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XXXXXX SCIENTIFIC INTERNATIONAL INC., as Issuer
$200,000,000
9% Senior Subordinated Notes due 2008
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INDENTURE
Dated as of November 20, 1998
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STATE STREET BANK AND TRUST COMPANY, as Trustee
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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)......................................................... 7.8; 7.10
(c)......................................................... N.A.
311(a)......................................................... 7.11
(b)......................................................... 7.11
(c)......................................................... N.A.
312(a)......................................................... 2.5
(b)......................................................... N.A.
(c)......................................................... N.A.
313(a)......................................................... 7.6
(b)(1)...................................................... N.A.
(b)(2)...................................................... 7.6
(c)......................................................... 7.6
(d)......................................................... 7.6
314(a)......................................................... 4.18
4.19; 13.2
(b)......................................................... N.A.
(c)(1)...................................................... 13.4
(c)(2)...................................................... 13.4
(c)(3)...................................................... N.A.
(d)......................................................... N.A.
(e)......................................................... 13.5
(f)......................................................... 4.19
315(a)......................................................... 7.1
(b)......................................................... 7.5; 13.2
(c)......................................................... 7.1
(d)......................................................... 7.1
(e)......................................................... 6.11
316(a)(last sentence).......................................... 13.6
(a)(1)(A)................................................... 6.5
(a)(1)(B)................................................... 6.4
(a)(2)...................................................... N.A.
(b)......................................................... 6.7
317(a)(1)...................................................... 6.8
(a)(2)...................................................... 6.9
(b)......................................................... 2.4
318(a)......................................................... 13.1
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 the Indenture.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE................ 1
SECTION 1.1. Definitions................................................ 1
SECTION 1.2. Other Definitions.......................................... 27
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act.............................................. 28
SECTION 1.4. Rules of Construction...................................... 28
ARTICLE II
THE SECURITIES............................. 29
SECTION 2.1. Form and Dating............................................ 29
SECTION 2.2. Execution and Authentication............................... 30
SECTION 2.3. Registrar and Paying Agent................................. 31
SECTION 2.4. Paying Agent to Hold Money in Trust........................ 32
SECTION 2.5. Securityholder Lists....................................... 32
SECTION 2.6. Transfer and Exchange...................................... 32
SECTION 2.7. Replacement Securities..................................... 39
SECTION 2.8. Outstanding Securities..................................... 39
SECTION 2.9. Temporary Securities....................................... 40
SECTION 2.10. Cancellation............................................... 40
SECTION 2.11. Defaulted Interest......................................... 40
SECTION 2.12. CUSIP Numbers.............................................. 41
ARTICLE III
REDEMPTION............................... 41
SECTION 3.1. Notices to Trustee......................................... 41
SECTION 3.2. Selection of Securities To be Redeemed..................... 41
SECTION 3.3. Notice of Redemption....................................... 42
SECTION 3.4. Effect of Notice of Redemption............................. 43
SECTION 3.5. Deposit Of Redemption Price................................ 43
ARTICLE IV
COVENANTS................................ 44
SECTION 4.1. Payment of Securities...................................... 44
SECTION 4.2. Limitation on Liens........................................ 44
SECTION 4.3. Limitation on Incurrence of Additional
Indebtedness............................................... 44
SECTION 4.4. Limitation on Restricted Payments.......................... 45
SECTION 4.5. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries........................ 47
SECTION 4.6. Limitation on Asset Sales.................................. 48
SECTION 4.7. Limitation on Transactions with
Affiliates................................................. 51
SECTION 4.8. Change of Control.......................................... 53
SECTION 4.9. Prohibition on Incurrence of Senior
Subordinated Debt.......................................... 54
SECTION 4.10. Limitation on Preferred Stock of
Subsidiaries............................................... 54
SECTION 4.11. Limitation on Guarantees by Restricted
Subsidiaries............................................... 54
SECTION 4.12. Conduct of Business........................................ 54
SECTION 4.13. Maintenance of Office or Agency............................ 54
SECTION 4.14. Corporate Existence........................................ 55
SECTION 4.15. Payment of Taxes and Other Claims.......................... 55
SECTION 4.16. Maintenance of Properties and
Insurance.................................................. 55
SECTION 4.17. Compliance With Laws....................................... 56
SECTION 4.18. Additional Information..................................... 56
SECTION 4.19. Further Instruments and Acts............................... 56
ARTICLE V
SUCCESSOR COMPANY............................ 57
SECTION 5.1. When Company May Merge or Transfer
Assets..................................................... 57
ARTICLE VI
DEFAULTS AND REMEDIES.......................... 58
SECTION 6.1. Events of Default.......................................... 58
SECTION 6.2. Acceleration............................................... 60
SECTION 6.3. Other Remedies............................................. 61
SECTION 6.4. Waiver of Past Defaults.................................... 62
SECTION 6.5. Control by Majority........................................ 62
SECTION 6.6. Limitation on Suits........................................ 62
SECTION 6.7. Rights of Holders to Receive Payment....................... 63
SECTION 6.8. Collection Suit by Trustee................................. 63
SECTION 6.9. Trustee May File Proofs of Claim........................... 63
SECTION 6.10. Priorities................................................. 64
SECTION 6.11. Undertaking for Costs...................................... 64
ARTICLE VII
TRUSTEE................................. 65
SECTION 7.1. Duties of Trustee.......................................... 65
SECTION 7.2. Rights of Trustee.............................................. 66
SECTION 7.3. Individual Rights of Trustee................................... 67
SECTION 7.4. Trustee's Disclaimer........................................... 67
SECTION 7.5. Notice of Defaults............................................. 67
SECTION 7.6. Reports by Trustee to Holders.................................. 67
SECTION 7.7. Compensation and Indemnity..................................... 68
SECTION 7.8. Replacement of Trustee......................................... 68
SECTION 7.9. Successor Trustee by Merger.................................... 70
SECTION 7.10. Eligibility; Disqualification.................................. 70
SECTION 7.11. Preferential Collection of Claims
Against Company...... ........................................ 70
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE.................... 70
SECTION 8.1. Discharge of Liability on Securities........................... 70
SECTION 8.2. Legal Defeasance and Covenant Defeasance....................... 72
SECTION 8.3. Conditions to Defeasance....................................... 73
SECTION 8.4. Application of Trust Money..................................... 75
SECTION 8.5. Repayment to Company........................................... 76
SECTION 8.6. Reinstatement.................................................. 76
ARTICLE IX
AMENDMENTS................................ 77
SECTION 9.1. Without Consent of Holders..................................... 77
SECTION 9.2. With Consent of Holders........................................ 78
SECTION 9.3. Compliance With Trust Indenture Act............................ 79
SECTION 9.4. Revocation and Effect of Consents and
Waivers..... ................................................. 79
SECTION 9.5. Notation on or Exchange of Securities.......................... 80
SECTION 9.6. Trustee to Sign Amendments..................................... 80
ARTICLE X
SUBORDINATION.............................. 81
SECTION 10.1. Agreement to Subordinate...................................... 81
SECTION 10.2. Liquidation, Dissolution, Bankruptcy.......................... 81
SECTION 10.3. Default on Senior Indebtedness................................ 82
SECTION 10.4. Acceleration of Payment of Securities......................... 83
SECTION 10.5. When Distribution Must Be Paid Over........................... 83
SECTION 10.6. Subrogation................................................... 83
SECTION 10.7. Relative Rights............................................... 83
SECTION 10.8. Subordination May Not Be Impaired by
Company..... ................................................ 84
SECTION 10.9. Rights of Trustee and Paying Agent............................ 84
SECTION 10.10. Distribution or Notice to
Representative........................................... 84
SECTION 10.11. Article X Not To Prevent Events of
Default or Limit Right to Accelerate..................... 84
SECTION 10.12. Trust Moneys Not Subordinated. .......................... 85
SECTION 10.13. Trustee Entitled to Rely................................. 85
SECTION 10.14. Trustee to Effectuate Subordination. .................... 85
SECTION 10.15. Trustee Not Fiduciary for Holders of
Senior Indebtedness...................................... 86
SECTION 10.16. Reliance by Holders of Senior
Indebtedness on Subordination Provisions................. 86
ARTICLE XI
[RESERVED]................................ 86
ARTICLE XII
[RESERVED]................................ 86
ARTICLE XIII
MISCELLANEOUS.............................. 86
SECTION 13.1. Trust Indenture Act Controls............................. 86
SECTION 13.2. Notices.................................................. 86
SECTION 13.3. Communication by Holders With Other
Holders.................................................. 87
SECTION 13.4. Certificate and Opinion As To
Conditions Precedent..................................... 87
SECTION 13.5. Statements Required in Certificate or
Opinion.................................................. 88
SECTION 13.6. When Securities Disregarded.............................. 88
SECTION 13.7. Rules by Trustee, Paying Agent and
Registrar................................................ 88
SECTION 13.8. Legal Holidays........................................... 89
SECTION 13.9. Governing Law............................................ 89
SECTION 13.10. No Recourse Against Others............................... 89
SECTION 13.11. Successors............................................... 89
SECTION 13.12. Multiple Originals....................................... 89
SECTION 13.13. Variable Provisions...................................... 89
SECTION 13.14. Qualification Of Indenture............................... 89
SECTION 13.15. Table of Contents; Headings.............................. 90
EXHIBITS
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EXHIBIT A FORM OF SECURITY
EXHIBIT B FORM OF EXCHANGE SECURITY
INDENTURE dated as of November 20, 1998, between XXXXXX SCIENTIFIC
INTERNATIONAL INC., a Delaware corporation (as further defined below, the
"Company"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts chartered
trust company, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 9% Senior
Subordinated Notes due 2008 (the "Initial Securities") and, if and when issued
in exchange for Initial Securities as provided in the Registration Rights
Agreement (as hereinafter defined), the Company's 9% Senior Subordinated Notes
due 2008 (the "Exchange Securities" and, together with the Initial Securities,
the "Securities").
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Acquired Indebtedness" means Indebtedness (i) of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company, or (ii) assumed in connection with the acquisition of
assets from such Person, in each case whether or not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition. Acquired Indebtedness
shall be deemed to have been incurred, with respect to clause (i) of the
preceding sentence, on the date such Person becomes a Restricted Subsidiary of
the Company and, with respect to clause (ii) of the preceding sentence, on the
date of consummation of such acquisition of assets.
"Affiliate" means a Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, the referent Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, no Person (other than the
Company or any Subsidiary of the Company) in whom a Receivables Entity makes an
Investment in connection with a Qualified Receivables Transaction shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.
"all or substantially all" shall have the meaning given such phrase
in the Revised Model Business Corporation Act.
"Applicable Premium" means, with respect to a Security, the greater
of (i) 1.0% of the then outstanding principal amount of such Security or (ii)
the excess of (A) the present value of the required interest and principal
payments due on such Security, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the then outstanding principal
amount of such Security; provided that in no event will the Applicable Premium
exceed the amount of the applicable redemption price upon an optional redemption
less 100% at any time on or after February 1, 2003.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person which
constitute all or substantially all of the assets of such Person, any division
or line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of
the Company of (a) any Capital Stock of any Restricted Subsidiary of the
Company; or (b) any other property or assets of the Company or any Restricted
Subsidiary of the Company other than in the ordinary course of business;
provided, however, that Asset Sales shall not include (i) any transaction or
series of related transactions for which the Company or its Restricted
Subsidiaries receive aggregate consideration of less than $5 million, (ii) the
sale, lease, conveyance, disposition or other transfer of all or substantially
all of the assets of the Company as permitted under Article V, (iii) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof, (iv) the factoring of accounts receivable arising in the
ordinary course of business pursuant to arrangements customary in the industry,
(v) the licensing of intellectual property, (vi) disposals or replacements of
obsolete equipment in the ordinary course of business, (vii) the sale, lease,
conveyance, disposition or other transfer by the Company or any Restricted
Subsidiary of assets or property in transactions constituting Investments that
are not prohibited
2
under Section 4.4, (viii) sales of accounts receivable and related assets of the
type specified in the definition of "Qualified Receivables Transaction" to a
Receivables Entity, (ix) transfers of accounts receivable and related assets of
the type specified in the definition of "Qualified Receivables Transaction" (or
a fractional undivided interest therein) by a Receivables Entity in a Qualified
Receivables Transaction, (x) leases or subleases to third persons not
interfering in any material respect with the business of the Company or any of
its Restricted Subsidiaries and (xi) the sale, issuance or transfer of Capital
Stock representing up to 30% of the fully-diluted equity ownership of one or
more of (a) Xxxxxx Technology Group Inc., (b) UniKix Technologies, (c)
Electronic Commerce Division and (d) Strategic Procurement Services to one or
more of their respective directors or employees in connection with the
compensation of such employees. For the purposes of clause (viii), Purchase
Money Notes shall be deemed to be cash.
"Bank Indebtedness" means any and all amounts, whether outstanding
on the Issue Date or thereafter incurred, payable under or in respect of the New
Credit Facility and any related notes, collateral documents, letters of credit
and guarantees, including principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or any Restricted Subsidiary of the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, indemnities, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means each day which is not a Legal Holiday.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of corporate stock, including each class of common stock
and
3
preferred stock of such Person and (ii) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's; (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances (or, with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $200 million; (v) certificates of deposit
or bankers' acceptances or similar instruments maturing within one year from the
date of acquisition thereof issued by any foreign bank that is a lender under
the New Credit Facility having at the date of acquisition thereof combined
capital and surplus of not less than $500 million; (vi) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) or clause (v) above; and (vii)
investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (i) through (vi) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons (other than
one or more Permitted Holders) for purposes of Section 13(d) of the Exchange Act
(a "Group"), together with any Affiliates thereof (whether or not otherwise in
compliance with the provisions of this Indenture); (ii) the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) any Person or Group
(other than one or more Permitted Holders) shall
4
become the owner, directly or indirectly, beneficially or of record, of shares
representing 50% or more of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock of the Company or (iv) the first day on
which a majority of the members of the Board of Directors of the Company are not
Continuing Directors.
