EXHIBIT 4.1
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EXECUTION COPY
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Interline Brands, Inc.
Issuer
11 1/2% Senior Subordinated Notes Due 2011
____________________
INDENTURE
Dated as of May 23, 2003
_____________________
The Bank of New York
Trustee
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CROSS-REFERENCE TABLE
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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.
(a)(5) ............................................ 7.10
(b) ............................................ 7.08; 7.10
(c) ............................................ N.A.
311(a) ............................................ 7.11
(b) ............................................ 7.11
(c) ............................................ N.A.
312(a) ............................................ 2.05
(b) ............................................ 13.03
(c) ............................................ 13.03
313(a) ............................................ 7.06
(b)(1) ............................................ N.A.
(b)(2) ............................................ 7.06
(c) ............................................ 13.02
(d) ............................................ 7.06
314(a) ............................................ 4.02; 4.11
(b) ............................................ N.A.
(c)(1) ............................................ 13.04
(c)(2) ............................................ 13.04
(c)(3) ............................................ N.A.
(d) ............................................ N.A.
(e) ............................................ 13.05
(f) ............................................ N.A.
315(a) ............................................ 7.01
(b) ............................................ 7.05; 13.02
(c) ............................................ 7.01
(d) ............................................ 7.01
(e) ............................................ 6.11
316(a)(last sentence) ............................................ 13.06
(a)(1)(A) ............................................ 6.05
(a)(1)(B) ............................................ 6.04
(a)(2) ............................................ N.A.
(b) ............................................ 6.07
(c) ............................................ 9.04
317(a)(1) ............................................ 6.08
(a)(2) ............................................ 6.09
(b) ............................................ 2.04
318(a) ............................................ 13.01
(b) ............................................ N.A.
(c) ............................................ N.A.
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N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.................................................... 1
SECTION 1.02. Other Definitions..............................................36
SECTION 1.03. Incorporation by Reference of TIA..............................37
SECTION 1.04. Rules of Construction..........................................37
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating................................................38
SECTION 2.02. Execution and Authentication...................................39
SECTION 2.03. Registrar and Paying Agent.....................................39
SECTION 2.04. Paying Agent To Hold Money in Trust............................40
SECTION 2.05. Securityholder Lists...........................................41
SECTION 2.06. Transfer and Exchange..........................................41
SECTION 2.07. Replacement Securities.........................................42
SECTION 2.08. Outstanding Securities.........................................42
SECTION 2.09. Temporary Securities...........................................43
SECTION 2.10. Cancellation ..................................................43
SECTION 2.11. Defaulted Interest.............................................43
SECTION 2.12. CUSIP Numbers .................................................44
SECTION 2.13. Additional Securities..........................................44
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee.............................................45
SECTION 3.02. Selection of Securities To Be Redeemed.........................45
SECTION 3.03. Notice of Redemption...........................................46
SECTION 3.04. Effect of Notice of Redemption.................................47
SECTION 3.05. Deposit of Redemption Price....................................47
SECTION 3.06. Securities Redeemed in Part....................................48
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities..........................................48
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SECTION 4.02. SEC Reports....................................................48
SECTION 4.03. Limitation on Indebtedness.....................................49
SECTION 4.04. Limitation on Restricted Payments..............................54
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries........................................58
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.............60
SECTION 4.07. Limitation on Affiliate Transactions...........................65
SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries........................................68
SECTION 4.09. Change of Control..............................................69
SECTION 4.10. Future Guarantors..............................................71
SECTION 4.11. Compliance Certificate.........................................71
SECTION 4.12. Further Instruments and Acts...................................72
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets......................72
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default..............................................75
SECTION 6.02. Acceleration ..................................................77
SECTION 6.03. Other Remedies ................................................78
SECTION 6.04. Waiver of Past Defaults........................................78
SECTION 6.05. Control by Majority............................................79
SECTION 6.06. Limitation on Suits............................................79
SECTION 6.07. Rights of Holders to Receive Payment...........................80
SECTION 6.08. Collection Suit by Trustee.....................................80
SECTION 6.09. Trustee May File Proofs of Claim...............................80
SECTION 6.10. Priorities ....................................................80
SECTION 6.11. Undertaking for Costs..........................................81
SECTION 6.12. Waiver of Stay or Extension Laws...............................81
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee..............................................82
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SECTION 7.02. Rights of Trustee..............................................83
SECTION 7.03. Individual Rights of Trustee...................................84
SECTION 7.04. Trustee's Disclaimer...........................................85
SECTION 7.05. Notice of Defaults.............................................85
SECTION 7.06. Reports by Trustee to Holders..................................85
SECTION 7.07. Compensation and Indemnity.....................................85
SECTION 7.08. Replacement of Trustee.........................................86
SECTION 7.09. Successor Trustee by Merger....................................88
SECTION 7.10. Eligibility; Disqualification..................................88
SECTION 7.11. Preferential Collection of Claims Against Company..............88
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance...............89
SECTION 8.02. Conditions to Defeasance.......................................90
SECTION 8.03. Application of Trust Money.....................................92
SECTION 8.04. Repayment to Company...........................................92
SECTION 8.05. Indemnity for Government Obligations...........................92
SECTION 8.06. Reinstatement .................................................92
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders.....................................93
SECTION 9.02. With Consent of Holders........................................94
SECTION 9.03. Compliance with TIA............................................95
SECTION 9.04. Revocation and Effect of Consents and Waivers..................95
SECTION 9.05. Notation on or Exchange of Securities..........................96
SECTION 9.06. Trustee To Sign Amendments.....................................96
SECTION 9.07. Payment for Consent............................................96
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate......................................97
SECTION 10.02. Liquidation, Dissolution, Bankruptcy..........................97
SECTION 10.03. Default on Senior Indebtedness of the Company.................98
SECTION 10.04. Acceleration of Payment of Securities........................100
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SECTION 10.05. When Distribution Must Be Paid Over..........................100
SECTION 10.06. Subrogation .................................................100
SECTION 10.07. Relative Rights..............................................101
SECTION 10.08. Subordination May Not Be Impaired by Company.................101
SECTION 10.09. Rights of Trustee and Paying Agent...........................101
SECTION 10.10. Distribution or Notice to Representative.....................102
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate..........................................102
SECTION 10.12. Trust Moneys Not Subordinated................................102
SECTION 10.13. Trustee Entitled To Rely.....................................102
SECTION 10.14. Trustee To Effectuate Subordination..........................103
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness
of the Company...............................................103
SECTION 10.16. Reliance by Holders of Senior Indebtedness of the
Company on Subordination Provisions..........................104
SECTION 10.17. Escrowed Funds Not Subordinated..............................104
ARTICLE 11
Subsidiary Guaranties
SECTION 11.01. Subsidiary Guaranties........................................104
SECTION 11.02. Limitation on Liability......................................108
SECTION 11.03. Successors and Assigns.......................................108
SECTION 11.04. No Waiver ...................................................108
SECTION 11.05. Modification ................................................108
SECTION 11.06. Release of Subsidiary Guarantor..............................109
SECTION 11.07. Contribution ................................................110
ARTICLE 12
Subordination of Subsidiary Guaranties
SECTION 12.01. Agreement to Subordinate.....................................110
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.........................110
SECTION 12.03. Default on Senior Indebtedness of Subsidiary Guarantor.......111
SECTION 12.04. Demand for Payment...........................................113
SECTION 12.05. When Distribution Must Be Paid Over..........................113
SECTION 12.06. Subrogation .................................................113
SECTION 12.07. Relative Rights..............................................113
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SECTION 12.08. Subordination May Not Be Impaired by the Subsidiary
Guarantors...................................................114
SECTION 12.09. Rights of Trustee and Paying Agent...........................114
SECTION 12.10. Distribution or Notice to Representative.....................115
SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit
Right To Demand Payment......................................115
SECTION 12.12. Trustee Entitled To Rely.....................................115
SECTION 12.13. Trustee To Effectuate Subordination..........................116
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Indebtedness
of Subsidiary Guarantor......................................116
SECTION 12.15. Reliance by Holders of Senior Indebtedness of Subsidiary
Guarantors on Subordination Provisions.......................116
ARTICLE 13
Miscellaneous
SECTION 13.01. TIA Controls.................................................117
SECTION 13.02. Notices......................................................117
SECTION 13.03. Communication by Holders with Other Holders..................118
SECTION 13.04. Certificate and Opinion as to Conditions Precedent...........118
SECTION 13.05. Statements Required in Certificate or Opinion................118
SECTION 13.06. When Securities Disregarded..................................119
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar.................119
SECTION 13.08. Legal Holidays...............................................119
SECTION 13.09. Governing Law ...............................................119
SECTION 13.10. No Recourse Against Others...................................119
SECTION 13.11. Successors ..................................................120
SECTION 13.12. Multiple Originals...........................................120
SECTION 13.13. Table of Contents; Headings..................................120
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Rule 144A/Regulation S Appendix
Exhibit 1 to the Rule 144A/Regulation S Appendix - Form of Security
Exhibit A - Form of Exchange Security or Private Exchange Security
Annex A - Form of Supplemental Indenture
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INDENTURE dated as of May 23, 2003, among
INTERLINE BRANDS, INC., a New Jersey corporation (the
"Company"), the SUBSIDIARY GUARANTORS listed on the
signature pages hereto and The Bank of New York, a
New York banking corporation, as trustee.
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
Initial Securities, Exchange Securities, Private Exchange Securities and
Additional Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.01. DEFINITIONS.
"Additional Assets" means (1) any property, plant or equipment
used in a Related Business, in each case including leasehold interests with
respect thereto with a term in excess of one year; (2) the Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary; or (3)
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary; PROVIDED, HOWEVER, that any such Restricted
Subsidiary described in clause (2) or (3) above is primarily engaged in a
Related Business.
"Additional Securities" means securities issued under this
Indenture after the Issue Date and in compliance with Sections 2.13 and 4.03, it
being understood that any securities issued in exchange for or replacement of
any Initial Security issued on the Issue Date shall not be an Additional
Security, including any such securities issued pursuant to a Registration Rights
Agreement.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the
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ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof. For purposes of Sections 4.04 and
4.06, and the definitions of "Asset Disposition", "EBITDA" and "Temporary Cash
Investments" only, "Affiliate" shall not include (1) any Affiliate of X.X.
Xxxxxx Partners, LLC in its capacity as a commercial bank or commercial lender,
investment bank, broker-dealer, securities trader, market-maker, money manager,
financial advisor or other similar capacity, in each case acting in the ordinary
course of its business, or (2) General Motors Investment Management Corporation
or any of its Affiliates (other than First Plaza Group Trust) acting in the
ordinary course of its business. For purposes of this definition, any Securities
acquired by (1) an Affiliate of X.X. Xxxxxx Partners, LLC in the ordinary course
of such Affiliate's business as a broker-dealer, securities trader,
market-maker, money manager, financial advisor or other similar capacity or (2)
General Motors Investment Management Corporation or any of its Affiliates (other
than First Plaza Group Trust) acting in the ordinary course of its business
shall not, in each case, be considered under the terms of this Indenture as
Securities held by an "Affiliate" of the Company.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a
Restricted Subsidiary);
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(2) all or substantially all the assets of any division or
line of business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or
such Restricted Subsidiary
other than, in the case of clauses (1), (2) and (3) above, (A) a disposition by
a Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (B) for purposes of Section 4.06 only,
(x) a disposition that constitutes a Restricted Payment (or would constitute a
Restricted Payment but for the exclusions from the definition thereof) and that
is not prohibited by Section 4.04 and (y) a disposition of all or substantially
all the assets of the Company in accordance with Section 5.01, (C) a disposition
of assets with a fair market value of less than $1.0 million, (D) the
disposition of cash or Temporary Cash Investments, (E) the disposition of
inventory or obsolete or worn out equipment in the ordinary course of business,
(F) entering into Hedging Obligations, (G) the creation of any Lien permitted
under this Indenture (but not the sale or other disposition of the property
subject to such Lien), and (H) any transfer or sale of accounts receivable and
related assets of the type specified in the definition of "Qualified Receivables
Transaction" to a Receivables Subsidiary for the fair market value thereof,
including cash in an amount at least equal to 75% of the book value thereof as
determined in accordance with GAAP, it being understood that, for the purposes
of this clause (H), investments received in exchange for the transfer of
accounts receivable and related assets will be deemed to constitute cash if the
Receivables Subsidiary or other payor is required to repay such investments as
soon as practicable from available cash collections less amounts required to be
established as reserves pursuant to contractual agreements with entities that
are not Affiliates of the Company entered into as part of a Qualified
Receivables Transaction.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (1) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of, or redemption or similar
payment with respect to, such
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Indebtedness multiplied by the amount of such payment by (2) the sum of all such
payments.
"Bank Indebtedness" means all Obligations pursuant to the
Credit Agreement (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not post-filing interest is allowed in such proceeding).
"Bank Refinancing" means the replacement of the Existing
Credit Agreement with a New Credit Facility, as more fully described in the
Offering Circular.
"Board of Directors" with respect to a Person means the Board
of Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board; PROVIDED, HOWEVER, that for purposes of the definition of
"Change of Control" this definition shall not include any such committees.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests (including partnership interests), rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such Person, including any Preferred Stock, but excluding
any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the
following events:
(1) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the
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beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause (1) such person
shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly,
of (x) prior to the first public offering of common stock of the
Company or any holding company of the Company, more than 50% of the
total voting power of the Voting Stock of the Company and (y) after the
first public offering of common stock of the Company or any holding
company of the Company, more than 35% of the total voting power of the
Voting Stock of the Company; PROVIDED, HOWEVER, that with respect to
this clause (y) the Permitted Holders beneficially own (as defined in
Rules 13d-3 and 13d-5 of the Exchange Act), directly or indirectly, in
the aggregate a lesser percentage of the total voting power of the
Voting Stock of the Company than such other person and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the
Company (for the purposes of this clause (1), such other person shall
be deemed to beneficially own any Voting Stock of a specified person
held by a parent entity, if such other person is the beneficial owner
(as defined above in this clause (1)), directly or indirectly, of more
than 35% of the voting power of the Voting Stock of such parent entity
and the Permitted Holders beneficially own (as defined in this
proviso), directly or indirectly, in the aggregate a lesser percentage
of the voting power of the Voting Stock of such parent entity and do
not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the board of directors of
such parent entity);
(2) individuals who on the Issue Date constituted the Board
of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by
the shareholders of the Company, was approved by a vote of a majority
of the directors of the Company then still in office who were either
directors on the Issue Date or whose election or nomination for
election was previously so approved)
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cease for any reason to constitute a majority of the Board of Directors
of the Company then in office;
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) the merger or consolidation the Company with or into
another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the
Company (determined on a consolidated basis) to another Person other
than (i) a transaction in which the survivor or transferee is a Person
that is controlled by the Permitted Holders; PROVIDED, HOWEVER, that
the Permitted Holders will be deemed to control such Person if the
Permitted Holders "beneficially own" 35% or more of the total voting
power of the Voting Stock of such Person and no other "person"
"beneficially owns", directly or indirectly, in the aggregate a greater
percentage of the total voting power of the Voting Stock of the Company
than the Permitted Holders or has the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of
the Board of Directors of the Company (all as determined in accordance
with clause (1) above); or (ii) a transaction following which (A) in
the case of a merger or consolidation transaction, holders of
securities that represented 100% of the Voting Stock of the Company
immediately prior to such transaction (or other securities into which
such securities are converted as part of such merger or consolidation
transaction) own directly or indirectly at least a majority of the
voting power of the Voting Stock of the surviving Person in such merger
or consolidation transaction immediately after such transaction and in
substantially the same proportion as before the transaction and (B) in
the case of a sale of assets transaction, each transferee becomes an
obligor in respect of the Securities and a Subsidiary of the transferor
of such assets.
