the outstanding Voting
Stock of the Company is reclassified into or exchanged for cash, securities
or other Property, other than any such transaction where (i) the
outstanding Voting Stock of the Company is reclassified into or exchanged
for Voting Stock of the surviving corporation and (ii) the Holders of the
Voting Stock of the Company immediately prior to such transaction own,
directly or indirectly, not less than a majority of the Voting Stock of the
surviving corporation immediately after such transaction and in
substantially the same proportion as before the transaction; or
(c) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (together with
any new directors whose election or appointment by such Board or whose
nomination for election by the share holders of the Company was approved by
a vote of 66 2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the Board of Directors then in office; or
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(d) the shareholders of the Company shall have approved any plan of
liquidation or dissolution of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means the Property and assets of the Company which is now
or hereafter subject to the Liens created by the Collateral Pledge Agreement.
"COLLATERAL PLEDGE AGREEMENT" means the pledge agreement between the
Trustee and the Company, substantially in the form of Exhibit B hereto, as it
may be amended or supplemented from time to time in accordance with the terms
thereof. Such pledge agreement shall be dated as of the Issue Date, and shall
be executed in favor of the Trustee for the benefit of the Holders.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"CONSOLIDATED COVERAGE RATIO" means, as of any date of determination,
the ratio of (a) the aggregate amount of EBITDA for the most recent four
consecutive fiscal quarters ending at least 45 days prior to such determination
date to (b) Consolidated Fixed Charges for such four fiscal quarters; PROVIDED,
HOWEVER, that (i) if the Company or any Restricted Subsidiary has Incurred any
Debt since the beginning of such period that remains outstanding or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Incurrence of Debt, or both, Consolidated Fixed Charges for such period
shall be calculated after giving effect on a pro forma basis to such Debt as if
such Debt had been Incurred on the first day of such period and the discharge of
any other Debt repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Debt as if such discharge had occurred on the first day of
such period, (ii) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Sale or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio is an Asset
Sale, or both, EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the Property which is the subject
of such Asset Sale for such period, or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period, in either
case as if such Asset Sale had occurred on the first day of such period, and
Consolidated Fixed Charges for such period shall be reduced by an amount equal
to the Consolidated Fixed Charges directly attributable to any Debt of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Sale, as if such Asset Sale had
occurred on the first day of such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, by an amount equal to the Consolidated Fixed
Charges for such period directly attributable to the Debt of such Restricted
Subsidiary to the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Debt after such sale), (iii) if since the
beginning of such period the
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Company shall have consummated a Public Equity Offering following which there is
a Public Market, Consolidated Fixed Charges for such period shall be reduced by
an amount equal to the Consolidated Fixed Charges directly attributable to any
Debt of the Company or any Restricted Subsidiary repaid, repurchased, defeased
or otherwise discharged with respect to the Company and its Restricted
Subsidiaries in connection with such Public Equity Offering for such period,
(iv) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or
an acquisition of Property, including any acquisition of Property occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Fixed Charges for such period shall be calculated after giving
pro forma effect thereto (including the Incurrence of any Debt) as if such
Investment or acquisition occurred on the first day of such period, (v) if since
the beginning of such period any Person that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period shall have made any Asset Sale, Investment or
acquisition of Property that would have required an adjustment pursuant to
clause (ii), (iii) or (iv) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Fixed Charges for such
period shall be calculated after giving pro forma effect thereto as if such
Asset Sale, Investment or acquisition of Property occurred on the first day of
such period and (vi) if since the beginning of such period any Restricted
Subsidiary shall have obtained relief from any limitation on the ability of such
Restricted Subsidiary to pay dividends to the Company, EBITDA and Consolidated
Fixed Charges for such period shall be calculated after giving pro forma effect
thereto as if the ability of such Restricted Subsidiary to pay dividends to the
Company had not been so limited from the first day of such period. For purposes
of this definition, pro forma calculations shall be determined in good faith by
a responsible financial or accounting Officer of the Company and as further
contemplated by the definition of the term "pro forma." If any Debt bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Debt shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Debt if such Interest
Rate Agreement has a remaining term in excess of 12 months).
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period plus (b) all
Preferred Stock Dividends (other than to the Company or a Wholly Owned
Subsidiary, and other than Redeemable Dividends) paid, accrued, declared or
accumulated during such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, (a) interest
expense attributable to capital leases, (b) amortization of debt discount and
debt issuance cost, including commitment fees, (c) capitalized interest,
(d) noncash interest expenses, (e) to the extent required under GAAP to be
reflected as interest expense in the
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consolidated financial statements of the Company, commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (f) to the extent required under GAAP to be reflected as
an expense in the consolidated financial statements of the Company, net costs
associated with Hedging Obligations (including amortization of fees),
(g) Redeemable Dividends, (h) interest incurred in connection with Investments
in discontinued operations, (i) interest accruing on any Debt of any other
Person to the extent such Debt is Guaranteed by the Company or any Restricted
Subsidiary and (j) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in connection
with Debt Incurred by such plan or trust.
"CONSOLIDATED NET INCOME" means, for any period, the net income (loss)
of the Company and its consolidated Subsidiaries, less the aggregate amount of
recurring expenditures made by the Company and its consolidated Subsidiaries
during such period with respect to environmental matters which were not deducted
in determining in such net income (loss) as a result of the adoption of American
Institute of Certified Public Accountants Statement of Position 96-1,
"Environmental Remediation Liabilities"; PROVIDED, HOWEVER, that there shall not
be included in such Consolidated Net Income (a) any net income (loss) of any
Person (other than the Company) if such Person is not a Restricted Subsidiary,
except that (i) subject to the exclusion contained in clause (d) below, the
Company's equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (c) below) and (ii) the Company's equity in a net loss of
any such Person other than an Unrestricted Subsidiary for such period shall be
included in determining such Consolidated Net Income to the extent of the
Company's obligation to fund such net loss in cash, (b) any net income (loss) of
any Person acquired by the Company or any of its consolidated Subsidiaries in a
pooling of interests transaction for any period prior to the date of such
acquisition, (c) any net income (but not loss) of any Restricted Subsidiary, to
the extent that the payment of dividends or the making of distributions by such
Restricted Subsidiary to the Company is not at the time permitted, directly or
indirectly, without prior approval (that has not been obtained), pursuant to the
terms of its charter or any agreement, instrument (other than agreements and
instruments limiting dividends or distributions by Metallurg, and not any other
Restricted Subsidiary, to the stockholders of Metallurg or such other Restricted
Subsidiary) or any governmental regulation applicable to such Restricted
Subsidiary, (d) any gain (loss) realized upon the sale or other disposition of
any Property of the Company or any of its consolidated Subsidiaries (including
pursuant to any Sale and Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business, (e) any extraordinary gain or
loss and (f) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Company or a Restricted Subsidiary to
7
the extent such dividends, repayments or transfers increase the amount of
Restricted Payments permitted under such covenant pursuant to clause (c)(iv)
thereof.
"CONSOLIDATED NET WORTH" means the total of the amounts shown on the
consolidated balance sheet of the Company and its Restricted Subsidiaries as of
the end of the most recent fiscal quarter of the Company ending at least 45 days
prior to the taking of any action for the purpose of which the determination is
being made, as (a) the par or stated value of all outstanding Capital Stock of
the Company plus (b) paid-in capital or capital surplus relating to such Capital
Stock plus (c) any retained earnings or earned surplus less (i) any accumulated
deficit and (ii) any amounts attributable to Disqualified Stock.
"CREDIT FACILITY" means one or more debt facilities with banks or
other institutional lenders (including pursuant to (a) the Loan Agreement dated
April 14, 1997, by and among the Company, certain subsidiaries of the Company
named therein, BankBoston, N.A. and the other Banks party thereto, and
BankBoston, N.A. as agent for such Banks, (b) the Loan Agreement dated
October 20, 1997, as amended, by and among GfE, certain of its subsidiaries and
BankBoston, N.A., Frankfurt Branch and (c) each of the Loan Documents (as
defined in such Loan Agreements) relating to such Loan Agreements) providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, foreign
exchange, bankers' acceptances or similar financial arrangements, in each case
as amended, restated, supplemented or modified and in effect from time to time,
together with any extensions, revisions, refinancings or replacements thereof by
a lender or syndicate of lenders.
"CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of a
Person, any foreign exchange contract, currency swap agreement, currency option
or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates.
"DEBT" means, with respect to any Person on any date of determination
(without duplication), (a) the principal of and premium (if any) in respect of
(i) debt of such Person for money borrowed and (ii) debt evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
Person is responsible or liable; (b) all Capital Lease Obligations of such
Person and all Attributable Debt in respect of Sale and Leaseback Transactions
entered into by such Person; (c) all obligations of such Person issued or
assumed as the deferred purchase price of Property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable and customer advance
payments or deposits arising in the ordinary course of business); (d) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in (a) through (c) above) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third Business Day
8
following receipt by such Person of a demand for reimbursement following payment
on the letter of credit); (e) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of such Person, any Preferred Stock
(but excluding, in each case, any accrued dividends); (f) all obligations of the
type referred to in clauses (a) through (e) of other Persons and all dividends
of other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; (g) all obligations of the type
referred to in clauses (a) through (f) of other Persons secured by any Lien on
any Property of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of the
value of such Property or the amount of the obligation so secured; and (h) to
the extent not otherwise included in this definition, Hedging Obligations of
such Person. The amount of Debt of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date; PROVIDED
that the amount outstanding at any time of any Debt issued with original issue
discount is the face amount of such Debt less the remaining unamortized portion
of the original issue discount of such Debt at such time as determined in
accordance with GAAP.
"DEPOSITARY" means, with respect to the Securities issuable or issued
in whole or in part in the form of one or more Global Securities, The Depository
Trust Company for so long as it shall be a clearing agency registered under the
Exchange Act, or such successor as the Company shall designate from time to time
in an Officers' Certificate delivered to the Trustee.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DISQUALIFIED STOCK" means, with respect to any Person, Redeemable
Stock of such Person as to which (a) the maturity, (b) mandatory redemption or
(c) redemption, conversion or exchange at the option of the holder thereof
occurs, or may occur, on or prior to the first anniversary of the Stated
Maturity of the Securities; PROVIDED, HOWEVER, that Redeemable Stock of such
Person that would not otherwise be characterized as Disqualified Stock under
this definition shall not constitute Disqualified Stock if such Redeemable Stock
is convertible or exchangeable into Debt or Disqualified Stock solely at the
option of the issuer thereof.
"EBITDA" means, for any period, an amount equal to, for the Company
and its consolidated Restricted Subsidiaries, (a) the sum of Consolidated Net
Income for such period, plus the following to the extent reducing Consolidated
Net Income for such period: (i) the provision for taxes based on income or
profits or utilized in computing net loss, (ii) Consolidated Interest Expense,
(iii) depreciation, (iv) amortization of intangibles and (v) any other noncash
items (other than any such noncash item to the extent that it represents an
accrual of or reserve for cash expenditures in any future period), minus (b) all
noncash items increasing Consolidated Net Income for such period (other than any
such noncash item to the extent that it will result in
9
the receipt of cash payments in any future period). Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization of, a Restricted Subsidiary shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"EUROCLEAR" means the Euroclear Clearance System or any successor
securities clearing agency.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means, with respect to any Property, the price
which could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined, except as otherwise provided, (a) if such Property has a Fair Market
Value of less than $5,000,000, by any Officer of the Company or (b) if such
Property has a Fair Market Value in excess of $5,000,000, by a majority of the
Board of Directors and evidenced by a Board Resolution, dated within 30 days of
the relevant transaction, delivered to the Trustee.
"GAAP" means United States generally accepted accounting principles as
in effect on the Issue Date, including those set forth (a) in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants, (b) in the statements and pronouncements of the
Financial Accounting Standards Board, (c) in such other statements by such other
entity as approved by a significant segment of the accounting profession and
(d) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar written
statements from the accounting staff of the SEC.
"GFE" means GfE Gesellschaft fuer Elektrometallurgie mbH.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in
10
whole or in part); PROVIDED, HOWEVER, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"GLOBAL SECURITY" means the Security or Securities that evidences all
or part of the Securities and bears the global securities legend set forth in
Exhibit 1 to Appendix A.
"HEDGING OBLIGATION" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, Currency Exchange Protection Agreement
or any other similar agreement or arrangement.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a Security
is registered on the Registrar's books.
"INCUR" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by merger, conversion, exchange or otherwise),
extend, assume, Guarantee or become liable in respect of such Debt or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Debt or obligation on the balance sheet of such Person (and "Incurrence"
and "Incurred" shall have meanings correlative to the foregoing); PROVIDED,
HOWEVER, that a change in GAAP that results in an obligation of such Person that
exists at such time, and is not theretofore classified as Debt, becoming Debt
shall not be deemed an Incurrence of such Debt; PROVIDED FURTHER, HOWEVER, that
solely for purposes of determining compliance with Section 4.03, amortization of
debt discount shall not be deemed to be the Incurrence of Debt, PROVIDED that in
the case of Debt sold at a discount, the amount of such Debt Incurred shall at
all times be the aggregate principal amount at Stated Maturity.
"INDENTURE" means this Indenture as amended or supplemented from time
to time.
"INDENTURE OBLIGATIONS" means the obligations of the Company pursuant
to this Indenture and the Securities (and any other obligor hereunder or under
the Securities) now or hereafter existing, to pay principal of and interest on
the Securities when due and payable, whether on maturity or an interest payment
date, by acceleration, call for redemption, acceptance of any Prepayment Offer,
Change of Control Offer, or otherwise, and interest on the overdue principal of,
and (to the extent lawful) interest, if any, on, the Securities and all other
amounts due or to become due in connection with this Indenture, the Securities
and the Collateral Pledge Agreement, including any and all extensions, renewals
or other modifications thereof, in whole or in part, and the performance of all
other obligations of the Company (and any other obligor hereunder or under the
Securities), including all costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by the Trustee or the Holders
in the collection or enforcement of any such obligations or realization upon the
Collateral or the security of any Collateral Pledge Agreement.
11
"INDEPENDENT APPRAISER" means an investment banking firm of national
standing or any third party appraiser of national standing, PROVIDED that such
firm or appraiser is not an Affiliate of the Company.
"INITIAL SECURITIES" has the meaning stated in the first recital of
this Indenture.
"INTEREST RATE AGREEMENT" means, for any Person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect against fluctuations in interest
rates.
"INVESTMENT" by any Person means any direct or indirect loan (other
than advances to customers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of such Person), advance or other
extension of credit or capital contribution (by means of transfers of cash or
other Property to others or payments for Property or services for the account or
use of others, or otherwise) to, or Incurrence of a Guarantee of any obligation
of, or purchase or acquisition of Capital Stock, bonds, notes, debentures or
other securities or evidence of Debt issued by, any other Person. For purposes
of the definition of "Restricted Payment", Section 4.04 and Section 4.14,
"Investment" shall include the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (a) the Company's "Investment" in such Subsidiary
at the time of such redesignation less (b) the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of the
net assets of such Subsidiary at the time of such redesignation. In determining
the amount of any Investment made by transfer of any Property other than cash,
such Property shall be valued at its Fair Market Value at the time of such
Investment.
"ISSUE DATE" means the date on which the Initial Securities are
initially issued.
"LIEN" means, with respect to any Property of any Person, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"MERGER" means the merger of Metallurg Acquisition Corp. with and into
Metallurg pursuant to an agreement and plan of merger, dated as of June 15,
1998, among the Company, Metallurg and Metallurg Acquisition Corp.
12
"METALLURG" means Metallurg, Inc.
"MOODY'S" means Xxxxx'x Investors Service, Inc. or any successor to
the rating agency business thereof.
"NET AVAILABLE CASH" from any Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to the
Property that is the subject of such Asset Sale or received in any other noncash
form), in each case net of (a) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all United States federal,
state, provincial, foreign and local taxes required to be accrued as a liability
under GAAP, as a consequence of such Asset Sale, whether paid or payable, (b)
all payments made on any Debt which is secured by any Property subject to such
Asset Sale, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such Property, or which must by its terms,
or in order to obtain a necessary consent to such Asset Sale, or by applicable
law, be repaid out of the proceeds from such Asset Sale, (c) all distributions
and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Sale, and (d) the
deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the Property
disposed in such Asset Sale and retained by the Company or any Restricted
Subsidiary after such Asset Sale.
"OFFICER" means the Chairman, President and Chief Executive Officer,
the Vice President, Finance and Chief Financial Officer or any Vice President of
the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Company, at least one of whom shall be the principal executive officer or
principal financial officer of the Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"PERMITTED DEBT" means:
(a) Debt of the Company evidenced by the Securities represented
by the Indenture up to the amounts specified therein as of the Issue Date,
together with any accretion thereon, and the Exchange Securities and
Private Exchange Securities;
(b) Debt of the Company and its subsidiaries evidenced by the
Senior Notes and represented by the Senior Note Indenture;
13
(c) Debt under the Credit Facility, PROVIDED that the aggregate
principal amount of all such Debt under the Credit Facility at any one time
outstanding shall not exceed the greater of (i) $50,000,000, which amount
shall be permanently reduced by the amount of Net Available Cash used to
repay Debt under the Credit Facility and permanently reduce the loan
commitment thereunder pursuant to Section 4.06 and (ii) the sum of the
amounts equal to (x) 65% of the book value of the inventory of the Company
and the Restricted Subsidiaries and (y) 90% of the book value of the
accounts receivable of the Company and the Restricted Subsidiaries, in each
case as of the most recently ended quarter of the Company for which
financial statements of the Company have been provided to the Holders of
Securities (the greater of (i) and (ii) being the "Permitted Debt Amount");
PROVIDED, FURTHER, that the aggregate amount of Debt Incurred pursuant to
this clause (c), together with the aggregate amount of Debt Incurred
pursuant to clause (d) below shall not exceed an amount equal to the
Permitted Debt Amount at any one time outstanding;
(d) Debt of any Restricted Subsidiary under one or more debt
facilities with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including
through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables),
letters of credit, foreign exchange, bankers acceptances or similar
financial arrangements, and any Permitted Refinancing Debt Incurred with
respect thereto, PROVIDED that the aggregate principal amount of all such
Debt at any one time outstanding shall not exceed the sum of (i) 65% of the
book value of the inventory of such Restricted Subsidiary and (ii) 90% of
the book value of the accounts receivable of such Restricted Subsidiary, in
each case as of the most recently ended quarter of the Company for which
financial statements of the Company have been provided to the Holders of
the Securities; PROVIDED, FURTHER, that the aggregate amount of Debt
Incurred pursuant to this clause (d), together with the aggregate amount of
Debt Incurred pursuant to clause (c) above shall not exceed the Permitted
Debt Amount at any one time outstanding;
(e) Debt in respect of Capital Lease Obligations and Purchase
Money Debt, PROVIDED that (i) the aggregate principal amount of such Debt
does not exceed the Fair Market Value (on the date of the Incurrence
thereof) of the Property acquired, constructed or leased and (ii) the
aggregate principal amount of all Debt Incurred and then outstanding
pursuant to this clause (e) (together with all outstanding Permitted
Refinancing Debt Incurred in respect of Debt previously Incurred pursuant
to such clause (e)) does not exceed $15,000,000;
14
(f) Debt of the Company owing to and held by any Restricted
Subsidiary or Debt of a Restricted Subsidiary owed to and held by the
Company or another Restricted Subsidiary; PROVIDED, HOWEVER, that any
subsequent transfer of Capital Stock or other event that results in any
such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of any such Debt (except to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Debt by the issuer thereof;
(g) Debt under Interest Rate Agreements entered into by the
Company or a Restricted Subsidiary for the purpose of limiting interest
rate risk in the ordinary course of the financial management of the Company
or such Restricted Subsidiary and not for speculative purposes, PROVIDED
that the obligations under such agreements are directly related to payment
obligations on Debt otherwise permitted by Section 4.03;
(h) Debt under Currency Exchange Protection Agreements entered
into by the Company or a Restricted Subsidiary for the purpose of limiting
currency exchange rate risks directly related to transactions entered into
by the Company or such Restricted Subsidiary in the ordinary course of
business and not for speculative purposes;
(i) Debt Incurred in connection with cash pooling arrangements
by and among the Company and its Restricted Subsidiaries, PROVIDED that no
liability is required under GAAP to be reflected in the consolidated
financial statements of the Company with respect thereto;
(j) Debt outstanding on the Issue Date not otherwise described
in clauses (a) through (h) above;
(k) Debt (other than Debt permitted by the immediately preceding
paragraph or the other clauses of this paragraph) in an aggregate principal
amount not to exceed $25,000,000; and
(l) Permitted Refinancing Debt Incurred in respect of Debt
Incurred pursuant to Section 4.03(a) and clauses (a) and (k) above.