"Change of Control Triggering Event" means the occurrence of a
Change of Control and the failure of the Securities to have a Minimum Rating on
the 30th day after the occurrence of such Change of Control.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Xxxxxx Scientific International Inc., a Delaware
corporation, 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 EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period, (B) Consolidated Interest Expense, (C)
Consolidated Non-cash Charges, (D) cash charges attributable to the exercise of
employee options that vested upon the consummation of the Recapitalization and
(E) for any four quarter period that includes one or more fiscal quarters of
fiscal 1997 or 1998, cash restructuring or nonrecurring charges, in an aggregate
amount not to exceed $20 million.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence of any
Indebtedness of such Person or any of its Restricted Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and any incurrence or repayment of other Indebtedness (and the
application of the
5
proceeds thereof) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such incurrence or repayment, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the Four
Quarter Period, (ii) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA (including pro forma
adjustments for cost savings ("Cost Savings Adjustments") that the Company
reasonably believes in good faith could have been achieved during the Four
Quarter Period as a result of such acquisition or disposition (provided that
both (A) such cost savings were identified and quantified in an Officers'
Certificate delivered to the Trustee at the time of the consummation of the
acquisition or disposition and (B) with respect to each acquisition or
disposition completed prior to the 90th day preceding such date of
determination, actions were commenced or initiated by the Company within 90 days
of such acquisition or disposition to effect such cost savings identified in
such Officers' Certificate and with respect to any other acquisition or
disposition, such Officers' Certificate sets forth the specific steps to be
taken within the 90 days after such acquisition or disposition to accomplish
such cost savings) attributable to the assets which are the subject of the Asset
Acquisition or Asset Sale during the Four Quarter Period) occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period, (iii) with respect to any such Four Quarter Period
commencing prior to the Recapitalization, the Recapitalization (including any
Cost Savings Adjustments), which shall be deemed to have taken place on the
first day of such Four Quarter Period, and (iv) any Asset Sales or Asset
Acquisitions (including any Consolidated EBITDA (including any Cost Savings
Adjustments) attributable to the assets which are the subject of the asset
acquisition or asset sale during the Four Quarter Period) that have been made by
any Person that has become a Restricted Subsidiary of the Company or has been
merged with or into the Company or any Restricted Subsidiary of the Company
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date that would have
constituted Asset Sales or Asset Acquisitions had such transactions occurred
when such Person was a Restricted Subsidiary of the Company or subsequent to
such Person's merger
6
into the Company, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any Indebtedness or Acquired
Indebtedness in connection therewith) occurred on the first day of the Four
Quarter Period; provided that to the extent that clause (ii) or (iv) of this
sentence requires that pro forma effect be given to an Asset Sale or Asset
Acquisition, such pro forma calculation shall be based upon the four full fiscal
quarters immediately preceding the Transaction Date of the Person, or division
or line of business of the Person, that is acquired or disposed for which
financial information is available. If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (2) if interest on any Indebtedness actually incurred on the Transaction
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four Quarter Period; and (3) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense
(excluding amortization or write-off of debt issuance costs relating to the
Recapitalization and the financing therefor or relating to retired or existing
Indebtedness and amortization or write-off of customary debt issuance costs
relating to future Indebtedness incurred in the ordinary course of business)
plus (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Stock of such Person (other than dividends, paid in Qualified
Capital Stock) times (y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective consolidated
Federal, state and local tax rate of such Person expressed as a decimal.
7
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication, (i) the aggregate of all cash
and non-cash interest expense with respect to all outstanding Indebtedness of
such Person and its Restricted Subsidiaries, including the net costs associated
with Interest Swap Obligations, for such period determined on a consolidated
basis in conformity with GAAP, and (ii) the interest component of Capitalized
Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such
Person and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided that there shall be excluded therefrom (a) gains and losses from Asset
Sales (without regard to the $5 million limitation set forth in the definition
thereof) or abandonments or reserves relating thereto and the related tax
effects according to GAAP, (b) gains and losses due solely to fluctuations in
currency values and the related tax effects according to GAAP, (c) items
classified as extraordinary, unusual or nonrecurring gains and losses, and the
related tax effects according to GAAP, (d) the net income (or loss) of any
Person acquired in a pooling of interests transaction accrued prior to the date
it becomes a Restricted Subsidiary of the Company or is merged or consolidated
with the Company or any Restricted Subsidiary of the Company, (e) the net income
of any Restricted Subsidiary of the Company to the extent that the declaration
of dividends or similar distributions by that Restricted Subsidiary of the
Company of that income is restricted by contract, operation of law or otherwise,
(f) the net loss of any Person other than a Restricted Subsidiary of the
Company, (g) the net income of any Person, other than a Restricted Subsidiary of
the Company, except to the extent of cash dividends or distributions paid to the
Company or a Restricted Subsidiary of the Company by such Person unless, in the
case of a Restricted Subsidiary of the Company who receives such dividends or
distributions, such Restricted Subsidiary of the Company is subject to clause
(e) above, (h) one time non-cash compensation charges, including any arising
from existing stock options resulting from any merger or recapitalization
transaction and (i) bonus payments paid to senior management of the Company
following the Recapitalization in an aggregate amount not to exceed $10 million.
"Consolidated Non-cash Charges" means, with respect to any Person
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person and its Restricted Subsidiaries of the Company for
such
8
period, determined on a consolidated basis in accordance with GAAP (excluding
any such charges which require an accrual of or a reserve for cash charges for
any future period).
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Issue Date, (ii) was nominated for election or elected
to such Board of Directors with, or whose election to such Board of Directors
was approved by, the affirmative vote of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election or (iii) is any designee of a Permitted Holder or was nominated by a
Permitted Holder or any designees of a Permitted Holder on the Board of
Directors.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Designated Senior Indebtedness" means (i) Bank Indebtedness and
(ii) any other Senior Indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof, are committed to lend up to, at least $25
million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness or another writing as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event
(other than an event which would constitute a Change of Control Triggering
Event), matures (excluding any maturity as the result of an optional redemption
by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise,
9
or is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control Triggering Event) on or prior to the
final maturity date of the Securities.
"Equity Offering" means an offering of Qualified Capital Stock of
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Notes" means the Company's outstanding $400.0 million 9%
Senior Subordinated Notes due 2008.
"fair market value" means, unless otherwise specified, with respect
to any asset or property, the price which could be negotiated in an
arm's-length, free market transaction, for cash, between a willing seller and a
willing and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction. Fair market value shall be determined by the Board of
Directors of the Company acting reasonably and in good faith and shall be
evidenced by a resolution of the Board of Directors of the Company delivered to
the Trustee.
"Fiscal 1998" means the year ended December 31, 1998.
"Foreign Subsidiary" means a Restricted Subsidiary of the Company
(i) that is organized in a jurisdiction other than the United States of America
or a state thereof or the District of Columbia and (ii) with respect to which at
least 90% of its sales (as determined in accordance with GAAP) are generated by
operations located in jurisdictions outside the United States of America.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the Issue Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well,
10
to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" means with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement (but excluding trade accounts payable arising in
the ordinary course of business), (v) all obligations for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any Lien on any property or asset
of such Person but which obligations are not assumed by such Person, the amount
of such obligation being deemed to be the lesser of the fair market value of
such property or asset or the amount of the obligation so secured, (viii) all
obligations under currency swap agreements and interest swap agreements of such
Person and (ix) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any. For
purposes hereof, (x) the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital Stock
and (y) any transfer of accounts receivable or other assets which
11
constitute a sale for purposes of GAAP shall not constitute Indebtedness
hereunder.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount.
"Investment" by any Person in any other Person means, with respect
to any Person, any direct or indirect loan or other extension of credit
(including, without limitation, a guarantee) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, such other Person.
"Investment" shall exclude extensions of trade credit by the Company and its
Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the case
may be. For the purposes of Section 4.4, (i) the Company shall be deemed to have
made an "Investment" equal to the fair market value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary and the aggregate amount of Investments made since
the Issue Date shall exclude (to the extent the designation as an Unrestricted
Subsidiary was included as a Restricted Payment) the fair market value of the
net assets of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary not to exceed the amount of the
Investment deemed made at the date of designation thereof as an Unrestricted
Subsidiary, and (ii) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, writedowns or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions (including tax
sharing payments) in connection with such Investment or any other amounts
received in respect of such Investment; provided that no such payment of
dividends or distributions or receipt of any such other amounts shall reduce the
amount of any Investment if such payment of dividends or distributions or
receipt of any such amounts would be included in Consolidated Net Income. If the
12
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Common Stock of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, the
Company no longer owns, directly or indirectly, 50% of the outstanding Common
Stock of such Restricted Subsidiary, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Common Stock of such Restricted Subsidiary not sold or disposed of.
"Investors" means one or more of (i) Xxxxxxx Xxxxx Kecalp L.P. 1997,
(ii) Kecalp Inc., (iii) ML IBK Positions, Inc., (iv) Chase Equity Associates,
L.P., (v) DLJ Merchant Banking Xxxxxxxx XX, X.X., XXX Xxxxxxxx Xxxxxxxx XX,
X.X., XXX Diversified Partners, L.P., DLJMB Funding II, Inc., DLJ Merchant
Banking Partners II-A, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners-A, L.P., UK Investment Plan 1997
Partners, DLJ EAB Partners, L.P. and DLJ First ESC, LLC, (vi) members of
management of the Company and (vii) any Affiliate of any of the foregoing.
"Issue Date" means the date of original issuance of the Securities.
"Joint Venture" means a corporation, partnership or other business
entity, other than a Subsidiary of the Company, engaged or proposed to be
engaged in the same or a similar line of business as the Company in which the
Company owns, directly or indirectly, not less than 30% 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 and trustees thereof, with the
balance of the ownership interests being held by one or more investors.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Merger Agreement" means the Second Amended and Restated Plan of
Merger dated as of November 14, 1997 by and between FSI Merger Corp. and the
Company.
"Minimum Rating" means (i) a rating of at least BBB- (or equivalent
successor rating) by S&P and (ii) a rating of at least Baa3 (or equivalent
successor rating) by Moody's.
13
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing arrangements, (c) repayment of Senior
Indebtedness that is required to be repaid in connection with such Asset Sale,
(d) any portion of cash proceeds which the Company determines in good faith
should be reserved for post-closing adjustments, it being understood and agreed
that on the day that all such post-closing adjustments have been determined, the
amount (if any) by which the reserved amount in respect of such Asset Sale
exceeds the actual post-closing adjustments payable by the Company or any of its
Subsidiaries shall constitute Net Cash Proceeds on such date; provided that, in
the case of the sale by the Company of an asset constituting an Investment made
after the Issue Date (other than a Permitted Investment), the "Net Cash
Proceeds" in respect of such Asset Sale shall not include the lesser of (x) the
cash received with respect to such Asset Sale and (y) the initial amount of such
Investment, less, in the case of clause (y), all amounts (up to an amount not to
exceed the initial amount of such Investment) received by the Company with
respect to such Investment, whether by dividend, sale, liquidation or repayment,
in each case prior to the date of such Asset Sale.
"New Credit Facility" means the credit agreement dated as of January
21, 1998, among the Company, the other borrowers thereto from time to time, if
any, the lenders party thereto from time to time and The Chase Manhattan Bank,
as administrative agent, Xxxxxxx Xxxxx Capital Corporation, as syndication
agent, and DLJ Capital Funding, Inc., as documentation agent, together with the
related documents thereto (including, without limitation, any guarantee
agreements, promissory notes and collateral documents), in each case as such
agreements may be amended, supplemented or otherwise modified from time to time,
or refunded, refinanced, restructured, replaced, renewed, repaid or extended
from time to time (whether with the original agents and lenders or other agents
and lenders or otherwise, and whether provided under the original New Credit
Facility or one or more other credit agreements or otherwise) to increase the
amount of
14
available borrowings thereunder or to add Restricted Subsidiaries as additional
borrowers or guarantors or otherwise.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness, without
duplication.
"Offering Memorandum" means the Offering Memorandum dated November
10, 1998 relating to the Initial Securities; provided that after the issuance of
Exchange Securities, all references herein to "Offering Memorandum" shall be
deemed references to the prospectus relating to the Exchange Securities.
"Officer" means the Chairman of the Board, the Vice Chairman of the
Board, the President, any Vice President, the Treasurer or the Secretary of the
Company, as applicable.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holder" means and includes (i) the Principal or any of
its Affiliates, (ii) the Investors or any of their Affiliates, (iii) any
corporation the outstanding voting power of the Capital Stock of which is
beneficially owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of the voting power of
the Capital Stock of the Company, (iii) any Plan, (iv) any underwriter during
the period engaged in a firm commitment underwriting on behalf of the Company
with respect to the shares of Capital Stock being underwritten or (v) the
Company or any Subsidiary of the Company.