Notwithstanding the foregoing, for purposes of this definition, (1) a
Person shall not be deemed to have beneficial ownership of securities
that it has the right to acquire pursuant to a stock purchase
agreement, merger agreement or other similar agreement until such time
as such Person's right to acquire such securities pursuant to such
agreement is no longer
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subject to conditions that are beyond the control of such Person and
(ii) in determining the beneficial ownership of securities, any holding
company for the Company shall be disregarded to the extent that (x)
such holding company owns 100% of the Capital Stock of the Company and
(y) such holding company has no significant assets other than the
Capital Stock of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, PLUS, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries,
without duplication,
(1) interest expense attributable to Capital Lease
Obligations,
(2) amortization of debt discount and debt issuance cost,
(3) non-cash interest expense,
(4) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing,
(5) net payments pursuant to Hedging Obligations in respect
of Indebtedness,
(6) accrued dividends in respect of all Preferred Stock of
any Restricted Subsidiary to the extent held by Persons other than the
Company or a Wholly Owned Subsidiary,
(7) interest incurred in connection with Investments in
discontinued operations, and
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(8) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by (or secured by
the assets of) the Company or any Restricted Subsidiary.
"Consolidated Leverage Ratio" as of any date of determination
means the ratio of:
(x) the aggregate amount of Indebtedness of the Company and
its Restricted Subsidiaries (other than Subordinated Obligations) as of
such date of determination to
(y) EBITDA for the period of the most recent four consecutive
fiscal quarters for which internal financial statements are then
available prior to the date of such determination (the "Reference
Period");
PROVIDED, HOWEVER, that:
(1) if the Company or any Restricted Subsidiary has Incurred
any Indebtedness since the beginning of the Reference Period that
remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Leverage Ratio is an Incurrence of
Indebtedness, or both, the aggregate amount of such Indebtedness shall
be calculated after giving effect on a pro forma basis to such
Incurrence of Indebtedness and EBITDA for the Reference Period shall be
calculated after giving effect on a pro forma basis to such Incurrence
of Indebtedness as if such Indebtedness had been Incurred on the first
day of the Reference Period,
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of the Reference Period or if any Indebtedness is to be
repaid, repurchased, defeased or otherwise discharged on the date of
the transaction giving rise to the need to calculate the Consolidated
Leverage Ratio, the aggregate amount of Indebtedness shall be
calculated after giving effect on a pro forma basis to such discharge
and EBITDA for the Reference Period shall be calculated after giving
effect on a pro forma basis to such discharge as if it had occurred on
the first day of the Reference Period and as if the Company or such
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Restricted Subsidiary had not earned the interest income, if any,
actually earned during the Reference Period in respect of cash or
Temporary Cash Investments used to repay, repurchase, defease or
otherwise discharge such Indebtedness,
(3) if since the beginning of the Reference Period the
Company or any Restricted Subsidiary shall have made any Asset
Disposition, EBITDA for the Reference Period shall be reduced by an
amount equal to EBITDA (if positive) directly attributable to the
assets which are the subject of such Asset Disposition for the
Reference Period, or increased by an amount equal to EBITDA (if
negative) directly attributable thereto for the Reference Period,
(4) if since the beginning of the Reference Period the
Company or any Restricted Subsidiary (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary (or any Person
which becomes a Restricted Subsidiary) or an acquisition of assets,
including any acquisition of assets occurring in connection with a
transaction requiring a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit, division or
line of business, EBITDA for the Reference Period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on the
first day of the Reference Period, and
(5) if since the beginning of the Reference Period any
Person (that subsequently became a Restricted Subsidiary or was merged
with or into the Company or any Restricted Subsidiary since the
beginning of the Reference Period) shall have made any Asset
Disposition, any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (3) or (4) above if made by
the Company or a Restricted Subsidiary during the Reference Period,
EBITDA for the Reference Period shall be calculated after giving pro
forma effect thereto as if such Asset Disposition, Investment or
acquisition occurred on the first day of the Reference Period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of
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Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting Officer of the Company (and may
include any applicable Pro Forma Adjustments). If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest on
such Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months). If any
Indebtedness is incurred under a revolving credit facility and is being given
pro forma effect, the interest on such Indebtedness shall be calculated based on
the average daily balance of such Indebtedness for the four fiscal quarters
subject to the pro forma calculation to the extent that such Indebtedness was
Incurred for working capital purposes.
"Consolidated Net Income" means, for any period, the net
income of the Company and its consolidated Subsidiaries; PROVIDED, HOWEVER, that
there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if
such Person is not a Restricted Subsidiary, except that
(A) subject to the exclusion contained in clause (3)
below, the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net Income
up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution paid to a Restricted
Subsidiary, to the limitations contained in clause (3) below),
and
(B) the Company's equity in a net loss of any such
Person for such period shall be included in determining such
Consolidated Net Income, but only to the extent the Company or a
Restricted Subsidiary funded such net loss with cash;
11
(2) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to the Company
(other than any restrictions permitted pursuant to clause (H) of
Section 4.05(1)), except that
(A) subject to the exclusion contained in clause (3)
below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash that
could have been distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a
dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause); and
(B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(3) any gain or loss realized upon the sale or other
disposition of any assets of the Company, its consolidated Subsidiaries
or any other Person (including pursuant to any sale-and-leaseback
arrangement) which are not sold or otherwise disposed of in the
ordinary course of business and any gain or loss realized upon the sale
or other disposition of any Capital Stock of any Person;
(4) extraordinary gains or losses;
(5) non-cash compensation charges or other non-cash expenses
or charges arising from the grant of or issuance or repricing of stock,
stock options or other equity-based awards or any amendment,
modification, substitution or change of any such stock, stock options
or other equity-based awards;
(6) any non-cash goodwill impairment charges subsequent to
the Issue Date resulting from the application of SFAS No. 142;
12
(7) any amortization or write-offs of debt issuance or
deferred financing costs and premiums and prepayment penalties, in each
case, to the extent attributable to the Indebtedness being Refinanced
or Incurred in connection with the Refinancing Transactions;
(8) any interest expense attributable to the Securities
during the period from and including the Issue Date to and including
the date of consummation of the Bank Refinancing; and
(9) the cumulative effect of a change in accounting
principles;
in each case, for such period. Notwithstanding the foregoing, for the purpose of
Section 4.04 only, there shall be excluded from Consolidated Net Income any
repurchases, repayments or redemptions of Investments, proceeds realized on the
sale of Investments or return of capital to the Company or a Restricted
Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or
returns increase the amount of Restricted Payments permitted pursuant to Section
4.04(a)(3)(iv).
"Credit Agreement" means the Existing Credit Agreement,
together with the documents related thereto (including the term loans and
revolving loans thereunder, any guarantees and security documents), as amended,
extended, renewed, restated, replaced, supplemented or otherwise modified (in
whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any agreement (and
related document or instrument) governing Indebtedness incurred to Refinance, in
whole or in part, the borrowings and commitments then outstanding or permitted
to be outstanding under such credit agreement or a successor credit agreement,
whether by the same or any other lender or group of lenders.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement with respect to currency
values.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
13
"Designated Senior Indebtedness" means, with respect to a
Person, (1) the Bank Indebtedness and (2) any other Senior Indebtedness of such
Person 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 $25.0 million and is specifically
designated by such Person in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, 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 at the option of the holder) or
upon the happening of any event:
(1) matures or is mandatorily redeemable (other than if
redeemable only for Capital Stock of such Person which is not itself
Disqualified Stock) pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the
holder for Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part,
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; PROVIDED, HOWEVER, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Securities shall not constitute
Disqualified Stock if (1) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to the holders of such
Capital Stock than the terms applicable to the Securities as described in
Sections 4.06 and 4.09 and (2) any such requirement only becomes operative after
compliance with such terms applicable to the Securities, including the purchase
of any Securities tendered pursuant thereto.
14
The amount of any Disqualified Stock that does not have a
fixed redemption, repayment or repurchase price shall be calculated in
accordance with the terms of such Disqualified Stock as if such Disqualified
Stock were redeemed, repaid or repurchased on any date on which the amount of
such Disqualified Stock is to be determined pursuant to this Indenture;
PROVIDED, HOWEVER, that if such Disqualified Stock could not be required to be
redeemed, repaid or repurchased at the time of such determination, the
redemption, repayment or repurchase price shall be the book value of such
Disqualified Stock as reflected in the most recent financial statements of such
Person.
"EBITDA" for any period means the sum of Consolidated Net
Income, plus the following (without duplication) to the extent deducted in
calculating such Consolidated Net Income:
(1) all income tax expense of the Company and its
consolidated Restricted Subsidiaries,
(2) Consolidated Interest Expense (other than any
Consolidated Interest Expense attributable to any Subordinated
Obligations),
(3) depreciation and amortization expense of the Company and
its consolidated Restricted Subsidiaries (excluding amortization
expense attributable to a prepaid operating activity item that was paid
in cash in a prior period),
(4) all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve for
cash expenditures in any future period) less all non-cash items of
income (other than accrual of revenue in the ordinary course of
business) of the Company and its consolidated Restricted Subsidiaries,
and
(5) non-recurring restructuring costs and non-recurring
acquisition costs and fees (other than amounts paid to any Affiliate of
the Company or any Permitted Holder), including expenses and payments
directly attributable to employee reduction or employee relocation
(including cash severance payments) and expenses and payments directly
attributable to the termination of real estate leases
15
or real estate sales and the relocation of distribution and call center
facilities,
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated
Net Income to compute EBITDA only to the extent (and in the same proportion,
including by reason of minority interests) that the net income of such
Restricted Subsidiary was included in calculating Consolidated Net Income and
only if a corresponding amount would be permitted at the date of determination
to be dividended to the Company by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Equity Offering" means any primary sale of Capital Stock
(other than Disqualified Stock) of the Company (a) to the public pursuant to an
effective registration statement under the Securities Act or (b) in a private
placement pursuant to an exemption from the registration requirements of the
Securities Act.
"Escrow Agent" means The Bank of New York, as escrow agent.
"Escrow Agreement" means the escrow agreement, dated May 23,
2003, among the Company, the Trustee and the Escrow Agent.
"Exchange Act" means the U.S. Securities Exchange Act of 1934,
as amended.
"Existing Credit Agreement" means the Amended and Restated
Revolving Credit and Term Loan Agreement dated as of September 29, 2000, among
the Company, Fleet National Bank, as administrative agent, Fleet Union National
Bank, as syndication agent, GMAC Business Credit, LLC, as documentation agent,
and the financial institutions and other lenders from time to time party
thereto.
"Existing Mezzanine Indebtedness" means the Company's 16%
Senior Subordinated Notes due September 29,
16
2008 outstanding on the Issue Date (including any accretion to the value thereof
after the Issue Date).
"Fair Market Value" means, 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 in good faith by the Board of
Directors of the Company, whose determination shall be conclusive and evidenced
by a resolution of such Board of Directors.
"Foreign Subsidiary" means any Restricted Subsidiary of the
Company that is not organized under the laws of the United States of America or
any State hereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in:
(1) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants,
(2) statements and pronouncements of the Financial Accounting
Standards Board,
(3) such other statements by such other entity as approved by
a significant segment of the accounting profession, and
(4) except as otherwise provided by the terms of this
Indenture, the rules and regulations of the SEC governing the inclusion
of financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of
the SEC.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any Person
and any obligation, direct or indirect, contingent or otherwise, of such Person:
17
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such Person (whether
arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise)
or
(2) entered into for the purpose 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. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranty Agreement" means a supplemental indenture,
substantially in the form of Annex A to this Indenture, pursuant to which a
Subsidiary Guarantor guarantees the Company's obligations with respect to the
Securities on the terms provided for in this Indenture.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, HOWEVER, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a Restricted Subsidiary. The
term "Incurrence" when used as a noun shall have a correlative meaning. Solely
for purposes of determining compliance with Section 4.03:
(1) amortization of debt discount or the accretion of
principal with respect to a non-interest bearing or other discount
security,
18
(2) the payment of regularly scheduled interest in the form
of additional Indebtedness of the same instrument or the payment of
regularly scheduled dividends on Capital Stock in the form of
additional Capital Stock of the same class and with the same terms (or
the accretion or accumulation of such Capital Stock), and
(3) the obligation to pay a premium in respect of
Indebtedness arising in connection with the issuance of a notice of
redemption or the making of a mandatory offer to purchase such
Indebtedness
shall not be deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable, including, in each case, any
premium on such indebtedness to the extent such premium has become due
and payable;
(2) all Capital Lease Obligations of such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
(4) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in
clauses (1) through (3) above) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the tenth Business Day following payment on
the letter of credit);
19
(5) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock of such Person or, with respect to any Preferred
Stock of any Subsidiary of such Person (but excluding, in each case,
accrued dividends);
(6) all obligations of the type referred to in clauses (1)
through (5) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable,
directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee;
(7) all obligations of the type referred to in clauses (1)
through (6) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets and the amount of the obligation
so secured; and
(8) to the extent not otherwise included in this definition,
Hedging Obligations of such Person; PROVIDED, HOWEVER, that for
purposes of calculating the Consolidated Leverage Ratio, the aggregate
amount of Indebtedness outstanding pursuant to any Hedging Obligation
shall be zero until such time as such Person has the obligation to make
a payment in respect of such Hedging Obligation and such payment is not
made within ten Business Days.
Notwithstanding the foregoing, (i) in connection with the purchase by the
Company or any Restricted Subsidiary of any business, the term "Indebtedness"
shall exclude post-closing payment adjustments to which the seller may become
entitled to the extent such payment is determined by a final closing balance
sheet or such payment depends on the performance of such business after the
closing; PROVIDED, HOWEVER, that, at the time of closing, the amount of any such
payment is not determinable and, to the extent such payment thereafter becomes
fixed and determined, the amount is paid within 30 days thereafter; and (ii)
Indebtedness shall not include any liability for Federal, state, local or other
taxes owed or owing to any governmental entity.
20
In the case of Indebtedness of any Person sold at a discount,
the amount of such Indebtedness at any time shall be the accreted value thereof
at such time.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Independent Qualified Party" means an investment banking
firm, accounting firm or appraisal firm of national standing; PROVIDED, HOWEVER,
that such firm is not an Affiliate of the Company.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement with respect to exposure to interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of Guarantee or similar
arrangement) 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 for value of Capital Stock,
Indebtedness or other similar instruments issued by such Person. Except as
otherwise provided for herein, the amount of an Investment shall be its fair
value at the time the Investment is made and without giving effect to subsequent
changes in value.
For purposes of the definition of "Unrestricted Subsidiary",
the definition of "Restricted Payment" and Section 4.04:
(1) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market
value of the net assets of any Subsidiary of the Company at the time
that such Subsidiary is designated an Unrestricted Subsidiary;
PROVIDED, HOWEVER, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have
a permanent "Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (A) the Company's "Investment" in such
Subsidiary at the time of such redesignation less (B) the portion
21
(proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time
of such redesignation; and
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of
Directors of the Company.