"PERMITTED HOLDERS" means (i) Safeguard International Fund, L.P.,
State of Michigan Retirement Systems -- Safeguard Limited Partnership, Safeguard
Scientifics (Delaware), Inc., Xx. Xxxxx Schimmelbush, Xxxxxx X. Xxxxxxx and
Xxxxxxx Xxxxx, or any Person of which any of the foregoing "beneficially owns"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act) voting securities
representing at least 51% of the voting power of all classes
15
of Voting Stock of such Person (exclusive of any matters as to which class
voting rights exist) or any Person which "beneficially owns" (as defined above)
voting securities representing at least 51% of the voting power of all classes
of Voting Stock of any of the foregoing (exclusive of any matters as to which
class voting rights exist); and (ii) any Person who beneficially owns Voting
Stock of the Company on the Issue Date so long as the Permitted Holders
specified under clause (i) above beneficially own in the aggregate at least 10%
of the Voting Stock of the Company.
"PERMITTED INVESTMENT" means any Investment by the Company or a
Restricted Subsidiary in (a) the Company, any Restricted Subsidiary or any
Person that will, upon the making of such Investment, become a Restricted
Subsidiary, PROVIDED that the primary business of such Restricted Subsidiary is
a Related Business; (b) any Person if as a result of such Investment such Person
is merged or consolidated with or into, or transfers or conveys all or
substantially all its Property to, the Company or a Restricted Subsidiary,
PROVIDED that such Person's primary business is a Related Business;
(c) Temporary Cash Investments; (d) receivables owing to the Company or a
Restricted Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; PROVIDED,
HOWEVER, that such trade terms may include such concessionary trade terms as the
Company or such Restricted Subsidiary deems reasonable under the circumstances;
(e) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (f) loans and
advances to employees made in the ordinary course of business consistent with
past practices of the Company or such Restricted Subsidiary, as the case may be,
PROVIDED that such loans and advances do not exceed $2,500,000 at any one time
outstanding; (g) stock, obligations or other securities received in settlement
of debts created in the ordinary course of business and owing to the Company or
a Restricted Subsidiary or in satisfaction of judgments; and (h) any Person to
the extent such Investment represents the non-cash portion of the consideration
received in connection with an Asset Sale consummated in compliance with the
covenant described under Section 4.06.
"PERMITTED LIENS" means:
(a) Liens to secure Debt permitted to be Incurred under clause (a) of
the first paragraph of Section 4.03 or clause (a), (c) or (d) of the
definition of "Permitted Debt";
(b) Liens to secure Debt permitted to be Incurred under clause (e) of
the definition of "Permitted Debt", PROVIDED that any such Lien may not
extend to any Property of the Company or any Restricted Subsidiary, other
than the Property acquired, constructed or leased with the proceeds of such
Debt and any improvements or accessions to such Property;
(c) Liens for taxes, assessments or governmental charges or levies on
the Property of the Company or any Restricted Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or
are being contested in good faith
16
and by appropriate proceedings promptly instituted and diligently
concluded, PROVIDED that any reserve or other appropriate provision that
shall be required in conformity with GAAP shall have been made therefor;
(d) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens, on the Property of the Company or any Restricted
Subsidiary arising in the ordinary course of business and securing payment
of obligations which are not more than 60 days past due or are being
contested in good faith and by appropriate proceedings;
(e) Liens on the Property of the Company or any Restricted Subsidiary
Incurred in the ordinary course of business to secure performance of
obligations with respect to statutory or regulatory requirements,
performance or return-of-money bonds, surety bonds or other obligations of
a like nature and Incurred in a manner consistent with industry practice,
in each case which are not incurred in connection with the borrowing of
money, the obtaining of advances or credit or the payment of the deferred
purchase price of Property and which do not in the aggregate impair in any
material respect the use of Property in the operation of the business of
the Company and the Restricted Subsidiaries taken as a whole;
(f) Liens on Property at the time the Company or any Restricted
Subsidiary acquired such Property, including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted
Subsidiary; PROVIDED, HOWEVER, that any such Lien may not extend to any
other Property of the Company or any Restricted Subsidiary; PROVIDED,
FURTHER, HOWEVER, that such Liens shall not have been Incurred in
anticipation or in connection with the transaction or series of
transactions pursuant to which such Property was acquired by the Company or
any Restricted Subsidiary;
(g) Liens on the Property of a Person at the time such Person becomes
a Restricted Subsidiary; PROVIDED, HOWEVER, that any such Lien may not
extend to any other Property of the Company or any other Restricted
Subsidiary which is not a direct Subsidiary of such Person; PROVIDED,
FURTHER, HOWEVER, that any such Lien was not Incurred in anticipation of or
in connection with the transaction or series of transactions pursuant to
which such Person became a Restricted Subsidiary;
(h) pledges or deposits by the Company or any Restricted Subsidiary
under workmen's compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Debt) or leases to which the
Company or any Restricted Subsidiary is party, or deposits to secure public
or statutory obligations of the Company, or deposits for the payment of
rent, in each case Incurred in the ordinary course of business;
17
(i) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character;
(j) Liens in favor of the Company;
(k) Liens existing on the Issue Date not otherwise described in
clauses (a) through (j) above;
(l) Liens on the Property of the Company or any Restricted Subsidiary
to secure any Refinancing, in whole or in part, of any Debt secured by
Liens referred to in clause (b), (f), (g) or (k) above; PROVIDED, HOWEVER,
that any such Lien shall be limited to all or part of the same Property
that secured the original Lien (together with improvements and accessions
to such Property) and the aggregate principal amount of Debt that is
secured by such Lien shall not be increased to an amount greater than the
sum of (i) the outstanding principal amount, or, if greater, the committed
amount, of the Debt secured by Liens described under clause (b), (f), (g)
or (k) above, as the case may be, at the time the original Lien became a
Permitted Lien under this Indenture and (ii) an amount necessary to pay any
premiums, fees and other expenses incurred by the Company or a Restricted
Subsidiary in connection with such Refinancing; or
(m) Liens not otherwise permitted by clauses (a) through (l) above
encumbering assets having an aggregate Fair Market Value not in excess of
$25,000,000 at any time.
"PERMITTED REFINANCING DEBT" means any Debt that Refinances any other
Debt, including any successive Refinancings, so long as (a) such Debt is in an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) not in excess of the sum of (i) the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accreted
value) then outstanding of the Debt being Refinanced and (ii) an amount
necessary to pay any fees and expenses, including premiums and defeasance costs,
related to such Refinancing, (b) the Average Life of such Debt is equal to or
greater than the Average Life of the Debt being Refinanced, (c) the Stated
Maturity of such Debt is no earlier than the Stated Maturity of the Debt being
Refinanced and (d) the new Debt shall not be senior in right of payment to the
Debt that is being Refinanced; PROVIDED, HOWEVER, that Permitted Refinancing
Debt shall not include (x) Debt of a Subsidiary that Refinances Debt of the
Company or (y) Debt of the Company or a Restricted Subsidiary that Refinances
Debt of an Unrestricted Subsidiary.
"PERSON" means any individual, corporation, company (including any
limited liability company), partnership, joint venture, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"PREFERRED STOCK" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as
18
to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of any other class of Capital Stock
issued by such Person.
"PREFERRED STOCK DIVIDENDS" means for any dividend with respect to
Preferred Stock, the quotient of the dividend divided by the difference between
one and the maximum statutory United States federal income tax rate (expressed
as a decimal number between 1 and 0) then applicable to the issuer of such
Preferred Stock.
"PRINCIPAL" of any Debt (including the Securities) means the principal
amount such Debt plus the premium, if any, on such Debt.
"PRO FORMA" means, with respect to any calculation made or required to
be made pursuant to the terms hereof, a calculation performed in accordance with
Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted in good faith by the Board of Directors after consultation with the
independent certified public accountants of the Company, or otherwise a
calculation made in good faith by the Board of Directors after consultation with
the independent certified public accountants of the Company, as the case may be.
"PROPERTY" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person. For purposes of any calculation required pursuant to this
Indenture, the value of any Property shall be its Fair Market Value.
"PUBLIC EQUITY OFFERING" means an underwritten public offering of
common stock of the Company or Metallurg pursuant to an effective registration
statement under the Securities Act.
"PUBLIC MARKET" means any time after (a) a Public Equity Offering has
been consummated and (b) at least 10% of the total issued and outstanding common
stock of the Company or Metallurg, as the case may be, has been distributed by
means of an effective registration statement under the Securities Act or sales
pursuant to Rule 144 under the Securities Act.
"PURCHASE AGREEMENT" means the Purchase Agreement, dated as of July 6,
1998, between the Company and the Purchaser.
"PURCHASE MONEY DEBT" means Debt (a) consisting of the deferred
purchase price of property, conditional sale obligations, obligations under any
title retention agreement, other purchase money obligations and obligations in
respect of industrial revenue bonds, in each case where the maturity of such
Debt does not exceed the anticipated useful life of the asset being financed and
(b) Incurred to finance the acquisition (including costs of design and
installation) by the Company or a Restricted Subsidiary of such asset, including
additions and improvements;
19
PROVIDED, HOWEVER, that such Debt is incurred within 180 days after such
acquisition of such asset by the Company or a Restricted Subsidiary.
"PURCHASER" means BancBoston Securities Inc.
"REDEEMABLE DIVIDEND" means, for any dividend with respect to
Redeemable Stock, the quotient of the dividend divided by the difference between
one and the maximum statutory United States federal income tax rate (expressed
as a decimal number between 1 and 0) then applicable to the issuer of such
Redeemable Stock.
"REDEEMABLE STOCK" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable, in either case, at the option of
the holder thereof) or otherwise (a) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (b) is or may become
redeemable or repurchasable at the option of the holder thereof, in whole or in
part, or (c) is convertible or exchangeable at the option of the holder thereof
for Debt or Disqualified Stock.
"REFINANCE" means, in respect of any Debt, to refinance, extend,
renew, refund, replace, prepay, redeem, defease or retire, or to issue other
Debt, in exchange or replacement for, such Debt. "Refinanced" and "Refinancing"
shall have correlative meanings.
"REGULATION S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"REGULATION S SECURITIES" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S.
"RELATED BUSINESS" means any business that is related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"RESTRICTED PAYMENT" means (a) any dividend or distribution (whether
made in cash, securities or other Property) declared or paid on or with respect
to any shares of Capital Stock of the Company or any Restricted Subsidiary
(including any payment in connection with any merger or consolidation with or
into the Company or any Restricted Subsidiary), except for any dividend or
distribution which is made solely to the Company or a Restricted Subsidiary
(and, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to the
other shareholders of such Restricted Subsidiary on a PRO RATA basis or on a
basis that results in the receipt by the Company or a Restricted Subsidiary of
dividends or distributions of greater value than it would receive on a PRO RATA
basis) or any dividend or distribution payable solely in shares of Capital Stock
(other than Redeemable Stock) of the Company; (b) the purchase, repurchase,
redemption, acquisition or retirement for value of any Capital Stock of the
Company or any Affiliate of the Company (other than from the Company or a
Restricted Subsidiary) or any warrants, rights or options to directly or
indirectly purchase or acquire any such Capital Stock or any securities
20
exchangeable for or convertible into any such Capital Stock, including the
exercise of any option to exchange any Capital Stock (other than for or into
Capital Stock of the Company that is not Disqualified Stock); (c) the purchase,
repurchase, redemption, acquisition, defeasance or retirement for value, prior
to any scheduled maturity, scheduled sinking fund or mandatory redemption
payment, any Subordinated Obligation (other than the purchase, repurchase or
other acquisition of any Subordinated Obligation purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition); or (d) any
Investment (other than Permitted Investments) in any Person.
"RESTRICTED PERIOD" means the period of 40 consecutive days beginning
on and including the later of (i) the day on which Securities are first offered
to persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the Issue Date.
"RESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Company after
the Issue Date unless such Subsidiary shall have been designated an Unrestricted
Subsidiary as permitted or required pursuant to Section 4.14 and (b) an
Unrestricted Subsidiary which is redesignated as a Restricted Subsidiary as
permitted pursuant to Section 4.14.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"RULE 144A SECURITIES" means the Initial Securities purchased by the
Purchaser from the Company pursuant to the Purchase Agreement, other than the
Regulation S Securities.
"S&P" means Standard & Poor's Ratings Service or any successor to the
rating agency business thereof.
"SALE AND LEASEBACK TRANSACTION" means any arrangement relating to
Property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such Property to another Person and the Company or a
Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SECURITIES" has the meaning stated in the first recital of this
Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" of the Company means (a) all obligations consisting of
the principal, premium, if any, and accrued and unpaid interest in respect of
(i) Debt of the Company for borrowed money and (ii) Debt of the Company
evidenced by notes, debentures, bonds or other similar instruments permitted
under this Indenture for the payment of which the Company is responsible or
liable; (b) all Capital Lease Obligations of the Company; (c) all obligations of
21
the Company (i) for the reimbursement of any obligor on any letter of credit,
bankers' acceptance or similar credit transaction, (ii) under Hedging
Obligations or (iii) issued or assumed as the deferred purchase price of
Property and all conditional sale obligations of the Company and all obligations
under any title retention agreement permitted under this Indenture; and (d) all
obligations of other Persons of the type referred to in clauses (a), (b) and
(c) for the payment of which the Company is responsible or liable as Guarantor;
PROVIDED, HOWEVER, that Senior Debt shall not include (a) Debt of the Company
that is by its terms subordinate in right of payment to the Securities; (B) any
Debt Incurred in violation of the provisions of this Indenture; (C) accounts
payable or any other obligations of the Company to trade creditors created or
assumed by the Company in the ordinary course of business in connection with the
obtaining of materials or services (including Guarantees thereof or instruments
evidencing such liabilities); (D) any liability for United States federal,
state, local or other taxes owed or owing by the Company; (E) any obligation of
the Company to any Subsidiary; or (F) any obligations with respect to any
Capital Stock of the Company.
"SENIOR NOTES" means Metallurg's 11% Senior Notes due 2007 issued
pursuant to the Senior Notes Indenture.
"SENIOR NOTES INDENTURE" means the Indenture, dated as of November 25,
1997, among Metallurg, the guarantors named therein, and IBJ Xxxxxxxx Bank &
Trust Company, as Trustee.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that would be
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"STATED MATURITY" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"SUBORDINATED OBLIGATION" means any Debt of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Securities pursuant to a written agreement to
that effect.
"SUBSIDIARY" means, in respect of any Person, any corporation,
company, association, partnership, joint venture or other business entity of
which more than 50% of the total voting power of shares of Capital Stock or
other interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled directly or
indirectly, by (i) such
22
Person, (ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person.
"TEMPORARY CASH INVESTMENTS" means any of the following:
(a) Investments in U.S. Government Obligations maturing within one year of the
date of acquisition thereof; (b) Investments in time deposit accounts,
certificates of deposit and money market deposits maturing within one year of
the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America or any state thereof or
any foreign country recognized by the United States having capital, surplus and
undivided profits aggregating in excess of $500,000,000 (or the foreign currency
equivalent thereof) and whose long-term debt is rated "A-3" or "A-" or higher
according to Xxxxx'x or S&P (or such similar equivalent rating by at least one
"nationally recognized statistical rating organization" (as defined in Rule 436
under the Securities Act)); (c) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (a)
entered into with a bank meeting the qualifications described in clause (b)
above; and (d) Investments in commercial paper, maturing not more than 270 days
after the date of acquisition, issued by a corporation (other than an Affiliate
of the Company) organized and in existence under the laws of the United States
of America with a rating at the time as of which any Investment therein is made
of "P-1" (or higher) according to Xxxxx'x or "A-1" (or higher) according to S&P
(or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture except as required by
Section 9.03 hereof; PROVIDED that in the event the Trust Indenture Act of 1939
is amended after such date, "TRUST INDENTURE ACT" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TRUST OFFICER" means an officer of the Trustee within the corporate
trust department, including any vice president or trust officer of the Trustee
and also means, with respect to a particular corporate trust matter, any other
officer to whom such corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"UNRESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Company that
is designated after the Issue Date as an Unrestricted Subsidiary as permitted
pursuant to Section 4.14 and not thereafter redesignated as a Restricted
Subsidiary as permitted pursuant thereto and (b) any Subsidiary of an
Unrestricted Subsidiary.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith
23
and credit of the United States of America is pledged and which are not callable
or redeemable at the issuer's option.
"VOTING STOCK" of any Person means all shares or other equivalents of
Capital Stock of such Person then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.
"WHOLLY OWNED SUBSIDIARY" means, at any time, a Restricted Subsidiary
all the Voting Stock of which (except directors' qualifying shares and shares
held by third parties which, in the aggregate, represent no more than 2% of the
outstanding Voting Stock of such Restricted Subsidiary) is at such time owned,
directly or indirectly, by the Company and its other Wholly Owned Subsidiaries.
OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Affiliate Transaction" ................ 4.07
"Bankruptcy Law" ....................... 6.01
"Change of Control Offer" .............. 4.08(a)
"Change of Control Payment Date" ....... 4.08(b)
"Change of Control Purchase Price"...... 4.08(a)
"covenant defeasance option" ........... 8.01(b)
"Custodian" ............................ 6.01
"Events of Default" ..................... 6.01
"Excess Proceeds" ...................... 4.06(c)
"Exchange Offer Registration Statement". Exhibit 1 to Appendix A
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 11.08
"Liquidated Damages" ........................ Exhibit 1 to Appendix A
"Notice of Default" ..................... 6.01(a)
"Offer Amount" ......................... 4.06(d)(2)
"Offer Period" ......................... 4.06(d)(2)
"Paying Agent" ......................... 2.04
"Prepayment Offer" ..................... 4.06(c)
"Prepayment Offer Notice" .............. 4.06(d)(1)
"Purchase Date" ........................ 4.06(d)(1)
"Registrar"............................. 2.04
"Surviving Person" ..................... 5.01(a)
"Temporary Regulation S Global Security" Exhibit 1 to Appendix A
24
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.4 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it by definition in this
Indenture;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or junior to
secured Debt merely by virtue of its nature as unsecured Debt;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the greater
of (i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect to
such Preferred Stock.