"Permitted Indebtedness" means, without duplication, (i) the
Securities, (ii) the Existing Notes, (iii) Indebtedness incurred pursuant to the
New Credit Facility in an aggregate principal amount at any time outstanding not
to exceed $469.2 million less (A) the amount of all mandatory principal payments
actually made by the Company in respect of term loans thereunder (excluding any
such payments to the extent refinanced at the time of payment under a New Credit
Facility) and (B) in the case of a revolving facility, reduced by any required
permanent repayments actually made (which are accompanied by a corresponding
permanent commitment reduction) thereunder (excluding any such repayments and
commitment reductions to the extent refinanced and replaced
15
at the time under a New Credit Facility), (iv) Indebtedness of Foreign
Subsidiaries incurred solely for working capital purposes of such Foreign
Subsidiaries, (v) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid or
permanent reductions thereon, (vi) Interest Swap Obligations of the Company or
any of its Restricted Subsidiaries covering Indebtedness of the Company or any
of its Restricted Subsidiaries; provided that any Indebtedness to which any such
Interest Swap Obligations correspond is otherwise permitted to be incurred under
this Indenture; provided, further, that such Interest Swap Obligations are
entered into, in the judgment of the Company, to protect the Company and its
Restricted Subsidiaries from fluctuation in interest rates on their respective
outstanding Indebtedness, (vii) Indebtedness of the Company or any of its
Restricted Subsidiaries under Currency Agreements entered into, in the judgment
of the Company, to protect the Company or such Restricted Subsidiary of the
Company from foreign currency exchange rates, (viii) intercompany Indebtedness
owed by any Restricted Subsidiary of the Company to the Company or any
Restricted Subsidiary of the Company or by the Company to any Restricted
Subsidiary of the Company, (ix) Acquired Indebtedness of the Company or any
Restricted Subsidiary of the Company to the extent the Company could have
incurred such Indebtedness in accordance with Section 4.3 on the date such
Indebtedness became Acquired Indebtedness; provided that, in the case of
Acquired Indebtedness of a Restricted Subsidiary of the Company, such Acquired
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Company,
(x) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or other similar instrument inadvertently drawn
against insufficient funds in the ordinary course of business; provided that
such Indebtedness is extinguished within five Business Days of its incurrence,
(xi) any refinancing, modification, replacement, renewal, restatement,
refunding, deferral, extension, substitution, supplement, reissuance or resale
of existing or future Indebtedness, including any additional Indebtedness
incurred to pay interest or premiums required by the instruments governing such
existing or future Indebtedness as in effect at the time of issuance thereof
("Required Premiums") and fees in connection therewith; provided that any such
event shall not (1) result in an increase in the aggregate principal amount of
Permitted Indebtedness (except to the extent such increase is a result of a
simultaneous incurrence of additional Indebtedness (A) to pay Required Premiums
and related fees or (B) otherwise permitted to be incurred under this Indenture)
of the Company and its Restricted Subsidiaries and (2) create Indebtedness with
a Weighted Average Life to Maturity
16
at the time such Indebtedness is incurred that is less than the Weighted Average
Life to Maturity at such time of the Indebtedness being refinanced, modified,
replaced, renewed, restated, refunded, deferred, extended, substituted,
supplemented, reissued or resold (except that this subclause (2) will not apply
in the event the Indebtedness being refinanced, modified, replaced, renewed,
restated, refunded, deferred, extended, substituted, supplemented, reissued or
resold was originally incurred in reliance upon clause (viii) or (xvii) of this
definition); provided that no Restricted Subsidiary of the Company may refinance
any Indebtedness pursuant to this clause (xi) other than its own Indebtedness,
(xii) Indebtedness (including Capitalized Lease Obligations) incurred by the
Company to finance the purchase, lease or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets) in an aggregate principal amount
outstanding not to exceed $30 million at the time of any incurrence thereof
(which amount shall be deemed not to include any such Indebtedness incurred in
whole or in part under the New Credit Facility to the extent permitted by clause
(iii) above), (xiii) the incurrence by a Receivables Entity of Indebtedness in a
Qualified Receivables Transaction that is not recourse to the Company or any
Restricted Subsidiary of the Company (except for Standard Securitization
Undertakings), (xiv) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims, (xv) Indebtedness arising
from agreements of the Company or a Restricted Subsidiary of the Company
providing for indemnification, adjustment of purchase price, earn out or other
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Restricted Subsidiary of the Company,
other than guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary of the Company for
the purpose of financing such acquisition, provided that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and its Restricted Subsidiaries in
connection with such disposition, (xvi) obligations in respect of performance
and surety bonds and completion guarantees provided by the Company or any
Restricted Subsidiary of the Company in the ordinary course of business, (xvii)
Indebtedness consisting of guarantees (a) by the Company of Indebtedness, leases
and any other obligation or liability permitted to be incurred under this
Indenture by Restricted Subsidiaries of the Company, and (b) subject to Section
4.11, by
17
Restricted Subsidiaries of the Company of Indebtedness, leases and any other
obligation or liability permitted to be incurred under this Indenture by the
Company or other Restricted Subsidiaries of the Company, and (xviii) additional
Indebtedness of the Company or any Restricted Subsidiary of the Company in an
aggregate principal amount not to exceed $20 million at any one time outstanding
(which amount should not be deemed to include any such Indebtedness incurred in
whole or in part under the New Credit Facility to the extent permitted by clause
(iii) above).
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Restricted Subsidiary of the Company
(whether existing on the Issue Date or created thereafter) and Investments in
the Company by any Restricted Subsidiary of the Company; (ii) cash and Cash
Equivalents; (iii) Investments existing on the Issue Date; (iv) loans and
advances to employees, officers and directors of the Company and its Restricted
Subsidiaries not in excess of $1 million at any one time outstanding; (v)
accounts receivable owing to the Company or any Restricted Subsidiary of the
Company 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 of the Company deems reasonable under the
circumstances; (vi) Currency Agreements and Interest Swap Obligations entered
into by the Company or any of its Restricted Subsidiaries for bona fide business
reasons and not for speculative purposes and otherwise in compliance with this
Indenture; (vii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers; (viii) guarantees
by the Company or any of its Restricted Subsidiaries of Indebtedness otherwise
permitted to be incurred by the Company or any of its Restricted Subsidiaries
under this Indenture; (ix) Investments by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such Investment (A)
such Person becomes a Restricted Subsidiary of the Company or (B) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company; (x) additional Investments having an
aggregate fair market value, taken together with all other Investments made
pursuant to this clause (x) that are at the time outstanding, not exceeding $5
million at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value), plus an amount equal to (A) 100% of the aggregate
net cash proceeds received by the Company from any Person (other than a
Subsidiary of the Company) from the issuance and sale subsequent
18
to the Issue Date of Qualified Capital Stock of the Company (including Qualified
Capital Stock issued upon the conversion of convertible Indebtedness or in
exchange for outstanding Indebtedness or as capital contributions to the Company
(other than from a Subsidiary)) and (B) without duplication of any amounts
included in clause (x)(A) above, 100% of the aggregate net cash proceeds of any
equity contribution received by the Company from a holder of the Company's
Capital Stock, that in the case of amounts described in clause (x)(A) or (x)(B)
are applied by the Company within 180 days after receipt, to make additional
Permitted Investments under this clause (x) (such additional Permitted
Investments being referred to collectively as "Stock Permitted Investments");
(xi) any Investment by the Company or a Restricted Subsidiary of the Company in
a Receivables Entity or any Investment by a Receivables Entity in any other
Person in connection with a Qualified Receivables Transaction, including
investments of funds held in accounts permitted or required by the arrangements
governing such Qualified Receivables Transaction or any related Indebtedness;
provided that any Investment in a Receivables Entity is in the form of a
Purchase Money Note, contribution of additional Receivables or an equity
interest; (xii) Investments received by the Company or its Restricted
Subsidiaries as consideration for asset sales, including Asset Sales; provided
in the case of an Asset Sale, (A) such Investment does not exceed 25% of the
consideration received for such Asset Sale and (B) such Asset Sale is otherwise
effected in compliance with Section 4.6; (xiii) Investments by the Company or
its Restricted Subsidiaries in Joint Ventures in an aggregate amount not in
excess of $25 million; and (xiv) that portion of any Investment where the
consideration provided by the Company is Capital Stock of the Company (other
than Disqualified Capital Stock). Any net cash proceeds that are used by the
Company or any of its Restricted Subsidiaries to make Stock Permitted
Investments pursuant to clause (x) of this definition shall not be included in
subclauses (x) and (y) of clause (iii) of Section 4.4(a).
"Permitted Liens" means the following types of Liens:
(i) Liens securing the Securities;
(ii) Liens securing Acquired Indebtedness incurred in reliance on
clause (ix) of the definition of Permitted Indebtedness; provided that
such Liens do not extend to or cover any property or assets of the Company
or of any of its Restricted Subsidiaries other than the property or assets
that secured the Acquired Indebtedness prior to the time such Indebtedness
became
19
Acquired Indebtedness of the Company or a Restricted Subsidiary of the
Company;
(iii) Liens existing on the Issue Date, together with any Liens
securing Indebtedness incurred in reliance on clause (xii) of the
definition of Permitted Indebtedness in order to refinance the
Indebtedness secured by Liens existing on the Issue Date; provided that
the Liens securing the refinancing Indebtedness shall not extend to
property other than that pledged under the Liens securing the Indebtedness
being refinanced;
(iv) Liens in favor of the Company on the property or assets, or any
proceeds, income or profit therefrom, of any Restricted Subsidiary of the
Company; and
(v) other Liens securing Senior Subordinated Indebtedness, provided
that the maximum aggregate amount of outstanding obligations secured
thereby shall not at any time exceed $5 million.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof or any other entity.
"Plan" means any employee benefit plan, retirement plan, deferred
compensation plan, restricted stock plan, health, life, disability or other
insurance plan or program, employee stock purchase plan, employee stock
ownership plan, pension plan, stock option plan or similar plan or arrangement
of the Company or any Subsidiary of the Company, or other successor plan
thereof, and "Plans" shall have a correlative meaning.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Principal" means Xxxxxx X. Xxx Company and its Affiliates.
"Productive Assets" means assets (including Capital Stock of a
Person that directly or indirectly owns assets) of a kind used or usable in the
businesses of the Company and its Restricted Subsidiaries as, or related to such
business, conducted on the date of the relevant Asset Sale.
20
"Purchase Money Note" means a promissory note of a Receivables
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note (a) shall be repaid from cash
available to the Receivables Entity, other than (i) amounts required to be
established as reserves pursuant to agreements, (ii) amounts paid to investors
in respect of interest, (iii) principal and other amounts owing to such
investors and amounts owing to such investors and (iv) amounts paid in
connection with the purchase of newly generated receivables and (b) may be
subordinated to the payments described in (a).
"QIB" means any "qualified institutional buyer" (as defined under
the Securities Act).
"Qualified Capital Stock" means any stock that is not Disqualified
Capital Stock.
"Qualified Receivables Transaction" means any transaction or series
of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any or its Subsidiaries may sell,
convey or otherwise transfer to (a) a Receivables Entity (in the case of a
transfer by the Company or any of its Subsidiaries) and (b) any other Person (in
the case of a transfer by a Receivables Entity), or may grant a security
interest in, any accounts receivable (whether now existing or arising in the
future) of the Company or any of its Subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable. The grant of a security interest in any accounts
receivable of the Company or any of its Restricted Subsidiaries to secure Bank
Indebtedness shall not be deemed a Qualified Receivables Transaction.
"Recapitalization" means the transaction contemplated by the Merger
Agreement, together with the financings therefor.
"Receivables Entity" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Subsidiary of the Company makes
an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable and related assets) which engages in no activities
other than in connection with the financing of accounts receivable, all proceeds
thereof and all rights (contractual or
21
other), collateral and other assets relating thereto, and any business or
activities incidental or related to such business, and which is designated by
the Board of Directors of the Company (as provided below) as a Receivables
Entity (a) no portion of the Indebtedness or any other Obligations (contingent
or otherwise) of which (i) is guaranteed by the Company or any Subsidiary of the
Company (excluding guarantees of Obligations (other than the principal of, and
interest on, Indebtedness) pursuant to Standard Securitization Undertakings),
(ii) is recourse to or obligates the Company or any Subsidiary of the Company in
any way other than pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of the Company or any Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Standard Securitization Undertakings, (b) with which
neither the Company nor any Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms which the Company
reasonably believes to be no less favorable to the Company or such Subsidiary
than those that might be obtained at the time from Persons that are not
Affiliates of the Company, other than fees payable in the ordinary course of
business in connection with servicing accounts receivable, and (c) to which
neither the Company nor any Subsidiary of the Company has any obligation to
maintain or preserve such entity's financial condition or cause such entity to
achieve certain levels of operating results other than through the contribution
of additional Receivables, related security and collections thereto and proceeds
of the foregoing. Any such designation by the Board of Directors of the Company
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"Redemption Event" shall mean (i) an underwritten initial public
offering of the common stock of the Company or (ii) a Change of Control.
"Registered Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated November 20, 1998, among the Company, Chase Securities Inc.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Indebtedness; provided
that if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then
22
the Representative for such Designated Senior Indebtedness shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Indebtedness in respect of any Designated Senior Indebtedness.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Securityholder" or "Holder" means the Person in whose name a
Security is registered on the Registrar's books.
"Securities Custodian" means the trustee as custodian for the
Depository.
"Senior Indebtedness" means (i) Bank Indebtedness and (ii) all
Indebtedness of the Company including interest thereon (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or any Restricted Subsidiary of the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), whether outstanding on the Issue Date or thereafter incurred,
unless in the instrument creating or evidencing the same or pursuant to which
the same is outstanding it is expressly provided that such obligations are not
superior in right of payment to the Securities; provided, however, that Senior
Indebtedness shall not include (1) any obligation of the Company to any
Subsidiary of the Company, (2) any liability for Federal, state, local or other
taxes owed or owing by the Company, (3) any accounts payable or other liability
to trade creditors arising in
23
the ordinary course of business (including guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of the Company which is
expressly subordinate in right of payment to any other Indebtedness of the
Company, including any Senior Subordinated Indebtedness and any Subordinated
Obligations, (5) any obligations with respect to any Capital Stock or (6) that
portion of any Indebtedness incurred in violation of Section 4.3 (but, as to any
such obligation, no such violation shall be deemed to exist for purposes of this
clause (6) if the holders(s) of such obligation or their representative and the
Trustee shall have received an Officers' Certificate of the Company to the
effect that the incurrence of such Indebtedness does not (or, in the case of
revolving credit Indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture).
"Senior Subordinated Indebtedness" means the Securities, the
Existing Notes and any other Indebtedness of the Company that specifically
provides that such Indebtedness is to rank pari passu with the Securities and is
not by its express terms subordinate in right of payment to any Indebtedness of
the Company which is not Senior Indebtedness.
"Shelf Registration Statement" has the meaning ascribed thereto in
the Registration Rights Agreement.
"Significant Subsidiary" means, as of any date of determination, for
any Person, each Restricted Subsidiary of such Person which (i) for the most
recent fiscal year of such Person accounted for more than 10% of consolidated
revenues or consolidated net income of such Person or (ii) as at the end of such
fiscal year, was the owner of more than 10% of the consolidated assets of such
Person.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which the Company reasonably believes to be customary
in an accounts receivable transaction.
"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.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter incurred) which is
expressly subordinate in right of payment to the Securities pursuant to a
written agreement.
24
"Subsidiary" means, with respect to any Person, (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantor" means a Restricted Subsidiary of the Company
that executes and delivers a supplemental indenture pursuant to Section 4.11.