"Issue Date" means May 23, 2003.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to such properties or assets or
received in any other non-cash form), in each case net of:
(1) all legal, title and recording tax expenses,
underwriting discounts, commissions and other fees and expenses
incurred (including without limitation, fees and expenses of counsel,
accountants and investment advisors), and all Federal, state,
provincial, foreign and local taxes required to be accrued as a
liability under GAAP, as a consequence of such Asset Disposition,
(2) all payments made on any Indebtedness which is secured
by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with
respect to such assets, or which must by its terms, or
22
in order to obtain a necessary consent to such Asset Disposition, or by
applicable law, be repaid out of the proceeds from such Asset
Disposition,
(3) all distributions and other payments required to be made
to minority interest holders in Restricted Subsidiaries as a result of
such Asset Disposition,
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the property or other assets disposed in such Asset
Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition, and
(5) any portion of the purchase price from an Asset
Disposition placed in escrow, whether as a reserve for adjustment of
the purchase price, for satisfaction of indemnities in respect of such
Asset Disposition or otherwise in connection with that Asset
Disposition; PROVIDED, however, that upon the termination of such
escrow, Net Available Cash will be increased by any portion of funds in
the escrow that are released to the Company or any Restricted
Subsidiary.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale
net of attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"New Credit Facility" means the credit agreement to be entered
into in connection with the Bank Refinancing (which may consist of an amendment
or restatement of the Existing Credit Agreement in effect on the Issue Date).
"Obligations" means, with respect to any Indebtedness, all
obligations for principal, premium, interest, penalties, fees, indemnifications,
reimbursements and other amounts payable pursuant to the documentation governing
such Indebtedness.
23
"Offering Circular" means the final offering circular dated
May 12, 2003 used in connection with the offering of the Initial Securities.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel. The counsel may be an employee of or counsel to the Company.
"Permitted Holders" means Parthenon Capital, X.X. Xxxxxx
Partners, LLC, General Motors Investment Management Corporation, Xxxxxxx X.
Xxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxx, Xxxxxxx X. Xxxxx and any Related
Party of the foregoing. Except for a Permitted Holder specifically identified by
name, in determining whether Voting Stock is owned by a Permitted Holder, only
Voting Stock acquired by a Permitted Holder in its described capacity will be
treated as "beneficially owned" by such Permitted Holder.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted
Subsidiary; PROVIDED, HOWEVER, that the primary business of such
Restricted Subsidiary is a Related Business;
(2) another Person if, as a result of such Investment, such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary; PROVIDED, HOWEVER, that such Person's primary
business is a Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
PROVIDED, HOWEVER, that such trade terms may include such concessionary
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
24
(5) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated
as expenses for accounting purposes and that are made in the ordinary
course of business;
(6) loans or advances to employees made in the ordinary
course of business of the Company or such Restricted Subsidiary;
(7) stock, obligations or securities received in settlement
of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments;
(8) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Disposition
as permitted pursuant to Section 4.06;
(9) any Person where such Investment was acquired by the
Company or any of its Restricted Subsidiaries (a) in exchange for any
other Investment or accounts receivable held by the Company or any such
Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other Investment or accounts receivable or (b) as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with
respect to any secured Investment or other transfer of title with
respect to any secured Investment in default;
(10) any Person to the extent such Investments consist of
prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar
deposits made in the ordinary course of business by the Company or any
Restricted Subsidiary;
(11) any Person to the extent such Investments consist of
Hedging Obligations otherwise permitted under Section 4.03;
25
(12) Persons to the extent such Investments are in existence
on the Issue Date;
(13) any joint venture engaged in a Related Business, to the
extent such Investments, when taken together with all other Investments
made pursuant to this clause (13) outstanding on the date such
Investment is made, do not exceed $7.0 million;
(14) any Investment by the Company or a Restricted Subsidiary
in a Receivables Subsidiary, or any Investment by a Receivables
Subsidiary in another Person, in each case in connection with a
Qualified Receivables Transaction; PROVIDED, HOWEVER, that such
Investment is in the form of a purchase money note, equity or residual
interest or limited liability company interest; and
(15) Persons to the extent such Investments, when taken
together with all other Investments made pursuant to this clause (15)
outstanding on the date such Investment is made, do not exceed the
greater of (x) $25.0 million and (y) 4% of Total Assets.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.
"Pro Forma Adjustments" means, with respect to any period, the
reduction in costs or other adjustments, as applicable, that are
26
(1) directly attributable to a business or asset acquisition
and calculated on a basis that is consistent with Regulation S-X under
the Securities Act in effect and as applied as of the Issue Date; or
(2) implemented by the Company, any Restricted Subsidiary or
the business that was the subject of any such asset acquisition, in
each case within one year prior to the date of the business or asset
acquisition and that are supportable and quantifiable by the underlying
accounting records of the Company, the Restricted Subsidiary or such
business;
in each case as if all such reductions in costs or other adjustments had been
effected as of the beginning of such period.
"Qualified Receivables Transaction" means any transaction or
series of transactions entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
sells, conveys or otherwise transfers to (i) a Receivables Subsidiary (in the
case of a transfer by the Company or any of its Restricted Subsidiaries) and
(ii) any other Person (in the case of a transfer by a Receivables Subsidiary),
or grants a security interest in, any accounts receivable (whether now existing
or arising in the future) of the Company or any of its Restricted Subsidiaries,
and any assets related thereto, including 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
(including contract rights) which are customarily transferred or in respect of
which security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable.
"Rating Agency" means Standard & Poor's, a division of The
McGraw Hill Companies, Inc., and Xxxxx'x Investors Service, Inc. or if Standard
& Poor's, a division of The McGraw Hill Companies, Inc., or Xxxxx'x Investors
Service, Inc. or both shall not make a rating on the Notes publicly available, a
nationally recognized statistical rating agency or agencies, as the case may be,
selected by the Company (as certified by a resolution of the Board of Directors
of the Company) which shall be substituted for Standard & Poor's, a division of
The McGraw Hill
27
Companies, Inc., or Xxxxx'x Investors Service, Inc. or both, as the case may be.
"Receivables Subsidiary" means a Subsidiary of the Company
which engages in no activities other than in connection with the financing of
accounts receivable or related assets (including contract rights) and which is
designated by the Board of Directors of the Company (as provided below) as a
Receivables Subsidiary (a) no portion of the Indebtedness or any other
Obligations (contingent or otherwise) of which (i) is Guaranteed by the Company
or any of its Restricted Subsidiaries (but excluding customary representations,
warranties, covenants and indemnities entered into in connection with a
Qualified Receivables Transaction), (ii) is recourse to or obligates the Company
or any of its Restricted Subsidiaries in any way other than pursuant to
customary representations, warranties, covenants and indemnities entered into in
connection with a Qualified Receivables Transaction or (iii) subjects any
property of asset (including contract rights) of the Company or any of its
Restricted Subsidiaries (other than accounts receivable and related assets as
provided in the definition of "Qualified Receivables Transaction"), directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to customary representations, warranties, covenants and indemnities
entered into in connection with a Qualified Receivables Transaction, (b) with
which neither the Company nor any of its Restricted Subsidiaries has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, other than customary fees payable in connection with servicing accounts
receivable and (c) with which neither the Company or any of its Restricted
Subsidiaries has any obligation to maintain or preserve such Subsidiary's
financial condition or cause such Subsidiary to achieve certain levels of
operating results. Any such designation by the Board of Directors of the Company
will 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 Officer's Certificate certifying that such designation
complied with the foregoing conditions.
28
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, replace, defease or
retire, or to issue other Indebtedness in exchange or replacement for, such
Indebtedness. "Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Subsidiary existing on the
Issue Date or Incurred in compliance with this Indenture, including Indebtedness
that Refinances Refinancing Indebtedness; PROVIDED, HOWEVER, that:
(1) such Refinancing Indebtedness has a Stated Maturity no
earlier than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the
time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being Refinanced;
(3) such Refinancing Indebtedness has an aggregate principal
amount (or, if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal
amount (or, if Incurred with original issue discount, the aggregate
accreted value) then outstanding or committed (plus (i) accrued
interest on the Indebtedness being Refinanced not to exceed the amount
of such accrued interest for one fiscal quarter and (ii) fees and
expenses, including any premium and defeasance costs) under the
Indebtedness being Refinanced; and
(4) if the Indebtedness being Refinanced is subordinated in
right of payment to the Securities, such Refinancing Indebtedness is
subordinated in right of payment to the Securities at least to the same
extent as the Indebtedness being Refinanced;
PROVIDED FURTHER, HOWEVER, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
29
"Refinancing Transactions" means (i) the offering and sale of
the Initial Securities, (ii) the establishment by the Company of the New Credit
Facility, (iii) the Refinancing of all amounts outstanding under the Existing
Credit Agreement (including fees and accrued interest with respect thereto) and
(iv) the redemption of the Existing Mezzanine Indebtedness (including the
payment of accrued interest and redemption premiums and fees with the respect
thereto).
"Related Business" means any business (including, without
limitation, the maintenance, repair and operations products distribution
business) in which the Company or any of its Restricted Subsidiaries was engaged
on the Issue Date and any business related, ancillary or complementary to any
business of the Company in which the Company was engaged on the Issue Date or
any business that is a reasonable extension of, or is necessary or desirable to
facilitate, any such business engaged in by the Company on the Issue Date.
"Related Party" means (1) any controlling stockholder,
controlling member, general partner, majority owned Subsidiary, or spouse or
immediate family member (in the case of an individual) of any Permitted Holder,
(2) any estate, trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons holding a controlling
interest of which consist solely of one or more Permitted Holders and/or such
other Persons referred to in the immediately preceding clause (1), or (3) any
executor, administrator, trustee, manager, director or other similar fiduciary
of any Person referred to in the immediately preceding clause (2) acting solely
in such capacity.
"Representative" means any trustee, agent or representative
(if any) for an issue of Senior Indebtedness.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including
any payment in connection with any merger or consolidation involving
such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or
30
distributions payable solely in its Capital Stock (other than
Disqualified Stock) or through accretion or accumulation of such
dividends on such Capital Stock and dividends or distributions payable
solely to the Company or a Restricted Subsidiary, and other than pro
rata dividends or other distributions made by a Subsidiary that is not
a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation)),
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company held by any
Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Company (other than the Company or a Restricted
Subsidiary), including in connection with any merger or consolidation
and including the exercise of any option to exchange any Capital Stock
(other than into Capital Stock of the Company that is not Disqualified
Stock),
(3) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations of such Person (other than the purchase,
repurchase or other acquisition of Subordinated Obligations purchased
in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the
date of such purchase, repurchase or other acquisition), or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit
facility contained in the Credit Agreement and any other facilities or financing
arrangements (including commercial paper facilities, revolving credit loans,
term loans, receivables financing, letters of credit or any debt securities or
other form of debt, convertible debt or exchangeable debt financing) that
Refinances, in whole or in part, any such facility or financing arrangement
31
(including any facility that increases borrowing availability), in each case as
amended, supplemented, extended, renewed, restated or otherwise modified.
"SEC" means the U.S. Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities" means the Initial Securities, the Exchange
Securities, the Private Exchange Securities and the Additional Securities issued
under this Indenture.
"Securities Act" means the U.S. Securities Act of 1933, as
amended.
"Senior Indebtedness" means, with respect to any Person:
(1) Indebtedness of such Person, whether outstanding on the
Issue Date or thereafter Incurred, and
(2) all other Obligations of such Person (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person whether or not post-filing
interest is allowed in such proceeding) in respect of Indebtedness
described in clause (1) above,
unless, in the case of clauses (1) and (2) above, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such Indebtedness or other Obligations are subordinate or PARI PASSU in
right of payment to the Securities or the Subsidiary Guaranty of such Person, as
the case may be; PROVIDED, HOWEVER, that Senior Indebtedness shall not include:
(1) any obligation of such Person to the Company or any
Subsidiary;
(2) any liability for Federal, state, local or other taxes
owed or owing by such Person;
(3) any accounts payable or other liability to trade
creditors arising in the ordinary course of
32
business (including guarantees thereof or instruments evidencing such
liabilities);
(4) any Indebtedness or other Obligation of such Person
which is subordinate or junior in any respect to any other Indebtedness
or other Obligation of such Person;
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture; or
(6) any obligations of such Person with respect to any
Capital Stock.
"Senior Subordinated Indebtedness" means, with respect to a
Person, the Securities (in the case of the Company), the Subsidiary Guaranty (in
the case of a Subsidiary Guarantor) and any other Indebtedness of such Person
that specifically provides that such Indebtedness is to rank PARI PASSU with the
Securities or such Subsidiary Guaranty, as the case may be, in right of payment
and is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of such Person which is not Senior Indebtedness of such Person.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or a Subsidiary Guaranty of such Person, as the case may be, pursuant to a
written agreement to that effect.
33
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which more
than 50% of the total voting power of shares of Voting Stock is at the time
owned or controlled, directly or indirectly, by (1) such Person, (2) such Person
and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of
such Person.
"Subsidiary Guarantor" means Wilmar Holdings, Inc., Wilmar
Financial, Inc., Glenwood Acquisition LLC and each other Subsidiary of the
Company that executes this Indenture as a guarantor on the Issue Date and each
other Subsidiary of the Company that thereafter guarantees the Securities
pursuant to the terms of this Indenture.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary
Guarantor of the Company's obligations with respect to the Securities.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United
States of America or any agency thereof or obligations guaranteed by
the United States of America or any agency thereof,
(2) investments in demand and time deposit accounts,
certificates of deposit and money market deposits maturing within 180
days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of
America, any State thereof or any foreign country recognized by the
United States of America, and which bank or trust company has, at the
time of making of such investment, capital, surplus and undivided
profits aggregating in excess of $50.0 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated "A" (or
such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436
under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor,
(3) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (1)
above entered into with
34
a bank meeting the qualifications described in clause (2) above,
(4) investments in commercial paper, maturing not more than
90 days after the date of acquisition, issued by a corporation (other
than an Affiliate of the Company) organized and in existence under the
laws of the United States of America or any foreign country recognized
by the United States of America with a rating at the time as of which
any investment therein is made of "P-1" (or higher) according to
Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to
Standard and Poor's, a division of The McGraw Hill Companies, Inc., and
(5) investments in securities with maturities of six months
or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof, and rated at
least "A" by Standard & Poor's, a division of The McGraw Hill
Companies, Inc., or "A" by Xxxxx'x Investors Service, Inc.
"Term Loan Facility" means the term loan facility contained in
the Credit Agreement and any other facilities or financing arrangements
(including commercial paper facilities, revolving credit loans, term loans,
receivables financing, letters of credit, or any debt securities or other form
of debt, convertible debt or exchangeable debt financing) that Refinances in
whole or in part any such facility or financing arrangement (including any
facility that increases borrowing availability), in each case as amended,
supplemented, extended, renewed, restated or otherwise modified.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the Issue Date.
"Total Assets" means the total consolidated assets of the
Company and its Restricted Subsidiaries, as set forth on the Company's
consolidated balance sheet for the most recently ended fiscal quarter for which
internal financial statements are available.
"Trustee" means The Bank of New York, a New York banking
corporation, until a successor replaces it and, thereafter, means the successor.
35
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters and
who shall have direct responsibility for the administration of this Indenture.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Company in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Capital Stock or Indebtedness of or holds any Lien on
any property of, the Company or any Restricted Subsidiary that is not a
Subsidiary of the Subsidiary to be so designated; PROVIDED, HOWEVER, that either
(A) the Subsidiary to be so designated has total assets of $1,000 or less or (B)
if such Subsidiary has assets greater than $1,000, such designation would be
permitted under Section 4.04.
The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to such designation (A) the Company could Incur
$1.00 of additional Indebtedness (other than Subordinated Obligations) under
Section 4.03(a) and (B) no Default shall have occurred and be continuing. Any
such designation by the Board of Directors of the Company shall be evidenced to
the Trustee by promptly filing with the Trustee a 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 provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of
36
America is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock
of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or one or more other Wholly Owned Subsidiaries.
SECTION 1.02. OTHER DEFINITIONS.