ARTICLE 2
25
THE SECURITIES
SECTION 2.1 AMOUNT OF SECURITIES. The aggregate principal amount
at maturity of Securities which may be authenticated and delivered under this
Indenture is $121,000,000. Subject to Section 2.03, the Trustee shall
authenticate Initial Securities for original issue on the Issue Date in the
aggregate principal amount at maturity of $121,000,000.
SECTION 2.2 FORM AND DATING. (a) Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in Appendix A, which is hereby incorporated in and expressly made
a part of this Indenture. The Initial Securities and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit 1 to Appendix A,
which is hereby incorporated in and expressly made a part of this Indenture.
The Exchange Securities and the Private Exchange Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rules, agreements to which the Company is subject, if any, or usage,
PROVIDED that any such notation, legend or endorsement is in a form reasonably
acceptable to the Company. Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in Exhibit 1 to
Appendix A and Exhibit A are part of the terms of this Indenture.
(b) Upon their original issuance, Rule 144A Securities shall be
issued in the form of one or more Global Securities registered in the name of
the Depositary or its nominee and deposited with the Trustee, as custodian for
the Depositary, duly executed by the Company and authenticated by the Trustee,
for credit by the Depositary to the respective accounts of beneficial owners of
the Securities represented thereby (or such other accounts as they may direct).
Such Global Securities are collectively herein called the "Rule 144A Global
Security". Upon their original issuance, Regulation S Securities shall be
issued in the form of one or more temporary Global Securities registered in the
name of the Depositary or its nominee and deposited with the Trustee as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee, for credit to the Agent Member accounts at the Depositary of
Euroclear and/or Cedel for further credit by Euroclear and Cedel, as the case
may be, to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct) (the "Temporary
Regulation S Global Securities"). Interests in the Temporary Regulation S
Global Securities may only be held by the Agent Members of the Depositary for
Euroclear and Cedel.
SECTION 2.3 EXECUTION AND AUTHENTICATION. Two Officers shall sign
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or 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 the Trustee authenticates the Security, the Security shall be
valid nevertheless.
26
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a written order of the Company for
the authentication and delivery of such Securities signed by two Officers or by
an Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company, and the Trustee in accordance with such written order of the Company
shall authenticate and deliver such Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, 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 any Registrar, Paying Agent or agent for service of notices
and demands.
SECTION 2.4 REGISTRAR AND PAYING AGENT. The Company shall maintain
in the Borough of Manhattan, City of New York an office or agency where
Securities may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency where Securities may be presented for payment
(the "Paying Agent") and an office or agency where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
The Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent 15 days prior to
entering into such agency agreement. If the Company fails to maintain a
Registrar or Paying Agent or fails to give the foregoing notice, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent, Registrar, co- registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.5 PAYING AGENT TO HOLD MONEY IN TRUST. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a
27
sum sufficient to pay such principal and interest when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall promptly notify
the Trustee of any default by the Company in making any such payment. If the
Company or a Wholly Owned Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.6 SECURITYHOLDER 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 Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and before the final maturity
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the
names, addresses and, if available, taxpayer identification numbers of
Securityholders.
SECTION 2.7 REPLACEMENT SECURITIES. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that such
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the
Holder satisfies any reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss that any of them may
suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
of mutilated, lost, destroyed or wrongfully taken Securities.
SECTION 2.8 OUTSTANDING SECURITIES. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
28
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money, in immediately
available funds, sufficient to pay all principal and interest payable on that
date with respect to the Securities (or portions thereof) to be redeemed or
maturing, as the case may be, and the Paying Agent is not prohibited from paying
such money to the Securityholders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or portions thereof)
cease to be outstanding and interest on them ceases to accrue.
SECTION 2.9 TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Every such temporary Security shall be
authenticated upon the same conditions and in substantially the same manner, and
with the same effect, as the definitive Securities. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Securities and deliver them in exchange for temporary Securities. Such exchange
shall be made by the Company at its own expense and without any charge therefor.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same rights, privileges and benefits under this Indenture as definitive
Securities authenticated and delivered hereunder.
SECTION 2.10 CANCELLATION. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the 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 and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company,
unless the Company directs the Trustee to deliver canceled Securities to the
Company. If the Company shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are delivered to the
Trustee for cancellation. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.11 DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12 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, HOWEVER, that any such
29
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 a
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.
ARTICLE 3
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed, the redemption price and that such redemption is being made
pursuant to paragraph 5 of the Securities.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.2 SELECTION OF SECURITIES TO BE REDEEMED. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed 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 so listed, PRO RATA or by lot or by a method that the Trustee
considers fair and appropriate. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in amounts of $1,000 or a whole multiple of $1,000, except that
if all the Securities of a Holder are to be redeemed, the entire outstanding
amount of Securities held by such Holder, even if not a multiple of $1,000,
shall be redeemed. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.3 NOTICE OF REDEMPTION. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
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(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts at maturity of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, Accreted Value on Securities (or portions
thereof) called for redemption ceases to increase and interest on
Securities (or portions thereof) called for redemption ceases to accrue on
and after the redemption date; and
(7) the CUSIP numbers, if any, of the Securities and that no
representation is made as to the correctness or accuracy of such CUSIP
number, if any, listed in such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption). Failure
to give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Wholly Owned Subsidiary is the Paying Agent, shall segregate and hold in trust)
money, in immediately available funds, sufficient to pay the redemption price of
and accrued interest (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date that
is on or prior to the date of redemption) on all Securities to be redeemed on
that date other than Securities or portions of Securities called for redemption
which have been delivered by the Company to the Trustee for cancellation.
SECTION 3.6 SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at
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the Company's expense) a new Security equal in principal amount at maturity to
the unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF SECURITIES. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if, not later than 11:00 a.m. New York City
time, on such date the Trustee or the Paying Agent holds in accordance with this
Indenture, money, in immediately available funds, sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.2 SEC REPORTS. Notwithstanding that the Company may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC and provide the Trustee and
Securityholders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and reports to be so filed and provided within 15 days after the times
specified for the filing of such information, documents and reports under such
Sections; PROVIDED, HOWEVER, that the Company shall not be so obligated to file
such information, documents and reports with the SEC if the SEC does not permit
such filings. The Company shall file with the SEC and provide the Trustee and
Securityholders with the information, documents and reports described herein
whether or not (a) the Exchange Offer Registration Statement has been filed or
declared effective or (b) the period to which any such specified information,
document or report relates includes the Issue Date.
SECTION 4.3 LIMITATION ON DEBT. The Company shall not, and shall
not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Debt
(which includes, in the case of Restricted Subsidiaries, Preferred Stock)
unless, after giving pro forma effect to the application of the proceeds
thereof, no Default or Event of Default would occur as a consequence of such
Incurrence or be continuing following such Incurrence and either (a) after
giving effect to the Incurrence of such Debt and the application of the proceeds
thereof, the Consolidated Coverage Ratio would be greater than 2.00 to 1.00 or
(b) such Debt is Permitted Debt.
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Notwithstanding the foregoing, the Company shall not, and shall not
permit any Restricted Subsidiary to, Incur any Debt if the proceeds thereof are
used, directly or indirectly, to Refinance any Subordinated Obligations unless
such Debt shall be subordinated to the Securities to at least the same extent as
such Subordinated Obligations.
SECTION 4.4 LIMITATION ON RESTRICTED PAYMENTS. (a) The Company
shall not make, and shall not permit any Restricted Subsidiary to make, directly
or indirectly, any Restricted Payment if at the time of, and after giving pro
forma effect to, such proposed Restricted Payment,
(i) a Default or Event of Default shall have occurred and be
continuing;
(ii) the Company could not Incur at least $1.00 of additional Debt
pursuant to clause (a) of the first paragraph of Section 4.03; or
(iii) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made since the Issue Date (the amount of
any Restricted Payment, if made other than in cash, to be based upon Fair
Market Value) would exceed an amount equal to the sum of:
(A) 50% of the aggregate amount of Consolidated Net Income
accrued during the period (treated as one accounting period) from and
after November 1, 1997 to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted Payment
(or if the aggregate amount of Consolidated Net Income for such period
shall be a deficit, minus 100% of such deficit);
(B) Capital Stock Sale Proceeds;
(C) the amount by which Debt (other than Subordinated
Obligations) of the Company or any other Restricted Subsidiary is
reduced on the Company's balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Company) subsequent to the Issue
Date of any Debt of the Company or any other Restricted Subsidiary
convertible into or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash or
other Property distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange);
(D) an amount equal to the sum of (1) the net reduction in
Investments in any Person other than a Restricted Subsidiary resulting
from dividends, repayments of loans or advances or other transfers of
assets, in each case to the Company or any Restricted Subsidiary from
such Person, and (2) the portion (proportionate to the Company's
equity interest in such Unrestricted Subsidiary) of the Fair Market
Value of the net assets of an Unrestricted Subsidiary at the time
33
such Unrestricted Subsidiary is designated a Restricted Subsidiary;
PROVIDED, HOWEVER, that the foregoing sum shall not exceed, in the
case of any Person, the amount of Investments previously made (and
treated as a Restricted Payment) by the Company or any Restricted
Subsidiary in such Person; and
(E) $5,000,000.
(b) Notwithstanding the foregoing limitation, the Company may:
(i) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on said declaration date, such dividends could have
been paid in compliance with this Indenture; PROVIDED, HOWEVER, that such
dividend shall be included in the calculation of the amount of Restricted
Payments;
(ii) purchase, repurchase, redeem, legally defease, acquire or retire
for value Capital Stock of the Company or Subordinated Obligations in
exchange for, or out of the proceeds of the substantially concurrent sale
of, Capital Stock of the Company (other than Disqualified Stock and other
than Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or trust established by the Company or any of
its Subsidiaries for the benefit of their employees); PROVIDED, HOWEVER,
that (A) such purchase, repurchase, redemption, legal defeasance,
acquisition or retirement shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Capital Stock Sale Proceeds from
such exchange or sale shall be excluded from the calculation pursuant to
clause (a)(iii)(B) above;
(iii) purchase, repurchase, redeem, legally defease, acquire or retire
for value any Subordinated Obligations in exchange for, or out of the
proceeds of the substantially concurrent sale of, Permitted Refinancing
Debt; PROVIDED, HOWEVER, that such purchase, repurchase, redemption, legal
defeasance, acquisition or retirement shall be excluded in the calculation
of the amount of Restricted Payments;
(iv) make Investments in an aggregate amount not to exceed
$20,000,000; PROVIDED, HOWEVER, that such Investments shall be excluded in
the calculation of the amount of Restricted Payments;
(v) repurchase shares of, or options to purchase shares of, common
stock of the Company or any of its Subsidiaries from employees or former
employees of the Company or any of its Subsidiaries, pursuant to the terms
of agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors under which such individuals
purchase or sell, or are granted the option to purchase or sell, shares of
such common stock; PROVIDED, HOWEVER, that the aggregate amount of such
repurchases shall not exceed $2,000,000 in any calendar year; PROVIDED
34
FURTHER, HOWEVER, that such repurchases shall be excluded in the
calculation of the amount of Restricted Payments;
(vi) expend up to $10,000,000 for Restricted Payments in addition to
the amounts in clauses (i) through (v) above; PROVIDED, HOWEVER, that at
the time of, and after giving effect to, any such expenditure, no Default
or Event of Default shall have occurred and be continuing and PROVIDED
FURTHER, HOWEVER, that such expenditures shall be excluded from the
calculation of the amount of Restricted Payments; or
(vii) make Restricted Payments required for any dissenters' rights
payments arising in connection with the Merger, but solely using up to
$10.0 million of the net proceeds from the sale of the Initial Securities.
(c) In computing Consolidated Net Income of the Company under
paragraph (a) above, (i) the Company shall use audited financial statements for
the portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (ii) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and records of the Company that are available on the date of
determination. If the Company makes a Restricted Payment which, at the time of
the making of such Restricted Payment, would in the good faith determination of
the Company be permitted under the requirements of this Indenture, such
Restricted Payment shall be deemed to have been made in compliance with this
Indenture notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting Consolidated Net Income of the Company
for any period.
SECTION 4.5 LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause or
suffer to exist any consensual restriction on the right of any Restricted
Subsidiary to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, or pay any Debt or other
obligation owed, to the Company or any other Restricted Subsidiary, except that
any Debt owed by a Restricted Subsidiary to the Company or any other Restricted
Subsidiary may be subordinated in right of payment to other Debt obligations of
such Restricted Subsidiary, (b) make any loans or advances to the Company or any
other Restricted Subsidiary, except that any repayment obligations of the
Company or any other Restricted Subsidiary in respect of such loans or advances
may be subordinated in right of payment to other Debt obligations of the Company
or such other Restricted Subsidiary or (c) transfer any of its Property to the
Company or any other Restricted Subsidiary. The foregoing limitations will not
apply (i) with respect to clauses (a), (b) and (c), to restrictions (A) in
effect on the Issue Date, (B) relating to Debt of a Restricted Subsidiary and
existing at the time it became a Restricted Subsidiary if such restriction was
not created in connection with or in anticipation of the transaction or series
of transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company or (C)
35
which result from the Refinancing of Debt Incurred pursuant to an agreement
referred to in the immediately preceding clause (i)(A) or (B) above or in
clause (ii)(A) or (B) below, PROVIDED such restriction is not materially less
favorable to the Holders of Securities than those under the agreement evidencing
the Debt so Refinanced, and (ii) with respect to clause (c) only, to
restrictions (A) relating to Debt that is permitted to be Incurred and is not
prohibited from being secured without also securing the Securities pursuant to
Section 4.03 and Section 4.11 that limit the right of the debtor to dispose of
the Property securing such Debt, (B) encumbering Property at the time such
Property was acquired by the Company or any Restricted Subsidiary, so long as
such restriction relates solely to the Property so acquired and was not created
in connection with or in anticipation of such acquisition, (C) resulting from
customary provisions restricting subletting or assignment of leases or customary
provisions in other agreements that restrict assignment of such agreements or
rights thereunder, (D) customary restrictions contained in asset sale or stock
purchase agreements limiting the transfer of such Property pending the closing
of such transaction or (E) any restriction imposed by applicable law.
SECTION 4.6 LIMITATION ON ASSET SALES. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Sale unless (i) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property subject to such Asset Sale; (ii) at least 75% of
the consideration paid to the Company or such Restricted Subsidiary in
connection with such Asset Sale is in the form of cash or cash equivalents; and
(iii) the Company delivers an Officers' Certificate to the Trustee certifying
that such Asset Sale complies with the foregoing clauses (i) and (ii). For
purposes of this covenant, the following are deemed to be cash: (x) the amount
of any liabilities (other than liabilities that are by their terms subordinated
to any other Debt of the Company or such Restricted Subsidiary, as the case may
be) of the Company or such Restricted Subsidiary (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet or in the notes thereto)
that are assumed by the transferee of any such assets or other property in such
Asset Sale, as a result of which the Company or the Restricted Subsidiaries are
no longer obligated with respect to such liabilities and (y) securities received
by the Company or any Restricted Subsidiary from the transferee that are
immediately converted by the Company or such Restricted Subsidiary into cash.
(b) The Net Available Cash (or any portion thereof) from Asset Sales
(or an amount equal thereto) may be applied by the Company or a Restricted
Subsidiary, to the extent the Company or such Restricted Subsidiary elects (or
is required by the terms of any Debt): (i) to prepay, repay, legally defease or
purchase Senior Debt of the Company or Debt of any Restricted Subsidiary
(excluding, in any such case, any Debt owed to the Company or an Affiliate of
the Company); or (ii) to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary in an amount equal to
such Net Available Cash received by the Company or another Restricted
Subsidiary); PROVIDED, HOWEVER, that in connection with any prepayment,
repayment, legal defeasance or purchase of Debt pursuant to clause (i) above,
the Company or other Restricted Subsidiary shall retire such Debt and shall
36
cause the related loan commitment (if any) to be permanently reduced by an
amount equal to the principal amount so prepaid, repaid, legally defeased or
purchased.
(c) In the event that any Net Available Cash from an Asset Sale (or
an amount equal thereto) is not applied in accordance with the preceding
paragraph within 270 days from the date of the receipt of such Net Available
Cash, such Net Available Cash shall constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5,000,000 (taking into account
income earned on such Excess Proceeds, if any), the Company will be required to
make an offer to purchase (the "Prepayment Offer") the Securities which offer
shall be in the amount of the Excess Proceeds, on a pro rata basis according to
principal amount, at a purchase price equal to 100% of the Accreted Value
thereof plus Liquidated Damages, if any, thereon to the purchase date, if such
purchase is prior to July 15, 2003, or 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
purchase date, if such purchase is on or after July 15, 2003 (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) in accordance with the procedures
(including prorating in the event of oversubscription) set forth in this
Indenture. To the extent that any portion of the amount of Net Available Cash
remains after compliance with the preceding sentence and provided that all
Holders of Securities have been given the opportunity to tender their Securities
for purchase as described in Section 4.06(d), the Company may use such remaining
amount for any purpose permitted by this Indenture and the amount of Excess
Proceeds will be reset to zero.
(d)(1) Within ten business days after the Company is obligated to
make a Prepayment Offer as described in the preceding paragraph, the Company
shall send a written notice, by first-class mail, to the Trustee and the Holders
of Securities (the "Prepayment Offer Notice"), accompanied by such information
regarding the Company and its Subsidiaries as the Company in good faith believes
will enable such Holders to make an informed decision with respect to such
Prepayment Offer. The Prepayment Offer Notice shall state, among other things,
(i) that the Company is offering to purchase Securities pursuant to the
provisions of this Indenture, (ii) that any Security (or any portion thereof)
accepted for payment (and duly paid on the Purchase Date) pursuant to the
Prepayment Offer shall cease to accrue interest on the Purchase Date, (iii) that
any Securities (or portions thereof) not properly tendered shall continue to
accrue interest, (iv) the purchase price and purchase date, which shall be,
subject to any contrary requirements of applicable law, no less than 30 days nor
more than 60 days after the date the Prepayment Offer Notice is mailed (the
"Purchase Date"), (v) the aggregate principal amount of Securities to be
purchased, (vi) a description of the procedures which Holders of Securities must
follow in order to tender their Securities and the procedures that Holders of
Securities must follow in order to withdraw an election to tender their
Securities for payment and (vii) all other instructions and materials necessary
to enable Holders to tender Securities pursuant to the Prepayment Offer.
(2) Not later than the date upon which written notice of a Prepayment
Offer is delivered to the Trustee as provided above, the Company shall deliver
to the Trustee an Officers'
37
Certificate as to (i) the amount of the Prepayment Offer (the "Offer Amount"),
(ii) the allocation of the Net Available Cash from the Asset Sales pursuant to
which such Prepayment Offer is being made and (iii) the compliance of such
allocation with the provisions of Section 4.06(a). On such date, the Company
shall also irrevocably deposit with the Trustee or with the Paying Agent (or, if
the Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate
and hold in trust) in Temporary Cash Investments, maturing on the last day prior
to the Purchase Date or on the Purchase Date if funds are immediately available
by open of business, an amount equal to the Offer Amount to be held for payment
in accordance with the provisions of this Section. Upon the expiration of the
period for which the Prepayment Offer remains open (the "Offer Period"), the
Company shall deliver to the Trustee for cancellation the Securities or portions
thereof which have been properly tendered to and are to be accepted by the
Company. The Trustee or the Paying Agent shall, on the Purchase Date, mail or
deliver payment to each tendering Holder in the amount of the purchase price.