"THL Co." means Xxxxxx X. Xxx Company, a financial investment firm.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.6 hereof.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the date fixed for prepayment (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the then remaining term to February 1, 2003; provided, however, that if
the then remaining term to February 1, 2003 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the then remaining term to February 1, 2003 is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
25
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided that (x) the
Company certifies to the Trustee that such designation complies with Section 4.4
and (y) each Subsidiary to be so designated and each of its Subsidiaries has not
at the time of designation, and does not thereafter, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness pursuant to which the lender has recourse to any of the
assets of the Company or any of its Restricted Subsidiaries. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company only if (x) immediately after giving effect to such
designation and treating all Indebtedness of such Unrestricted Subsidiary as
being incurred on such date, the Company is able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.3 and (y) immediately before and immediately after giving effect to
such designation, no Default or Event of Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complies with the foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the
26
nearest one-twelfth) which will elapse between such date and the making of
such payment.
"Wholly Owned Subsidiary" means any Restricted Subsidiary of the
Company all the outstanding voting securities of which (other than directors,
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned, directly or indirectly, by
the Company.
SECTION 1.2 Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"............................................... 4.7
"Agent Member"........................................................ 2.1
"Bankruptcy Law"...................................................... 6.1
"Blockage Notice"..................................................... 10.3
"Change of Control Offer"............................................. 4.8
"Change of Control Payment Date"...................................... 4.8(b)
"covenant defeasance option".......................................... 8.1(b)
"Custodian"........................................................... 6.1
"Definitive Securities"............................................... 2.1
"Event of Default".................................................... 6.1
"Exchange Securities"................................................. Preamble
"Global Security"..................................................... 2.1(b)
"incur"............................................................... 4.3
"Initial Securities".................................................. Preamble
"legal defeasance option"............................................. 8.1(b)
"Legal Holiday"....................................................... 13.8
"Net Proceeds Offer".................................................. 4.6
"Net Proceeds Offer Amount"........................................... 4.6
"Net Proceeds Offer Trigger Date"..................................... 4.6
"Non-Global Purchaser"................................................ 2.1
"Note Offer Amount"................................................... 4.6(a)
"Offer"............................................................... 4.6
"Other Debt".......................................................... 6.1
"pay the Securities".................................................. 10.3
"Paying Agent"........................................................ 2.3
"Payment Blockage Period"............................................. 10.3
"Reference Date"...................................................... 4.4(a)
"Registrar"........................................................... 2.3
"Restricted Payment".................................................. 4.4
27
"Rule 144A"........................................................... 2.1(b)
"Securities".......................................................... Preamble
"Successor Company"................................................... 5.1
"Trustee"............................................................. Preamble
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 the 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;
(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;
28
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any non interest 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 (i) the
maximum liquidation preference of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating. (a) The Initial Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B, which is hereby
incorporated by reference and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage, in addition to those set forth on Exhibits A and B. The
Company and the Trustee shall approve the forms of the Securities and any
notation, endorsement or legend on them. Each Security shall be dated the date
of its authentication. The terms of the Securities set forth in Exhibit A and
Exhibit B are part of the terms of this Indenture and, to the extent applicable,
the Company, and the Trustee, by their execution and delivery of this Indenture,
expressly agree to be bound by such terms.
(b) GLOBAL SECURITIES. The Initial Securities are being offered and
sold by the Company pursuant to a Purchase Agreement, dated November 10, 1998,
among the Company, Chase Securities Inc., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation (the
"Purchase Agreement").
Initial Securities offered and sold to a QIB in reliance on Rule
144A under the Securities Act ("Rule 144A") and outside the United States in
reliance on Registration S under the
29
Securities Act ("Regulation S"), respectively, as provided in the Purchase
Agreement, shall in each case be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the Global Securities Legend and Restricted Securities
Legend set forth in Exhibit A hereto (each, a "Global Security"), which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Trustee, at its corporate trust office, as custodian for the
Depository, 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
hereinafter provided. The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by endorsements made on such
Global Securities by the Trustee, the Securities Custodian or the Depository or
its nominee as hereinafter provided.
(c) BOOK-ENTRY PROVISIONS. This Section 2.1(c) shall apply only to
Global Securities.
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 the custodian of the
Depository 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 an 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 the Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(d) CERTIFICATED SECURITIES. Except as provided in Section 2.6,
owners of beneficial interests in Global Securities will not be entitled to
receive certificated Securities bearing the Restricted Securities Legend set
forth in Exhibit A hereto (the "Definitive Securities"). Definitive Securities
will bear the Restricted Securities Legend set forth on Exhibit A unless removed
in accordance with Section 2.6(d) hereof.
SECTION 2.2 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.
30
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.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
The Trustee shall authenticate and deliver: (1) Initial Securities
for original issue in an aggregate principal amount of $200 million and (2)
Exchange Securities for issue only in a Registered Exchange Offer pursuant to
the Registration Rights Agreement, and only in exchange for Initial Securities
of an equal principal amount, in each case 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 original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities or Exchange Securities. The aggregate principal amount of Securities
outstanding at any time may not exceed $200 million except as provided in
Section 2.7.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such 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.
SECTION 2.3 Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). 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 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 each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the
31
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.7. The Company or any of its domestically
incorporated Wholly Owned Restricted Subsidiaries may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4 Paying Agent to Hold Money in Trust. By at least 10:00
A.M. (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a 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
(other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.5 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 seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.6 Transfer and Exchange.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented by a Holder to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
32
(y) to exchange such Definitive Securities for an equal principal
amount 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:
(i) such Definitive Securities 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 such Holder or
his attorney duly authorized in writing; and
(ii) if such Definitive Securities are Transfer Restricted
Securities, such Definitive Securities shall also be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Securities are being delivered
to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in the form set forth on the reverse of the Security); or
(B) if such Transfer Restricted Securities are being
transferred (x) to the Company or to a QIB in accordance with Rule
144A under the Securities Act or (y) pursuant to an effective
registration statement under the Securities Act, a certification
from such Holder to that effect (in the form set forth on the
reverse of the Security); or
(C) if such Transfer Restricted Securities are being
transferred (w) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act;
(x) to an institutional "accredited investor" as defined in
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act (an "IAI"); or (y) in reliance on another exemption
from the registration requirements of the Securities Act: (i) a
certification to that effect from such Holder (in the form
33
set forth on the reverse of the Security) and (ii) if the Company or
the Trustee so requests, an Opinion of Counsel reasonably acceptable
to the Company and to the Trustee to the effect that such transfer
is in compliance with the Securities Act.
(b) 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.
(ii) A Global Security deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof only if such transfer
complies with this Section 2.6 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such 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 and the Company
notifies the Trustee in writing of such circumstances, (ii) the Company,
at its option, notifies the Trustee in writing that it elects to cause the
issuance of Securities in definitive form or (iii) an Event of Default has
occurred and is continuing and the Registrar has received a request from
the Depository or the Trustee to issue Definitive Securities.
(iii) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 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 Company shall sign and the Trustee
shall authenticate and deliver, upon such transfer of each portion of such
Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations. Each Definitive Security delivered
in exchange for 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 shall be
registered in such names as the Depository shall direct. Any Definitive
Security delivered in exchange for an
34
interest in the Global Security shall, except as otherwise provided in
Section 2.6(d), bear the Restricted Securities Legend set forth in Exhibit
A hereto.
(iv) 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.
(v) In the event of the occurrence of any of the events specified in
Section 2.6(b)(ii), the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without interest coupons.
(c) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (b) of this Section 2.6), 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 by the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(d) Legend.
(i) Except as permitted by the following paragraph (ii) each
Security certificate evidencing Global Securities and Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD THAT
35
MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) (OR ANY SUCCESSOR
PROVISION THEREOF) AS PERMITTING THE RESALE BY NON-AFFILIATES OF
RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION
DATE"), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE MEANING OF
SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A
MINIMUM PURCHASE PRICE OF $250,000 FOR SUCH NOTES, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFERS OR SALE IN CONNECTION
WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH
OTHER APPLICABLE LAWS, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE."
(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 or pursuant to an
effective registration statement 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
36
Restricted Security for a Definitive Security that does not bear the
legend set forth in paragraph (i) above and rescind any restriction
on the transfer of such Security; and
(B) in the case of any such Transfer Restricted Security
represented by a Global Security, such Transfer Restricted Security
shall not be required to bear the legend set forth in paragraph (i)
above, although it shall continue to be subject to the provisions of
Section 2.6(b) hereof.
(e) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or canceled, such Global Security
shall be retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, redeemed, repurchased or canceled, the principal amount
of Securities represented by such Global Security shall be reduced and an
endorsement shall be made on such Global Security by the Securities Custodian to
reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall, subject to the other terms and conditions of this Article II,
execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company, Registrar or
co-registrar 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 or similar governmental
charges payable upon exchange or transfer pursuant to Sections 4.6, 4.8 or
9.5 or pursuant to paragraph 5 of the Securities).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article III,
except the
37
unredeemed portion of any Definitive Security being redeemed in part, or
(b) any Security for a period beginning (1) 15 Business Days before the
mailing of a notice of an offer to repurchase or redeem Securities and
ending at the close of business on the day of such mailing or (2) 15
Business Days before an interest payment date and ending on such interest
payment date.
(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.
(vi) 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 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 the
payment of any amount or delivery of any Securities (or other security or
property) 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 in respect of the Securities shall be given or made only to or
upon the order of 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 the Depository with respect to its members,
participants and any beneficial owners.
38
(vii) 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.
SECTION 2.7 Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other 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 Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which 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.
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 2.7, 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.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money 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
39
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. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and deliver in exchange therefor, one or more
Definitive Securities representing an equal principal amount of Securities.
Until so exchanged, the Holder of temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as a holder of Definitive
Securities.
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.
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 (or upon the Company's failure to do so the Trustee shall fix)
any such special record date and payment date to the reasonable satisfaction of
the Trustee which specified record date shall not be less than 10 days prior to
the payment date for such defaulted interest and shall promptly mail or cause to
be mailed to each Securityholder a notice that states the special record date,
the payment date and the amount of
40
defaulted interest to be paid. The Company shall notify the Trustee in writing
of the amount of defaulted interest proposed to be paid on each Security and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when so deposited to be held in trust for the benefit of the
Person entitled to such defaulted interest as provided in this Section.
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 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 III
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 and the principal amount of Securities
to be redeemed.
The Company shall give each notice to the Trustee provided for in
this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein. If fewer than all the Securities are to be redeemed, the
record date relating to such redemption shall be selected by the Company and set
forth in the related notice given to the Trustee, which record date shall be not
less than 15 days after the date of such notice.
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 pro rata or by lot or
41
by a method that complies with applicable legal and securities exchange
requirements, if any, and that the Trustee considers fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances; provided, however, that if a partial redemption is
made with the proceeds of an Equity Offering, selection of the Securities or
portion thereof for redemption shall be made by the Trustee only on a pro rata
basis, unless such method is otherwise prohibited. 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.
Provisions of this Indenture that apply to the entirety of 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 prior to the date fixed for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail, postage prepaid, to each Holder
of Securities to be redeemed at the last address for such Holder then shown on
the Registrar's books.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(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) the subparagraph of the Securities pursuant to which such
redemption is being made;
(6) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(7) 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 , interest on Securities (or
42
portion thereof) called for redemption ceases to accrue on and after the
redemption date;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request at least seven days prior to the date on
which such notice is to be given, 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 interest to the redemption date;
provided that if the redemption date is after a regular record date and on or
prior to the interest payment date, the accrued interest shall be payable to the
Securityholder of the redeemed Securities registered on the relevant record
date. 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. By at least 10:00 A.M. (New
York City time) on the date on which any principal of or interest on any
Security is due and payable, the Company shall deposit with the Paying Agent
(or, if the Company or a Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which are owned by the Company or a
Subsidiary and have been delivered by the Company or such Subsidiary to the
Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such redemption price or the Paying Agent
is prohibited from making such payment, interest on the Securities to be
redeemed will cease to accrue on and after the applicable redemption date,
whether or not such Securities are presented for payment.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company
43
shall execute and the Trustee shall authenticate for the Holder (at the
Company's expense) a new Security equal in a principal amount to the unredeemed
portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. The Company shall promptly pay
the principal of (and premium, if any) and interest on the Securities on the
dates and in the manner provided in the Securities and in this Indenture.
Principal (and premium, if any) and interest shall be considered paid on the
date due if on such date the Trustee or the Paying Agent holds in accordance
with this Indenture money sufficient to pay all principal (and premium, if any)
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.
Notwithstanding anything to the contrary contained in this
Indenture, the Paying Agent may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.2 Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to
exist any Liens (other than Permitted Liens) of any kind against or upon any of
their respective property or assets, or any proceeds, income or profit therefrom
which secure Senior Subordinated Indebtedness or Subordinated Obligations,
unless (i) in the case of Liens securing Subordinated Obligations, the
Securities are secured by a Lien on such property, assets, proceeds, income or
profit that is senior in priority to such Liens and (ii) in the case of Liens
securing Senior Subordinated Indebtedness, the Securities are equally and
ratably secured by a Lien on such property, assets, proceeds, income or profit.
SECTION 4.3 Limitation on Incurrence of Additional Indebtedness. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or
44
otherwise, with respect to, or otherwise become responsible for payment of
(collectively, "incur") any Indebtedness (other than Permitted Indebtedness);
provided, however, that if no Default or Event of Default shall have occurred
and be continuing at the time or as a consequence of the incurrence of any such
Indebtedness, (i) the Company may incur Indebtedness if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0
to 1.0 and (ii) any Restricted Subsidiary of the Company may incur Indebtedness
if on the date of the incurrence of such Indebtedness, after giving effect to
the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the
Company is greater than 3.0 to 1.0.