Term Defined in Section
--------------------------------------------------------------------------------
"Affiliate Transaction"....................... 4.07(a)
"Appendix..................................... 2.01
"Bankruptcy Law".............................. 6.01
"Blockage Notice"............................. 10.03; 12.03
"Change of Control Offer"..................... 4.09(b)
"covenant defeasance option".................. 8.01(b)
"CUSIP"....................................... 2.12
"Custodian"................................... 6.01
"Event of Default"............................ 6.01
"Exchange Securities"......................... Appendix
"Initial Securities".......................... Appendix
"ISIN"........................................ 2.12
"legal defeasance option"..................... 8.01(b)
"Offer"....................................... 4.06(b)
"Offer Amount"................................ 4.06(c)(2)
"Offer Period"................................ 4.06(c)(2)
"Paying Agent"................................ 2.03
"Payment Blockage Period"..................... 10.03; 12.03
"Payment Default"............................. 10.03; 12.03
"Private Exchange Securities"................. Appendix
"Purchase Date"............................... 4.06(c)(1)
"Registrar"................................... 2.03
"Registration Rights Agreement"......... Appendix
"Securities Obligations"...................... 11.01
"Successor Company"........................... 5.01(a)(1)
"Transfer Restricted Securities".............. Appendix
37
SECTION 1.03. INCORPORATION BY REFERENCE OF TIA. 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 and the Subsidiary
Guaranties;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by reference in the TIA to another statute or defined by SEC
rule have the meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(A) a term has the meaning assigned to it;
(B) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(C) "or" is not exclusive;
(D) "including" means including without limitation;
(E) words in the singular include the plural and words
in the plural include the singular;
(F) unsecured Indebtedness shall not be deemed to be
subordinate or junior to secured Indebtedness merely by virtue of
its nature as unsecured Indebtedness;
38
(G) secured Indebtedness shall not be deemed to be
subordinate or junior to any other secured Indebtedness merely
because it has a junior priority with respect to the same
collateral;
(H) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal amount
thereof that would be shown on a balance sheet of the issuer
dated such date prepared in accordance with GAAP; and
(I) all references to the date the Securities were
originally issued shall refer to the Issue Date.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. Provisions relating to the
Securities are set forth in the Rule 144A/Regulation S Appendix attached hereto
(the "Appendix"), which is hereby incorporated in and expressly made part of
this Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange 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
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in the Appendix and Exhibit A are part of
the terms of this Indenture.
39
SECTION 2.02. EXECUTION AND AUTHENTICATION. One Officer
shall sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities as set
forth in Section 2.2 of the Appendix.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Any such appointment
shall be evidenced by an instrument signed by the Trustee, a copy of which shall
be furnished to the Company. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (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 "Registrar" includes any co-registrar. The term "Paying Agent"
includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture, which shall
incorporate the terms of the TIA. The agreement shall implement the provisions
40
of this Indenture that relate to such agent. The Company shall notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within the
United States of America may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
The Company may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; PROVIDED,
HOWEVER, that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to the Company and the Trustee.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. On or
prior to each due date of the principal of and interest on any Security, the
Company shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities and shall 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 to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying with this Section 2.04, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
41
SECTION 2.05. 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 all Securityholders and shall
otherwise comply with TIA ss. 312(a). If the Trustee is not the Registrar, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and 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 2.06. TRANSFER AND EXCHANGE. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and Section
8-401(1) of the Uniform Commercial Code are met. When Securities are presented
to the Registrar with a request to exchange them for an equal principal amount
of Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met.
To permit registration of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Securities at the Registrar's
request. The Company or the Registrar may require a Holder, among other things,
to pay a sum sufficient to pay all taxes, assessments or other governmental
charges in connection with any transfer or exchange pursuant to this Section
(other than any such transfer taxes, assessments or similar governmental charges
payable upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.09 and
9.05). The Company shall not be required to make and the Registrar need not
register transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.
Prior to the due presentation for registration of transfer of
any Security, the Company, the Subsidiary Guarantors, the Trustee, the Paying
Agent, and the Registrar may deem and treat the Person in whose name a Security
is registered as the absolute owner of such
42
Security for the purpose of receiving payment of principal of and (subject to
paragraph 2 of the Securities) interest, if any, on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, any Subsidiary Guarantor, the Trustee, the Paying Agent or the
Registrar shall be affected by notice to the contrary.
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.
SECTION 2.07. 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 and the 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 2.08. 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 2.08 as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
43
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 portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. 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
and deliver them in exchange for temporary 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 dispose of all Securities surrendered for registration of
transfer, exchange, payment or cancellation in its customary manner unless the
Company directs the Trustee in writing 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 any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that
44
states the special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the
Securities may use numbers assigned by the Committee on Uniform Securities
Identification Procedures ("CUSIP") and corresponding International Securities
Identification Numbers ("ISIN") (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. The Company shall promptly notify the Trustee of any
change in the CUSIP or ISIN numbers.
SECTION 2.13. ADDITIONAL SECURITIES. After the Issue Date,
the Company shall be entitled, subject to its compliance with Section 4.03, to
issue Additional Securities under this Indenture, which Securities shall have
identical terms as the Initial Securities issued on the Issue Date, other than
with respect to the date of issuance, issue price and first interest payment
date. All the Securities issued under the Indenture shall be treated as a single
class for all purposes of this Indenture.
With respect to any Additional Securities, the Company shall
set forth in a resolution of the Board of Directors and an Officers'
Certificate, a copy of each which shall be delivered to the Trustee, the
following information:
(A) the aggregate principal amount of such Additional
Securities to be authenticated and delivered pursuant to this
Indenture and the provision of Section 4.03 that the Company is
relying upon to issue such Additional Securities;
(B) the issue price, the issue date and the CUSIP
number of such Additional Securities; PROVIDED, HOWEVER, that no
Additional Securities may be issued at a price that would cause
such Additional Securities to have "original issue
45
discount" within the meaning of Section 1273 of the Code; and
(C) whether such Additional Securities shall be
Transfer Restricted Securities and issued in the form of Initial
Securities set forth in Exhibit 1 to the Rule 144A/Regulation S
Appendix to this Indenture or shall be issued in the form of
Exchange Securities as set forth in Exhibit A.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to
redeem Securities pursuant to paragraph 5 or 6 of the Securities or is required
to redeem the Securities pursuant to paragraph 6 of the Securities, it shall
notify the Trustee in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.
The Company shall give each notice to the Trustee provided for
in this Section 3.01 at least 45 days but not more than 60 days before the
redemption date unless the Trustee consents to a shorter period; PROVIDED,
HOWEVER, that in connection with any redemption pursuant to paragraph 6 of the
Securities, such notice shall be given as provided in such paragraph. Each such
notice shall be accompanied by an Officers' Certificate and an Opinion of
Counsel from the Company to the effect that such redemption will comply with the
conditions herein; PROVIDED, HOWEVER, that in connection with any redemption
pursuant to paragraph 6 of the Securities, an Opinion of Counsel shall not be
required.
In connection with any redemption pursuant to paragraph 6 of
the Securities, the redemption date shall be as set forth on the date provided
for in paragraph 6 of the Securities.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If
fewer than all the Securities are to be redeemed, the Trustee shall select the
Securities to be
46
redeemed pro rata or by lot or by a method that complies with applicable legal
and securities exchange requirements, if any, and that the Trustee in its sole
discretion shall deem to be fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
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 principal amounts of $1,000
or a whole multiple of $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail or cause to be mailed a notice of redemption by first-class mail to each
Holder of Securities to be redeemed at such Holder's registered address;
PROVIDED, HOWEVER, if the Company redeems the Securities pursuant to paragraph 6
of the Securities, it shall mail or cause to be mailed such notice on the date
notice is delivered to the Trustee pursuant to Section 3.01.
The notice shall identify the Securities (including CUSIP
numbers) 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) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is
47
prohibited from making such payment pursuant to the terms of this
Indenture, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date;
(7) 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; and
(8) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03.
SECTION 3.04. 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
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment 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 3.05. DEPOSIT OF REDEMPTION PRICE. On or prior to
the redemption date, the Company shall deposit with the Trustee or the Paying
Agent (or, if the Company or a Subsidiary is the Trustee or 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 have been
delivered by the Company to the Trustee for cancellation. The Trustee or the
Paying Agent will return to the Company any money deposited with the Trustee or
the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of and accrued interest on all Securities to be redeemed.
48
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of
a Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall
promptly pay or cause to be paid the principal of and interest on the Securities
on the dates and in the manner provided in the Securities and in this Indenture.
Principal and interest shall be considered paid on the date due if on such date
the Trustee or the Paying Agent holds in accordance with this Indenture money
sufficient to pay all principal and interest then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such money to
the Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS.
(a) Notwithstanding that the Company may not be subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall file with the SEC (to the extent the SEC will accept such filings)
and provide the Trustee and Securityholders with such annual reports and such
information, documents and other reports as are specified in Sections 13 and
15(d) of the Exchange Act and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to be so filed and
provided at the times specified for the filings of such information, documents
and reports under such Sections. Notwithstanding the foregoing, the Company may
satisfy such requirements prior to the effectiveness of the exchange offer
registration statement or the shelf registration statement required by the
Registration Rights Agreement by filing with the SEC the exchange offer
49
registration statement or shelf registration statement, to the extent that any
such registration statement contains substantially the same information as would
be required to be filed by the Company if it were subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, and by providing the
Trustee and Security holders with such registration statement (and any
amendments thereto) promptly following the filing thereof. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
(b) The Company shall furnish to the Holders of the
Securities and to prospective investors, upon the requests of such Holders, any
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act so long any Securities are not freely transferable under the
Securities Act.
(c) The Company shall comply with the other provisions of
TIA ss. 314(a).
SECTION 4.03. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
PROVIDED, HOWEVER, that the Company and Subsidiary Guarantors shall be entitled
to Incur Indebtedness if, on the date of such Incurrence after giving effect
thereto on a PRO FORMA basis, no Default has occurred and is continuing and the
Consolidated Leverage Ratio would be less than (x) 4.5 to 1.0 if such
Indebtedness is Incurred on or prior to June 24, 2004, (y) 4.25 to 1.0 if such
Indebtedness is Incurred after June 24, 2004 and on or prior to July 1, 2005 and
(z) 4.0 to 1.0 if such Indebtedness is Incurred after July 1, 2005.
(b) Notwithstanding Section 4.03(a), the Company and the
Restricted Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred by the Company or any Subsidiary
Guarantor pursuant to any Revolving Credit
50
Facility; PROVIDED, HOWEVER, that, immediately after giving effect to
any such Incurrence, the aggregate principal amount of all Indebtedness
Incurred under this Section 4.03(b)(1) and then outstanding does not
exceed the greater of (x) $65.0 million and (y) 50% of the book value
of the inventory of the Company and its Restricted Subsidiaries;
(2) Indebtedness Incurred by the Company or any Subsidiary
Guarantor pursuant to any Term Loan Facility; PROVIDED, HOWEVER, that,
after giving effect to any such Incurrence, the aggregate principal
amount of all Indebtedness Incurred under this Section 4.03(b)(2) and
then outstanding does not exceed $140.0 million less the sum of all
principal payments made after the Issue Date with respect to such
Indebtedness pursuant to Section 4.06(a)(3)(A);
(3) Indebtedness of the Company owed to and held by any
Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed
to and held by the Company or any Restricted Subsidiary; PROVIDED,
HOWEVER, that (A) any subsequent issuance or transfer of any Capital
Stock or any other event that results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of any
such Indebtedness (other than to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence
of such Indebtedness by the obligor thereon, (B) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all obligations
with respect to the Securities and (C) if a Subsidiary Guarantor is the
obligor on such Indebtedness, such Indebtedness is expressly
subordinated to the prior payment in full in cash of all obligations of
such obligor with respect to its Subsidiary Guaranty;
(4) the Securities (other than any Additional Securities);
(5) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2), (3) or (4) of this Section
4.03(b));
(6) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on
51
which such Subsidiary was acquired by the Company (other than
Indebtedness Incurred in connection with, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Subsidiary became a Subsidiary or was acquired by the Company);
PROVIDED, HOWEVER, that on the date of such acquisition after giving
PRO FORMA effect thereto, no Default has occurred and is continuing and
the Consolidated Leverage Ratio would be (i) equal to or less than such
ratio immediately prior to such acquisition and (ii) less than (x) 5.0
to 1.0 if such Indebtedness is Incurred on or prior to June 24, 2004,
(y) 4.75 to 1.0 if such Indebtedness is Incurred after June 24, 2004
and on or prior to July 1, 2005 and (z) 4.5 to 1.0 if such Indebtedness
is Incurred after July 1, 2005;
(7) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (4), (5) or
(6) of this Section 4.03(b) or this Section 4.03(b)(7);
(8) Hedging Obligations entered into in the ordinary course
of business to hedge interest rate and currency risk of the Company and
the Restricted Subsidiaries and not for the purpose of speculation;
(9) obligations in respect of one or more standby letters of
credit, performance, bid and surety bonds and completion guarantees
provided by the Company or any Restricted Subsidiary in the ordinary
course of business;
(10) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business;
PROVIDED, HOWEVER, that such Indebtedness is extinguished within five
Business Days of its Incurrence;
(11) the Guarantee or co-issuance by any Subsidiary Guarantor
of any Indebtedness otherwise permitted to be Incurred pursuant to this
Indenture;
(12) Indebtedness (including Capital Lease Obligations)
Incurred by the Company or any of its Restricted Subsidiaries to
finance the purchase,
52
lease, construction 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), and any Refinancing
Indebtedness Incurred to Refinance such Indebtedness, in an aggregate
principal amount which, when taken together with all other Indebtedness
Incurred pursuant to this Section 4.03(b)(12) and outstanding on the
date of such Incurrence, does not exceed $7.5 million;
(13) Indebtedness of a Receivables Subsidiary Incurred
pursuant to a Qualified Receivables Transaction;
(14) Indebtedness Incurred by Foreign Subsidiaries which,
when taken together with all other Indebtedness Incurred pursuant to
this Section 4.03(b)(14) and outstanding on the date of such
Incurrence, does not exceed $15.0 million; and
(15) Indebtedness of the Company or any Subsidiary Guarantor
in an aggregate principal amount which, when taken together with all
other Indebtedness of the Company and the Subsidiary Guarantors
Incurred pursuant to this Section 4.03(b)(15) and outstanding on the
date of such Incurrence, does not exceed $15.0 million.
(c) Notwithstanding the foregoing, neither the Company nor
any Subsidiary Guarantor shall Incur any Indebtedness pursuant to Section
4.03(b) if the proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations of the Company or any Subsidiary Guarantor unless
such Indebtedness shall be subordinated to the Securities or the applicable
Subsidiary Guaranty to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this Section
4.03:
(1) any Indebtedness remaining outstanding under the Credit
Agreement after the application of the net proceeds from the sale of
the Securities shall be treated as Incurred on the Issue Date under
Section 4.03(b)(1) and (b)(2);
(2) any Indebtedness remaining outstanding under the New
Credit Facility after the consummation of the
53
Bank Refinancing will be treated as Incurred on the date of
consummation of the Bank Refinancing under Section 4.03(b)(1) and
(b)(2);
(3) in the event that an item of Indebtedness (or any
portion thereof) meets the criteria of more than one of the types of
Indebtedness described in Section 4.03(a) or (b), the Company, in its
sole discretion, shall classify such item of Indebtedness (or any
portion thereof) at the time of Incurrence and shall only be required
to include the amount and type of such Indebtedness in Section 4.03(a)
or one of the clauses in Section 4.03(b);
(4) the Company shall be entitled to divide and classify an
item of Indebtedness in more than one of the types of Indebtedness
described in Section 4.03(a) or (b); and
(5) following the date of its Incurrence, any Indebtedness
originally classified as Incurred pursuant to one of the clauses in
Section 4.03(b) (other than pursuant to Section 4.03(b)(1) or (b)(2))
may later be reclassified by the Company such that it will be deemed as
having been Incurred pursuant to Section 4.03(a) or another clause in
Section 4.03(b) above, as applicable, to the extent that such
reclassified Indebtedness could be Incurred pursuant to such new
section or clause at the time of such reclassification.