In the event that the aggregate purchase price of the Securities delivered by
the Company to the Trustee is less than the Offer Amount, the Trustee or the
Paying Agent shall deliver the excess to the Company immediately after the
expiration of the Offer Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company or its agent at the address specified in the notice at least three
Business Days prior to the Purchase Date. Holders shall be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount at maturity of the Security which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have such
Security purchased. If at the expiration of the Offer Period the aggregate
principal amount of Securities surrendered by Holders exceeds the Offer Amount,
the Company shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part shall be issued
new Securities equal in principal amount at maturity to the unpurchased portion
of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee or the
Paying Agent mails or delivers payment therefor to the surrendering Holder.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company will
38
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section by virtue thereof.
SECTION 4.7 LIMITATION ON TRANSACTIONS WITH AFFILIATES. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, conduct any business or enter into or suffer to exist any
transaction or series of transactions (including the purchase, sale, transfer,
assignment, lease, conveyance or exchange of any Property or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction"), unless (a) the terms of such Affiliate Transaction are
(i) set forth in writing and (ii) no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained in
a comparable arm's-length transaction with a Person that is not an Affiliate of
the Company, (b) if such Affiliate Transaction involves aggregate payments or
value in excess of $2,000,000, the Board of Directors (including a majority of
the disinterested members of the Board of Directors) approves such Affiliate
Transaction and, in its good faith judgment, believes that such Affiliate
Transaction complies with clause (a) (ii) of this paragraph as evidenced by a
Board Resolution promptly delivered to the Trustee and (c) if such Affiliate
Transaction involves aggregate payments or value in excess of $15,000,000, the
Company obtains a written opinion from an Independent Appraiser to the effect
that the consideration to be paid or received in connection with such Affiliate
Transaction is fair, from a financial point of view, to the Company or such
Restricted Subsidiary, as the case may be.
(b) Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may enter into or suffer to exist the following:
(i) any transaction or series of transactions between the Company and
one or more Restricted Subsidiaries or between two or more Restricted
Subsidiaries in the ordinary course of business, PROVIDED that no more than
5% of the total voting power of the Voting Stock (on a fully diluted basis)
of any such Restricted Subsidiary is owned by an Affiliate of the Company
(other than a Restricted Subsidiary);
(ii) any Restricted Payment permitted to be made pursuant to
Section 4.04;
(iii) the payment of compensation (including amounts paid pursuant to
employee benefit plans) for the personal services of officers, directors
and employees of the Company or any of the Restricted Subsidiaries, so long
as the Board of Directors in good faith shall have approved the terms
thereof and deemed the services theretofore or thereafter to be performed
for such compensation to be fair consideration therefor; and
(iv) the payment of reasonable fees to directors of the Company or
such Restricted Subsidiary (x) who are not employees of the Company or any
Restricted Subsidiary or (y) who are employees of the Company or any
Restricted Subsidiary, PROVIDED that such fees are consistent with the past
practices of the Company or such Restricted Subsidiary.
39
SECTION 4.8 CHANGE OF CONTROL. (a) Upon the occurrence of a
Change of Control, each Holder of Securities shall have the right to require the
Company to repurchase all or any part (equal to $1,000 in principal amount at
maturity or an integral multiple thereof) of such Holder's Securities pursuant
to the offer described below (the "Change of Control Offer") at a purchase price
(the "Change of Control Purchase Price") equal to 101% of the Accreted Value
thereof, plus Liquidated Damages, if any, thereon at the purchase date, if the
purchase date is prior to July 15, 2003, or 101% of the aggregate principal
amount at maturity thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon, to the purchase date, if the purchase date is on or
after July 15, 2003 (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
(b) Within 30 days following any Change of Control, the Company shall
(a) cause a notice of the Change of Control Offer to be sent at least once to
the Dow Xxxxx News Service or similar business news service in the United States
and (b) send, by first-class mail, with a copy to the Trustee, to each Holder of
Securities, at such Holder's address appearing in the Security Register, a
notice stating: (i) that a Change of Control has occurred and a Change of
Control Offer is being made pursuant to this Section and that all Securities (or
portions thereof) timely tendered will be accepted for payment; (ii) the Change
of Control Purchase Price and the purchase date, which shall be, subject to any
contrary requirements of applicable law, a business day no earlier than 30 days
nor later than 60 days from the date such notice is mailed (the "Change of
Control Payment Date"); (iii) the circumstances and relevant facts regarding
such Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving effect to the
Change of Control); (iv) that any Securities (or portion thereof) accepted for
payment (and duly paid on the Change of Control Payment Date) pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date; (v) that any Securities (or portions thereof) not tendered
will continue to accrue interest; and (vi) the procedures that Holders of
Securities must follow in order to tender their Securities (or portions thereof)
for payment, and the procedures that Holders of Securities must follow in order
to withdraw an election to tender Securities (or portions thereof) for payment.
(c) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form (which may include the form on
the reverse thereof) duly completed, to the Company or its agent at the address
specified in the notice at least three Business Days prior to the Change of
Control Payment Date. Holders will be entitled to withdraw their election if
the Trustee or the Company receives not later than one Business Day prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount at maturity of
the Security which was delivered for purchase by the Holder and a statement that
such Holder is withdrawing his election to have such Security purchased.
Holders whose Securities are purchased only in part shall be issued new
Securities equal in principal amount at maturity to the unpurchased portion of
the Securities surrendered.
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(d) On or prior to the Change of Control Payment Date, the Company
shall irrevocably deposit with the Trustee or with the Paying Agent (or, if the
Company or any of its Wholly Owned Subsidiaries is acting as the Paying Agent,
segregate and hold in trust) in cash an amount equal to the Change of Control
Purchase Price payable to the Holders entitled thereto, to be held for payment
in accordance with the provisions of this Section. On the Change of Control
Payment Date, the Company shall deliver to the Trustee the Securities or
portions thereof which have been properly tendered to and are to be accepted by
the Company for payment. The Trustee or the Paying Agent shall, on the Change
of Control Payment Date, mail or deliver payment to each tendering Holder of the
Change of Control Purchase Price. In the event that the aggregate Change of
Control Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Change of
Control Payment Date.
(e) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee or the
Paying Agent mails or delivers payment therefor to the surrendering Holder.
(f) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of the covenant described
hereunder, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
covenant described hereunder by virtue of such compliance.
SECTION 4.9 COMPLIANCE CERTIFICATE The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.10. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. LIMITATION ON LIENS. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or
suffer to exist, any Lien (other than Permitted Liens) upon any of its Property
(including Capital Stock of a Restricted Subsidiary), whether owned at the Issue
Date or thereafter acquired, or any interest therein or any
41
income or profits therefrom, unless it has made or will make effective provision
whereby the Initial Securities will be secured by such Lien equally and ratably
with (or prior to) all other Debt of the Company or any Restricted Subsidiary
secured by such Lien.
SECTION 4.12. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
any Sale and Leaseback Transaction with respect to any Property unless (a) the
Company or such Restricted Subsidiary would be entitled to (i) Incur Debt in an
amount equal to the Attributable Debt with respect to such Sale and Leaseback
Transaction pursuant to Section 4.03 and (ii) create a Lien on such Property
securing such Attributable Debt without securing the Securities pursuant to
Section 4.11 and (b) such Sale and Leaseback Transaction is effected in
compliance with Section 4.06.
SECTION 4.13. LIMITATION ON STATUS AS INVESTMENT COMPANY. The
Company and its Restricted Subsidiaries shall be prohibited from being required
to register as an "investment company" (as that term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act")), or
from otherwise becoming subject to regulation under the Investment Company Act.
SECTION 4.14. DESIGNATION OF RESTRICTED AND UNRESTRICTED
SUBSIDIARIES. The Board of Directors may designate any Subsidiary of the
Company to be an Unrestricted Subsidiary if (a) the Subsidiary to be so
designated does not own any Capital Stock or Debt of, or own or hold any Lien on
any Property of, the Company or any other Restricted Subsidiary, (b) the
Subsidiary to be so designated is not obligated under any Debt, Lien or other
obligation that, if in default, would result (with the passage of time or notice
or otherwise) in a default on any Debt of the Company or of any Restricted
Subsidiary and (c) either (i) the Subsidiary to be so designated has total
assets of $1,000 or less or (ii) such designation is effective immediately upon
such entity becoming a Subsidiary of the Company. Unless so designated as an
Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company
will be classified as a Restricted Subsidiary; PROVIDED, HOWEVER, that such
Subsidiary shall not be designated a Restricted Subsidiary and shall be
automatically classified as an Unrestricted Subsidiary if either of the
requirements set forth in clauses (x) and (y) of the immediately following
paragraph will not be satisfied after giving pro forma effect to such
classification. Except as provided in the first sentence of this paragraph, no
Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary if, immediately after giving pro forma effect to such
designation, (x) the Company could Incur at least $1.00 of additional Debt
pursuant to clause (a) of the first paragraph of Section 4.03 and (y) no Default
or Event of Default shall have occurred and be continuing or would result
therefrom.
Any such designation or redesignation by the Board of Directors will
be evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such
42
designation or redesignation and an Officers' Certificate (a) certifying that
such designation or redesignation complies with the foregoing provisions and
(b) giving the effective date of such designation or redesignation, such filing
with the Trustee to occur within 45 days after the end of the fiscal quarter of
the Company in which such designation or redesignation is made (or, in the case
of a designation or redesignation made during the last fiscal quarter of the
Company's fiscal year, within 90 days after the end of such fiscal year).
SECTION 4.15. LIMITATION ON LINES OF BUSINESS. The Company and its
Restricted Subsidiaries shall be prohibited from directly or indirectly engaging
to any substantial extent in any line or lines of business activity other than
that which, in the reasonable good faith judgment of the Board of Directors, is
a Related Business.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. (a) The
Company shall not merge, consolidate or amalgamate with or into any other Person
(other than a merger of a Wholly Owned Subsidiary into the Company) or sell,
transfer, assign, lease, convey or otherwise dispose of all or substantially all
its Property in any one transaction or series of transactions unless: (i) the
Company shall be the surviving Person (the "Surviving Person") or the Surviving
Person (if other than the Company) formed by such merger, consolidation or
amalgamation or to which such sale, transfer, assignment, lease, conveyance or
disposition is made shall be a corporation organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia;
(ii) the Surviving Person (if other than the Company) expressly assumes, by
supplemental indenture in form satisfactory to the Trustee, executed and
delivered to the Trustee by such Surviving Person, the due and punctual payment
of the principal of, and premium, if any, and interest on, all the Securities,
according to their tenor, and the due and punctual performance and observance of
all the covenants and conditions of this Indenture and the Collateral Pledge
Agreement to be performed by the Company; (iii) in the case of a sale, transfer,
assignment, lease, conveyance or other disposition of all or substantially all
the Property of the Company, such Property shall have been transferred as an
entirety or virtually as an entirety to one Person; (iv) immediately before and
after giving effect to such transaction or series of transactions on a pro forma
basis (and treating, for purposes of this clause (iv) and clauses (v) and
(vi) below, any Debt which becomes, or is anticipated to become, an obligation
of the Surviving Person or any Restricted Subsidiary as a result of such
transaction or series of transactions as having been Incurred by the Surviving
Person or such Restricted Subsidiary at the time of such transaction or series
of transactions), no Default or Event of Default shall have occurred and be
continuing; (v) immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Company or the Surviving Person, as the
case may be, would be able to Incur at least $1.00 of additional Debt under
clause (a) of the first paragraph of Section 4.03; (vi) immediately after giving
effect to such transaction or series of transactions on a
43
pro forma basis, the Surviving Person shall have a Consolidated Net Worth in an
amount which is not less than the Consolidated Net Worth of the Company
immediately prior to such trans action or series of transactions; and (vii) the
Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such transaction and the supplemental
indenture, if any, in respect thereto comply with this covenant and that all
conditions precedent herein provided for relating to such transaction have been
satisfied.
(b) The Surviving Person shall succeed to, and be substituted for,
and may exercise every right and power of the Company under this Indenture and
the Collateral Pledge Agreement, but the predecessor Company in the case of a
sale, transfer, assignment, lease, conveyance or other disposition shall not be
released from the obligation to pay the principal of, and premium, if any, and
interest on, the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. The following events shall be
"Events of Default":
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of, or
premium, if any, on, any Security when the same becomes due and payable at
its Stated Maturity, upon optional redemption, upon required repurchase,
upon acceleration or otherwise;
(3) the Company fails to comply with Article 5;
(4) the Company fails to comply with any other covenant or agreement
in the Securities or in this Indenture (other than a failure which is the
subject of the foregoing clause (1), (2) or (3)) and such failure continues
for 30 days after written notice is given to the Company as provided below;
(5) a default by the Company or any Restricted Subsidiary under any
Debt of the Company or any Restricted Subsidiary which results in
acceleration of the maturity of such Debt, or failure to pay any such Debt
at maturity, in an aggregate amount greater than $5,000,000;
(6) any judgment or judgments for the payment of money in an aggregate
amount in excess of $5,000,000 shall be rendered against the Company or any
Restricted
44
Subsidiary and shall not be waived, satisfied or discharged for any period
of 30 consecutive days during which a stay of enforcement shall not be in
effect;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property;
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary; or
(D) is for any similar relief granted under any foreign laws;
and in each such case the order or decree remains unstayed and in effect
for 60 days; and
(9) an event of default under the Collateral Pledge Agreement.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
45
The term "Bankruptcy Law" means Xxxxx 00, XXXXXX XXXXXX CODE, or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Securities then outstanding notify the Company (and, in the case of such notice
by Holders, the Trustee) of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default, its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8)) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
aggregate principal amount at maturity of the Securities then outstanding by
notice to the Company and the Trustee, may declare the Accreted Value of all
Securities then outstanding (if prior to July 15, 2003) or the principal amount
of all the Securities then outstanding plus accrued but unpaid interest to the
date of acceleration (if on or after July 15, 2003) to be immediately due and
payable. In the case of an Event of Default specified in Section 6.01(7) or
(8), such amount with respect to all the Securities shall be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Securityholders. The Holders of a majority in aggregate principal amount at
maturity of the Securities then outstanding by written notice to the Trustee and
the Company may rescind any declaration of acceleration if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest 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 Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
46
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate principal amount at maturity of the Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a Default
in the payment of the principal of or interest on a Security or (ii) a Default
in respect of a provision that under Section 9.02 cannot be amended without the
consent of each Securityholder affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
aggregate principal amount at maturity of the Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee with
respect to the Securities. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.01,
that the Trustee determines is unduly prejudicial to the rights of other
Securityholders or would involve the Trustee in personal liability; PROVIDED,
HOWEVER, that the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to reasonable indemnity against all
losses and expenses caused by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount at
maturity of the Securities then outstanding shall have made a written
request, and such Holder of or Holders shall have offered reasonable
indemnity, to the Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and has not
received from the Holders of at least a majority in aggregate principal
amount at maturity of the Securities then outstanding a direction
inconsistent with such request, within 60 days after such notice, request
and offer.
The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Securityholder for the
enforcement of payment of the principal of or interest on such Security on or
after the applicable due date specified in such Security. A Securityholder may
not use this Indenture to prejudice the rights of another Securityholder or to
obtain a preference or priority over another Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and
47
interest on the Securities held by such Holder, on or after the respective due
dates expressed in the Securities, 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 such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in
Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, if the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
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 or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, and any liquidated damages
without preference or priority of any kind, according to the amounts due
and payable on the Securities for principal and interest and liquidated
damages, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
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SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in aggregate principal amount at maturity of the
Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
49
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) and (f) of this Section.
(e) 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.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
50
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) Unless otherwise specifically provided herein, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(g) The Company, the Paying Agent, the Registrar, the Trustee and any
agent of the Company, the Paying Agent, the Registrar or the Trustee 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 or on account of
the principal of and, subject to the provisions of this Indenture, interest on
such Security and for all other purposes; and neither the Company, the Paying
Agent, the Registrar nor the Trustee nor any agent of the Company, the Paying
Agent, the Registrar or the Trustee shall be affected by any notice to the
contrary.
(h) The Trustee shall be under no obligation to exercise any of the
rights or powers created in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(i) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
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 its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Securities, the Collateral Pledge Agreement or the
Collateral, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture, the Collateral Pledge Agreement or in any document
issued in connection with the sale of the Securities or in the Securities other
than the Trustee's certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the employees of the Trustee with
responsibility for the Securities, the Trustee
51
shall mail to each Securityholder notice of the Default within the earlier of
90 days after it is known to such employees of the Trustee or written notice of
it is received by the Trustee. Except in the case of a Default in payment of
principal of or interest on any Security, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the best interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each June 15 beginning June 15, 1999, and in any event prior
to August 15 in each year, the Trustee shall mail to each Securityholder a brief
report dated as of such June 15 that complies with Section 313(a) of the TIA.
The Trustee shall also comply with Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees) incurred by it in
connection with the acceptance and administration of this trust and the
performance of its duties hereunder and under the Collateral Pledge Agreement or
in connection with the placement or administration of the Securities, including
the costs and expenses of enforcing this Indenture against the Company and of
defending itself against any claim (whether asserted by any Holder or by the
Company). The Trustee shall notify the Company of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend any
such claim at the Company's expense with counsel satisfactory to the Trustee. If
the Trustee shall not consent to the Company's assumption of defense, the
Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an indemnified
party through such party's own wilful misconduct, negligence or bad faith. The
Company need not pay for any settlement made by the Trustee without the
Company's consent, such consent not to be unreasonably withheld or delayed.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
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Such lien shall survive the satisfaction and discharge of this Indenture and the
resignation or removal of the Trustee.
The Company's payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Section 6.01(7)
or (8), the expenses are intended to constitute expenses of administration under
the Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in aggregate
principal amount at maturity of the Securities then outstanding may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in aggregate principal amount at maturity of the Securities then
outstanding and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of Trustee for any reason (the
Trustee in such event being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
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 Securityholders. 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.
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 aggregate principal amount at maturity of the
Securities then outstanding may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
(who has been bona fide Holder of a Security for at least six months) may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture and any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with 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.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
and the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities, including interest
thereon to maturity or such redemption date (other than Securities replaced
pursuant to Section 2.07), and if in either
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case the Company pays all other sums payable hereunder by the Company, then this
Indenture and the Collateral Pledge Agreement shall, subject to Section 8.01(c),
cease to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Securities, the Collateral Pledge
Agreement and this Indenture ("legal defeasance option") or (ii) its obligations
under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13, 4.14,
4.15, 5.01(a)(iv) (to the extent relating to such other Sections), 5.01(a)(v)
and 5.01(a)(vi) and the operation of Section 6.01(4) (to the extent relating to
such other Sections), Section 6.01(5), 6.01(6), 6.01(7) (with respect only to
Significant Subsidiaries), 6.01(8) (with respect only to Significant
Subsidiaries) and 6.01(9) ("covenant defeasance option"). Upon the exercise of
a covenant defeasance option, any Collateral subject to the Collateral Pledge
Agreement shall be released. The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section 6.01(3)
and 6.01(4) (with respect to the Sections of Articles 4 and 5 identified in the
immediately preceding paragraph), 6.01(5), 6.01(6), 6.01(7) (with respect only
to Significant Subsidiaries), 6.01(8) (with respect only to Significant
Subsidiaries) and 6.01(9).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06 and
Appendix A shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07 and 8.05 shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise
its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and interest
on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government
55
Obligations plus any deposited money without investment will provide cash
at such times and in such amounts as will be sufficient to pay principal
and interest when due on all the Securities to maturity or redemption, as
the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable United States federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or loss
for United States federal income tax purposes as a result of such
defeasance and will be subject to United States federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for United States
federal income tax purposes as a result of such covenant defeasance and
will be subject to United States federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this
Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying
56
Agent and in accordance with this Indenture to the payment of principal of and
interest on the Securities.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors; 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 mailed to each such Holder a notice that said
moneys have not been so applied and that after a date named therein any
unclaimed balance of said moneys then remaining will be returned to the Company.