SECTION 4.4 Limitation on Restricted Payments. (a) The Company will
not, and will not cause or permit any of its Restricted Subsidiaries to,
directly or indirectly, (a) declare or pay any dividend or make any distribution
(other than dividends or distributions payable in Qualified Capital Stock) on or
in respect of shares of Capital Stock of the Company to holders of such Capital
Stock, (b) purchase, redeem or otherwise acquire or retire for value any Capital
Stock of the Company or any warrants, rights or options to purchase or acquire
shares of any class of such Capital Stock, other than the exchange of such
Capital Stock for Qualified Capital Stock, or (c) make any Investment (other
than Permitted Investments) in any other Person (each of the foregoing actions
set forth in clauses (a), (b) and (c) (other than the exceptions thereto) being
referred to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto, (i) a Default or an Event of
Default shall have occurred and be continuing, (ii) the Company is not able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.3 or (iii) the aggregate amount of
Restricted Payments made subsequent to the Issue Date shall exceed the sum of:
(w) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated
Net Income shall be a loss, minus 100% of such loss) of the Company earned
subsequent to January 1, 1998 and on or prior to the date the Restricted Payment
occurs (the "Reference Date") (treating such period as a single accounting
period); plus (x) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale subsequent to January 21, 1998 and on or prior to the
Reference Date of Qualified Capital Stock of the Company (including Capital
Stock issued upon the conversion of convertible Indebtedness or in exchange for
outstanding Indebtedness but excluding net cash proceeds from the sale of
Capital Stock to the extent used to repurchase or acquire shares of Capital
Stock of the Company pursuant to clause (2)(ii) of the next succeeding
paragraph); plus (y) without duplication
45
of any amounts included in clause (iii)(x) above, 100% of the aggregate net cash
proceeds of any equity contribution received by the Company subsequent to
January 21, 1998 from a holder of the Company's Capital Stock; plus (z) to the
extent that any Investment (other than a Permitted Investment) that was made
after January 21, 1998 is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash received with respect to such sale, liquidation
or repayment of such Investment (less the cost of such sale, liquidation or
repayment, if any) and (B) the initial amount of such Investment, but only to
the extent not included in the calculation of Consolidated Net Income. Any net
cash proceeds included in the foregoing clauses (iii)(x) or (iii)(y) shall not
be included in clause (x)(A) or clause (x)(B) of the definition of "Permitted
Investments" to the extent actually utilized to make a Restricted Payment under
this paragraph.
(b) Notwithstanding paragraph (a) above, the provisions set forth in
the immediately preceding paragraph do not prohibit: (1) the payment of
any dividend or the consummation of any irrevocable redemption within 60
days after the date of declaration of such dividend or notice of such
redemption if the dividend or payment of the redemption price, as the case
may be, would have been permitted on the date of declaration or notice;
(2) if no Event of Default shall have occurred and be continuing as a
consequence thereof, the acquisition of any shares of Capital Stock of the
Company, either (i) solely in exchange for shares of Qualified Capital
Stock of the Company, or (ii) through the application of net proceeds of a
substantially concurrent sale (other than to a Subsidiary of the Company)
of shares of Qualified Capital Stock of the Company; (3) payments for the
purpose of and in an amount equal to the amount required to permit the
Company to redeem or repurchase shares of its Capital Stock or options in
respect thereof, in each case in connection with the repurchase provisions
under employee stock option or stock purchase agreements or other
agreements to compensate management employees; provided that such
redemptions or repurchases pursuant to this clause (3) shall not exceed
$15 million in the aggregate after January 21, 1998 (which amount shall be
increased by the amount of any cash proceeds to the Company from (x) sales
of its Capital Stock to management employees subsequent to the Issue Date
and (y) any "key-man" life insurance policies which are used to make such
redemptions or repurchases); (4) the payment of fees and compensation as
permitted under clause (i) of Section 4.7(b); (5) so long as no Default or
Event of Default shall have occurred and be continuing, payments not to
exceed $100,000 in the aggregate, to enable the Company to make payments
to holders of its Capital Stock in lieu of issuance of fractional shares
of its Capital Stock; (6) repurchases of Capital Stock deemed to occur
upon the exercise of stock options if such Capital Stock represents a
46
portion of the exercise price thereof; (7) Restricted Payments made pursuant to
the Merger Agreement; (8) the Company or any Restricted Subsidiary from making
payments in respect of any redemption, repurchase, acquisition, cancellation or
other retirement for value of shares of Capital Stock of the Company or options,
stock appreciation or similar securities, in each case held by then current or
former officers, directors or employees of the Company or any of its
Subsidiaries (or their estates or beneficiaries under their estates) or by an
employee benefit plan, upon death, disability, retirement or termination of
employment, not to exceed $10 million in the aggregate after January 21, 1998;
(9) repurchases of payment-in-kind preferred stock; provided that (i) such
repurchases do not exceed $15 million in the aggregate over the life of the
Securities and (ii) such preferred stock repurchased shall have been issued on
or prior to January 21, 1998; and (10) the Company or any Restricted Subsidiary
from purchasing all (but not less than all), excluding directors' qualifying
shares, of the Capital Stock or other ownership interests in a Subsidiary of the
Company which Capital Stock or other ownership interests were not theretofore
owned by the Company or a Subsidiary of the Company, such that after giving
effect to such purchase such Subsidiary becomes a Restricted Subsidiary of the
Company. In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the immediately
preceding paragraph, (a) amounts expended (to the extent such expenditure is in
the form of cash or other property other than Qualified Capital Stock) pursuant
to clauses (1), (3), (8) and (9) of this Section 4.4(b) shall be included in
such calculation, provided that such expenditures pursuant to clause (3) shall
not be included to the extent of cash proceeds received by the Company from any
"key man" life insurance policies and (b) amounts expended pursuant to clauses
(2), (4), (5), (6), (7) and (10) shall be excluded from such calculation.
SECTION 4.5 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or advances
or to pay any Indebtedness or other obligation owed to the Company or any other
Restricted Subsidiary of the Company; or (c) transfer any of its property or
assets to the Company or any other Restricted Subsidiary of the Company, except
for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) non-assignment provisions of any
contract or any lease entered into in the ordinary course of business; (4) any
instrument governing
47
Acquired Indebtedness, which encumbrance or restriction is not applicable to the
Company or any Restricted Subsidiary of the Company, or the properties or assets
of any such Person, other than the Person or the properties or assets of the
Person so acquired; provided, however, that such Acquired Indebtedness was not
incurred in connection with, or in anticipation or contemplation of an
acquisition by the Company or the Restricted Subsidiary; (5) agreements existing
on the Issue Date (including, without limitation, the New Credit Facility and
the Merger Agreement); (6) restrictions on the transfer of assets subject to any
Lien permitted under this Indenture imposed by the holder of such Lien; (7)
restrictions imposed by any agreement to sell assets permitted under this
Indenture to any Person pending the closing of such sale; (8) any agreement or
instrument governing Capital Stock of any Person that is acquired after the
Issue Date; (9) Indebtedness or other contractual requirements of a Receivables
Entity in connection with a Qualified Receivables Transaction; provided that
such restrictions apply only to such Receivables Entity and such Restricted
Subsidiary is engaged in the Qualified Receivables Transaction; or (10) an
agreement effecting a refinancing, replacement or substitution of Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in clause (2),
(4) or (5) above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such refinancing, replacement or
substitution agreement are no less favorable to the Company or the Holders in
any material respect as determined by the Board of Directors of the Company than
the provisions relating to such encumbrance or restriction contained in
agreements referred to in such clause (2), (4) or (5).
SECTION 4.6 Limitation on Asset Sales. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless (i) the Company or the applicable Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as determined in
good faith by the Company's Board of Directors), (ii) at least 75% of the
consideration received by the Company or such Restricted Subsidiary, as the case
may be, from such Asset Sale shall be cash or Cash Equivalents and is received
at the time of such disposition; provided that the amount of (x) any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of the Company or such Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Securities)
that are assumed by the transferee of any such assets and from which the Company
and its Restricted Subsidiaries are unconditionally released and (y) any notes
or other obligations received by the Company or such Restricted Subsidiary from
such transferee that are promptly, but in no event more than 60 days
48
after receipt, converted by the Company or such Restricted Subsidiary into cash
or Cash Equivalents (to the extent of the cash or Cash Equivalents received)
shall be deemed to be cash for purposes of this provision; and (iii) upon the
consummation of an Asset Sale, the Company shall apply, or cause such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
365 days of receipt thereof either (A) to prepay Senior Indebtedness and, in the
case of any Senior Indebtedness under any revolving credit facility, effect a
permanent reduction in the availability under such revolving credit facility,
(B) to reinvest in Productive Assets, or (C) a combination of prepayment and
investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the
366th day after an Asset Sale or such earlier date, if any, as the Board of
Directors of the Company or of such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(iii)(A), (iii)(B) and (iii)(C) of the immediately preceding sentence (each, a
"Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the immediately
preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase for cash (the
"Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less
than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders on a pro rata basis at least that amount of
Securities equal to the Note Offer Amount at a price in cash equal to 100% of
the principal amount of the Securities to be purchased, plus accrued and unpaid
interest thereon, if any, to the date of purchase; provided, however, that if at
any time any non-cash consideration received by the Company or any Restricted
Subsidiary of the Company, as the case may be, in connection with any Asset Sale
is converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this Section 4.6(a).
Any offer to purchase with respect to Other Debt shall be made and consummated
concurrently with any Net Proceeds Offer.
"Other Debt" shall mean other Indebtedness of the Company that ranks
pari passu with the Securities and requires that an offer to purchase such Other
Debt be made upon consummation of an Asset Sale.
"Note Offer Amount" means (i) if an offer to purchase Other Debt is
not being made, the amount of the Net Proceeds
49
Offer Amount and (ii) if an offer to purchase Other Debt is being made, an
amount equal to the product of (x) the Net Proceeds Offer Amount and (y) a
fraction the numerator of which is the aggregate amount of Securities tendered
pursuant to such offer to purchase and the denominator of which is the aggregate
amount of Securities and Other Debt tendered pursuant to such offer to purchase.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is
less than $10 million, the application of the Net Cash Proceeds constituting
such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until
such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by the
Company and its Restricted Subsidiaries aggregates at least $10 million, at
which time the Company or such Restricted Subsidiary shall apply all Net Cash
Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred
to make a Net Proceeds Offer (the first date the aggregate of all such deferred
Net Proceeds Offer Amounts is equal to $10 million or more shall be deemed to be
a "Net Proceeds Offer Trigger Date").
Notwithstanding the immediately preceding paragraphs of this Section
4.6(a), the Company and its Restricted Subsidiaries will be permitted to
consummate an Asset Sale without complying with such paragraphs to the extent
(i) at least 75% of the consideration for such Asset Sale constitutes Productive
Assets and (ii) such Asset Sale is for at least fair market value (as determined
in good faith by the Company's Board of Directors); provided that any
consideration not constituting Productive Assets received by the Company or any
of its Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds and shall be
subject to the provisions of the preceding paragraphs; provided, that at the
time of entering into such transaction or immediately after giving effect
thereto, no Default or Event of Default shall have occurred or be continuing or
would occur as a consequence thereof.
(b) Each Net Proceeds Offer will be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Securities in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
securities in an amount exceeding the Note Offer Amount, Securities of tendering
Holders will be purchased on a pro rata basis (based on amounts tendered). A Net
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Proceeds Offer shall remain open for a period of 20 Business Days or such longer
period as may be required by law. To the extent that the aggregate amount of
Securities tendered pursuant to a Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company may use any remaining Net Proceeds Offer
Amount for general corporate purposes. Upon completion of any such Net Proceeds
Offer, the Net Proceeds Offer Amount shall be reset at zero.
(c) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.6, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.6 by virtue thereof.
SECTION 4.7 Limitation on Transactions with Affiliates. (a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with, or for
the benefit of, any of its Affiliates (an "Affiliate Transaction"), other than
(x) Affiliate Transactions permitted under paragraph (b) below and (y) Affiliate
Transactions entered into on terms that are fair and reasonable to, and in the
best interests of, the Company or such Restricted Subsidiary, as the case may
be, as determined in good faith by the Company's Board of Directors; provided,
however, that for a transaction or series of related transactions with an
aggregate value of $5 million or more, at the Company's option (i) such
determination shall be made in good faith by a majority of the disinterested
members of the Board of the Directors of the Company or (ii) the Board of
Directors of the Company or any such Restricted Subsidiary party to such
Affiliate Transaction shall have received a favorable opinion from a nationally
recognized investment banking firm that such Affiliate Transaction is fair from
a financial point of view to the Company or such Restricted Subsidiary;
provided, further, that for a transaction or series of related transactions with
an aggregate value of $15 million or more, the Board of Directors of the Company
shall have received a favorable opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair from a financial point of
view to the Company or such Restricted Subsidiary.
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(b) The foregoing restrictions shall not apply to (i) reasonable
fees and compensation paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Subsidiary of the
Company as determined in good faith by the Company's Board of Directors; (ii)
transactions exclusively between or among the Company and any of its Restricted
Subsidiaries or exclusively between or among such Restricted Subsidiaries,
provided such transactions are not otherwise prohibited by this Indenture; (iii)
transactions effected as part of a Qualified Receivables Transaction; (iv) any
agreement as in effect as of the Issue Date or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment thereto)
in any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any material
respect than the original agreement as in effect on the Issue Date; (v)
Restricted Payments permitted by this Indenture; (vi) any Permitted Investment;
(vii) transactions permitted by, and complying with, the provisions of Section
5.1; (viii) any payment, issuance of securities or other payments, awards or
grants, in cash or otherwise, pursuant to, or the funding of, employment
arrangements and Plans approved by the Board of Directors of the Company; (ix)
the grant of stock options or similar rights to employees and directors of the
Company and its Subsidiaries pursuant to Plans and employment contracts approved
by the Board of Directors of the Company; (x) loans or advances to officers,
directors or employees of the Company or its Restricted Subsidiaries not in
excess of $5 million at any one time outstanding; (xi) the granting or
performance of registration rights under a written registration rights agreement
approved by the Board of Directors of the Company; (xii) transactions with
Persons solely in their capacity as holders of Indebtedness or Capital Stock of
the Company or any of its Restricted Subsidiaries, where such Persons are
treated no more favorably than holders of Indebtedness or Capital Stock of the
Company or such Restricted Subsidiary generally; (xiii) any agreement to do any
of the foregoing; (xiv) the payment, on a quarterly basis, of management fees to
THL Co. and/or any Affiliate of THL Co. in accordance with the management
arrangements entered into in January 1998 between THL Co. and/or any Affiliate
of THL Co. and the Company in an aggregate amount (for all such Persons taken
together) not to exceed $250,000 in any fiscal quarter of the Company; (xv)
reimbursement of THL Co. and/or any Affiliate of THL Co. for their reasonable
out-of-pocket expenses incurred by them in connection with performing management
services for the Company and its Subsidiaries; and (xvi) the payment of one time
fees to THL Co. and/or Affiliates of THL Co. in connection with each acquisition
of a company or a line of business by the Company or its Subsidiaries, such fees
to be payable at the time of each such acquisition and not to exceed
52
1% of the aggregate consideration paid by the Company and its Subsidiaries for
any such acquisition.