(e) Notwithstanding Sections 4.03(a) and (b), neither the
Company nor any Subsidiary Guarantor shall Incur (1) any Indebtedness if such
Indebtedness is subordinate or junior in right of payment in any respect to any
Senior Indebtedness of the Company or such Subsidiary Guarantor, as applicable,
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
subordinated in right of payment to Senior Subordinated Indebtedness of the
Company or such Subsidiary Guarantor, as applicable, or (2) any Secured
Indebtedness that is not Senior Indebtedness of such Person unless
contemporaneously therewith such Person makes effective provision to secure the
Securities or the relevant Subsidiary Guaranty, as applicable, equally and
ratably with (or on a senior basis to, in the case of Indebtedness subordinated
in right of payment to the Securities or the relevant Subsidiary
54
Guaranty, as applicable) such Secured Indebtedness for so long as such Secured
Indebtedness is secured by a Lien.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary, directly or indirectly, to make a Restricted Payment if
at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom);
(2) the Company is not entitled to Incur an additional $1.00
of Indebtedness (other than Subordinated Obligations) pursuant to
Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of
(without duplication):
(i) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the beginning of the
fiscal quarter immediately following the fiscal quarter during which
the Issue Date occurs to the end of the most recent fiscal quarter
prior to the date of such Restricted Payment for which internal
financial statements are then available (or, in case such Consolidated
Net Income shall be a deficit, minus 100% of such deficit); PLUS
(ii) the sum of (x) 100% of the aggregate Net Cash
Proceeds received by the Company from the issuance or sale of its
Capital Stock (other than Disqualified Stock) subsequent to the Issue
Date (other than (i) an issuance or sale to a Subsidiary of the
Company, (ii) an issuance or sale to an employee stock ownership plan
or to a trust established by the Company or any of its Subsidiaries for
the benefit of their employees with respect to amounts funded or
Guaranteed by the Company or any of its Subsidiaries and (iii) an
issuance or sale to an employee if such employee has received any loan
or advance made pursuant to clause (6) under the definition of
"Permitted Investment", except, with respect to
55
clause (iii), to the extent such loan or advance is repaid by such
employee in cash other than with the proceeds from a Permitted
Investment), (y) 100% of the Fair Market Value of property or assets
(other than cash, Indebtedness and Capital Stock, except that Capital
Stock of a Person that is or becomes a Restricted Subsidiary shall be
valued in accordance with the Company's interest in the Fair Market
Value of such Person's property and assets, exclusive of goodwill or
any similar intangible asset) that is received by the Company
subsequent to the Issue Date in exchange for Capital Stock (other than
Disqualified Stock) of the Company (other than any such property or
assets received from a Subsidiary of the Company) or as a capital
contribution from its shareholders and (z) 100% of any cash capital
contribution received by the Company from its shareholders subsequent
to the Issue Date; PLUS
(iii) the amount by which Indebtedness of the Company
or a Restricted Subsidiary is reduced on the Company's consolidated
balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of any
Indebtedness of the Company convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Company (less the amount
of any cash, or the fair value of any other property, distributed by
the Company or a Restricted Subsidiary upon such conversion or
exchange); PROVIDED, HOWEVER, that the foregoing amount shall not
exceed the Net Cash Proceeds received by the Company or any Restricted
Subsidiary from the sale of such Indebtedness (excluding Net Cash
Proceeds from sales to a Subsidiary of the Company or to an employee
stock ownership plan or to a trust established by the Company or any of
its Subsidiaries for the benefit of their employees); PLUS
(iv) an amount equal to the sum of (x) the net
reduction in the Investments (other than Permitted Investments) made by
the Company or any Restricted Subsidiary in any Person resulting from
repurchases, repayments or redemptions of such Investments by such
Person, proceeds realized on the sale of such Investment and proceeds
representing the return of capital (excluding dividends and
distributions), in
56
each case received by the Company or any Restricted Subsidiary, and (y)
to the extent such Person is an Unrestricted Subsidiary, the portion
(proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Unrestricted Subsidiary
at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; PROVIDED, HOWEVER, that the foregoing sum shall not exceed,
in the case of any such Person or Unrestricted Subsidiary, the amount
of Investments (excluding Permitted Investments) previously made (and
treated as a Restricted Payment) by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds
of the substantially concurrent sale of, or made by exchange for,
Capital Stock of the Company (other than Disqualified Stock and other
than Capital Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees with
respect to amounts funded or Guaranteed by the Company or any of its
Subsidiaries) or a substantially concurrent cash capital contribution
received by the Company from its shareholders; PROVIDED, HOWEVER, that
(A) such Restricted Payment shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from such
sale or such cash capital contribution (to the extent so used for such
Restricted Payment) shall be excluded from the calculation of amounts
under Section 4.04(a)(3)(ii);
(2) any purchase, repurchase, redemption, defeasance,
satisfaction, discharge or other acquisition or retirement for value of
Subordinated Obligations of the Company or any Subsidiary Guarantor
made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Subordinated Obligations of such Person which is
permitted to be Incurred pursuant to Section 4.03; PROVIDED, HOWEVER,
that such purchase, repurchase, redemption, defeasance, satisfaction,
discharge or other acquisition or retirement for value shall be
excluded
57
in the calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section 4.04; PROVIDED, HOWEVER, that such
dividend shall be included in the calculation of the amount of
Restricted Payments;
(4) so long as no Default has occurred and is continuing,
the repurchase or other acquisition of shares of Capital Stock of the
Company or any of its Subsidiaries from employees, former employees,
directors or former directors of the Company or any of its Subsidiaries
(or permitted transferees of such employees, former employees,
directors or former directors), pursuant to the terms of the agreements
(including employment, severance, compensation or shareholder
agreements) or plans (or amendments thereto) approved by the Board of
Directors of the Company under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such Capital
Stock; PROVIDED, HOWEVER, that (x) the aggregate amount of such
repurchases and other acquisitions shall not exceed $7.0 million or (y)
the aggregate amount of such repurchases and other acquisitions in any
fiscal year shall not exceed $2.5 million; PROVIDED FURTHER, HOWEVER,
that the aggregate amount of Restricted Payments permitted (but not
made) pursuant to this Section 4.04(b)(4) in any one fiscal year may be
carried forward to any succeeding fiscal year; PROVIDED FURTHER,
HOWEVER, that such repurchases and other acquisitions shall be excluded
in the calculation of the amount of Restricted Payments;
(5) payments of dividends on Disqualified Stock issued
pursuant to Section 4.03; PROVIDED, HOWEVER, that such dividends shall
be excluded in the calculation of the amount of Restricted Payments;
(6) Restricted Payments made with Net Available Cash from
Asset Dispositions remaining after application thereof as required by
Section 4.06; PROVIDED, HOWEVER, that such Restricted Payments shall be
included in the calculation of the amount of Restricted Payments;
58
(7) repurchases of Capital Stock deemed to occur upon
exercise of stock options if such Capital Stock represents a portion of
the exercise price of such options; provided, however, that such
Restricted Payments shall be excluded in the calculation of the amount
of Restricted Payments;
(8) payments of intercompany subordinated Indebtedness, the
Incurrence of which was permitted under Section 4.03(b)(3); PROVIDED,
HOWEVER, that no Default has occurred and is continuing or would
otherwise result therefrom; PROVIDED FURTHER, HOWEVER, that such
payments shall be excluded in the calculation of the amount of
Restricted Payments; or
(9) Restricted Payments in an amount which, when taken
together with all Restricted Payments made pursuant to this Section
4.04(b)(9), does not exceed $10.0 million; PROVIDED, HOWEVER, that (A)
at the time of each such Restricted Payment, no Default shall have
occurred and be continuing (or result therefrom) and (B) such payments
shall be excluded in the calculation of the amount of Restricted
Payments.
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS
FROM RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, 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
its Capital Stock or pay any Indebtedness owed or other obligations to the
Company, (b) make any loans or advances to the Company or (c) transfer any of
its property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c),
(A) any encumbrance or restriction pursuant to an
agreement (including the Credit Agreement) in effect at or
entered into on the Issue Date;
(B) any encumbrance or restriction pursuant to the New
Credit Facility as in effect on the date of consummation of
the Bank Refinancing;
(C) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an
59
agreement existing on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, or to provide all
or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and
outstanding on such date;
(D) any encumbrance or restriction pursuant to an
agreement effecting a Refinancing of Indebtedness Incurred
pursuant to an agreement referred to in Section 4.05(1)(A),
4.05(1)(B) or 4.05(1)(C) or this Section 4.05(1)(D) or
contained in any amendment to an agreement referred to in
Section 4.05(1)(A), 4.05(1)(B) or 4.05(1)(C) or this Section
4.05(1)(D) (in each case other than in connection with the
Bank Refinancing); PROVIDED, HOWEVER, that the encumbrances
and restrictions with respect to such Restricted Subsidiary
contained in any such refinancing agreement or amendment are
no less favorable to the Securityholders than encumbrances and
restrictions with respect to such Restricted Subsidiary
contained in such predecessor agreements;
(E) any encumbrance or restriction consisting of any
restriction on the sale or other disposition of assets or
property securing Indebtedness solely as a result of a Lien on
such asset;
(F) any encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered
into for the sale or disposition of all or a portion of the
Capital Stock or assets of such Restricted Subsidiary pending
the closing of such sale or disposition;
(G) any encumbrance or restriction pursuant to
applicable law, regulation or order;
60
(H) any encumbrance or restriction pursuant to the
terms of Indebtedness Incurred under Section 4.03(b)(14);
(I) any encumbrance or restriction in any agreement
that is not more restrictive than the restrictions under the
terms of the New Credit Facility as in effect on the date of
consummation of the Bank Refinancing; and
(J) any encumbrance or restriction pursuant to the
terms of any agreement entered into in connection with any
Qualified Receivables Transaction, provided that such
encumbrance or restriction applies only to a Receivables
Subsidiary; and
(2) with respect to clause (c) only,
(A) any encumbrance or restriction consisting of
customary nonassignment provisions in leases governing
leasehold interests to the extent such provisions restrict the
transfer of the lease or the property leased thereunder;
(B) any encumbrance or restriction contained in
security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or
restriction restricts the transfer of the property subject to
such security agreements or mortgages; and
(C) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements
entered into in the ordinary course of business.
SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY
STOCK.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, consummate any Asset
Disposition unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to
the Fair Market Value (including as to the value of all non-cash
61
consideration) of the shares and assets subject to such Asset
Disposition;
(2) at least 75% of the consideration thereof received by
the Company or such Restricted Subsidiary is in the form of cash or
cash equivalents; and
(3) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be)
(A) FIRST, to the extent the Company elects (or is
required by the terms of any Indebtedness), to prepay, repay,
redeem or purchase Senior Indebtedness of the Company or
Indebtedness (other than any Preferred Stock or Disqualified
Stock) of a Wholly Owned Subsidiary (in each case other than
Indebtedness owed to the Company or an Affiliate of the
Company) within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash;
(B) SECOND, to the extent of the balance of such Net
Available Cash after application in accordance with Section
4.06(a)(3)(A), to the extent the Company elects, to acquire
Additional Assets within one year from the later of the date
of such Asset Disposition or the receipt of such Net Available
Cash;
(C) THIRD, to the extent of the balance of such Net
Available Cash after application in accordance with Section
4.06(a)(3)(A) and Section 4.06(a)(3)(B), to make an Offer to
the holders of the Securities (and to holders of other Senior
Subordinated Indebtedness of the Company designated by the
Company) to purchase Securities (and such other Senior
Subordinated Indebtedness of the Company) pursuant to and
subject to the conditions of this Indenture; and
(D) FOURTH, to the extent of the balance of such Net
Available Cash after application in accordance Section
4.06(a)(3)(A), (B) and (C), for any purpose not prohibited by
the terms of this Indenture;
62
PROVIDED, HOWEVER, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to Section 4.06(a)(3)(A) or Section 4.06(a)(3)(C), the
Company or such Restricted Subsidiary shall permanently retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06,
the Company and the Restricted Subsidiaries shall not be required to apply any
Net Available Cash in accordance with this Section 4.06(a) except to the extent
that the aggregate Net Available Cash from all Asset Dispositions which is not
applied in accordance with this Section 4.06(a) exceeds $10.0 million. Pending
application of Net Available Cash pursuant to this Section 4.06(a), such Net
Available Cash shall be invested in Temporary Cash Investments or applied to
temporarily reduce Senior Indebtedness.
For the purposes of this Section 4.06(a), the following are
deemed to be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company (other
than obligations in respect of Disqualified Stock of the Company) or
any Restricted Subsidiary (other than obligations in respect of
Disqualified Stock and Preferred Stock of a Subsidiary Guarantor) and
the release of the Company or such Restricted Subsidiary from all
liability on such Indebtedness in connection with such Asset
Disposition; and
(2) securities received by the Company or any Restricted
Subsidiary from the transferee that are converted by the Company or
such Restricted Subsidiary into cash within 90 days, to the extent of
the cash received in that conversion.
(b) In the event of an Asset Disposition that requires the
purchase of Securities (and other Senior Subordinated Indebtedness of the
Company) pursuant to Section 4.06(a)(3)(C), the Company shall purchase
Securities tendered pursuant to an offer by the Company for the Securities (and
such other Senior Subordinated Indebtedness) (the "Offer") at a purchase price
of 100% of their principal amount (or, in the event such other Senior
Subordinated Indebtedness of the Company was issued with significant original
issue discount, 100% of the accreted
63
value thereof) without premium, plus accrued but unpaid interest (or, in respect
of such other Senior Subordinated Indebtedness of the Company, such lesser
price, if any, as may be provided for by the terms of such Senior Subordinated
Indebtedness) in accordance with the procedures (including prorating in the
event of oversubscription) set forth in Section 4.06(c). If the aggregate
purchase price of Securities (and any other Senior Subordinated Indebtedness)
tendered pursuant to the Offer exceeds the Net Available Cash allotted to their
purchase, the Company shall select the Securities and other Senior Subordinated
Indebtedness to be purchased on a pro rata basis but in round denominations,
which in the case of the Securities will be denominations of $1,000 principal
amount or multiples thereof. The Company shall not be required to make such an
Offer to purchase Securities (and other Senior Subordinated Indebtedness of the
Company) pursuant to this Section 4.06 if the Net Available Cash available
therefor is less than $5.0 million (which lesser amount shall be carried forward
for purposes of determining whether such an Offer is required with respect to
the Net Available Cash from any subsequent Asset Disposition). Upon completion
of such an Offer to purchase pursuant to Section 4.06, Net Available Cash will
be deemed to be reduced by the aggregate amount of such offer.
(c) (1) Promptly, and in any event within 10 days after the
Company becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Securities purchased by the Company either
in whole or in part (subject to prorating as described in Section 4.06(b) in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall state (A) that the Company has become obligated
to make an Offer, (B) the aggregate principal amount of Securities that is
subject to such Offer, (C) the purchase price, (D) the circumstances and
relevant facts regarding such Asset Disposition, (E) the Purchase Date, (F) the
instructions, as determined by the Company, consistent with this Section, that a
Holder must follow in order to have its Securities purchased and (G) such other
information as the Company may deem necessary.