SECTION 8.05. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of any Securities
because of 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 or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the
Trustee may amend this Indenture, the Collateral Pledge Agreement or the
Securities without notice to or consent of any Security holder:
(a) to cure any ambiguity, omission, defect or inconsistency;
(b) to comply with Article 5;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated
Securities are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code);
(d) to add to the covenants of the Company for the benefit of the
Holders of the Securities or to surrender any right or power conferred upon
the Company;
(e) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the Trust Indenture Act;
(f) to make any change that does not adversely affect the rights of
any Holder of the Securities;
(g) to evidence and provide for the acceptance of the appointment of a
successor Trustee hereunder; or
(h) to provide for additional collateral for or for guarantors of the
Securities.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture, the Collateral Pledge Agreement or the Securities
without notice to any Securityholder but with the written consent of the Holders
of at least a majority in aggregate principal amount at maturity of the
Securities then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Securities). However, without the consent
of each Securityholder affected thereby, an amendment may not:
58
(a) reduce the amount of Securities whose Holders must consent to an
amendment or waiver;
(b) reduce the accretion rate or reduce the rate of or extend the time
for payment of interest on any Security;
(c) reduce the principal of or extend the Stated Maturity of any
Security;
(d) make any Security payable in money other than that stated in the
Security;
(e) impair the right of any Securityholder to institute suit for the
enforcement of any payment on or with respect to such Holder's Securities;
(f) subordinate the Securities to any other obligation of the Company;
(g) release any security interest that may have been granted in favor
of the Securityholders;
(h) reduce the amount payable upon the redemption or repurchase of any
Security under Article 3 or Section 4.06 or Section 4.08 or change the time
at which any Security may be redeemed in accordance with Article 3;
(i) at any time after a Change of Control or Asset Sale has occurred,
change the time at which the Change of Control Offer or any Prepayment
Offer relating thereto must be made or at which the Securities must be
repurchased pursuant to such Change of Control Offer or Prepayment Offer;
or
(j) make any change in Section 6.04 or Section 6.07 or the second
sentence of this Section.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
59
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
An amendment or waiver becomes effective once the requisite number of consents
are received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than
120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an
amendment 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 on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
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 to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
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ARTICLE 10
SECURITY
SECTION 10.1 SECURITY INTEREST.
(a) In order to secure the prompt and complete payment and
performance in full of the Indenture Obligations, the Company and the Trustee
have entered into this Indenture and the Collateral Pledge Agreement. Each
Holder, by accepting a Security, agrees to all of the terms and provisions of
this Indenture and the Collateral Pledge Agreement, and the Trustee agrees to
all of the terms and provisions of this Indenture and the Collateral Pledge
Agreement, as this Indenture and the Collateral Pledge Agreement may be amended
from time to time pursuant to the provisions thereof and hereof.
(b) Subject to the terms of the Collateral Pledge Agreement, the
Collateral as now or hereafter constituted shall be held for the equal and
ratable benefit of the Holders without preference, priority or distinction of
any thereof over any other by reason of difference in time of issuance, sale or
otherwise, as the only security for the Indenture Obligations.
(c) The provisions of TIA Section 314(d), and the provisions of
TIA Section 314(c)(3) to the extent applicable by specific reference in this
Article 10, are hereby incorporated by reference herein as if set forth in their
entirety, except that, as set forth in Section 10.04, TIA Section 314(d) need
not be complied with in certain respects.
SECTION 10.2 RECORDING; OPINIONS OF COUNSEL.
(a) The Company represents that it has caused to be executed and
delivered, filed and recorded and covenants that it will promptly cause to be
executed and delivered, filed and recorded, all instruments and documents, and
has done and will do or will cause to be done all such acts and other things, at
the Company's expense, as are necessary to effect and maintain valid and
perfected security interests in the Collateral. The Company shall, as promptly
as practicable, cause to be executed and delivered, filed and recorded all
instruments and do all acts and other things as may be required by law to
perfect, maintain and protect the security interests under the Collateral Pledge
Agreement and herein.
(b) The Company shall furnish to the Trustee, concurrently with
the execution and delivery of this Indenture and the Collateral Pledge Agreement
and promptly after the execution and delivery of any amendment thereto or any
other instrument of further assurance, an Opinion of Counsel stating that, in
the opinion of such counsel, subject to customary exclusions and exceptions
reasonably acceptable to the Trustee, either (i) this Indenture, the Collateral
Pledge Agreement, any such amendment and all other instruments of further
assurance have been properly recorded, registered and filed and all such other
action has been taken to the
61
extent necessary to make effective valid security interests and to perfect the
security interests intended to be created by this Indenture and the Collateral
Pledge Agreement, and reciting the details of such action, or (ii) no such
action is necessary to effect and maintain in full force and effect the validity
and perfection of the security interests under the Collateral Pledge Agreement
and hereunder.
(c) The Issuers shall furnish to the Trustee, on or prior to
August 15, of each year commencing in 1999, an Opinion of Counsel, dated as of
such date, stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions reasonably acceptable to the Trustee, either (A) all
such action has been taken with respect to the recording, registering, filing,
rerecording and refiling of this Indenture, all supplemental indentures, the
Collateral Pledge Agreement, financing statements, continuation statements and
all other instruments of further assurance as is necessary to maintain the
validity and perfection of security interests under the Collateral Pledge
Agreement and hereunder in full force and effect and reciting the details of
such action, and stating that all financing statements and continuation
statements have been executed and filed and such other actions taken that are
necessary fully to preserve and protect the rights of the Holders and the
Trustee hereunder and under the Collateral Pledge Agreement, or (B) no such
action is necessary to maintain in full force and effect the validity and
perfection of the security interests under the Collateral Pledge Agreement and
hereunder.
SECTION 10.3 DISPOSITION OF CERTAIN COLLATERAL.
(a) The Collateral shall not be released from the security
interest created hereunder and under the Collateral Pledge Agreement and no
property shall be substituted for any of the Collateral, except in accordance
with the provisions of Sections 5 and 18 of the Collateral Pledge Agreement;
PROVIDED that Collateral may be released from the security interest created
hereunder and under the Collateral Pledge Agreement in connection with any
disposition thereof by the Company made in accordance with the Indenture, so
long as no Default or Event of Default is in existence at the time of or
immediately after giving effect thereto.
(b) In the event that the Issuers have sold, exchanged, or
otherwise disposed of or propose to sell, exchange or otherwise dispose of any
portion of the Collateral which under the provisions of this Section 10.03 may
be sold, exchanged or otherwise disposed of by the Company without consent of
the Trustee, and the Company requests the Trustee to furnish a written
disclaimer, release or quitclaim of any interest in such property under the
Collateral Pledge Agreement, the Trustee shall execute such an instrument,
prepared by the Company, upon delivery to the Trustee of an Officers'
Certificate by the Company reciting the sale, exchange or other disposition made
or proposed to be made and describing in reasonable detail the property affected
thereby, and certifying that such property is property which by the provisions
of this Section 10.03 may be sold, exchanged or otherwise disposed of or dealt
with
62
by the Company without any release or consent of the Trustee or the Holders.
The Trustee shall be authorized to conclusively rely on such certification.
(c) Any disposition of Collateral made in compliance with the
provisions of this Section 10.03 and Section 10.04 shall be deemed not to impair
the security interests under the Collateral Pledge Agreement and hereunder in
contravention of the provisions of this Indenture.
SECTION 10.4 CERTAIN RELEASES OF COLLATERAL.
Subject to applicable law, the release of any Collateral from Liens
created by the Collateral Pledge Agreement or the release of, in whole or in
part, the Liens created by the Collateral Pledge Agreement, will not be deemed
to impair the Collateral Pledge Agreement in contravention of the provisions of
this Indenture if and to the extent the Collateral or Liens are released
pursuant to, and in accordance with, the Collateral Pledge Agreement and
pursuant to, and in accordance with, the terms hereof. To the extent
applicable, without limitation, the Company shall cause TIA Section 314(d),
relating to the release of property or securities from the Liens of the
Collateral Pledge Agreement, to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by two Officers, except in cases in
which TIA Section 314(d) requires that such certificate or opinion be made by an
independent person.
SECTION 10.5 PAYMENT OF EXPENSES.
On demand of the Trustee, the Company forthwith shall pay or
satisfactorily provide for all reasonable expenditures incurred by the Trustee
under this Article 10, including the reasonable fees and expenses of counsel and
all such sums shall be a Lien upon the Collateral and shall be secured thereby.
SECTION 10.6 SUITS TO PROTECT THE COLLATERAL.
Subject to Section 10.01 of this Indenture and to the provisions of
the Collateral Pledge Agreement, the Trustee shall have power to institute and
to maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of the Collateral Pledge Agreement or this Indenture, including the power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid or if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interests in contravention of this Indenture or be prejudicial to the interests
of the Holders or of the Trustee. The Trustee shall give notice to the Company
promptly following the institution of any such suit or proceeding.
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SECTION 10.7 TRUSTEE'S DUTIES.
The powers and duties conferred upon the Trustee by this Article 10
are solely to protect the security interests and shall not impose any duty upon
the Trustee to exercise any such powers and duties, except as expressly provided
in this Indenture or the TIA. The Trustee shall be under no duty to the Company
whatsoever to make or give any presentment, demand for performance, notice of
nonperformance, protest, notice of protest, notice of dishonor, or other notice
or demand in connection with any Collateral, or to take any steps necessary to
preserve any rights against prior parties except as expressly provided in this
Indenture. The Trustee shall not be liable to the Company for failure to
collect or realize upon any or all of the Collateral, or for any delay in so
doing, nor shall the Trustee be under any duty to the Company to take any action
whatsoever with regard thereto. The Trustee shall have no duty to the Company
to comply with any recording, filing, or other legal requirements necessary to
establish or maintain the validity, priority or enforceability of the security
interests in, or the Trustee's rights in or to, any of the Collateral.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.2 NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly thereafter)
or overnight courier guaranteeing next-day delivery and addressed as follows:
if to the Company:
Metallurg Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention of:
if to the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention of: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed. If a notice or communication is mailed in the
manner above to a Securityholder, it is duly given, whether or not the
Securityholder receives it.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. Notices to the Company or the Trustee shall be effective only
upon receipt.
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SECTION 11.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, 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
individual, such covenant or condition has been complied with.
SECTION 11.6 WHEN SECURITIES DISREGARDED. In determining whether
the Holders of the required principal amount at maturity 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 disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
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SECTION 11.7 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar the Paying Agent and any co-registrar may make reasonable rules
for their functions.
SECTION 11.8 LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 11.9 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.10 NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 11.11 SUCCESSORS. All agreements of the Company in this
Indenture, the Collateral Pledge Agreement and the Securities shall bind its
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 11.12 MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 11.13 TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
METALLURG HOLDINGS, INC.
by /S/ XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee
by /S/ XXXXXX X. XXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
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APPENDIX A
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. DEFINITIONS
1.1 DEFINITIONS
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depositary for such Global
Security, Euroclear and Cedel, in each case to the extent applicable to such
transaction and as in effect from time to time.
"Cedel" means Cedel Bank, S.A., or any successor securities clearing
agency.
"Definitive Security" means a certificated Initial Security, Private
Exchange Security or Exchange Security bearing, if required, the restricted
securities legend set forth in Section 2.3(e).
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Exchange Securities" means the 12.75% Senior Discount Exchange Notes
due 2008 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to the Registration Agreement.
"Initial Purchaser" means BancBoston Securities Inc.
"Initial Securities" means the 12.75% Senior Discount Notes due 2008
in the aggregate principal amount at maturity of $121,000,000 issued on July 13,
1998.
"Private Exchange" means the offer by the Company, pursuant to Section
2(f) of the Registration Agreement dated July 13, 1998, or pursuant to any
similar provision of any other Registration Agreement, to issue and deliver to
certain purchasers, in exchange for the Initial
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Securities held by such purchasers as part of their initial distribution, a like
aggregate principal amount at maturity of Private Exchange Securities.
"Private Exchange Securities" means the 12.75% Senior Discount Private
Exchange Notes due 2008 to be issued pursuant to this Indenture in connection
with a Private Exchange pursuant to the Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated July 6, 1998,
between the Company and the Initial Purchaser.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount at maturity of Exchange Securities registered
under the Securities Act.
"Registration Agreement" means the Registration Agreement dated July
13, 1998, among the Company and the Initial Purchaser.
"Regulation S Securities" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S under the Securities
Act.
"Restricted Period" means the period of 40 consecutive days beginning
on and including the later of (i) the day on which Securities are first offered
to persons other than distributors (as defined in Regulation S under the
Securities Act) in reliance on Regulation S and (ii) the Issue Date.
"Rule 144A Securities" means the Initial Securities purchased by the
Initial Purchaser from the Company pursuant to the Purchase Agreement, other
than the Regulation S Securities.
"Securities" means the Initial Securities, the Private Exchange
Securities and the Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto who
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Securities
pursuant to the Registration Agreement.
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"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the legend set forth in
Section 2.3(d) hereto.
1.2 OTHER DEFINITIONS
DEFINED IN
TERM SECTION:
"Agent Members" 2.1(b)
"Global Security" 2.1(a)
"Regulation S" 2.1
"Rule 144A" 2.1
"Temporary Regulation S Global Security" 2.1(a)
2. THE SECURITIES
2.1 FORM AND DATING
The Initial Securities are being offered and sold by the Company
pursuant to the Purchase Agreement. The Initial Securities will be resold,
initially only to QIBs in reliance on Rule 144A under the Securities Act
("Rule 144A") and in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs and purchasers in reliance on Regulation S.
(a) GLOBAL SECURITIES. Rule 144A Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form and Regulation S Securities shall be issued initially in
the form of one or more temporary global Securities (collectively, the
"Temporary Regulation S Global Security"), in each case without interest coupons
with the global securities legend and restricted securities legend set forth in
Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the
Initial Securities represented thereby with the Securities Custodian, and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and authenticated by the Trustee as provided in this
Indenture. Beneficial ownership interests in the Temporary Regulation S Global
Security will not be exchangeable for interests in the Rule 144A Global
Security, a permanent global security (the "Permanent Regulation S Global
Security"), or any other security without a legend containing restrictions or
transfer until the expiration of the Restricted Period and then only upon
certification (the "Regulation S Certification") in form reasonably satisfactory
to the Trustee that beneficial ownership interests in such Temporary
Regulation S Global Security are owned either by non-U.S. persons or U.S.
persons who purchased such interests in a transaction that did not require
registration under the Securities Act. Following the termination of the
Restricted Period, beneficial ownership interests in the Temporary Regulation S
Global Security may be exchanged for equivalent beneficial ownership interests
in the Permanent Regulation S Global Security, the Rule 144A Global Security, or
any other Security without a legend containing restrictions or transfer pursuant
to the Applicable Procedures of the Depositary and only upon the receipt by the
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Trustee and Euroclear or Cedel of the Regulation S Certification from the owner
of such beneficial ownership interest in such Temporary Regulation S Global
Security. The Company shall instruct the Depositary that, until the expiration
of the Restricted Period, beneficial ownership interests in the Temporary
Regulation S Global Security may be held only in or through accounts maintained
at the Depositary by Euroclear or Cedel (or by Agent Members acting for the
account thereof), and no person shall be entitled to effect any transfer or
exchange that would result in any such interest being held otherwise than in or
through such an account. The Rule 144A Global Security, Temporary Regulation S
Global Security and Permanent Regulation S Global Security are collectively
referred to herein as "Global Securities." The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its nominee
as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b) and pursuant to an order of the Company, authenticate and
deliver initially one or more Global Securities that (a) shall be registered in
the name of the Depository for such Global Security or Global Securities or the
nominee of such Depository and (b) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instructions or held by the Trustee
as Securities Custodian.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as Securities Custodian or
under such Global Security, and the Depository may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices of
such Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) DEFINITIVE SECURITIES. Except as provided in Section 2.3 or 2.4,
owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities.
2.2 AUTHENTICATION. The Trustee shall authenticate and deliver:
(1) Initial Securities for original issue in an aggregate principal amount at
maturity of $121,000,000, (2) Exchange Securities for issue only in a Registered
Exchange Offer pursuant to the Registration Agreement, for a like principal
amount at maturity of Initial Securities and (3) Private Exchange Securities for
issue only in a Private Exchange pursuant to the Registration Agreement, for a
like principal
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amount at maturity of Initial Securities, upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the issue of Securities is
to be authenticated and whether the Securities are to be Initial Securities,
Private Exchange Securities or Exchange Securities. The aggregate principal
amount at maturity of Securities outstanding at any time may not exceed
$121,000,000, except as provided in Section 2.08 of this Indenture.
2.3 TRANSFER AND EXCHANGE. (a) TRANSFER AND EXCHANGE OF DEFINITIVE
SECURITIES. When Definitive Securities are presented to the Registrar or a
co-registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount at maturity of Definitive Securities of other authorized
denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section 2.3(b)
or pursuant to clause (A), (B) or (C) below, and are accompanied by the
following additional information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144 under
the Securities Act, (i) a certification to that effect and (ii) if the
Company so requests, an opinion of counsel or other evidence
reasonably satisfactory to it as to the compliance with the
restrictions set forth in the legend set forth in Section 2.3(d)(i).
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(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by a written instrument
of transfer in form reasonably satisfactory to the Company and the Registrar or
co-registrar, together with:
(i) certification that such Definitive Security is being transferred
(A) to a QIB in accordance with Rule 144A or (B) outside the United States
in an offshore transaction within the meaning of Regulation S and in
compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount at maturity of the Definitive
Security to be exchanged and shall credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in the Global
Security equal to the principal amount at maturity of the Definitive Security so
canceled. If no Global Securities are then outstanding and the Global Security
has not been previously exchanged pursuant to Section 2.4, the Company shall
issue and the Trustee shall authenticate, upon written order of the Company in
the form of an Officers' Certificate, a new Global Security in the appropriate
principal amount at maturity.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global Security
shall deliver a written order given in accordance with the Depository's
procedures containing information regarding the participant account of the
Depository to be credited with a beneficial interest in the Global Security and
such account shall be credited in accordance with such instructions with a
beneficial interest in the Global Security and the account of the Person making
the transfer shall be debited by an amount equal to the beneficial interest in
the Global Security being transferred.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global Security,
the Registrar shall reflect on
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its books and records the date and an increase in the principal amount at
maturity of the Global Security to which such interest is being transferred
in an amount equal to the principal amount at maturity of the interest to
be so transferred, and the Registrar shall reflect on its books and records
the date and a corresponding decrease in the principal amount at maturity
of the Global Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix A (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Security is exchanged for Securities
in definitive registered form pursuant to Section 2.4 prior to the
consummation of a Registered Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Securities, such Securities may
be exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial
Securities intended to ensure that such transfers comply with Rule 144A,
Regulation S or such other applicable exemption from registration under the
Securities Act, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
(d) RESTRICTIONS ON TRANSFER OF TEMPORARY REGULATION S GLOBAL
SECURITIES. During the Restricted Period, beneficial ownership interests in
Temporary Regulation S Global Securities may only be sold, pledged or
transferred through Euroclear or Cedel in accordance with the Applicable
Procedures and only (i) to the Company, (ii) so long as such security is
eligible for resale pursuant to Rule 144A under the Securities Act
("Rule 144A"), to a person whom the selling holder reasonably believes is a
"qualified institutional buyer" ("QIB") as defined in Rule 144A that purchases
for its own account or for the account of a QIB to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, (iii) in an
offshore transaction in accordance with Regulation S, (iv) pursuant to an
exemption from registration under the Securities Act provided by Rule 144 (if
applicable) under the Securities Act, or (v) 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. During the
Restricted Period, interests in the Temporary Regulation S Global Security may
not be transferred to institutions that are "Accredited Investors" (but not
QIBs) as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
Holders of interests in Temporary Regulation S Global Securities will notify any
purchaser of such resale restrictions, if then applicable.