SECTION 4.8 Change of Control. (a) Upon the occurrence of a Change
of Control Triggering Event, each Holder will have the right to require that the
Company purchase for cash all or a portion of such Holder's Securities pursuant
to the offer described below (the "Change of Control Offer"), at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued
interest to the date of purchase. Prior to the mailing of the notice referred to
below, but in any event within 30 days following the date the Company obtains
actual knowledge of any Change of Control Triggering Event, the Company
covenants to (i) repay in full and terminate all commitments under the Bank
Indebtedness or offer to repay in full and terminate all commitments under all
Bank Indebtedness and to repay the Bank Indebtedness owed to each holder of Bank
Indebtedness which has accepted such offer or (ii) obtain the requisite consents
under the New Credit Facility to permit the repurchase of the Securities as
provided below. The Company shall first comply with the covenant in the
immediately preceding sentence before it shall be required to repurchase
Securities pursuant to the provisions described below. The Company's failure to
comply with this Section 4.8 shall constitute an Event of Default under Section
6.1(4) and not under 6.1(2).
(b) Within 30 days following the date the Company obtains actual
knowledge that a Change of Control Triggering Event has occurred, the Company
must send, by first class mail, a notice to each Holder, with a copy to the
Trustee, which notice shall govern the terms of the Change of Control Offer.
Such notice shall state, among other things, the purchase date, which must be no
earlier than 30 days nor later than 45 days from the date such notice is mailed,
other than as may be required by law (the "Change Of Control Payment Date").
Holders electing to have a Security purchased pursuant to a Change of Control
Offer will be required to surrender the Security, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Security completed, to the
Paying Agent at the address specified in the notice prior to the close of
business on the third business day prior to the Change of Control Payment Date.
(c) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in 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 this
Section 4.8, the Company shall comply with the applicable securities laws and
regulations and shall not be
53
deemed to have breached its obligations under this Section 4.8 by virtue
thereof.
SECTION 4.9 Prohibition on Incurrence of Senior Subordinated Debt.
Neither the Company nor any Subsidiary Guarantor will incur or suffer to exist
Indebtedness that is senior in right of payment to the Securities or such
Subsidiary Guarantor's Guarantee and subordinate in right of payment to any
other Indebtedness of the Company or such Subsidiary Guarantor, as the case may
be.
SECTION 4.10 Limitation on Preferred Stock of Subsidiaries. The
Company will not permit any of its Restricted Subsidiaries to issue any
Preferred Stock (other than to the Company or to a Restricted Subsidiary of the
Company) or permit any Person (other than the Company or a Restricted Subsidiary
of the Company) to own any Preferred Stock of any Restricted Subsidiary of the
Company.
SECTION 4.11 Limitation on Guarantees by Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries, directly or
indirectly, to guarantee the payment of any Indebtedness of the Company, other
than guarantees incurred pursuant to clause (ii) of the definition of "Permitted
Indebtedness" unless such Restricted Subsidiary, the Company and the Trustee
execute and deliver a supplemental indenture evidencing such Restricted
Subsidiary's guarantee of the Securities (a "Guarantee"), such Guarantee to be a
senior subordinated unsecured obligation of such Restricted Subsidiary; provided
that if any Subsidiary Guarantor is released from its guarantee with respect to
Indebtedness outstanding under the New Credit Facility and all other
Indebtedness of the Company, such Subsidiary Guarantor shall automatically be
released from its obligations as a Subsidiary Guarantor. Neither the Company nor
any such Subsidiary Guarantor shall be required to make a notation on the
Securities to reflect any such Guarantee. Nothing in this Section 4.11 shall be
construed to permit any Restricted Subsidiary of the Company to incur
Indebtedness otherwise prohibited by Section 4.3.
SECTION 4.12 Conduct of Business. The Company and its Restricted
Subsidiaries will not engage in any businesses which are not the same, similar,
related or ancillary to the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date.
SECTION 4.13 Maintenance of Office or Agency. The Company shall
maintain the office or agency required under Section 2.3. The Company shall give
prior written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
54
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.2.
SECTION 4.14 Corporate Existence. Except as otherwise permitted by
Article V, the Company shall do or cause to be done, at its own cost and
expense, all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate existence of each of its Restricted
Subsidiaries in accordance with the respective organizational documents of each
such Restricted Subsidiary and the material rights (charter and statutory) and
franchises of the Company and each such Restricted Subsidiary; provided,
however, that the Company shall not be required to preserve, with respect to
itself, any material right or franchise and, with respect to any of its
Restricted Subsidiaries, any such existence, material right or franchise, if the
Board of Directors of the Company shall determine in good faith that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and the Subsidiaries, taken as a whole.
SECTION 4.15 Payment of Taxes and Other Claims. The Company shall
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Restricted Subsidiaries or properties of
it or any of its Restricted Subsidiaries and (ii) any lawful claims for labor,
materials and supplies that, if unpaid, might by law become a Lien upon the
property of it or any of its Restricted Subsidiaries; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
SECTION 4.16 Maintenance of Properties and Insurance. (a) The
Company shall, and shall cause each of its Restricted Subsidiaries to, maintain
its material properties in good working order and condition (subject to ordinary
wear and tear) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto and actively conduct and carry
on its business; provided, however, that nothing in this Section 4.16 shall
prevent the Company or any of its Restricted Subsidiaries from discontinuing the
operation and maintenance of any of its properties, if such discontinuance is,
in the good faith judgment of the Board of Directors of the Company or the
55
Restricted Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Holders.
(b) The Company shall provide or cause to be provided, for itself
and each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Board of Directors of the Company, are adequate and appropriate
for the conduct of the business of the Company and such Restricted Subsidiaries
of the Company in a prudent manner, with reputable insurers or with the
government of the United States of America or any agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall be
customary, in the good faith judgment of the Board of Directors of the Company,
for companies similarly situated in the industry.
SECTION 4.17 Compliance With Laws. The Company shall comply, and
shall cause each of its Restricted Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States of
America, all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties, except for such
noncompliances as are not in the aggregate reasonably likely to have a material
adverse effect on the financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole.
SECTION 4.18. Additional Information. The Company will deliver to
the Trustee within 15 days after the filing of the same with the Commission,
copies of the quarterly and annual reports and of the information, documents and
other reports, if any, which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company will file with the Commission, to the extent
permitted, and provide the Trustee and Holders with such annual reports and such
information, documents and other reports specified in Sections 13 and 15(d) of
the Exchange Act. The Company will also comply with the other provisions of TIA
Section 314(a).
SECTION 4.19. Further Instruments and Acts. Upon request of the
Trustee, the Company will 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.
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ARTICLE V
SUCCESSOR COMPANY
SECTION 5.1. When Company May Merge or Transfer Assets. (a) The
Company will not, in a single transaction or a series of related transactions,
consolidate with or merge with or into, or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its assets to, another
Person or Persons unless:
(i) either (A) the Company shall be the survivor of such merger or
consolidation or (B) the surviving Person is a corporation existing under
the laws of the United States, any state thereof or the District of
Columbia and such surviving Person shall expressly assume all the
obligations of the Company under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (on a pro
forma basis, including any Indebtedness incurred or anticipated to be
incurred in connection with such transaction and the other adjustments
referred to in the definition of "Consolidated Fixed Charge Coverage
Ratio"), the Company or the surviving Person is able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.3;
(iii) immediately before and immediately after giving effect to such
transaction (including any Indebtedness incurred or anticipated to be
incurred in connection with the transaction), no Default or Event of
Default shall have occurred and be continuing; and
(iv) the Company has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with this Indenture, that the surviving Person
agrees to be bound thereby and by the Securities and the Registration
Rights Agreement, and that all conditions precedent in this Indenture
relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company, the
57
Capital Stock of which constitutes all or substantially all of the properties
and assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company. Notwithstanding
the foregoing clauses (ii) and (iii) above, (a) any Restricted Subsidiary of the
Company may consolidate with, merge into or transfer all or part of its
properties and assets to the Company and (b) the Company may merge with an
Affiliate that is (x) a corporation that has no material assets or liabilities
and which was incorporated solely for the purpose of reincorporating the Company
in another jurisdiction or (y) a Restricted Subsidiary of the Company so long as
all assets of the Company and the Restricted Subsidiaries immediately prior to
such transaction are owned by such Restricted Subsidiary and its Restricted
Subsidiaries immediately after the consummation thereof.
(b) Upon any consolidation, combination or merger or any transfer of
all or substantially all of the assets of the Company in accordance with the
foregoing, the surviving entity shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture and the
Securities with the same effect as if such surviving entity had been named as
such.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest (including
liquidated damages, if any, under the Registration Rights Agreement) on
any Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article X, and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon redemption or otherwise (including the failure to make a payment to
purchase Securities tendered, pursuant to a Change of Control Offer or a
Net Proceeds Offer), whether or not such payment shall be prohibited by
Article X;
(3) the Company defaults in the observance or performance of the
covenant set forth in Section 5.1;
58
(4) the Company defaults in the observance or performance of any
other covenant or agreement contained in this Indenture, which default
continues for a period of 30 days after the Company receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Securities;
(5) the Company fails to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary (other
than a Receivables Entity) of the Company, or the acceleration of the
final stated maturity of any such Indebtedness if the aggregate principal
amount of such Indebtedness, together with the principal amount of any
other such Indebtedness in default or failure to pay principal at final
maturity or which has been accelerated, aggregates $15 million or more at
any time;
(6) one or more judgments in an aggregate amount in excess of $15
million shall have been rendered against the Company or any of its
Significant Subsidiaries and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become
final and non-appealable, and in the event such judgment is covered by
insurance, an enforcement proceeding has been commenced by any creditor
upon such judgment which is not promptly stayed;
(7) the Company or a Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of judgment, decree or order for
relief against it in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
59
(E) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it;
(F) takes any corporate action to authorize or effect any of
the foregoing;
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; or
(C) orders the winding up or liquidation of the Company
or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days.
The foregoing will 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 any judgment, decree or order of any to
court or any order, rule or regulation of any administrative or governmental
body.
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.
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 Event of Default.
SECTION 6.2. Acceleration. (a) If an Event of Default (other than an
Event of Default specified in 6.1(7) or
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(8) with respect to the Company) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of outstanding Securities may
declare the principal of and accrued interest on all the Securities to be due
and payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration", and the
same shall become immediately due and payable.
(b) If an Event of Default specified in Sections 6.1(7) and (8) with
respect to the Company occurs and is continuing, then the principal of and
accrued interest on all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder of Securities.
(c) At any time after a declaration of acceleration with respect to the
Securities as described in Section 6.2(a) or (b) above, the Holders of a
majority in principal amount of the Securities may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) 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, (iii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (iv) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances and (v)
in the event of the cure or waiver of an Event of Default of the type described
in Section 6.1(6), (7) or (8), the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived.
SECTION 6.3. 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.
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SECTION 6.4. Waiver of Past Defaults. Subject to Sections 6.7 and
9.2, the holders of a majority in principal amount of the Securities may waive
any existing Default or Event of Default under this Indenture, and its
consequences, except (i) a default in the payment of the principal of or
interest on any Securities or (ii) a Default or Event of Default in respect of a
provision that under Section 9.2 cannot be amended without the consent of each
Securityholder affected. When a Default or Event of Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any consequent right. This paragraph of this
Section 6.4 shall be in lieu of ss. 316(a)(1)(B) of the TIA and such ss.
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount 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. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, 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 indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action. This Section 6.5 shall be in lieu of ss.
316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
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(2) the Holders of at least 25%; in outstanding principal amount of
the Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 45-day period.
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 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and 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 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(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
7.7.
SECTION 6.9. 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 Subsidiaries or
their respective creditors or properties 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, in the event that the Trustee shall consent to
the making of such payments directly to the
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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 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness to the extent required by
Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities far principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company or any other obligors on the Securities as
their interests may appear, or as a court of competent jurisdiction may
direct.
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 Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
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 6.7 or a suit by Holders of more
than 10% in outstanding principal amount of the Securities.
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ARTICLE VII
TRUSTEE
SECTION 7.1. 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 willful
misconduct, except that:
(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 6.5.
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(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(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 7.2. 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
willful misconduct or negligence.
(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
66
faith and in accordance with the advice or opinion of such counsel.
SECTION 7.3. 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 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, 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 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 7.5. Notice of Defaults. If a Default or Event of Default
occurs and is continuing the Trustee shall mail to each Securityholder notice of
the Default or Event of Default within 30 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of or interest on
any Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, the Executive Committee of its
board of directors or a committee of its Trust Officers in good faith determines
that withholding the notice is in the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA Section 313(a) if such a report is required by that section.
The Trustee also shall comply with TIA Section 313(b). The Trustee shall also
transmit by mail all reports required by TIA Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC if required by law 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.
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SECTION 7.7. 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 upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, costs of preparing and reviewing reports,
certificates and other documents, costs of preparation and mailing-of notices to
Securityholders and reasonable costs of counsel retained by the Trustee in
connection with the delivery of an Opinion of Counsel or otherwise, 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 administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
against any claims (whether asserted by any Securityholder, the Company or
otherwise). The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee 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 the Trustee through
the Trustee's own willful misconduct, negligence or bad faith.
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. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the securities may remove the
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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 or is removed by the Company or by the
Holders of a majority in principal amount of the Securities 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 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities 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
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
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SECTION 7.9. 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, consolidation or transfer to the Trustee shall succeed to the trusts
created by this Indenture, 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, an successor to the Trustee may authenticate such Securities
either in the name of an 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 million 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 an creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shal1
be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Securities. (a) The Company
may terminate its obligations under the Securities and this Indenture, except
those obligations referred to in Section 8.1(b), if all Securities previously
authenticated and delivered (other than destroyed, lost or stolen Securities
70
which have been replaced or paid or Securities for whose payment money has
theretofore been deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company, as provided in Section 8.5) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(i) either (A) pursuant to Article III, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of
the redemption of all of the Securities under arrangements satisfactory to
the Trustee for the giving of such notice or (B) all Securities have
otherwise become due and payable hereunder;
(ii) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such money, to pay
principal of, premium on, if any, and interest on the outstanding
Securities to maturity or redemption, as the case may be; provided that
the Trustee shall have been irrevocably instructed to apply such money to
the payment of said principal, premium, if any, and interest with respect
to the Securities and, provided, further, that from and after the time of
deposit, the money deposited shall not be subject to the rights of holders
of Senior Indebtedness pursuant to the provisions of Article X;
(iii) no Default or Event of Default with respect to this Indenture
or the Securities shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company is a party or by which it
is bound;
(iv) the Company shall have paid all other sums payable by it
hereunder; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's
71
obligations under the Securities and this Indenture have been satisfied.