64
(2) Not later than the date upon which written notice of an
Offer is delivered to the Trustee as provided below, the Company shall
deliver to the Trustee an Officers' Certificate as to (A) the amount of
the Offer (the "Offer Amount"), including information as to any other
Senior Subordinated Indebtedness included in the Offer, (B) the
allocation of the Net Available Cash from the Asset Dispositions
pursuant to which such Offer is being made and (C) the compliance of
such allocation with the provisions of Section 4.06(a) and (b). On or
prior to each Purchase Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) an amount in cash equal to the
applicable Offer Amount. If the Offer includes other Senior
Subordinated Indebtedness, the deposit described in the preceding
sentence may be made with any other paying agent pursuant to
arrangements reasonably satisfactory to the Trustee. Upon the
expiration of the period for which the Offer remains open (the "Offer
Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and
are to be accepted by the Company. The Trustee shall, on the Purchase
Date, mail or deliver payment (or cause the delivery of payment) to
each tendering Holder in the amount of the purchase price. In the event
that the aggregate purchase price of the Securities delivered by the
Company to the Trustee is less than the Offer Amount applicable to the
Securities, the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly
completed, to the Company at the address specified in the notice at
least three Business Days prior to the Purchase Date. Holders shall be
entitled to withdraw their election if the Trustee or the Company
receives not later than one Business Day prior to the Purchase Date, a
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing
65
his election to have such Security purchased. Holders whose Securities
are purchased only in part shall be issued new Securities equal in
principal amount to the unpurchased portion of the Securities
surrendered.
(4) At the time the Company delivers Securities to the
Trustee which are to be accepted for purchase, the Company shall also
deliver an Officers' Certificate stating that such Securities are to be
accepted by the Company pursuant to and in accordance with the terms of
this Section 4.06. A Security shall be deemed to have been accepted for
purchase at the time the Trustee, directly or through an agent, mails
or delivers payment therefor to the surrendering Holder.
(d) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.06. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.06, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.06 by virtue of its
compliance with such securities laws or regulations.
SECTION 4.07. LIMITATION ON AFFILIATE TRANSACTIONS.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with, or for the
benefit of, any Affiliate of the Company (an "Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less
favorable to the Company or such Restricted Subsidiary than those that
could be obtained at the time of the Affiliate Transaction in
arm's-length dealings with a Person who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in
excess of $5.0 million, the terms of the Affiliate Transaction are set
forth in writing and a
66
majority of the directors of the Company disinterested with respect to
such Affiliate Transaction have determined in good faith that the
criteria set forth in Section 4.07(a)(1) are satisfied and have
approved the relevant Affiliate Transaction as evidenced by a
resolution of such Board of Directors; and
(3) if such Affiliate Transaction involves an amount in
excess of $20.0 million, the Board of Directors of the Company shall
also have received a written opinion from an Independent Qualified
Party to the effect that such Affiliate Transaction is fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries or
is not less favorable to the Company and its Restricted Subsidiaries
than could reasonably be expected to be obtained at the time in an
arm's-length transaction with a Person who was not an Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit:
(1) any Investment (other than a Permitted Investment
(except for Permitted Investments described in clause
(3) of the definition thereof)) or other Restricted
Payment, in each case permitted to be made pursuant to
Section 4.04;
(2) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or
the funding of, employment, compensation or severance
arrangements, stock options and stock ownership plans
approved by the Board of Directors of the Company;
(3) loans or advances to employees in the ordinary course of
business of the Company or its Restricted Subsidiaries,
but in any event not to exceed $5.0 million in the
aggregate outstanding at any one time;
(4) the payment of reasonable compensation or employee
benefits to, and the provision of an indemnity for the
benefit of, directors, officers or employees of the
Company or its
67
Restricted Subsidiaries in the ordinary course of
business;
(5) the payment of reasonable fees to directors of the
Company and its Restricted Subsidiaries who are not
employees of the Company or its Restricted Subsidiaries;
(6) any commercial banking, commercial lending, investment
banking, brokerage, securities trading, market-making,
money management, financial advisory or other similar
transaction, including the payment of customary fees
with respect thereto, with an Affiliate of X.X. Xxxxxx
Partners, LLC that is approved by a majority of the
directors of the Company disinterested with respect to
such transaction;
(7) any transaction with General Motors Investment
Management Corporation or any of its Affiliates that is
approved by a majority of the directors of the Company
disinterested with respect to such transaction;
PROVIDED, HOWEVER, that the Permitted Holders (other
than General Motors Investment Management Corporation)
beneficially own (as defined in Rules 13d-3 and 13d-5 of
the Exchange Act) in the aggregate a greater percentage
of the total voting power of the Voting Stock of the
Company than is beneficially owned (as defined in clause
(1) of the definition for "Change of Control") by
General Motors Investment Management Corporation and its
Affiliates and General Motors Investment Management
Corporation and its Affiliates do not have the right or
ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of
Directors of the Company (for purposes of this proviso,
General Motors Investment Management Corporation and its
Affiliates shall be deemed to beneficially own any
Voting Stock of the Company held by a parent entity of
the Company, if General Motors Investment Management
Corporation or any of its Affiliates is the beneficial
68
owner (as defined in clause (1) of the definition for
"Change of Control"), directly or indirectly, of over
50% of the voting power of the Voting Stock of such
parent entity);
(8) any transaction with a Restricted Subsidiary or joint
venture or similar entity which would constitute an
Affiliate Transaction solely because the Company or a
Restricted Subsidiary owns an equity interest in or
otherwise controls such Restricted Subsidiary, joint
venture or similar entity;
(9) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company;
(10) any agreement that provides registration rights to the
shareholders of the Company;
(11) any merger, consolidation or reorganization of the
Company with an Affiliate solely for the purpose and
with the sole effect of reorganizing the stock ownership
interest in the Company to facilitate the initial public
offering of securities of the Company;
(12) any transaction with a Receivables Subsidiary pursuant
to a Qualified Receivables Transaction; and
(13) any agreement as in effect on the Issue Date and
described in the Offering Circular or any renewals
extensions of any such agreement (so long as such
renewals or extensions are not less favorable to the
Company or the Restricted Subsidiaries) and the
transactions evidenced thereby.
SECTION 4.08. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES. The Company:
(a) shall not, and shall not permit any Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose of any Capital Stock
of any Restricted Subsidiary to any Person (other than the Company or a Wholly
Owned Subsidiary) and
69
(b) shall not permit any Restricted Subsidiary to issue any
of its Capital Stock (other than, if necessary, shares of its Capital Stock
constituting directors' or other legally required qualifying shares) to any
Person (other than to the Company or a Wholly Owned Subsidiary),
unless, in the case of either Section 4.08(a) or (b):
(i) immediately after giving effect to such issuance,
sale or other disposition, neither the Company nor any of its
Subsidiaries own any Capital Stock of such Restricted Subsidiary or
(ii) immediately after giving effect to such issuance,
sale or other disposition, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect thereto is treated as a new Investment by
the Company and such Investment would be permitted to be made under
Section 4.04 if made on the date of such issuance, sale or other
disposition.
Notwithstanding the foregoing, the issuance or sale of shares
of Capital Stock of any Restricted Subsidiary of the Company will not violate
the provisions of this Section 4.08 if such shares are issued or sold in
connection with (x) the initial formation or capitalization of such Restricted
Subsidiary (provided no assets (other than cash or Temporary Cash Investments)
of the Company or any Restricted Subsidiary are transferred to such Restricted
Subsidiary) or (y) a single transaction or a series of substantially
contemporaneous transactions whereby such Restricted Subsidiary becomes a
Restricted Subsidiary of the Company by reason of the acquisition of securities
or assets from another Person.
SECTION 4.09. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require that the Company repurchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.09(b).
69
In the event that at the time of such Change of Control the terms of any Senior
Indebtedness of the Company restrict or prohibit the purchase of Securities
pursuant to this Section 4.09, then prior to the mailing of the notice to
Holders provided for in Section 4.09(b) below but in any event within 30 days
following any Change of Control, the Company shall (1) repay in full all such
Senior Indebtedness or (2) obtain the requisite consents under the agreements
governing all such Senior Indebtedness to permit the repurchase of the
Securities as provided for in Section 4.09(b).
(b) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such Holder's
Securities at a purchase price in cash equal to 101% of the principal
amount thereof on the date of purchase, plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of
Holders of record on the relevant record date to receive interest on
the relevant interest payment date);
(2) the circumstances and relevant facts regarding such
Change of Control;
(3) the purchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company,
consistent with this Section 4.09, that a Holder must follow in order
to have its Securities purchased.
(c) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal
71
amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Security
purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section 4.09 shall be delivered by the Company to the Trustee
for cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section
4.09, the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.09 applicable to a Change of Control Offer made by the Company
and purchases all Securities validly tendered and not withdrawn under such
Change of Control Offer.
(f) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.09. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.09, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.09 by virtue of its
compliance with such securities laws or regulations.
SECTION 4.10. FUTURE GUARANTORS. The Company will cause each
domestic Restricted Subsidiary (other than a Receivables Subsidiary) that Incurs
any Indebtedness to, and each Foreign Subsidiary that enters into a Guarantee of
any Senior Indebtedness (other than a Foreign Subsidiary that Guarantees Senior
Indebtedness Incurred by another Foreign Subsidiary) to, in each case at the
same time, execute and deliver to the Trustee a Guaranty Agreement pursuant to
which such Restricted Subsidiary will Guarantee payment of the Securities on the
same terms and conditions as those set forth in this Indenture.
SECTION 4.11. COMPLIANCE CERTIFICATE. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers'
72
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Company they would normally have knowledge of
any Default and whether or not the signers know of any Default that occurred
during such period. If they do, the certificate shall describe the Default, its
status and what action the Company is taking or proposes to take with respect
thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.12. FURTHER INSTRUMENTS AND ACTS. Upon request of
the Trustee or otherwise as necessary, the Company shall execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this Indenture.
ARTICLE 5
SUCCESSOR COMPANY
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS.
(a) The Company shall not consolidate with or merge with or
into, or convey, transfer or lease, in one transaction or a series of
transactions, directly or indirectly, all or substantially all its assets to,
any Person, unless:
(1) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture;
(2) immediately after giving pro forma effect to such
transaction (and treating any Indebtedness which becomes an obligation
of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
73
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(3) immediately after giving pro forma effect to such
transaction, either (A) the Successor Company would be able to Incur an
additional $1.00 of Indebtedness (other than Subordinated Obligations)
pursuant to Section 4.03(a) or (B) the Consolidated Leverage Ratio for
the Successor Company would be (i) equal to or less than such ratio for
the Company immediately prior to such transaction and (ii) equal to or
less than (x) 4.75 to 1.0 if such transaction is consummated on or
prior to June 24, 2004, (y) 4.5 to 1.0 if such transaction is
consummated after June 24, 2004 and on or prior to July 1, 2005 and (z)
4.25 to 1.0 if such transaction is consummated after July 1, 2005; and
(4) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture;
PROVIDED, HOWEVER, that clause (3) shall not be applicable to (A) a Restricted
Subsidiary consolidating with, merging into, or transferring all or part of its
properties and assets to the Company or any Restricted Subsidiary or (B) the
Company merging with an Affiliate of the Company solely for the purpose and with
the sole effect of reincorporating the Company in another jurisdiction or
forming a holding company for the Company.
For purposes of this Section 5.01(a), the sale, lease,
conveyance, assignment, transfer or other disposition of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, and the predecessor Company, except
74
in the case of a lease, shall be released from the obligation to pay the
principal of and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:
(1) except in the case of a Subsidiary Guarantor that has
been disposed of in its entirety to another Person (other than to the
Company or a Subsidiary of the Company) or otherwise ceases to be a
Subsidiary Guarantor as a result of such transaction or series of
transactions, whether through a merger, consolidation or sale of
Capital Stock or assets, if in connection therewith the Company
provides an Officers' Certificate to the Trustee to the effect that the
Company will comply with its obligations under Section 4.06 in respect
of such disposition, the resulting, surviving or transferee Person (if
not such Subsidiary) shall be a Person organized and existing under the
laws of the jurisdiction under which such Subsidiary was organized or
under the laws of the United States of America, or any State thereof or
the District of Columbia, and such Person shall expressly assume, by a
Guaranty Agreement, in a form reasonably satisfactory to the Trustee,
all the obligations of such Subsidiary, if any, under its Subsidiary
Guaranty;
(2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person
as a result of such transaction as having been issued by such Person at
the time of such transaction), no Default shall have occurred and be
continuing; and
(3) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such Guaranty Agreement, if any,
complies with this Indenture;
PROVIDED, HOWEVER, that this Section 5.01(b) shall not be applicable to any
Subsidiary Guarantor that consolidates
75
with, merges with or into or conveys, transfers or leases, in one transaction or
a series of transactions, all or substantially all of its assets to the Company
or another Subsidiary Guarantor.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default"
occurs if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues
for a period of 30 days;
(2) the Company (i) defaults in the payment of the principal
of any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon special mandatory redemption,
upon declaration of acceleration or otherwise, whether or not such
payment shall be prohibited by Article 10, or (ii) fails to purchase
Securities when required pursuant to this Indenture or the Securities,
whether or not such purchase shall be prohibited by Article 10;
(3) the Company fails to comply with its obligations
pursuant to Section 5.01;
(4) the Company or any Restricted Subsidiary fails to comply
with Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09 or 4.10
(other than a failure to purchase Securities validly tendered when
required under Section 4.06 or 4.09) and such failure continues for 30
days after the notice specified below;
(5) the Company or any Restricted Subsidiary fails to comply
with any of its agreements in the Securities or this Indenture (other
than those referred to in clause (1), (2), (3) or (4) above) and such
failure continues for 60 days after the notice specified below;
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(6) Indebtedness of the Company, any Subsidiary Guarantor or
any Significant Subsidiary is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof
because of a default and the total amount of such Indebtedness unpaid
or accelerated exceeds $12.5 million;
(7) the Company, a Subsidiary Guarantor or any Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company, a Subsidiary
Guarantor or any Significant Subsidiary in an involuntary
case;
(B) appoints a Custodian of the Company, a Subsidiary
Guarantor or any Significant Subsidiary or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the
Company, a Subsidiary Guarantor or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in
excess of $12.5 million is entered against
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the Company, a Subsidiary Guarantor or any Significant Subsidiary,
remains outstanding for a period of 60 consecutive days following the
entry of such judgment or decree and is not discharged, waived or the
execution thereof stayed; or
(10) any Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary
Guaranty) and such default continues for 10 days or any Subsidiary
Guarantor denies or disaffirms its obligations under its Subsidiary
Guaranty, as the case may be.
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, XXXXXX XXXXXX CODE,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4) or (5) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4) or (5), its status and what action the Company is taking or proposes
to take with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other
than an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or
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the Holders of at least 25% in principal amount of the Securities by notice to
the Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately, provided that
if any Bank Indebtedness is outstanding at such time, neither the Company nor
any Subsidiary Guarantor shall make any payment with respect to the Securities
until five Business Days after the Representatives of all the issues of Bank
Indebtedness receive written notice of such acceleration and, thereafter, any
such payment shall be made only if the provisions of Article 10 and 12 do not
restrict payment at such time. If an Event of Default specified in Section
6.01(7) or (8) with respect to the Company occurs, the principal of and 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
Securityholders. The Holders of a majority in principal amount of the Securities
by notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the
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principal of or interest on a Security, (ii) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(iii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority
in 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 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
from such Holders satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. LIMITATION ON SUITS. Except to enforce the
right to receive payment of principal, premium (if any) or interest when due, no
Securityholder may 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;
(2) the Holders of at least 25% in principal amount of the
outstanding 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 60
days after receipt of the request and the offer of security or
indemnity reasonably satisfactory to it; and
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(5) the Holders of a majority in principal amount of the
outstanding Securities do not give the Trustee a direction inconsistent
with the request during such 60-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 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any money
or property pursuant to this Article 6, it shall pay out the money or property
in the following order:
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FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company and
the Subsidiary Guarantors, to the extent required by Articles 10 and
12;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for 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.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Company shall mail to each Securityholder and the
Trustee a notice that states the record date, the payment date and amount to be
paid.