(e) LEGEND.
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(i) Except as permitted by the following paragraphs (ii), (iii), (iv)
and (vi), each Security certificate evidencing the Global Securities and
the Definitive Securities (and all Securities issued in exchange therefor
or in substitution thereof) shall bear a legend in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR
REGULATION S THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) (a) IN THE UNITED STATES
TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (ii)
TO THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE."
Each Definitive Security will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
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(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security
that does not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legends set forth above and
rescind any restriction on the transfer of such Transfer Restricted
Security,
in either case, if the Holder certifies in writing to the Registrar that its
request for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities during the period of
the effectiveness of a Shelf Registration Statement with respect to such
Initial Securities, all requirements pertaining to legends on such Initial
Security will cease to apply, the requirements requiring that any such
Initial Security be issued in global form will cease to apply, and an
Initial Security in certificated or global form without legends will be
available to the transferee of the Holder of such Initial Securities upon
exchange of such transferring Holder's certificated Initial Security. Upon
the occurrence of any of the circumstances described in this paragraph, the
Company will deliver an Officers' Certificate to the Trustee instructing
the Trustee to issue Securities without legends.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which certain Holders of such
Initial Securities are offered Exchange Securities in exchange for their
Initial Securities, all requirements pertaining to such Initial Securities
that Initial Securities be issued in global form will cease to apply, and
certificated Initial Securities with the restricted securities legend set
forth in Exhibit 1 hereto will be available to Holders of such Initial
Securities that do not exchange their Initial Securities, and Exchange
Securities in certificated or global form will be available to Holders that
exchange such Initial Securities in such Registered Exchange Offer. Upon
the occurrence of any of the circumstances described in this paragraph, the
Company will deliver an Officers' Certificate to the Trustee instructing
the Trustee to issue Securities without legends.
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(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities are
offered Private Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
continue to apply, and Private Exchange Securities in global form will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(vi) Upon a sale or transfer of any Initial Security acquired
pursuant to Regulation S, all requirements pertaining to legends on such
Initial Security will cease to apply, the requirements requiring any such
Initial Security be issued in global form will cease to apply, and an
Initial Security in certificated or global form without the Restricted
Security Legend will be available to the transferee of the Holder of such
Initial Securities.
(f) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depository to the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
certificated or Definitive Securities, redeemed, repurchased or canceled, the
principal amount at maturity of Securities represented by such Global Security
shall be reduced and an adjustment shall be made on the books and records of the
Trustee (if it is then the Securities Custodian for such Global Security) with
respect to such Global Security, by the Trustee or the Securities Custodian, to
reflect such reduction.
(g) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities,
Definitive Securities and Global Securities at the Registrar's or
co-registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Section 3.06, 4.06, 4.08 and 9.05 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of any Security selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of
the Security not to be redeemed) or to transfer or exchange any Security
for a period beginning 15 days before the mailing of a notice of redemption
or an offer to repurchase Securities or 15 days before an interest payment
date.
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(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(h) NO OBLIGATION OF THE TRUSTEE.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depository or any other Person with respect to the accuracy of the records
of the Depository or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than the Depository) of any notice (including any notice of
redemption or repurchase) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be given to
the Holders and all payments to be made to Holders under the Securities
shall be given or made only to the registered Holders (which shall be the
Depository or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through
the Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 CERTIFICATED SECURITIES
(a) A Global Security deposited with the Depository or with the
Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred to
the beneficial owners thereof in the form of certificated Securities in an
aggregate principal amount at maturity equal to the
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principal amount at maturity of such Global Security, in exchange for such
Global Security, only if such transfer complies with Section 2.3 and (i) the
Depository notifies the Company that it is unwilling or unable to continue as a
Depository for such Global Security or if at any time the Depository ceases to
be a "clearing agency" registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days of such notice, or
(ii) an Event of Default has occurred and is continuing or (iii) the Company, in
its sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depository to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount at maturity of certificated Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depository shall
direct. Any certificated Initial Security delivered in exchange for an interest
in the Global Security shall, except as otherwise provided by Section 2.3(d),
bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events specified
in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
A-12
EXHIBIT 1
to APPENDIX A
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A OR REGULATION S THEREUNDER. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER
THAT (A) SUCH SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (i) (a) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN
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A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR
(d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
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[FORM OF FACE OF INITIAL SECURITY]
No. $__________
12.75% Senior Discount Note due 2008
CUSIP No. ______
Metallurg Holdings, Inc., a Delaware corporation, promises to pay
to Cede & Co., or registered assigns, the principal sum
of Dollars on July 15, 2008.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
The following information is supplied for purposes of Sections 1273
and 1275 of the Internal Revenue Code:
Issue Date: July 13, 1998 Original issue discount under
Section 1273 of the
Internal Revenue Code (for each $1,000
principal amount at
maturity): $461.35
Issue Price (for each $1,000 principal Yield to Maturity: 12.75%
amount at maturity): $538.65
Additional provisions of this Security are set forth on the other side
of this Security.
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IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
METALLURG HOLDINGS, INC.,
by
-------------------------------
Name:
Title:
by
-------------------------------
Name:
Title:
[CORPORATE SEAL]
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
-----------------------------
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
12.75% Senior Discount Note due 2008
1. INTEREST
(a) Metallurg Holdings, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above from July
15, 2003 until maturity. The Company will pay interest semiannually on January
15 and July 15 of each year commencing January 15, 2004. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. Until July 15,
2003, no cash interest will accrue or be payable on this Security, but the
Accreted Value will increase between July 13, 1998 and July 15, 2003, on a
semi-annual bond equivalent basis using a 360-day year comprised of twelve
30-day months, such that the Accreted Value shall be equal to the full principal
amount at maturity of this Security on July 15, 2003. The Accreted Value shall
cease to increase as of July 15, 2003. Beginning on July 15, 2003, interest on
this Security will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from July 15, 2003; PROVIDED that the
first interest payment date shall be January 15, 2004. The Company shall pay
interest on overdue principal at the rate borne by the Securities plus 1% per
annum, and it shall pay interest on overdue installments of interest at the same
rate to the extent lawful. The Company shall provide the Trustee with an
Officer's Certificate setting forth the calculation of the Accreted Value to any
date of determination requested by the Trustee and the Trustee may conclusively
rely on such Officer's Certificate for all purposes under the Indenture.
(b) LIQUIDATED DAMAGES. The holder of this Security is entitled to
the benefits of a Registration Agreement, dated as of July 13, 1998, between the
Company and the Purchaser named therein (the "Registration Agreement").
Capitalized terms used in this paragraph (b) but not defined herein have the
meanings assigned to them in the Registration Agreement. If (i) on or prior to
the 60th day following the date of the original issuance of the Securities,
neither the Exchange Offer Registration Statement nor the Shelf Registration
Statement has been filed with the Commission, (ii) on or prior to the 120th day
following the date of the original issuance of the Securities, the Exchange
Offer Registration Statement has not been declared effective, (iii) on or prior
to the 150th day following the date of original issuance of the Securities,
neither the Registered Exchange Offer has been consummated nor the Shelf
Registration Statement has been declared effective or (iv) after either the
Exchange Offer Registration Statement or the Shelf Registration Statement has
been declared effective, such Registration Statement thereafter ceases to be
effective or usable for its intended purpose without being succeeded immediately
by a post-effective amendment to such Registration Statement that cures such
failure and that is itself immediately declared effective (each such event
referred to in clauses (i) through (iv), being referred to herein as a
"Registration Default"), the Company hereby agrees to pay liquidated damages
("Liquidated Damages") to each Holder of Securities affected thereby with
respect to the first 90-day period immediately following the occurrence of the
first Registration Default, in
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an amount equal to $.05 per week per $1,000 principal amount of Securities held
by such Holder. The amount of the Liquidated Damages shall increase by an
additional $.05 per week per $1,000 principal amount of Securities with respect
to each subsequent 90-day period until all Registration Defaults have been
cured, up to a maximum amount of Liquidated Damages of $.25 per week per $1,000
principal amount of Securities (regardless of whether one or more than one
Registration Defaults is outstanding). All accrued Liquidated Damages shall be
paid by the Company on January 15 and July 15 of each year to Holders of
Securities by wire transfer of immediately available funds or by mailing checks
to their registered addresses if no such accounts have been specified.
Following the cure of all Registration Defaults relating to any particular
Securities, the accrual of Liquidated Damages with respect to such Securities
will cease. The Company shall notify the Trustee of the accrual and amount of
Liquidated Damages, if any.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the January 1 or July 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments
in respect of a certificated Security (including principal, premium and
interest), by mailing a check to the registered address of each Holder thereof;
PROVIDED, HOWEVER, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount at maturity of
Securities, by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, United States Trust Company of New York, a New York banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Xxxxxxxxx xx xx-xxxxxxxxx.
X0-0
0. INDENTURE
The Company issued the Securities under an Indenture dated as of July
13, 1998 (the "Indenture"), between the Company 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 Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are senior secured obligations of the Company limited
to $121,000,000 aggregate principal amount at maturity at any one time
outstanding (subject to Sections 2.01 and 2.08 of the Indenture). This Security
is one of the Initial Securities referred to in the Indenture issued in an
aggregate principal amount at maturity of $121,000,000. The Securities include
the Initial Securities and any Exchange Securities and Private Exchange
Securities issued in exchange for Initial Securities. The Initial Securities,
the Exchange Securities and the Private Exchange Securities are treated as a
single class of securities under the Indenture. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of the Company to consolidate or merge with
or into any other Person or convey, transfer or lease all or substantially all
of the Property of the Company.
5. OPTIONAL REDEMPTION
Except as set forth in the following paragraph, the Securities will
not be redeemable at the option of the Company prior to July 15, 2003.
Thereafter, the Securities will be redeemable at the option of the Company, in
whole or in part, on not less than 30 nor more than 60 days' prior notice, at
the following redemption prices (expressed as percentages of principal amount),
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on July 15 of the years set forth
below:
REDEMPTION
YEAR PRICE
--------------------------------------------------
2003 106.375%
2004 104.250%
2005 102.125%
2006 and thereafter 100.000%
A1-5
In addition, prior to July 15, 2001, the Company may redeem up to a
maximum of 34% of the original aggregate principal amount at maturity of the
Securities with the proceeds of one or more Public Equity Offerings following
which there is a Public Market, at a redemption price equal to 112.75% of the
Accreted Value thereof, plus accrued and unpaid interest thereon, if any, to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
PROVIDED, HOWEVER, that after giving effect to any such redemption, at least 66%
of the aggregate principal amount at maturity of the originally issued
Securities remains outstanding. Any such redemption shall be made within
60 days of such Public Equity Offering upon not less than 30 nor more than
60 days' notice mailed to each holder of Securities being redeemed and otherwise
in accordance with the procedures set forth in the Indenture.
6. SINKING FUND
The Securities are not subject to any sinking fund.
7. NOTICE OF REDEMPTION
Notice of redemption will 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 his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date the
Accreted Value will cease to increase and interest will cease to accrue on such
Securities (or such portions thereof) called for redemption.
8. REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the Accreted Value thereof, plus Liquidated
Damages, if any, thereon at the purchase date, if the purchase date is prior to
July 15, 2003, or 101% of the aggregate principal amount of the Securities to be
repurchased plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase, if the purchase date is on or after July 15,
2003 (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with
A1-6
the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or to transfer
or exchange any Securities for a period beginning 15 days before the mailing of
a notice of redemption or an offer to repurchase Securities or 15 days before an
interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Collateral Pledge Agreement or the Securities may be amended
without prior notice to any Securityholder but with the written consent of the
Holders of at least a majority in aggregate principal amount at maturity of the
outstanding Securities and (ii) any default or noncompliance with any provision
may be waived with the written consent of the Holders of at least a majority in
principal amount at maturity of the outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder of
Securities, the Company, and the Trustee may amend the Indenture, the Collateral
Pledge Agreement or the Securities (i) to cure any ambiguity, omission, defect
or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to
provide for uncertificated Securities in addition to or in place of certificated
Securities; (iv) to add additional covenants or to surrender rights and powers
conferred on the Company; (v) to comply with the requirements of the Commission
in order to effect or maintain the qualification of the Indenture under the TIA;
(vi) to make any change that does not adversely affect the rights of any
Securityholder; (vii) to evidence and provide for the acceptance of the
A1-7
appointment of a successor Trustee; or (viii) to provide for additional
collateral for or for guarantors of the Securities.
14. DEFAULTS AND REMEDIES
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount at maturity of the Securities,
subject to certain limitations, may declare all the Securities to be immediately
due and payable. Certain events of bankruptcy or insolvency are Events of
Default and shall result in the Securities being immediately due and payable
upon the occurrence of such Events of Default without any further act of the
Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount at
maturity of the Securities may direct the Trustee in its exercise of any trust
or power under the Indenture. The Holders of a majority in aggregate principal
amount at maturity of the Securities, by written notice to the Trustee and the
Company, may rescind any declaration of acceleration and its consequences if the
rescission would not conflict with any judgment or decree, and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. SECURITY
In order to secure the obligations under the Indenture, the Company
and the Trustee have entered into the Collateral Pledge Agreement in order to
create security interests in certain assets of the Company.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
A1-8
18. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. GOVERNING LAW
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY.
A1-9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
__________________________________________________________
(Print or type assignee's name, address and zip code)
__________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________ agent 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 other side of this Security.
A1-10
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
(1) _ to the Company; or
(2) _ pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) _ inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4) _ outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
(5) _ pursuant to an exemption from registration provided by Rule 144
under the Securities Act of 1933; or
(6) _ pursuant to another available exemption from registration under
the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; PROVIDED, HOWEVER, that if
box (4), (5) or (6) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933.
------------------------------
Your Signature
A1-11
Signature Guarantee:
Date:
-------------------------- -----------------------------------
Signature must be guaranteed Signature of Guarantor
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
----------------------------------------------------------------------
A1-12
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
A1-13
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
Amount of decrease in Amount of increase in Principal amount of this Signature of authorized signatory
Date of Principal Amount of Principal Amount of Global Security following of Trustee or Securities
Exchange this Global Security this Global Security such decrease or increase Custodian
--------- -------------------- -------------------- ------------------------- ----------------------------------
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the
amount:
$ _____________
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears
on the other side of the Note)
Signature Guarantee:_______________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
A1-15
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
AND PRIVATE EXCHANGE SECURITY]
No. $__________
12.75% Senior Discount [Exchange] [Private Exchange] Note due 2008
CUSIP No. ______
Metallurg Holdings, Inc., a Delaware corporation, promises to pay
to Cede & Co., or registered assigns, the principal sum
of Dollars on July 15, 2008.
Interest Payment Dates: January 15 and July 15.
Record Dates: January 1 and July 1.
The following information is supplied for purposes of Sections 1273
and 1275 of the Internal Revenue Code:
Issue Date: July 13, 1998 Original issue discount under
Section 1273 of the
Internal Revenue Code (for each $1,000
principal amount at
maturity): $461.35
Issue Price (for each $1,000 principal Yield to Maturity: 12.75%
amount at maturity): $538.65
Additional provisions of this Security are set forth on the other side
of this Security.
Ex. A-1
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
METALLURG HOLDINGS, INC.,
by _____________________________
Name:
Title:
by _____________________________
Name:
Title:
[CORPORATE SEAL]
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by _____________________________
Authorized Signatory
-----------------------
*/ If the Security is to be issued in global form, add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO
Ex. A-2
GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to the Initial Purchaser holding an unsold portion of its initial allotment, add
the restricted securities legend from Exhibit 1 to Appendix A and replace the
Assignment Form with that included in Exhibit A.
Ex. A-3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
12.75% Senior Discount [Exchange] [Private Exchange] Note due 2008
1. INTEREST.
Metallurg Holdings, Inc., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above from July 15, 2003
until maturity; [provided, however, that if a Registration Default (as defined
in the Registration Agreement) occurs, liquidated damages will be payable on
this Security in an amount equal to $.05 per week per $1,000 principal amount of
maturity. Such liquidated damages may increase as provided in the Registration
Agreement].(1) The Company will pay interest semiannually on January 15 and July
15 of each year commencing January 15, 2004. Interest will be computed on the
basis of a 360-day year of twelve 30-day months. Until July 15, 2003, no cash
interest will accrue or be payable on this Security, but the Accreted Value will
increase between July 13, 1998 and July 15, 2003, on a semi-annual bond
equivalent basis using a 360-day year comprised of twelve 30-day months, such
that the Accreted Value shall be equal to the full principal amount at maturity
of this Security on July 15, 2003. The Accreted Value shall cease to increase
as of July 15, 2003. Beginning on July 15, 2003, interest on this Security will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from July 15, 2003; provided that the first interest
payment date shall be January 15, 2004. The Company shall pay interest on
overdue principal at the rate borne by the Securities plus 1% per annum, and it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful. The Company shall provide the Trustee with an Officer's
Certificate setting forth the calculation of the Accreted Value to any date of
determination requested by the Trustee and the Trustee may conclusively rely on
such Officer's Certificate for all purposes under the Indenture.
2. METHOD OF PAYMENT
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the January 1 or July 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent
--------------------
(1) Insert if at the time of issuance of the Exchange Security or
Private Exchange Security (as the case may be) neither the Registered
Exchange Offer has been consummated nor a Shelf Registration Statement has
been declared effective in accordance with the Registration Agreement.
Ex A-4
to collect principal payments. The Company will pay principal and interest in
money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated Security (including principal, premium and
interest), by mailing a check to the registered address of each Holder thereof;
PROVIDED, HOWEVER, that payments on the Securities may also be made, in the case
of a Holder of at least $1,000,000 aggregate principal amount at maturity of
Securities, by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. PAYING AGENT AND REGISTRAR
Initially, United States Trust Company of New York, a New York banking
association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture dated as of July
13, 1998 (the "Indenture"), between the Company 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 Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are senior secured obligations of the Company limited
to $121,000,000 aggregate principal amount at maturity at any one time
outstanding (subject to Sections 2.01 and 2.08 of the Indenture). [This
Security is one of the Exchange Securities referred to in the Indenture issued
in exchange for the Initial Securities.] [This Security is one of the Private
Exchange Securities referred to in the Indenture issued in exchange for the
Initial Securities.] The Securities include the Exchange Securities, the
Private Exchange Securities and the Initial Securities in the aggregate
principal amount at maturity of $121,000,000. The Exchange Securities, the
Private Exchange Securities and the Initial Securities are treated as a single
class of securities under the Indenture. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, make certain Investments and other Restricted Payments, pay
dividends and other distributions, incur
Ex. A-5
Indebtedness, enter into consensual restrictions upon the payment of certain
dividends and distributions by such Restricted Subsidiaries, enter into or
permit certain transactions with Affiliates, create or incur Liens and make
Asset Sales. The Indenture also imposes limitations on the ability of the
Company to consolidate or merge with or into any other Person or convey,
transfer or lease all or substantially all of the Property of the Company.