Such Opinion of Counsel shall also state that such satisfaction and
discharge does not result in a default under the New Credit Facility (if
then in effect) or any other agreement or instrument then known to such
counsel that binds or affects the Company.
(b) Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.2, 2.5, 2.6, 2.7, 2.8, 4.1, 4.13, 4.14, 4.15, 4.17,
7.7, 8.4, 8.5, and 8.6 shall survive until the Securities are no longer
outstanding pursuant to the last paragraph of Section 2.8. After the Securities
are no longer outstanding, the Company's obligations in Sections 7.7, 8.4, 8.5,
and 8.6 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
SECTION 8.2. Legal Defeasance and Covenant Defeasance. (a) The
Company may, at its option by Board Resolution of the Board of Directors of the
Company, at any time, elect to have either paragraph (b) or (c) below be applied
to all outstanding Securities upon compliance with the conditions set forth in
Section 8.3.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.3, be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date the conditions-set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.4 hereof and the other Sections of this
Indenture referred to in (i) through (iv) below, and to have satisfied all its
other obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and the following provisions shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
Sections 8.3 and 8.4 hereof, and as more fully set forth in such Sections,
payments in respect of the principal of (and premium, if any, on) and interest
on such Securities when such payments are due, (ii) the Company's obligations
with respect to such Securities under Article II and
72
Section 4.13 hereof, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection therewith and
(iv) this Article VIII. The Holders of the Securities and any amounts deposited
under Section 8.3 hereof shall cease to be subject to any obligations to, or the
rights of, any holder of Senior Indebtedness or Guarantor Senior Indebtedness
under Article X or otherwise. Subject to compliance with this Article VIII, the
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in section 8.3 hereof, be released from
its obligations under the covenants contained in Sections 4.2 through 4.12 and
Article V hereof with respect to the outstanding Securities on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Securities shall not be deemed outstanding for
accounting purposes) and Holders of the Securities and any amounts deposited
under Sections 8.3 and 8.4 hereof shall cease to be subject to any obligations
to, or the rights of, any holder of Senior Indebtedness under Article X or
otherwise. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or any reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.1(3) hereof, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 8.3. Conditions to Defeasance. The Company may exercise its
Legal Defeasance option or its Covenant Defeasance option only if:
(1) the Company irrevocably deposits with the Trustee, in trust, for
the benefit of the holders of the Securities cash in U.S. dollars,
non-callable U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the opinion of
73
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay the principal of, premium, if any, and interest on the
Securities on the stated date for payment thereof or on the applicable
redemption date, as the case may be;
provided that the Trustee shall have received an irrevocable written order from
the Company instructing the Trustee to apply such cash in U.S. dollars or the
proceeds of such U.S. Government Obligations to said payments with respect to
the Securities;
(2) in the case of a Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming 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 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 Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of a Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Securityholders
will not recognize income, gain or loss for Federal income tax purposes as
a result of such Covenant Defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Securities shall have occurred and be continuing on the
date of such deposit (other than a Default or Event of Default with
respect to this Indenture resulting from the incurrence of Indebtedness,
all or a portion of which will be used to defease the Securities
concurrently with such incurrence) or insofar as Sections 6.1(7) and
6.1(8) hereof are concerned, at any
74
time in the period ending on the 91st day after the
date of such deposit;
(5) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others;
(7) 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 and this Indenture as
contemplated by this Article VIII have been complied with;
(8) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the trust funds will not be subject to any
rights of holders of Indebtedness of the Company other than the Securities
and (B) assuming no intervening bankruptcy of the Company between the date
of deposit and the 91st day following the deposit and that no Holder is an
insider of the Company, after the 91st day following the deposit, the
trust funds will not be subject to the effect of an applicable bankruptcy
insolvency, reorganization or similar laws affecting creditors' rights
generally; and
(9) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940.
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 III.
SECTION 8.4. Application of Trust Money. The Trustee or Paying Agent
shall hold in trust U.S. Legal Tender or U.S.
75
Government Obligations deposited with it pursuant to this Article VIII, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of,
premium, if any, and interest on the Securities. The Trustee shall be under no
Obligation to invest said U.S. Legal Tender or U.S. Government obligations
except as it may agree with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.3 hereof or the
principal, premium, if any, and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the Holders
of the outstanding Securities.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.3 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.5. Repayment to Company. Subject to Article VIII, the
Trustee and the Paying Agent shall promptly pay to the Company, upon request any
excess U.S. Legal Tender or U.S. Government Obligations held by them at any time
and thereupon shall be relieved from all liability with respect to such money.
The Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years; provided that the Trustee or such Paying Agent, before being required
to make any payment, may at the expense of the Company cause to be published
once in a newspaper of general circulation in the City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein which shall be at least 30 days from the
date of such publication or mailing any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. Legal Tender or U.S. Government Obligations in accordance with
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any
76
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 Article VIII until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with Article VIII; provided 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 U.S. Legal Tender or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
provided that such amendment does not in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, 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;
(4) to make any change in Article X that would limit or terminate
the benefits available to any holder of Senior Indebtedness (or
Representatives therefor) under Article X;
(5) to add Guarantees with respect to the Securities or to secure
the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
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(7) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the rights of
any Securityholder;
(9) to provide for the issuance of the Exchange Securities, which
will have terms substantially identical in all material respects to the
Initial Securities (except that the transfer restrictions contained in the
Initial Securities and provisions relating to an increase in interest
rates in the event the Securities are not registered under the Securities
Act will be modified or eliminated, as appropriate), and which will be
treated together with any outstanding Initial Securities, as a single
issue of securities; or
(10) to secure the Securities pursuant to the requirements of
Section 4.2 or otherwise;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.1.
SECTION 9.2. With Consent of Holders. Subject to Section 6.7, the
Company, when authorized by a resolution of its Board of Directors, and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to Section 6.7, the Holders of a majority in
principal amount of the outstanding Securities may waive compliance by the
Company with any provision of this Indenture or the Securities. However, without
the consent of the Holder of each Security affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.4, may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any
Security;
(3) reduce the principal of or change or have the effect of changing
the Stated Maturity of any Security, or change the date on which any
Securities may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor;
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(4) make any Security payable in money other than that stated in the
Security;
(5) make an change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of, premium, if any,
and interest on such Security on or after the due date thereof or to bring
suit to enforce such payment or permitting holders of a majority in
principal amount of the Securities to waive Defaults or Events of Default
(other than Defaults or Events of Default with respect to the payment of
principal of, premium, if any, or interest on the Securities);
(6) amend, change or modify in any material respect the obligation
of the Company to make and consummate a Change of Control Offer or make
and consummate a Net Proceeds Offer with respect to any Asset Sale that
has been consummated or modify any of the provisions or definitions with
respect thereto; or
(7) modify Article X or the definitions used in Article X of this
Indenture to adversely affect the Holders in any material respect.
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.
An amendment under this Section may not make any change that
adversely affects the rights under Article X of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
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 9.3. Compliance With Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the Trust Indenture Act of
1939, as amended as then in effect.
SECTION 9.4. 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
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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, unless it makes a change described in any of
clauses (1) through (7) of Section 9.2, in which case, the amendment or waiver
shall bind only each Securityholder who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder; provided that any such waiver shall not impair or affect
the right of any Holder to receive payment of principal of, premium, if any, and
interest on a Security, on or after the respective due dates expressed in such
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
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 become
valid or effective more than 120 days after such record date.
SECTION 9.5. 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 9.6. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX 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 7.1)
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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.
ARTICLE X
SUBORDINATION
SECTION 10.1. Agreement to Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article X, to the prior payment of all Senior
Indebtedness and that the subordination is for the benefit of and enforceable by
the holders of Senior Indebtedness. The Securities will also be effectively
subordinated to any Secured Indebtedness of the Company to the extent of the
value of the assets securing such Indebtedness, and to all existing and future
obligations of the Company's Subsidiaries. The Securities shall in all respects
rank pari passu with all other Senior Subordinated Indebtedness of the Company
and only Indebtedness of the Company which is Senior Indebtedness will rank
senior to the Securities in accordance with the provisions set forth herein. All
provisions of this Article X shall be subject to Section 10.12.
SECTION 10.2. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets or securities of the Company to creditors upon a
total or partial liquidation or dissolution or reorganization or similar
proceeding of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its properties, or
in an assignment for the benefit of creditors or any marshalling of the assets
and liabilities of the Company, whether voluntary or involuntary:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents of all Senior Indebtedness
before Securityholders shall be entitled to receive any payment of
principal of, premium, if any, or interest on or other amounts with
respect to the Securities; and
(2) until the Senior Indebtedness is paid in full in cash or Cash
Equivalents, any payment or distribution to which Securityholders would be
entitled but for this Article X shall be made to holders of Senior
Indebtedness as their interests may appear.
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SECTION 10.3. Default on Senior Indebtedness. The Company may not
pay principal of, premium (if any) or interest on, or any other amount in
respect of, the Securities or make any deposit pursuant to Article VIII and may
not otherwise purchase, redeem or otherwise retire any Securities (collectively,
"pay the Securities") if any amount due in respect of any Senior Indebtedness
(including, without limitation any amount due as a result of acceleration of the
maturity thereof by reason of default or otherwise) has not been paid in full in
cash or Cash Equivalents unless the default has been cured or waived and any
such acceleration has been rescinded or such Senior Indebtedness has been paid
in full in cash or Cash Equivalents. However, the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of the holders of the
Designated Senior Indebtedness with respect to which the events set forth in the
immediately preceding sentence have occurred and are continuing.
In addition, during the continuance of any default (other than a
payment default described in the first sentence of the immediately preceding
paragraph) with respect to any Designated Senior Indebtedness pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the
Securities for a period (a "Payment Blockage Period") commencing upon the
receipt by the Trustee (with a copy to the Company) of written notice (a
"Blockage Notice") of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice and all other defaults with
respect to such Designated Senior Indebtedness shall have been cured or shall
have ceased to exist or (iii) because such Designated Senior Indebtedness has
been repaid in full in cash or Cash Equivalents).
Notwithstanding the provisions described in the immediately
preceding paragraph, unless any payment default described in the first sentence
of the second immediately preceding paragraph has occurred and is then
continuing, the Company may resume payments on the Securities after the end of
such Payment Blockage Period, including any missed payments. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period. However, if any Blockage Notice within such 360-day period is
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given by or on behalf of any holders of Designated Senior Indebtedness other
than the Bank Indebtedness, a Representative of holders of Bank Indebtedness may
give another Blockage Notice within such period. In no event, however, may the
total number of days during which any Payment Blockage Period or Periods is in
effect exceed 179 days in the aggregate during any 360 consecutive day period.
SECTION 10.4. Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, the Company shall
promptly notify the holders of the Designated Senior Indebtedness or the
Representative of such holders of the acceleration and provide copies of such
notices to the Trustee.
If any Designated Senior Indebtedness is outstanding at the time of
such acceleration, the Company may not pay the Securities until the earlier of
five Business Days after the holder or Representative of such Designated Senior
Indebtedness receives notice of such acceleration or the date of acceleration of
such Designated Senior Indebtedness and, thereafter, may pay the Securities only
if this Article X otherwise permits payments at that time.
SECTION 10.5. When Distribution Must Be Paid Over. If a payment or
distribution is made to Securityholders that because of this Article X should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and promptly pay it
over to them as their respective interests may appear.
SECTION 10.6. Subrogation. After all Senior Indebtedness is paid in
full in cash and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article X to holders of Senior Indebtedness which otherwise would have been made
to Securityholders is not, as between the Company and Securityholders, a payment
by the Company of Senior Indebtedness.
SECTION 10.7. Relative Rights. This Article X defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
83
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions
otherwise payable to Securityholders.
SECTION 10.8. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by the failure of the Company to comply with this
Indenture.
SECTION 10.9. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it specifically stating that payments
may not be made under this Article X. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. Article X Not To Prevent Events of Default or Limit
Right to Accelerate. The failure to make a payment in respect of the Securities
by reason of any provision in this Article X shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article X shall have an effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
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SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Legal Tender or U.S. Government Obligations held in trust under Article
VIII by the Trustee for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article X, and
none of the Securityholders shall be obligated to pay over any such amount to
the Company, any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
SECTION 10.13. Trustee Entitled to Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article X. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article X, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The provisions of Sections 7.1 and
7.2 shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article X.
SECTION 10.14. Trustee to Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
85
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article X or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XI
[RESERVED]
ARTICLE XII
[RESERVED]
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. 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 provision required by
the TIA shall control.
SECTION 13.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
86
if to the Company:
Xxxxxx Scientific International Inc.
Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention of General Counsel
if to the Trustee:
State Street Bank and Trust Company
Xxxxxxx Square
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention of Corporate Trust Administration
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.
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. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. 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 13.4. 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, upon request, 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
87
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 13.5. 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 13.6. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be 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.
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
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SECTION 13.8. 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 or in the state in which the corporate trust office of the
Trustee is located. 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 13.9. 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 13.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have an 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 13.11. Successors. All agreements of the Company and the
Subsidiary Guarantors in this Indenture and the Securities shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 13.12. 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 13.13. Variable Provisions. The company initially appoints
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.
SECTION 13.14. Qualification Of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees for the Company, the Trustee and the Holders)
incurred in connection therewith, including, but not limited to, costs and
expenses of qualification of this Indenture and the Securities and printing this
Indenture and the Securities. The Trustee shall be entitled to receive from the
89
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.15. 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.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
XXXXXX SCIENTIFIC INTERNATIONAL
INC.
By: /s/ Xxxx X. XxXxxxx
---------------------------
Name: Xxxx X. XxXxxxx
Title: Vice President, General
Counsel and Secretary
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Xxxxxx X. Xxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[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]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO
YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K)
(OR ANY SUCCESSOR PROVISION THEREOF) AS PERMITTING THE RESALE BY NON-AFFILIATES
OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY, ANY GUARANTOR OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
A-1
THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE"), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE
MEANING OF SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A MINIMUM PURCHASE PRICE OF
$250,000 FOR SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH
OTHER APPLICABLE LAWS, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-2
THIS SECURITIY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES
OF SECTION 1271 et. seq. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $965. THE ISSUE DATE OF
THIS SECURITY IS NOVEMBER 20, 1998 AND THE YIELD TO MATURITY IS 9.577%.