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 and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in principal amount of the
Securities.
SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein
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granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of certificates or opinions
specifically required by any provision hereof to be provided to it, the
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of Section
7.01(b);
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(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section
7.01.
(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 7.01 and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on any document
(whether in original or facsimile form) believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need not investigate
any fact or matter stated in the document.
(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
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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, without limiting the effect of
Section 7.01(b), the Trustee's conduct does not constitute wilful misconduct or
negligence.
(e) The Trustee may consult with counsel of its own selection,
and the advice or opinion of counsel with respect to legal matters relating to
this Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity reasonably satisfactory
to the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent or Registrar
may do the same with like rights. However, the Trustee must comply with Sections
7.10 and 7.11.
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SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation, warranty or certification as to the
validity or adequacy of this Indenture or the Securities except as contained in
the Trustee's certificate of authentication. The Trustee shall not be
accountable for the Company's use of the proceeds from the issuance and sale of
the Securities and shall not be responsible for any statement of the Company
made in connection with the issuance and sale of the Securities, whether oral or
written and whether contained in this Indenture, any offering document or any
other document, certificate or instrument.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security), the Trustee may withhold the notice if and so long as a committee of
its Trust Officers in good faith determines that withholding the notice is in
the interests of Securityholders.
SECTION 7.06. 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 for so long as
the Securities are outstanding, the Trustee shall mail to each Securityholder a
brief report dated as of May 15 that complies with TIA ss. 313(a). The Trustee
also shall comply with TIA ss. 313(b). The Trustee will also transmit by mail
all reports required by TIA ss. 313(c).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed in accordance with TIA ss. 313(d). The Company
agrees to notify promptly the Trustee whenever the Securities become listed on
any stock exchange and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall
pay to the Trustee from time to time such reasonable compensation as agreed to
between the Company and the Trustee for its acceptance of the responsibilities
under this Indenture. 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
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upon request for all reasonable disbursements, advancements and expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability, claim, damage or expense (including
reasonable attorneys' fees and expenses) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder. 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 reasonable 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 wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
7.07 shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(7) or (8)
with respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
The Trustee will comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
SECTION 7.08. 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 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;
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(2) the Trustee is adjudged bankrupt or insolvent or an
order for relief against the Trustee is entered with respect to any
Bankruptcy Law;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in 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 upon payment of its
charges hereunder promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition at the expense
of the Company any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, 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 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA ss. 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 ss. 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
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ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES;
DEFEASANCE.
(a) When (1) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section 2.07)
for cancelation, (2) all outstanding Securities have become due and payable,
whether at maturity or on a redemption date as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof or pursuant to paragraph (6)
of the Securities or (3) all outstanding Securities will become due and payable
within one year or are to be called for redemption within one year under
arrangements reasonably satisfactory to the Trustee and, in the case of clauses
(2) and (3), the Company irrevocably deposits with the Trustee funds sufficient
to pay at maturity or upon redemption all outstanding Securities, including
interest thereon to maturity or such redemption date (other than Securities
replaced pursuant to Section 2.07), and if in any case the Company pays all
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (1) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (2) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09 and 4.10 and the operation of
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Subsidiary Guarantors and
Significant Subsidiaries) and the limitations contained in Sections 5.01(a)(3)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If
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the Company exercises its covenant defeasance option, payment of the Securities
may not be accelerated because of an Event of Default specified in Sections
6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01 (7) and (8), with respect only to Subsidiary Guarantors and Significant
Subsidiaries) or because of the failure of the Company to comply with Section
5.01(a)(3). If the Company exercises its legal defeasance option or its covenant
defeasance option, each Subsidiary Guarantor, if any, shall be released from all
its obligations with respect to its Subsidiary Guaranty simultaneously with the
exercise of either such option.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive such satisfaction and discharge.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment of
principal of and interest on the Securities to maturity or redemption,
as the case may be;
(2) the Company delivers to the Trustee a certificate from a
firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment on
the deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such amounts
as will be sufficient to pay principal and interest when due on all the
Securities to maturity or redemption, as the case may be;
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(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any
other agreement binding on the Company and is not prohibited by Article
10 or 12;
(5) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) 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 defeasance had not occurred;
(6) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Securityholders will not recognize income, gain or
loss for 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;
(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 as
contemplated by this Article 8 have been complied with; and
(8) 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.
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Before or after a deposit, the Company may make arrangements
reasonably satisfactory to the Trustee for the redemption of Securities at a
future date in accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
(and in accordance with the provisions of) this Article 8. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Securities. Money and securities so held in trust are not
subject to Article 10.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any excess
money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent
is unable to apply any money or U.S. Government Obligations in accordance with
this Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its
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obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, the
Subsidiary Guarantors 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;
(2) to comply with Article 5;
(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 add Guarantees with respect to the Securities,
including any Subsidiary Guaranties, or to secure the Securities;
(5) 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 or a Subsidiary Guarantor;
(6) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA;
(7) to make any change that does not adversely affect the
rights of any Securityholder; or
(8) to make any change in Article 10 that would limit or
terminate the benefits available to any holder of Senior Indebtedness
of the Company or of a
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Subsidiary Guarantor (or Representatives therefor) under Article 10 or
12.
An amendment under this Section 9.01 may not make any change
that adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or a Subsidiary Guarantor 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 9.01 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 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to any Securityholder but with the written consent of the Holders
of at least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange for
the Securities). However, without the consent of each Securityholder affected
thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal amount of or extend the Stated
Maturity of any Security;
(4) change the provisions applicable to the redemption of
any Security contained in Article 3 or paragraphs 5, 6 or 7 of the
Securities (other than the notice provisions with respect thereto);
(5) make any Security payable in money other than that
stated in the Security;
(6) impair the right of any Securityholder to receive
payment of principal of and interest on such Holder's Securities on or
after the due dates therefor
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or to institute suit for the enforcement of any payment on or with
respect to such Holder's Securities;
(7) make any changes in Articles 10 or 12 that would
adversely affect the Securityholders;
(8) make any change in Section 6.04 or 6.07 or this second
sentence of this Section 9.02; or
(9) make any change in, or release other than in accordance
with Section 11.06 or 8.01(b), any Subsidiary Guaranty that would
adversely affect the Securityholders.
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 may not make any change
that adversely affects the rights under Article 10 or 12 of any holder of Senior
Indebtedness of the Company or of a Subsidiary Guarantor 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 9.02 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 9.02.
SECTION 9.03. COMPLIANCE WITH TIA. Every amendment to this
Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS.
A consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the
96
Security if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Securityholder. An amendment or waiver becomes
effective upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an
amendment or waiver changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make the
appropriate notation or to issue a new Security shall not affect the validity of
such amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not 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
shall be provided with, and (subject to Section 7.01) shall be fully protected
in relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor
any Affiliate of the Company shall, directly or
97
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Securities unless such consideration either (i) is offered to be paid to
all Holders that so consent, waive or agree to amend in the time frame set forth
in solicitation documents relating to such consent, waiver or agreement or (ii)
is paid to all Holders.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Indebtedness
and other Obligations evidenced by the Securities is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment of all Obligations with respect to Senior Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter incurred) and that
the subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Securities shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of the Company and only Indebtedness
of the Company that is Senior Indebtedness of the Company shall rank senior to
the Securities in accordance with the provisions set forth herein. All
provisions of this Article 10 shall be subject to Section 10.12.
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any total or partial
liquidation or any total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership, winding-up, assignment for
the benefit of creditors, marshalling of assets or similar proceeding relating
to the Company or its property, whether voluntary or involuntary:
(1) the holders of Senior Indebtedness of the Company shall
be entitled to receive payment in full of all Obligations with respect
to all such Senior
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Indebtedness before Securityholders shall be entitled to receive any
payment with respect to the Securities;
(2) until all such Senior Indebtedness is paid in full, any
payment or distribution to which Securityholders would be entitled but
for this Article 10 shall be made to holders of such Senior
Indebtedness as their interests may appear, except that Securityholders
may receive shares of stock and any debt securities that are
subordinated to such Senior Indebtedness to at least the same extent as
the Securities; and
(3) if a distribution is made to holders of the Securities
that, due to the subordination provisions, should not have been made to
them, such holders of the Securities are required to hold in trust for
the holders of the Senior Indebtedness of the Company and pay it over
to them as their interests may appear.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OF THE COMPANY.
The Company shall not pay (in cash, property, securities or other assets), the
principal of, interest on or other Obligations owing with respect to the
Securities or make any deposit pursuant to Section 8.01 or 8.02 and may not
purchase, redeem or otherwise retire or acquire any Securities (collectively,
"pay the Securities") if either of the following (a "Payment Default") occurs
(1) any Obligations with respect to Designated Senior Indebtedness of the
Company are not paid in full when due or (2) any other default on Designated
Senior Indebtedness of the Company occurs and the maturity of such Designated
Senior Indebtedness is accelerated in accordance with its terms, unless, in
either case, the Payment Default has been cured or waived and any such
acceleration has been rescinded or such Designated Senior Indebtedness has been
paid in full; PROVIDED, HOWEVER, that the Company shall be entitled to pay the
Securities without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representatives of all
Designated Senior Indebtedness with respect to which the Payment Default has
occurred and is continuing.
During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of the Company
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect
99
such acceleration) or the expiration of any applicable grace periods, the
Company shall 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
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter. The Payment Blockage Period
shall end earlier if such Payment Blockage Period is terminated
(1) by written notice to the Trustee and the Company from
the Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such Blockage Notice
is cured, waived or otherwise no longer continuing; or
(3) because such Designated Senior Indebtedness has been
discharged or repaid in full.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section 10.03), unless the holders of such Designated Senior Indebtedness giving
such Blockage Notice or the Representatives of such Designated Senior
Indebtedness shall have accelerated the maturity of the Designated Senior
Indebtedness, the Company shall be entitled to resume payments on the Securities
after termination of such Payment Blockage Period. The Securities shall not be
subject to more than one Payment Blockage Period in any consecutive 360-day
period, irrespective of the number of defaults with respect to Designated Senior
Indebtedness of the Company during such period; PROVIDED, HOWEVER, that if any
Blockage Notice within such 360-day period is given by or on behalf of any
holders of Designated Senior Indebtedness of the Company (other than the Bank
Indebtedness), the Representative of the Bank Indebtedness shall be entitled to
give another Blockage Notice within such period; PROVIDED FURTHER, HOWEVER, that
in no event shall 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, and there must be 181 days during any consecutive
360-day period during which no Payment Blockage Period is in effect.
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For purposes of this Section 10.03, no default or event of
default which existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness of
the Company initiating such Payment Blockage Period shall be, or be made, the
basis of the commencement of a subsequent Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.
SECTION 10.04. ACCELERATION OF PAYMENT OF SECURITIES. If
payment of the Securities is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify in writing the holders of the
Designated Senior Indebtedness of the Company (or their Representatives) of the
acceleration (although the failure to give any such notice shall not affect the
subordination provisions of this Article 10). If any Bank Indebtedness of the
Company is outstanding, neither the Company nor any Subsidiary Guarantor shall
pay the Securities until five Business Days after the Representatives of all
such Bank Indebtedness of the Company receive written notice of such
acceleration and, thereafter, the Company and the Subsidiary Guarantors shall be
entitled to pay the Securities (and the Securityholders may accept and retain
such payment) only if this Article 10 otherwise permits payment (and the
acceptance and retention) at that time.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution or payment is made to the Trustee or Securityholders that because
of this Article 10 should not have been made to (or received by) them, the
Trustee or Securityholders who receive the distribution or payment shall hold it
in trust for holders of Senior Indebtedness of the Company and pay it over to
them or their Representatives as their interests may appear.
SECTION 10.06. SUBROGATION. After all Senior Indebtedness of
the Company is paid in full 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 such Senior Indebtedness. A
distribution made under this Article 10 to holders of Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
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and Securityholders, a payment by the Company on such Senior Indebtedness.
SECTION 10.07. RELATIVE RIGHTS. This Article 10 defines the
relative rights of Securityholders and holders of Senior Indebtedness of the
Company. 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
(2) prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default, subject to the rights
of holders of Senior Indebtedness of the Company to receive
distributions or payments otherwise payable to Securityholders.
SECTION 10.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness of the Company 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 its failure to comply with
this Indenture.
SECTION 10.09. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 10.03, the Trustee or Paying Agent shall continue to
make payments on the Securities and shall not be charged with knowledge of the
existence of facts that under this Article 10 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 notice satisfactory to it that
such payments are prohibited by this Article 10. The Company, the Registrar, the
Paying Agent, a Representative or a holder of Senior Indebtedness of the Company
shall be entitled to give the notice; PROVIDED, HOWEVER, that, if an issue of
Senior Indebtedness of the Company has a Representative, only the Representative
shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of the Company with the same rights it
would have if it were not Trustee. The Registrar and co-registrar and the Paying
Agent shall be entitled to do the same with like rights.
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The Trustee shall be entitled to all the rights set forth in this Article 10
with respect to any Senior Indebtedness of the Company which may at any time be
held by it, to the same extent as any other holder of such Senior Indebtedness;
and nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee (in its capacity as such) under or pursuant to Section 7.07.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever any Person is to make a distribution or give a notice to holders of
Senior Indebtedness of the Company, such Person shall be entitled to make such
distribution or give such notice to their Representative (if any).
SECTION 10.11. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT OR
LIMIT RIGHT TO ACCELERATE. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. Nothing in this Article 10 shall have
any effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities in accordance with Section 6.02.
SECTION 10.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust in accordance with Article 8 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 of the Company
or subject to the restrictions set forth in this Article 10, and none of the
Securityholders shall be obligated to pay over any such amount to the Company or
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 10, the Trustee and the Securityholders
shall be entitled to rely
(1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in
Section 10.02 are pending,
102
(2) 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
(3) upon the Representatives of Senior Indebtedness of the
Company
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of such 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 10.
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 of the Company to participate in any payment or distribution
pursuant to this Article 10, the Trustee shall be entitled to request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such 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 10, and, if such
evidence is not furnished, the Trustee shall be entitled to defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Sections 7.01 and 7.02 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 10.
SECTION 10.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
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 of the Company as provided in this Article 10 and appoints
the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF THE COMPANY. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company 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
104
Person, money or assets to which any holders of Senior Indebtedness of the
Company shall be entitled by virtue of this Article 10 or otherwise.
SECTION 10.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF
THE COMPANY ON SUBORDINATION Provisions. Each Securityholder by accepting a
Security (whether upon original issue or upon transfer, assignment or exchange
thereof) 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 of the Company, 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 such 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.