5. OPTIONAL REDEMPTION
Except as set forth in the following paragraph, the Securities will
not be redeemable at the option of the Company prior to July 15, 2003.
Thereafter, the Securities will be redeemable at the option of the Company, in
whole or in part, on not less than 30 nor more than 60 days' prior notice, at
the following redemption prices (expressed as percentages of principal amount),
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), if
redeemed during the 12-month period commencing on July 15 of the years set forth
below:
REDEMPTION
YEAR PRICE
------------------------------------------------------------
2003 106.375%
2004 104.250%
2005 102.125%
2006 and thereafter 100.000%
In addition, prior to July 15, 2001, the Company may redeem up to a
maximum of 34% of the original aggregate principal amount at maturity of the
Securities with the proceeds of one or more Public Equity Offerings following
which there is a Public Market, at a redemption price equal to 112.75% of the
Accreted Value thereof, plus accrued and unpaid interest thereon, if any, to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
PROVIDED, HOWEVER, that after giving effect to any such redemption, at least 66%
of the originally issued aggregate principal amount at maturity of the
Securities remains outstanding. Any such redemption shall be made within
60 days of such Public Equity Offering upon not less than 30 nor more than 60
days' notice mailed to each holder of Securities being redeemed and otherwise in
accordance with the procedures set forth in the Indenture.
6. SINKING FUND
The Securities are not subject to any sinking fund.
7. NOTICE OF REDEMPTION
Ex. A-6
Notice of redemption will 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 his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date the
Accreted Value will cease to increase and interest will cease to accrue on such
Securities (or such portions thereof) called for redemption.
8. REPURCHASE OF SECURITIES AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions specified in the Indenture, to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the Accreted Value thereof, plus Liquidated
Damages, if any, thereon at the purchase date, if the purchase date is prior to
July 15, 2003, or 101% of the aggregate principal amount of the Securities to be
repurchased plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of purchase, if the date of purchase is on or after July 15,
2003 (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of purchase) as provided in, and subject to the terms of, the
Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or to transfer or exchange any Securities for a period of beginning 15 days
before the mailing of a notice of redemption or an offer to repurchase
Securities or 15 days before an interest payment date.
10. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request
Ex. A-7
unless an abandoned property law designates another Person. After any such
payment, Holders entitled to the money must look only to the Company and not to
the Trustee for payment.
12. DISCHARGE AND DEFEASANCE
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
13. AMENDMENT, WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Collateral Pledge Agreement or the Securities may be amended
without prior notice to any Securityholder but with the written consent of the
Holders of at least a majority in aggregate principal amount at maturity of the
outstanding Securities and (ii) any default or noncompliance with any provision
may be waived with the written consent of the Holders of at least a majority in
principal amount at maturity of the outstanding Securities. Subject to certain
exceptions set forth in the Indenture, without the consent of any Holder of
Securities, the Company, and the Trustee may amend the Indenture, the Collateral
Pledge Agreement or the Securities (i) to cure any ambiguity, omission, defect
or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to
provide for uncertificated Securities in addition to or in place of certificated
Securities; (iv) to add additional covenants or to surrender rights and powers
conferred on the Company; (v) to comply with the requirements of the Commission
in order to effect or maintain the qualification of the Indenture under the TIA;
(vi) to make any change that does not adversely affect the rights of any
Securityholder; (vii) to evidence and provide for the acceptance of the
appointment of a successor Trustee; or (viii) to provide for additional
collateral for or for guarantors of the Securities.
14. DEFAULTS AND REMEDIES
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount at maturity of the Securities,
subject to certain limitations, may declare all the Securities to be immediately
due and payable. Certain events of bankruptcy or insolvency are Events of
Default and shall result in the Securities being immediately due and payable
upon the occurrence of such Events of Default without any further act of the
Trustee or any Holder.
Holders of Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount at
maturity of the Securities may direct the Trustee in its exercise of any trust
or power under the Indenture. The Holders of a majority in aggregate principal
amount
Ex. A-8
at maturity of the Securities, by written notice to the Trustee and the Company,
may rescind any declaration of acceleration and its consequences if the
rescission would not conflict with any judgment or decree, and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration.
15. TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. SECURITY
In order to secure the obligations under the Indenture, the Company
and the Trustee have entered into the Collateral Pledge Agreement in order to
create security interests in certain assets of the Company.
17. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
18. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. ABBREVIATIONS
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. GOVERNING LAW
Ex. A-9
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
22. REGISTRATION RIGHTS
Pursuant to the Registration Agreement, the Company will have certain
obligations to the Holders of the Private Exchange Securities. The Holders of
the Private Exchange Securities shall be entitled to receive certain liquidated
damages upon certain conditions, all pursuant to and in accordance with the
terms of the Registration Agreement. The Company shall notify the Trustee of
the amount of any such payments.
THE COMPANY WILL FURNISH TO ANY HOLDER OF SECURITIES UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT
THE TEXT OF THIS SECURITY.
Ex. A-10
ASSIGNMENT FORM*
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
__________________________________________________
(Print or type assignee's name, address and zip code)
__________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ____________ agent 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 other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
____________________
* If the Security is a Private Exchange Security, replace the Assignment Form
with that included in Exhibit 1 to Appendix A to the Indenture.
Ex. A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
----
----
If you want to elect to have only part of this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the
amount:
$ ______________
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears
on the other side of the Note)
Signature Guarantee:_______________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee.
Ex. A-12
APPENDIX B
FORM OF
PLEDGE AGREEMENT
from
METALLURG HOLDINGS, INC.,
as Pledgor
to
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
PLEDGE AGREEMENT
PLEDGE AGREEMENT, together with any amendments, replacements and
supplements hereafter entered into (the "Pledge Agreement"), dated July 13,
1998, between Metallurg Holdings, Inc. (together with its successors and
assigns, the "Pledgor") and United States Trust Company of New York, as trustee
(the "Trustee") under the indenture (as the same may be amended from time to
time in accordance with the terms thereof, the "Indenture") relating to the
12.75% Senior Discount Notes due 2008 (together with a series of substantially
identical senior discount notes due 2008 to be issued in exchange for the
originally issued series, the "Notes") of the Pledgor, made for the equal and
ratable benefit of the holders of the Notes (the "Holders"). As used herein,
all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Indenture.
W I T N E S S E T H:
WHEREAS, the Pledgor will issue the Notes in an aggregate principal
amount at maturity of $121,000,000 pursuant to the Indenture; and
WHEREAS, in order to secure on an equal and ratable basis the payment
and performance in full of the obligations to the Holders and the Trustee under
the terms of the Indenture (the "Indenture Obligations"), the parties hereto
desire to set forth their mutual understanding and certain agreements regarding
the terms and conditions of the pledge of the Pledged Collateral (as defined
below) made by the Pledgor to the Trustee for the benefit of the Holders.
NOW, THEREFORE, in consideration of the premises and other benefits to
the Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. PLEDGE. As collateral security for the due and prompt
payment in full and complete performance of the Indenture Obligations and all
indebtedness and other liabilities and obligations, whether now existing or
hereafter arising, under, or arising out of, the Indenture, the Pledgor hereby
pledges, assigns, transfers, sets over and delivers unto the Trustee and hereby
grants unto the Trustee for the benefit of the Holders and unto their respective
successors and assigns, a first priority security interest in all of the right,
title and interest of the Pledgor in, to and under any and all of
B-1
the following described property, rights and interests (collectively, the
"Pledged Collateral"):
(a) all of the Equity Interests of Metallurg, Inc. (the
"Pledged Subsidiary") identified on Schedule A attached hereto (for purposes of
this Agreement, "Equity Interests" shall mean any and all issued and outstanding
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) any entity, or any
securities convertible into or exercisable or exchangeable for any such
interests);
(b) all other Equity Interests, now or hereafter owned or
acquired by the Pledgor and wherever located, of the Pledged Subsidiary directly
owned by the Pledgor and the certificates representing such securities, and any
present or future options, warrants or other rights to subscribe for or purchase
any of the foregoing described in subsections 1(a) or 1(b) hereof or any notes,
bonds, debentures or other evidences of indebtedness that (i) are at any time
convertible, exchangeable or exercisable into Equity Interests of the Pledged
Subsidiary or (ii) have or at any time could by their terms have voting rights
with respect to any matter affecting the Pledged Subsidiary and all securities,
certificates and instruments representing or evidencing ownership of any of the
foregoing (the property described in subsections 1(a) and 1(b) hereof, being
referred to herein collectively as the "Pledged Securities"); and
(c) to the extent not included in the foregoing, all of
Pledgor's rights, claims or other general intangibles constituting, or arising
out of or relating to, its rights as a general partner, limited partner or
managing general partner of the Pledged Subsidiary, including without limitation
its share in the profits and losses of the Pledged Subsidiary and its right as
such partner to receive distributions of the Pledged Subsidiary's assets or
income, in each case whether arising under a partnership agreement or applicable
law, created by operation of law, or otherwise;
(d) all obligations for money borrowed ("Indebtedness")
from time to time owed to the Pledgor by the Pledged Subsidiary and the
instruments evidencing such Indebtedness, including, without limitation, all
Indebtedness listed on Schedule B hereto, and all interest, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Indebtedness;
and
(e) all dividends, distributions, cash, instruments and
other property or securities (including without limitation any security as such
term is defined
B-2
in Article 8 of the Uniform Commercial Code as in effect in the applicable
jurisdiction at such time (the "UCC")), now or hereafter at any time or from
time to time received or receivable or otherwise distributed or distributable in
respect of or in exchange for any or all of the Pledged Collateral and all
proceeds of the Pledged Collateral.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Trustee for the benefit of the Holders and unto their respective
successors and assigns.
Section 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
PLEDGOR. The Pledgor hereby represents and warrants, covenants and agrees that:
(a) The Pledgor is, and as to Pledged Collateral acquired
by it from time to time after the date hereof, will be, the sole legal and
beneficial owner of the Pledged Collateral, and holds, or will hold, the Pledged
Collateral free and clear of all Liens (except for the security interest granted
hereunder to the Trustees for the benefit of Holders), and has not made and will
not make any other pledge, assignment, mortgage, hypothecation or transfer of
the Pledged Collateral. The Pledged Securities are not subject to any put,
call, option or other right in favor of any other person whatsoever.
(b) The Pledged Securities which are shares of stock have
been duly authorized and validly issued and are fully paid and non-assessable.
(c) Except as set forth below, upon delivery of the
certificates evidencing the Pledged Securities to the Collateral Agent and so
long as the Collateral Agent maintains possession of such certificates pursuant
to this Pledge Agreement, the Trustee will have a valid and perfected first
priority security interest in the Pledged Securities. In the case of a Pledged
Security which represents an interest in a partnership, upon filing of a UCC-1
financing statement in the appropriate jurisdiction in connection with such
interest, and upon delivery of the certificate evidencing such interest and so
long as the Collateral Agent maintains possession of such certificate, the
Collateral Agent will have a valid and perfected first priority security
interest in such Pledged Security, which together with the security interest in
the other Pledged Securities will secure the payment and performance in full of
the Indenture Obligations.
(d) The Pledgor has the valid right and legal authority to
pledge the Pledged Collateral in the manner hereby done or contemplated and will
defend its title thereto against the claims of all persons whomsoever and shall
maintain and
B-3
preserve the security interest granted hereunder with respect to the Pledged
Collateral as long as this Pledge Agreement shall remain in full force and
effect.
(e) Neither the execution and delivery of this Pledge
Agreement by the Pledgor nor the consummation of the transactions herein
contemplated nor the fulfillment of the terms hereof (i) violate the Pledgor's
or the Pledged Subsidiary's, charter or bylaws, (ii) violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument or
other document to which the Pledgor or the Pledged Subsidiary, is a party, or by
which any of them may be bound or to which any of their properties or assets may
be subject, which violation or conflict would have a material adverse effect on
the financial condition, business, assets or liabilities of the Pledgor and the
Pledged Subsidiary taken as a whole, or on the value of the Pledged Collateral
or a material adverse effect on the security interests hereunder, or (iii)
conflict with any law, order, rule or regulation applicable to the Pledgor or
the Pledged Subsidiary, of any court or any government, regulatory body or
administrative agency or other governmental body having jurisdiction over the
Pledgor or the Pledged Subsidiary, or its or their Properties, or (iv) result in
or require the creation or imposition of any Lien (other than the Lien
contemplated hereby), upon or with respect to any of the property now owned or
hereafter acquired by the Pledgor or the Pledged Subsidiary, which violation or
conflict would have a material adverse effect on the financial condition,
business, assets or liabilities of the Pledgor and the Pledged Subsidiary taken
as a whole, or on the value of the Pledged Collateral or a material adverse
effect on the security interests hereunder.
(f) The Pledged Securities, as described in Schedule A
attached hereto, include all of the issued and outstanding Equity Interests of
the Pledged Subsidiary as of the date hereof, and all outstanding options,
warrants, calls, commitments of any character whatsoever or other rights to
subscribe for or purchase any property described in subsection 2(a) or any
notes, bonds, debentures or other evidences of indebtedness that (i) are at any
time convertible into Equity Interests of the Pledged Subsidiary or (ii) have or
at any time could by their terms have voting rights with respect to any matters
affecting the Pledged Subsidiary. There is no Indebtedness owed to the Pledgor
by the Pledged Subsidiary as of the date hereof, and Schedule B is accordingly
blank.
(g) No consent or approval which has not been obtained
prior to the date hereof of any other person or entity and no authorization,
approval or other action by, and no notice to or filing with any governmental
body, regulatory authority or securities exchange, was or is necessary as a
condition to the validity of the pledge
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hereunder of the Pledged Collateral, and such pledge is effective to vest in the
Trustee the rights of the Trustee in the Pledged Collateral as set forth herein.
(h) The Pledgor shall deliver to the Trustee concurrently
with the execution of this Pledge Agreement: (i) all certificates and
instruments representing the Pledged Securities described in Schedule A, and
(ii) each other item of Pledged Collateral (including all certificates,
instruments, notes and writings representing or evidencing any such Pledged
Collateral) immediately upon the Pledgor's acquisition thereof. Any and all
Pledged Securities delivered to the Trustee shall be accompanied by undated duly
executed stock powers in blank and by such other instruments of transfer or
documents as the Trustee may reasonably request. The Trustee shall have the
right (in its discretion) to hold the certificates representing the Pledged
Securities in its own name or in the name of its nominee, all in form and
substance sufficient to make effective the pledge hereunder and otherwise
satisfactory to the Trustee.
(i) Upon reasonable request to the Pledgor, the Trustee
shall have full and free access during normal business hours to all of the
books, correspondence and records of the Pledgor relating to the Pledged
Collateral, and the Trustee and its representatives may examine the same, take
extracts therefrom and make photocopies thereof, and the Pledgor agrees to
render to the Trustee, at the Pledgor's cost and expense, such clerical and
other assistance as may be reasonably requested by the Trustee with regard
thereto.
(j) The Pledgor will comply in all material respects with
all requirements of law applicable to the Pledged Collateral or any part thereof
and use its best efforts to obtain all approvals as may be required to effect
any of the granting clauses of this Pledge Agreement.
(k) The Pledgor shall not permit the Pledged Subsidiary to
issue to the Pledgor or any of its Affiliates (other than a Restricted
Subsidiary) any securities of the type required to be pledged hereunder unless
such securities are promptly pledged and delivered hereunder to the Trustee in
accordance with Section 1. In addition, the Pledgor shall not permit the
Pledged Subsidiary to issue any securities of the type required to be pledged
hereunder unless such issuance is made in compliance with the terms of the
Indenture.
(l) If, while this Pledge Agreement is in effect, any stock
dividend, stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the
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creation of any subscription or other rights or other Pledged Securities, is
declared or made, or proposed to be declared or made, by the Pledged Subsidiary,
all substituted and additional securities or interest issued with respect to the
Pledged Collateral and evidenced by certificates shall be endorsed in blank by
the Pledgor promptly upon receipt thereof or otherwise appropriately transferred
to the Trustee in negotiable form, and all certificates or instruments
evidencing such securities shall be delivered to the Trustee to be held under
the terms of this Pledge Agreement in the same manner as, and as a part of, the
Pledged Collateral. All Pledged Securities shall be evidenced by one or more
certificates. Any securities that may be issued upon exercise of any
subscription or other rights relating to the Pledged Securities shall be
endorsed in blank and delivered to the Trustee with any necessary powers.
(m) The Pledgor shall pay and discharge all taxes,
assessments and governmental charges or levies against any Pledged Collateral
prior to delinquency thereof and shall keep all Pledged Collateral free of all
unpaid charges whatsoever, unless contested in good faith and appropriate
reserves have been set aside in accordance with GAAP.
(n) The Pledgor has, independently and without reliance on
the Trustee and/or any Holder and based on such documents and information as it
deemed appropriate, made its own credit analysis and decision to enter into this
Pledge Agreement.
(o) In the event that the Trustee desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in
this Pledge Agreement and determines it necessary to obtain any approvals
therefor, then, upon the request of the Trustee, the Pledgor agrees to use its
best efforts to assist and aid the Trustee to obtain as soon as possible any
necessary approvals for the exercise of any such remedies, rights and powers.
(p) The Pledgor has delivered to the Trustee a duly
executed acknowledgment from the Pledged Subsidiary acknowledging the
registration on its books and records of the pledge of the Pledged Securities
pursuant to this Agreement.
(q) There are no voting trusts or other agreements or
understandings to which Pledgor is a party or by which it may be bound with
respect to voting, managerial consent, election or other rights of Pledgor
relating to the Pledged Securities.
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(r) The principal place of business and chief executive
office of Pledgor and the office where Pledgor keeps its records concerning the
Pledged Collateral shall be [c/o Safeguard International Fund, L.P., 800 The
Safeguard Building, 000 Xxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxxxxxxx 00000].
Section 3. ADMINISTRATION OF THE PLEDGED COLLATERAL. The Trustee
shall administer the Pledged Collateral in accordance with the provisions hereof
and of the Indenture.
Section 4. RELEASE AND SUBSTITUTION OF PLEDGED COLLATERAL. The
Pledged Collateral shall not be released from the security interest created
hereunder and no property shall be substituted for any of the Pledged
Collateral, except in accordance with the provisions of Sections 5 and 18
hereof; PROVIDED that Pledged Collateral may be released from the security
interest created hereunder in connection with any disposition thereof by the
Pledgor made in accordance with the Indenture, so long as no "Default" or "Event
of Default" (as defined in the Indenture) is in existence at the time of or
immediately after giving effect thereto.
Section 5. VOTING RIGHTS, DIVIDENDS, ETC.
(a) So long as no Event of Default shall have occurred and
be continuing and notwithstanding any other section hereof:
(i) the Pledgor shall be entitled to exercise any and all
voting or consensual rights and powers, including subscription rights,
accruing to an owner of the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement or any
agreement giving rise to any of the Indenture Obligations;
(ii) the Pledgor shall be entitled to receive, retain and
use any and all dividends, distributions or other payments which are
permitted by the Indenture and paid on the Pledged Collateral in cash or
property (other than securities which are subject to this Agreement);
(iii) the Trustee shall execute and deliver to the Pledgor
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, dividend orders and other instruments as the Pledgor
may reasonably request in writing for the purpose of enabling it to
exercise the voting or consensual rights and powers which the Pledgor is
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entitled to exercise pursuant to the foregoing subparagraph (i) or to
receive the dividends, distributions or other payments which the Pledgor is
authorized to retain pursuant to the foregoing subparagraph (ii).