XXXXXX SCIENTIFIC INTERNATIONAL INC.
No. Principal Amount $
CUSIP NO.
9% Senior Subordinated Note due 2008
Xxxxxx Scientific International Inc., a Delaware corporation, promises to pay to
Cede & Co., or registered assigns, the principal sum of _______ on February 1,
2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other
side of this Security.
A-3
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto and imprinted hereon.
Dated: November 20, 1998
XXXXXX SCIENTIFIC INTERNATIONAL INC.
By:
------------------------------
Name:
Title
By:
------------------------------
Name:
Title
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
---------------------
Authorized Signatory
A-4
(Reverse of Security)
9% Senior Subordinated Note due 2008
1. Interest
Xxxxxx Scientific International 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.
The Company will pay interest semiannually on February 1 and August
1 of each year, commencing February 1, 1999. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from the date of issuance. The
Company shall pay interest on overdue principal or premium, if any, and interest
at the rate borne by the Securities to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 A.M. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the January 15 and July 15 immediately
preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed 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 that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
A-5
3. Paying Agent and Registrar
Initially, State Street Bank and Trust Company, a Massachusetts
chartered trust company (the "Trustee"), will act as Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. 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
November 20, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among 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. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein 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 Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $200 million aggregate principal amount (subject to
Section 2.7 of the Indenture). This Security is one of the Initial Securities
referred to in the Indenture. The Securities include the Initial Securities and
any Exchange Securities issued in exchange for the Initial Securities pursuant
to the Indenture and the Registration Rights Agreement. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on the incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and its
Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries, the investments of the Company, its Subsidiaries and
transactions with Affiliates, Liens, dividends and other payment restrictions
affecting Subsidiaries, incurrence of senior subordinated Indebtedness,
preferred stock of Subsidiaries and future guarantees. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
A-6
5. Optional Redemption
Except as set forth in this paragraph 5, the Securities will not be
redeemable at the option of the Company prior to February 1, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount) if redeemed
during the twelve month period commencing on February 1 of the year set forth
below plus, in each case, accrued and unpaid interest 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):
Year Redemption Price
---- ----------------
2003........................................ 104.50%
2004........................................ 103.00%
2005........................................ 101.50%
2006 and thereafter......................... 100.00%
Notwithstanding the foregoing, at any time, or from time to time, on
or prior to February 1, 2001, the Company may, at its option, use the net cash
proceeds of one or more Equity Offerings to redeem up to 40% of the aggregate
principal amount of Securities originally issued at a redemption price equal to
109% of the principal amount thereof plus accrued interest to the date of
redemption; provided that at least 60% of the original principal amount of
Securities remains outstanding immediately after any such redemption (excluding
any Securities owned by the Company). In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company must mail a
notice of redemption no later than 60 days after the related Equity Offering and
must consummate such redemption within 90 days of the closing of the Equity
Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. If fewer than all the Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed pro rata or by
lot or by a method that complies with applicable legal and
A-7
securities exchange requirements, if any, and that the Trustee considers fair
and appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances; provided, however, that if a
partial redemption is made with the proceeds of an Equity Offering, selection of
the Securities or portion thereof for redemption shall be made by the Trustee
only on a pro rata basis, unless such method is otherwise prohibited. Securities
in denominations of principal amount 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 and unpaid 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 interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Option of Holder to Elect Purchase
Upon a Change of Control Triggering Event, any Holder of Securities
will have the right to require that the Company purchase all or a portion of
such Holder's Securities pursuant to the Indenture at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued interest to the date
of repurchase as provided in, and subject to the terms of, the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company or a Restricted Subsidiary from an Asset Sale are not
used (a) to prepay any Senior Indebtedness and, in the case of any Senior
Indebtedness under any revolving credit facility, effect a permanent reduction
in the availability under such revolving credit facility, (b) to reinvest in
Productive Assets or (c) a combination of prepayment and investment permitted by
the foregoing clauses (a) and (b), then such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date shall be applied by the Company or such Restricted Subsidiary to
make an offer to purchase on a date not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date from all Holders on a
pro rata basis that amount of Securities equal to the Note Offer Amount at a
price in cash equal to 100% of the principal amount of the Securities to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase.
A-8
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Security for a period beginning (i) 15 Business Days before
the mailing of a notice of an offer to repurchase or redeem Securities and
ending at the close of business on the day of such mailing or (b) 15 Business
Days before an interest payment date and ending on such 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 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. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of 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 of, premium, if any,
A-9
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 or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, and the
Trustee may amend the Indenture or the Securities to, among other things set
forth in the Indenture, cure any ambiguity, omission, defect or inconsistency,
or to comply with Article V of the Indenture, or to make certain changes in
Article X of the Indenture or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act, or to make any change that does not adversely affect the rights of any
Securityholder, or to provide for the issuance of Exchange Securities.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon required repurchase, upon declaration or otherwise;
(iii) failure by the Company to comply with other agreements in the Indenture or
the Securities, in certain cases subject to notice and lapse of time; (iv)
failure to pay at final maturity (giving effect to any applicable grace period
and any extensions thereof) the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary (other than a Receivables Entity) of the
Company, or the acceleration of the final maturity of any such Indebtedness, if
the aggregate principal amount of any such Indebtedness, together with the
principal amount of any such other Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $15.0
million or more at any time; (v) certain events of bankruptcy or insolvency with
A-10
respect to the Company or any Significant Subsidiary; and (vi) certain final,
non-appealable judgments or decrees for the payment of money in excess of $15.0
million against the Company or any Significant Subsidiary. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders 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 of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
15. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, 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. 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.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on
A-11
its behalf) manually signs the certificate of authentication on the other side
of this Security.
18. 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
entirety), 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).
19. 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.
20. Registration Rights.
Pursuant to the Registration Rights Agreement by and among the
Company and the Initial Purchasers, the Company will be obligated to consummate
an exchange offer pursuant to which the Holder of this Security shall have,
subject to the conditions set forth in the Registration Rights Agreement, the
right to exchange this Security for another series of 9% Senior Subordinated
Notes due 2008 of the Company (herein called the "Exchange Securities"), which
have been registered under the Securities Act of 1933, as amended, in like
principal amount and having identical terms as the Securities (other than as set
forth in this paragraph). The Holders of Securities shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
A-12
21. 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.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: Xxxxxx
Scientific International Inc., Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000,
Attention: General Counsel.
A-13
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:
----------------- ------------------------------------------
Signature Guarantee:
------------------------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years 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:
CHECK ONE BOX BELOW:
1 [_] acquired for the undersigned's own account, without transfer
(in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture); or
2 [_] transferred to the Company; or
A-14
3 [_] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
4 [_] transferred pursuant to an effective registration statement
under the Securities Act; or
5 [_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
6 [_] transferred to an institutional "accredited
investor" (as defined in Rule 501(a) (1), (2), (3) or (7) under
the Securities Act of 1933), that has furnished to the Trustee a
signed letter containing certain representations and agreements
(the form of which letter appears as Exhibit C to the
Indenture); or
7 [_] transferred pursuant to another available exemption from the
registration requirements of 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 (5), (6),
or (7) is checked, the Trustee or the Company may require, prior to registering
any such transfer of the Securities, in their sole discretion, such legal
opinions, certifications and other information as the Trustee or the Company may
reasonably request 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, such as the exemption provided by
Rule 144 under such Act.
----------------------
Signature Guarantee Signature
------------------------------ ----------------------
(Signature must be guaranteed) Signature
A-15
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
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
Date of Principal Amount of this Principal Amount of this Global Security following officer of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
A-16
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 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 4.6 or 4.8 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: Your Signature
------------ -----------------------------------------------
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
-----------------------------------------
(Signature must be guaranteed)
A-18
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[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.
B-1
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF
SECTION 1271 et. seq. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $965. THE ISSUE DATE OF
THIS SECURITY IS NOVEMBER 20, 1998 AND THE YIELD TO MATURITY IS 9.577%.
XXXXXX SCIENTIFIC INTERNATIONAL INC.
No. Principal Amount
----
CUSIP NO. 338032 AH 8
9% Senior Subordinated Note due 2008
Xxxxxx Scientific International Inc., a Delaware corporation,
promises to pay to Cede & Co., or registered assigns, the principal sum
of_______________________Dollars on February 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other
side of this Security.
B-2
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto and imprinted hereon.
Dated: , 1998 XXXXXX SCIENTIFIC INTERNATIONAL
INC.
By:
------------------------------------
Name:
Title
By:
------------------------------------
Name:
Title
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
--------------------------------
Authorized Signatory
B-3
(Reverse of Security)
9% Senior Subordinated Note due 2008
1. Interest
Xxxxxx Scientific International 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.
The Company will pay interest semiannually on February 1 and August
1 of each year, commencing February 1, 1999. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from the earlier of the most recent
date on which interest was paid on the Initial Securities or, if no such
interest has been paid, from the date of issuance of the Initial Securities. The
Company shall pay interest on overdue principal or premium, if any, and interest
at the rate borne by the Securities to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 A.M. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the January 15 and July 15 immediately
preceding the interest payment date even if Securities are canceled, repurchased
or redeemed 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 that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
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3. Paying Agent and Registrar
Initially, State Street Bank and Trust Company, Massachusetts
chartered trust company (the "Trustee"), will act as Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. 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
November 20, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among 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. xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein 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 Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $200 million aggregate principal amount (subject to
Section 2.7 of the Indenture). This Security is one of the Initial Securities
referred to in the Indenture. The Securities include the Initial Securities and
any Exchange Securities issued in exchange for the Initial Securities pursuant
to the Indenture and the Registration Rights Agreement. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on the incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and its
Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries, the investments of the Company, its Subsidiaries and
transactions with Affiliates, Liens, dividends and other payment restrictions
affecting Subsidiaries, incurrence of senior subordinated Indebtedness,
preferred stock of Subsidiaries and future guarantees. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
B-5
5. Optional Redemption
Except as set forth in this paragraph 5, the Securities will not be
redeemable at the option of the Company prior to February 1, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount) if redeemed
during the twelve month period commencing on February 1 of the year set forth
below plus, in each case, accrued and unpaid interest 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):
Year Redemption Price
---- ----------------
2003................................................. 104.50%
2004................................................. 103.00%
2005................................................. 101.50%
2006 and thereafter.................................. 100.00%
Notwithstanding the foregoing, at any time, or from time to time, on
or prior to February 1, 2001, the Company may, at its option, use the net cash
proceeds of one or more Equity Offerings to redeem up to 40% of the aggregate
principal amount of Securities originally issued at a redemption price equal to
109% of the principal amount thereof plus accrued interest to the date of
redemption; provided that at least 60% of the original principal amount of
Securities remains outstanding immediately after any such redemption (excluding
any Securities owned by the Company). In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company must mail a
notice of redemption no later than 60 days after the related Equity Offering and
must consummate such redemption within 90 days of the closing of the Equity
Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. If fewer than all the Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed pro rata or by
lot or by a method that complies with applicable legal and
B-6
securities exchange requirements, if any, and that the Trustee considers fair
and appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances; provided, however, that if a
partial redemption is made with the proceeds of an Equity Offering, selection of
the Securities or portion thereof for redemption shall be made by the Trustee
only on a pro rata basis, unless such method is otherwise prohibited. Securities
in denominations of principal amount 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 and unpaid 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 interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Option of Holder to Elect Purchase
Upon a Change of Control Triggering Event, any Holder of Securities
will have the right to require that the Company purchase all or a portion of
such Holder's Securities pursuant to the Indenture at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued interest to the date
of repurchase as provided in, and subject to the terms of, the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company or a Restricted Subsidiary from an Asset Sale are not
used (a) to prepay any Senior Indebtedness and, in the case of any Senior
Indebtedness under any revolving credit facility, effect a permanent reduction
in the availability under such revolving credit facility, (b) to reinvest in
Productive Assets or (c) a combination of prepayment and investment permitted by
the foregoing clauses (a) and (b), then such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date shall be applied by the Company or such Restricted Subsidiary to
make an offer to purchase on a date not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date from all Holders on a
pro rata basis that amount of Securities equal to the Note Offer Amount at a
price equal in cash to 100% of the principal amount of the Securities to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase.
B-7
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Security for a period beginning (i) 15 Business Days before
the mailing of a notice of an offer to repurchase or redeem Securities and
ending at the close of business on the day of such mailing or (b) 15 Business
Days before an interest payment date and ending on such 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 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.
B-8
12. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of 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 of, premium, if any,
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 or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, and the
Trustee may amend the Indenture or the Securities to, among other things set
forth in the Indenture, cure any ambiguity, omission, defect or inconsistency,
or to comply with Article V of the Indenture, or to make certain changes in
Article X of the Indenture or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act, or to make any change that does not adversely affect the rights of any
Securityholder, or to provide for the issuance of Exchange Securities.
B-9
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon required repurchase, upon declaration or otherwise;
(iii) failure by the Company to comply with other agreements in the Indenture or
the Securities, in certain cases subject to notice and lapse of time; (iv)
failure to pay at final maturity (giving effect to any applicable grace period
and any extensions thereof) the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary (other than a Receivables Entity) of the
Company, or the acceleration of the final maturity of any such Indebtedness, if
the aggregate principal amount of any such Indebtedness, together with the
principal amount of any such other Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $15.0
million or more at any time; (v) certain events of bankruptcy or insolvency with
respect to the Company or any Significant Subsidiary; and (vi) certain final,
non-appealable judgments or decrees for the payment of money in excess of $15.0
million against the Company or any Significant Subsidiary. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders 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 of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
B-10
15. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, 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. 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.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
18. 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
entirety), 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).
19. 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.
B-11
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.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: Xxxxxx
Scientific International Inc., Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000,
Attention: General Counsel.
B-12
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:
----------------- ------------------------------------------
Signature Guarantee:
------------------------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
B-13
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
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
Date of Principal Amount of this Principal Amount of this Global Security following officer of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
B-14
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 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 4.6 or 4.8 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: Your Signature
---------- -------------------------------------------
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed)
B-15