(b) Upon the occurrence and during the continuance of an
Event of Default, all rights of the Pledgor to exercise the voting or consensual
rights and powers which the Pledgor would otherwise be entitled to exercise
pursuant to subparagraph (i) of Section 5(a) hereof and to receive the
dividends, distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to subsection (ii) of Section 5(a)
shall automatically cease, and all such rights shall thereupon become vested in
the Trustee, which shall then have the sole and exclusive right and authority to
exercise all such voting and consensual rights and powers and to receive and
retain as Pledged Collateral all such dividends, distributions and other
payments. Any and all money and other property paid over to or received by the
Trustee pursuant to the provisions of this Section 5(b) shall be retained by the
Trustee as Pledged Collateral hereunder and shall be administered and applied in
accordance with the provisions of this Pledge Agreement and the Indenture. All
dividends and interest payments which are received by the Pledgor contrary to
the provisions of this subsection (b) shall be received in trust for the benefit
of the Trustee, shall be segregated from other funds of the Pledgor and shall be
forthwith paid over to the Trustee as Pledged Collateral in the same form as so
received (with any necessary endorsement).
Section 6. DEFAULT; REMEDIES.
(a) EXERCISE OF REMEDIES UNDER THE PLEDGE AGREEMENT. If an
Event of Default shall have occurred and be continuing, the Trustee shall
commence the taking of such actions (or refrain from taking actions) toward
collection or enforcement of this Pledge Agreement and the Pledged Collateral
(or any portion thereof), including without limitation action toward foreclosure
upon any Pledged Collateral, as it deems appropriate in its sole discretion.
(b) REMEDIES GENERALLY. If an Event of Default shall have
occurred and be continuing, the Trustee itself or by its agents or attorneys may
(i) exercise any or all of its rights and remedies hereunder, under the
Indenture or any other instrument or agreement securing, evidencing or relating
to the Indenture Obligations or under applicable laws (including all of the
rights and remedies of a secured creditor under the Uniform Commercial Code then
in effect in the State of New York; the "NUCC"), (ii) retain the Pledged
Collateral or (iii) sell, assign, transfer, or dispose of, endorse and deliver
the whole or, from time to time, any part of the Pledged Collateral
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at public or private sale or sales, at any exchanges, brokers board or at any of
the Trustee's offices or elsewhere, for cash, upon credit or for other property,
for immediate or future delivery, and for such price or prices and on such other
terms that the Trustee may deem commercially reasonable (in its liability for
loss or damage). Upon consummation of any such sale, the Trustee shall have the
right to assign, transfer, endorse and deliver to the purchaser or purchasers
thereof the Pledged Collateral so sold. Each such purchaser at any such sale
shall hold the property sold absolutely free from any claim or right on the part
of the Pledgor, and the Pledgor hereby waives (to the full extent permitted by
law) all rights of redemption, stay or appraisal which the Pledgor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted. The Trustee shall give the Pledgor at least 10 Business
Days' written notice (which the Pledgor agrees shall be deemed to be reasonable
notification within the meaning of Section 9-504(3) of the NUCC) of the
Trustee's intention to make any such public or private sale. Any such sale
shall be held at such time or times and at such place or places as the Trustee
may deem commercially reasonable. At any such sale, the Pledged Collateral, or
portion thereof to be sold, may be sold as an entirety or in separate portions,
as the Trustee may deem commercially reasonable. The Trustee shall not be
obligated to make any sale of the Pledged Collateral if it shall determine not
to do so, regardless of the fact that notice of sale of the Pledged Collateral
may have been given. The Trustee may adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case sale of all or any
part of the Pledged Collateral is made on credit for future delivery, the
Pledged Collateral so sold may be retained by the Trustee until the sale price
is paid by the purchaser or purchasers thereof, but the Trustee shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Pledged Collateral so sold and, in case of any such failure, such
Pledged Collateral may be sold again upon like notice. As an alternative to
exercising the power of sale herein conferred upon it, the Trustee may proceed
by suit or suits at law or in equity to exercise its remedies regarding the
Pledged Collateral and sell the Pledged Collateral or any portion thereof
pursuant to judgment or decree of a court or courts having competent
jurisdiction. If under mandatory requirements of applicable law, the Trustee
shall be required to make disposition of the Pledged Collateral within a period
of time that does not permit the giving of notice to the Pledgor as herein
before provided, the Trustee need give the Pledgor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of law.
(c) PREVENTING IMPAIRMENT OF THE PLEDGED COLLATERAL.
Regardless of whether or not there shall have occurred any Event of Default, the
Trustee may
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institute and maintain or cause in its name or in the name of the Pledgor or
either of them, to be instituted and maintained, such suits and proceedings as
the Trustee may be advised by counsel shall be necessary or expedient to prevent
any impairment of the security interest in or perfection of the Pledged
Collateral in contravention of the terms of the Indenture. The Pledgor agrees
not to knowingly take or permit to be taken any action which would impair the
Pledged Collateral or the Trustee's rights in the Pledged Collateral.
Section 7. TRUSTEE APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
constitutes and appoints the Trustee its attorney-in-fact, during the occurrence
and continuance of an Event of Default, for the purpose of carrying out the
provisions, but subject to the terms and conditions, of this Pledge Agreement
and taking any action and executing any instrument, including, without
limitation, any financing statement or continuation statement, and taking any
other action to maintain the validity, perfection, priority and enforcement of
the security interest intended to be created hereunder, that the Trustee may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest; PROVIDED, HOWEVER, that nothing
herein contained shall be construed as requiring or obligating the Trustee to
make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by it, or to present or file any claim or notice, or to
take any action with respect to the Pledged Collateral or any part thereof or
the monies due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted or any part thereof shall give rise to
any defense, counterclaim or right of action against the Trustee, unless the
Trustee's actions are taken or omitted to be taken with gross negligence or bad
faith or constitute willful misconduct.
Section 8. PURCHASE OF PLEDGED COLLATERAL BY THE TRUSTEE OR
HOLDERS. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, the Trustee or any Holder may, to the extent
permitted by applicable law, bid for and purchase, free from any right of
redemption (all such rights being hereby waived and released by the Pledgor to
the extent permitted by law), the Pledged Collateral or any part thereof or an
interest therein and upon compliance with the terms of such sale may hold,
retain, exploit, resell or otherwise dispose of such property without further
accountability to the Pledgor for the proceeds of such sale. The Pledgor will
execute and deliver or cause to be executed and delivered, such instruments,
endorsements, assignments, waivers, certificates and other documents and take
such further action as the Trustee shall request in connection with any such
sale.
Section 9. PAYMENTS AND PROCEEDS.
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All distributions to the Trustee with respect to the Pledged
Collateral after the occurrence of an Event of Default shall first be applied
to the reasonable costs and expenses, including attorneys' fees, incurred by the
Trustee in taking such foreclosure action and thereafter shall be applied by the
Trustee as provided in the Indenture. After payment in full of all Indenture
Obligations, the remaining proceeds from any foreclosure hereunder shall be paid
to the Pledgor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
any surplus then remaining from such Proceeds.
Section 10. WAIVER OF CLAIMS. Except as otherwise provided in this
Pledge Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE TRUSTEE'S
TAKING POSSESSION OR THE TRUSTEE'S DISPOSITION OF ANY OF THE PLEDGED COLLATERAL,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND HEARINGS FOR ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE PLEDGOR WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF
ANY STATE, and, to the full extent permitted by applicable law, the Pledgor
hereby further waives:
(a) all damages occasioned by such taking of possession
except any damages which are the direct result of the Trustee's gross
negligence, bad faith or willful misconduct;
(b) all other requirements as to the time, place and terms
of sale or other requirements, with respect to the enforcement of the Trustee's
rights and powers hereunder; and
(c) except as provided in Section 6(c) hereof, all rights
of redemption, appraisement, valuation, stay, marshalling of assets, extension
or moratorium, existing at law or in equity, by statute or otherwise, now or
hereafter in force, in order to prevent or delay the enforcement of this Pledge
Agreement or the sale or other disposition of the Pledged Collateral or any
portion thereof, and the Pledgor, for itself and all who may claim under it,
insofar as it now or hereafter lawfully may, hereby waives all such rights.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest,
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claim and demand, at law or in equity, of the Pledgor therein and thereto, and
shall be a perpetual bar both at law and in equity against the Pledgor and
against any and all persons claiming or attempting to claim the Pledged
Collateral so sold, optioned or realized upon, or any part thereof, through and
under the Pledgor.
Section 11. REMEDIES CUMULATIVE; NO WAIVER. Each right, power and
remedy of the Trustee provided for herein or in another agreement pursuant to
which a Lien is created in favor of the Trustee for the benefit of any Holder,
or now or hereafter existing at law or in equity, by statute or otherwise, shall
be cumulative and concurrent and shall be in addition to every other right,
power or remedy of the Trustee or any Holder provided for herein or in another
agreement pursuant to which a Lien is created in favor of the Trustee for the
benefit of any Holder or now or hereafter existing at law or in equity, by
statute or otherwise. No failure on the part of the Trustee or any Holder to
exercise, and no delay in exercising, any right, power or remedy hereunder, or
in another agreement pursuant to which a Lien is created in favor of the Trustee
for the benefit or any Holder or now or hereafter existing at law or in equity,
by statute or otherwise, shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
No notice to or demand on the Pledgor hereunder shall, of itself, entitle the
Pledgor to any other or further notice or demand in the same, similar or other
circumstances.
Section 12. ADDITIONAL COLLATERAL. Without notice or consent of
any Pledgor and without impairment of the security interests and rights created
by this Pledge Agreement, the Trustee may accept from any person or persons
additional collateral or other security for the Indenture Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Trustee from
resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Trustee's rights hereunder.
Section 13. FURTHER ASSURANCES. The Pledgor agrees (i) that it
shall, at its own expense, promptly file or record such notices, financing
statements, continuation statements or other documents and take all further
action as may be necessary to perfect, maintain and protect the validity,
perfection and priority of the security interests of the Trustee hereunder or to
enable the Trustee to exercise and enforce its rights and remedies hereunder
with respect to the Pledged Collateral, and as the Trustee may reasonably
request, such instruments to be in form and substance satisfactory to the
Trustee, and (ii) that it shall, at its own expense, do such further acts and
things and execute and deliver
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to the Trustee such additional conveyances, assignments, agreements and
instruments as the Trustee may at any time reasonably request in connection with
the administration and enforcement of this Pledge Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm unto
the Trustee its rights, powers and remedies hereunder.
The Pledgor agrees that it will notify the Trustee in writing not less
than 30 days prior to any change in location and the creation of a new location
of (a) the principal place of business or chief executive office and (b) the
offices where the Pledgor's books and records and related information concerning
the Pledged Collateral are kept; PROVIDED, HOWEVER, that no such change may be
effected before all filings required to be made and all other necessary action
to preserve the perfection of the first priority security interest of the
Trustee in the Collateral shall have been made or taken.
The Pledgor will not change its name, identity or structure in any
manner which might make any financing statement filed hereunder incorrect or
misleading unless Pledgor shall have given the Trustee at least 30 days' prior
written notice thereof and shall have properly amended all financing statements
and properly filed all additional financing statements necessary to maintain the
perfection of the security interest granted hereunder at all times and shall
have provided the Trustee with an Officers' Certificate certifying that the
above steps have been taken.
Section 14. INDEMNIFICATION. The Trustee shall have such indemnity
as is provided under Section 7.07 of the Indenture.
Section 15. REGISTRATION RIGHTS, ETC.
(a) If the Trustee determines that the registration of any
of the securities included in the Pledged Collateral under, or other compliance
with, the Securities Act or any similar federal or state law is desirable, upon
or at any time after an Event of Default and acceleration of either issue of the
Notes, the Pledgor will use its best efforts to cause such registration or
compliance to be effectively made, at no expense to the Trustee or to the
Holders, and to continue any such registration effective for such time as may be
reasonably necessary in the opinion of the Trustee. The Pledgor will reimburse
the Trustee upon demand for any expenses incurred by the Trustee (including
reasonable attorneys' fees and expenses) incurred in connection therewith, which
obligation to pay such expenses shall be secured hereunder.
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(b) If the Pledgor is unable to effect a public sale of any
or all of the Pledged Collateral or if the Trustee determines that it is
desirable to sell the Pledged Collateral in one or more private sales, the
Trustee may limit such sales to a restricted group of purchasers who will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to distribution or resale. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Trustee shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the issuer of such
securities to register such securities for public sale under the Securities Act
or under applicable state securities laws even if such issuer would agree to do
so.
(c) The Pledgor further agrees to do or cause to be done
all such other acts and things as may be necessary to make such sale or sales of
all or any part of the Pledged Collateral valid and binding and in compliance
with any and all applicable law, rules, regulations, orders or decrees, all at
the Pledgor's expense. The Pledgor further agrees that a breach of any of the
covenants contained in this Pledge Agreement will cause irreparable injury to
the Trustee, as secured party, for which the Trustee would have no adequate
remedy at law in respect of such breach and, as a consequence, agrees that each
and every covenant contained in this Section 15 shall be specifically
enforceable against the Pledgor and the Pledgor waives and agrees not to assert
any defenses against an action for specific performance of such covenants.
Section 16. PLEDGOR'S INDENTURE OBLIGATIONS ABSOLUTE. The
liability of the Pledgor under this Pledge Agreement shall remain in full force
and effect without regard to, and shall not be released, suspended, discharged,
terminated or otherwise affected by (a) any change in the time, place or manner
of payment of all or any of the Indenture Obligations, or in any other term of
the Indenture, the Notes, any waiver, indulgence, renewal, extension, amendment
or modification of or addition, consent or supplement to or deletion from or any
other action or inaction under or in respect of the Indenture, the Notes or any
assignment or transfer thereof; (b) any lack of validity or enforceability, in
whole or in part, of the Indenture or the Notes; (c) any furnishing of any
additional security for the Indenture Obligations or any acceptance thereof or
any release or non-perfection of any security interest in the Pledged
Collateral; (d) any limitation on any party's liability or obligations under the
Indenture or the Notes; (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to a Pledgor, or any action taken with respect to
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this Pledge Agreement by any trustee or receiver, or by any court, in any such
proceeding, whether or not the Pledgor shall have notice or knowledge of any of
the foregoing; (f) any exchange, release or amendment or waiver of or consent to
departure from any agreement pursuant to which a Lien is created in favor of the
Trustee for the benefit of the Holder, pursuant to which a person other than the
Pledgor has granted a security interest; or (g) any other circumstance that
might otherwise constitute a defense available to, or a discharge of the
Pledgor.
Section 17. WAIVER. To the extent permitted by applicable law, the
Pledgor hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Indenture Obligations and this Pledge
Agreement and any requirement that the Trustee protect, secure, perfect or
insure any security interest or any property subject thereto or exhaust any
right or take any action against the Pledgor or any other person or entity;
PROVIDED, HOWEVER, that the Trustee shall in any event take such care in the
handling of any Pledged Securities in its possession as it takes with respect to
Property of a similar nature in its possession.
Section 18. TERMINATION. Upon payment and performance in full and
satisfaction of all of the obligations of the Pledgor or its successors or
assigns under the Indenture and all other amounts payable under this Pledge
Agreement, this Pledge Agreement shall terminate and the Trustee shall assign
and redeliver to the Pledgor all of the Pledged Collateral hereunder that has
not been sold, disposed of, retained or applied by the Trustee in accordance
with the terms hereof. Such reassignment and redelivery shall be without
warranty by or recourse to the Trustee, and shall be at the expense of the
Pledgor. At such time, this Pledge Agreement shall no longer constitute a Lien
upon or grant any security interest in any of the Pledged Collateral, and the
Trustee shall, at the Pledgor's expense deliver to the Pledgor written
acknowledgment thereof and of cancellation of this Pledge Agreement in a form
reasonably requested by the Pledgor; PROVIDED, HOWEVER, that this Pledge
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned upon the insolvency, bankruptcy or reorganization of
the Pledgor or the Pledged Subsidiary all as though such payment had not been
made.
Section 19. NOTICES. Any notices or other communications required
or permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section
11.02 of the Indenture.
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Any party hereto may by notice to the other party designate such
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to any party shall be deemed to have been
given or made as of the date so delivered, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; and five
calendar days after mailing, if sent by registered or certified mail (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee). The Pledgor may give notice to the Holders
at the addresses set forth for them in the register kept by the Registrar under
the Indenture or may request that the Trustee notify the Holders at such
addresses at the expense of the Pledgor.
Section 20. BINDING AGREEMENT; ASSIGNMENT. This Pledge Agreement
shall be binding upon and inure to the benefit of the Trustee, the Pledgor and
their respective successors and permitted assigns. Neither this Pledge
Agreement nor any interest herein or in the Pledged Collateral, or any part
thereof, may be assigned by the Pledgor without the prior written consent of the
Trustee (which consent shall not be unreasonably withheld). This Pledge
Agreement shall be deemed to be automatically assigned by the Trustee to any
person who succeeds to such Trustee in accordance with Article 7 of the
Indenture, and its assignee shall have all rights and powers of, and act as,
such Trustee hereunder.
Section 21. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 22. AMENDMENTS. This Pledge Agreement may not be amended
or modified, except with the consent of the Pledgor and the Trustee in
accordance with Article 9 of the Indenture as it exists on the date hereof.
Section 23. SEVERABILITY. In the event that any provision
contained in this Pledge Agreement shall for any reason beheld to be illegal or
invalid under the laws of any jurisdiction, such illegality or invalidity shall
in no way impair the effectiveness of any other provision hereof, or of such
provision under the laws of any other jurisdiction; PROVIDED, that in the
construction and enforcement of such provision under the laws of the
jurisdiction in which such holding of illegality or invalidity exists, and to
the extent only of such illegality or invalidity, this Pledge Agreement shall be
construed and enforced as though such illegal or invalid provision had not been
contained herein.
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Section 24. HEADINGS. Section headings used herein are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Pledge Agreement.
Section 25. COUNTERPARTS. This Pledge Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Trustee.
Section 26. EXPENSES. The Pledgor will upon demand pay to the
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the
Trustee may incur in connection with (i) the administration of this Pledge
Agreement, (ii) the custody or presentation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Trustee hereunder or (iv) the failure by
the Pledgor to perform or observe any of the provisions hereof.
Section 27. NO RECOURSE AGAINST OTHERS. A direct or indirect
partner, director, officer, employee or stockholder, as such, past, present or
future of the Pledgor or any successor entity shall not have any personal
liability in respect of the obligations of the Pledgor under this Agreement by
reason of its status as such partner, stockholder, employee, officer or
director, to the extent such liabilities may be waived under applicable law.
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IN WITNESS WHEREOF, the parties have caused this Pledge Agreement to
be executed and delivered by their respective officers thereunto duly authorized
as of the day and first written above.
METALLURG HOLDINGS, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
SCHEDULE A
PLEDGED SECURITIES
Percentage
Class of Stock/ Number of
Stock Equity Certificate of Outstanding
Issuer Interest No.(s) Shares Equity
Metallurg, Inc. Common Stock 100%
SCHEDULE B
PLEDGED DEBT
None