SECTION 10.17. ESCROWED FUNDS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary, neither the
Securityholders' interest in the property held by the Escrow Agent pursuant to
the Escrow Agreement during the period of up to 32 days following the Issue Date
nor the right of the Securityholders to payment pursuant to paragraph (6) of the
Securities shall be subordinated to the prior payment of any Senior Indebtedness
of the Company or subject to the restrictions set forth in this Article 10, and
none of the Securityholders shall be obligated to pay over any such amount to
the Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
ARTICLE 11
SUBSIDIARY GUARANTIES
SECTION 11.01. SUBSIDIARY GUARANTIES. Each Subsidiary
Guarantor hereby unconditionally and irrevocably guarantees, jointly and
severally, to each Holder and to the Trustee and its successors and assigns (a)
the full and punctual payment of principal of and interest on the Securities
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Company under this Indenture and the
105
Securities and (b) the full and punctual performance within applicable grace
periods of all other obligations of the Company under this Indenture and the
Securities (all the foregoing being hereinafter collectively called the
"Securities Obligations"). Each Subsidiary Guarantor further agrees that the
Securities Obligations may be extended or renewed, in whole or in part, without
notice or further assent from such Subsidiary Guarantor and that such Subsidiary
Guarantor will remain bound under this Article 11 notwithstanding any extension
or renewal of any Securities Obligation.
To the fullest extent permitted by law, each Subsidiary
Guarantor waives presentation to, demand of, payment from and protest to the
Company of any of the Securities Obligations and also waives notice of protest
for nonpayment. To the fullest extent permitted by law, each Subsidiary
Guarantor waives notice of any default under the Securities or the Securities
Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be
affected by
(a) the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any right or remedy against the Company
or any other Person (including any Subsidiary Guarantor) under this
Indenture, the Securities or any other agreement or otherwise;
(b) any extension or renewal of any such claim, demand,
right or remedy;
(c) any rescission, waiver, amendment or modification of any
of the terms or provisions of this Indenture, the Securities or any
other agreement;
(d) the release of any security held by any Holder or the
Trustee for the Securities Obligations or any of them;
(e) the failure of any Holder or the Trustee to exercise any
right or remedy against any other guarantor of the Securities
Obligations; or
(f) except as set forth in Section 11.06, any change in the
ownership of such Subsidiary Guarantor.
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Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Securities Obligations.
Each Subsidiary Guaranty is, to the extent and in the manner
set forth in Article 12, subordinated and subject in right of payment to the
prior payment in full of the principal of and premium, if any, and interest on
all Senior Indebtedness of the Subsidiary Guarantor giving such Subsidiary
Guaranty and each Subsidiary Guaranty is made subject to such provisions of this
Indenture.
Except as expressly set forth in Sections 8.01(b), 11.02 and
11.06, to the fullest extent permitted by law, the obligations of each
Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and, to the fullest extent
permitted by law, shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Securities Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Securities Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
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In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Securities Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Securities Obligation, each
Subsidiary Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of
(1) the unpaid amount of such Securities Obligations,
(2) accrued and unpaid interest on such Securities
Obligations (but only to the extent not prohibited by law) and
(3) all other monetary Securities Obligations of the Company
to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in respect of any Securities Obligations guaranteed
hereby until payment in full of all Securities Obligations and all obligations
to which the Securities Obligations are subordinated as provided in Article 12.
Each Subsidiary Guarantor further agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand,
(x) the maturity of the Securities Obligations Guaranteed
hereby may be accelerated as provided in Article 6 for the purposes of
such Subsidiary Guarantor's Subsidiary Guaranty herein, notwithstanding
any stay, injunction or other prohibition preventing such acceleration
in respect of the Securities Obligations guaranteed hereby, and
(y) in the event of any declaration of acceleration of such
Securities Obligations as provided in Article 6, such Securities
Obligations (whether or not due and payable) shall forthwith become due
and payable by such Subsidiary Guarantor for the purposes of this
Section 11.01.
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Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section 11.01.
SECTION 11.02. LIMITATION ON LIABILITY. Any term or provision
of this Indenture to the contrary notwithstanding, the maximum aggregate amount
of the Securities Obligations guaranteed hereunder by any Subsidiary Guarantor
shall not exceed the maximum amount that can be hereby guaranteed without
rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 11.03. SUCCESSORS AND ASSIGNS. This Article 11 shall
be binding upon each Subsidiary Guarantor and its successors and assigns and
shall enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 11.04. NO WAIVER. Neither a failure nor a delay on
the part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 11 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 11
at law, in equity, by statute or otherwise.
SECTION 11.05. MODIFICATION. No modification, amendment or
waiver of any provision of this Article 11, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or
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further notice or demand in the same, similar or other circumstances.
SECTION 11.06. RELEASE OF SUBSIDIARY GUARANTOR. A Subsidiary
Guarantor will be released from its obligations under this Article 11 without
any further action required on the part of the Trustee or any Holder (other than
any obligation that may have arisen under Section 11.07 prior to such release),
(1) upon the sale (including any sale pursuant to any
exercise of remedies by a holder of Senior Indebtedness of the Company
or of such Subsidiary Guarantor) or other disposition (including by way
of consolidation or merger) of a Subsidiary Guarantor,
(2) upon the sale or disposition of all or substantially all
the assets of such Subsidiary Guarantor,
(3) upon the designation of such Subsidiary Guarantor as an
Unrestricted Subsidiary pursuant to the terms of this Indenture,
(4) in connection with any sale or other disposition
(including by way of a merger or consolidation) of Capital Stock of a
Subsidiary Guarantor to a Person in accordance with the Indenture that
results in the Subsidiary Guarantor no longer being a Restricted
Subsidiary; PROVIDED, HOWEVER, that after giving effect to such sale,
such former Subsidiary Guarantor shall have no Guaranties outstanding
of any Indebtedness of the Company or any Restricted Subsidiary, or
(5) at such time as such Subsidiary Guarantor no longer has
any other Indebtedness outstanding;
PROVIDED, HOWEVER, that in the case of clauses (1), (2) and (4) above, (i) such
sale or other disposition is made to a Person other than the Company or a
Subsidiary of the Company, (ii) such sale or disposition is otherwise permitted
by this Indenture and (iii) the Company provides an Officers' Certificate to the
Trustee to the effect that the Company will comply with its obligations under
Section 4.06 with respect to such sale or disposition. At the request of the
Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
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SECTION 11.07. CONTRIBUTION. Each Subsidiary Guarantor that
makes a payment under its Subsidiary Guaranty shall be entitled upon payment in
full of all guarantied obligations under this Indenture to a contribution from
each other Subsidiary Guarantor in an amount equal to such other Subsidiary
Guarantor's pro rata portion of such payment based on the respective net assets
of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTIES
SECTION 12.01. AGREEMENT TO SUBORDINATE. Each Subsidiary
Guarantor agrees, and each Securityholder by accepting a Security agrees, that
the Indebtedness evidenced by such Subsidiary Guarantor's Subsidiary Guaranty is
subordinated in right of payment, to the extent and in the manner provided in
this Article 12, to the prior payment of all Senior Indebtedness of such
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
incurred) and that the subordination is for the benefit of and enforceable by
the holders of such Senior Indebtedness. The Securities Obligations of a
Subsidiary Guarantor shall in all respects rank PARI PASSU with all other Senior
Subordinated Indebtedness of such Subsidiary Guarantor and only Senior
Indebtedness of such Subsidiary Guarantor (including such Subsidiary Guarantor's
Guarantee of Senior Indebtedness of the Company) shall rank senior to the
Securities Obligations of such Subsidiary Guarantor in accordance with the
provisions set forth herein.
SECTION 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any
payment or distribution of the assets of any Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon a total or
partial liquidation or a total or partial dissolution of such Subsidiary
Guarantor or in a bankruptcy, reorganization, insolvency, receivership,
winding-up, assignment for the benefit of creditors, marshalling of assets or
similar proceeding relating to such Subsidiary Guarantor or its property whether
voluntary or involuntary:
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(1) the holders of Senior Indebtedness of such Subsidiary
Guarantor shall be entitled to receive payment in full of all
Obligations with respect to all such Senior Indebtedness before
Securityholders shall be entitled to receive any payment with respect
to any Obligations of such Subsidiary Guarantor; and
(2) until the Senior Indebtedness of such Subsidiary
Guarantor is paid in full, any payment or distribution to which
Securityholders would be entitled but for this Article 12 shall be made
to holders of such Senior Indebtedness as their interests may appear,
except that Securityholders may receive shares of stock and any debt
securities that are subordinated to such Senior Indebtedness to at
least the same extent as the Securities.
SECTION 12.03. DEFAULT ON SENIOR INDEBTEDNESS OF SUBSIDIARY
GUARANTOR. No Subsidiary Guarantor shall make any payment (in cash, property,
securities or other assets) with respect to its Subsidiary Guaranty or purchase,
redeem or otherwise retire, acquire or defease any Securities or other
Securities Obligations (collectively, "pay its Subsidiary Guaranty") if either
of the following (a "Payment Default") occurs (1) any Designated Senior
Indebtedness of such Subsidiary Guarantor is not paid in full when due or (2)
any other default on Designated Senior Indebtedness of such Subsidiary Guarantor
occurs and the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms, unless, in either case, the Payment Default has been
cured or waived and any such acceleration has been rescinded or such Designated
Senior Indebtedness has been paid in full; PROVIDED, HOWEVER, that any
Subsidiary Guarantor shall be entitled to make any payment with respect to its
Subsidiary Guaranty without regard to the foregoing if such Subsidiary Guarantor
and the Trustee receive written notice approving such payment from the
Representatives of all Designated Senior Indebtedness with respect to which the
Payment Default has occurred and is continuing.
During the continuance of any default (other than a Payment
Default) with respect to any Designated Senior Indebtedness of such Subsidiary
Guarantor 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, such Subsidiary
Guarantor shall
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not pay its Subsidiary Guaranty 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
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter. The Payment Blockage Period
shall end earlier if such Payment Blockage Period is terminated
(1) by written notice to the Trustee and such Subsidiary
Guarantor from the Person or Persons who gave such Blockage Notice;
(2) because the default giving rise to such Blockage Notice
is cured, waived or otherwise no longer continuing; or
(3) because such Designated Senior Indebtedness has been
discharged or repaid in full.
Notwithstanding the provisions described in the immediately preceding two
sentences (but subject to the provisions contained in the first sentence of this
Section 12.03), unless the holders of such Designated Senior Indebtedness giving
such Blockage Notice or the Representatives of such Designated Senior
Indebtedness shall have accelerated the maturity of such Designated Senior
Indebtedness, any Subsidiary Guarantor shall be entitled to resume payments
pursuant to its Subsidiary Guaranty after termination of such Payment Blockage
Period. No Subsidiary Guaranty shall be subject to more than one Blockage Period
in any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness of such Subsidiary Guarantor during
such period; PROVIDED, HOWEVER, that if any Blockage Notice within such 360-day
period is given by or on behalf of any holders of Designated Senior Indebtedness
of such Subsidiary Guarantor (other than the Bank Indebtedness), the
Representative of the Bank Indebtedness shall be entitled to give another
Blockage Notice within such period; PROVIDED further, HOWEVER, that in no event
shall 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, and there must be 181 days during any consecutive 360-day period
during which no Payment Blockage Period is in effect.
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For purposes of this Section 12.03, no default or event of
default which existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Indebtedness of
such Subsidiary Guarantor initiating such Payment Blockage Period shall be, or
be made, the basis of the commencement of a subsequent Payment Blockage Period
by the Representative of such Designated Senior Indebtedness, whether or not
within a period of 360 consecutive days, unless such default or event of default
shall have been cured or waived for a period of not less than 90 consecutive
days.
SECTION 12.04. DEMAND FOR PAYMENT. If a demand for payment is
made on a Subsidiary Guarantor pursuant to Article 11, the Trustee shall
promptly notify in writing the holders of the Designated Senior Indebtedness of
such Subsidiary Guarantor (or their Representatives) of such demand.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a
distribution is made to the Trustee as the Securityholders that because of this
Article 12 should not have been made to (or received by) them, the Trustee or
the Securityholders who receive the distribution or payment shall hold it in
trust for holders of Senior Indebtedness of the applicable Subsidiary Guarantor
and pay it over to them or their Representatives as their interests may appear.
SECTION 12.06. SUBROGATION. After all Senior Indebtedness of
a Subsidiary Guarantor is paid in full 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 of such
Subsidiary Guarantor. A distribution made under this Article 12 to holders of
Senior Indebtedness which otherwise would have been made to Securityholders is
not, as between the relevant Subsidiary Guarantor and Securityholders, a payment
by such Subsidiary Guarantor on such Senior Indebtedness.
SECTION 12.07. RELATIVE RIGHTS. This Article 12 defines the
relative rights of Securityholders and holders of Senior Indebtedness of a
Subsidiary Guarantor. Nothing in this Indenture shall:
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(1) impair, as between a Subsidiary Guarantor and
Securityholders, the obligation of such Subsidiary Guarantor, which is
absolute and unconditional, to pay its Subsidiary Guaranty to the
extent set forth in Article 11; or
(2) prevent the Trustee or any Securityholder from
exercising its available remedies upon a default by such Subsidiary
Guarantor under its Subsidiary Guaranty, subject to the rights of
holders of Senior Indebtedness of such Subsidiary Guarantor to receive
distributions otherwise payable to Securityholders.
SECTION 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY THE
SUBSIDIARY GUARANTORS. No right of any holder of Senior Indebtedness of any
Subsidiary Guarantor to enforce the subordination of the Subsidiary Guaranty of
such Subsidiary Guarantor shall be impaired by any act or failure to act by such
Subsidiary Guarantor or by such Subsidiary Guarantor's failure to comply with
this Indenture.
SECTION 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 12.03, the Trustee or Paying Agent shall continue to
make payments on any Subsidiary Guaranty and shall not be charged with knowledge
of the existence of facts under this Article 12 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 that such payments are prohibited by this Article 12. The
Company, the relevant Subsidiary Guarantor, the Registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to give the notice; PROVIDED, HOWEVER, that, if an issue of
Senior Indebtedness of any Subsidiary Guarantor has a Representative, only the
Representative shall be entitled to give the notice.
The Trustee in its individual or any other capacity shall be
entitled to hold Senior Indebtedness of any Subsidiary Guarantor with the same
rights it would have if it were not the 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 12 with respect to any
Senior
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Indebtedness of any Subsidiary Guarantor which may at any time be held by it, to
the same extent as any other holder of such Senior Indebtedness; and nothing in
Article 7 shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article 12 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 7.07.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever any Person is to make a distribution or give a notice to holders of
Senior Indebtedness of any Subsidiary Guarantor, such Person shall be entitled
to make such distribution or give such notice to their Representative (if any).
SECTION 12.11. ARTICLE 12 NOT TO PREVENT EVENTS OF DEFAULT OR
LIMIT RIGHT TO DEMAND PAYMENT. The failure to make a payment pursuant to a
Subsidiary Guaranty by reason of any provision in this Article 12 shall not be
construed as preventing the occurrence of a Default. Nothing in this Article 12
shall have any effect on the right of the Securityholders or the Trustee to make
a demand for payment on any Subsidiary Guarantor pursuant to its Subsidiary
Guaranty.
SECTION 12.12. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely
(1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in
Section 12.02 are pending,
(2) 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
(3) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of such Senior Indebtedness and other
Indebtedness of such Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 12.
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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 of any Subsidiary Guarantor to participate in any payment or
distribution pursuant to this Article 12, the Trustee shall be entitled to
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness of such Subsidiary Guarantor
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 12, and, if such evidence is not furnished, the
Trustee shall be entitled to defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.01 and 7.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.13. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
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 of any Subsidiary Guarantor as provided in this Article 12
and appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF SUBSIDIARY GUARANTOR. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of any Subsidiary Guarantor
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 such Senior Indebtedness shall be entitled by
virtue of this Article 12 or otherwise.
SECTION 12.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF
SUBSIDIARY GUARANTORS 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 of any Subsidiary Guarantor, 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
117
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 13
MISCELLANEOUS
SECTION 13.01. TIA CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. NOTICES. Any notice or communication shall be
in writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or any Subsidiary Guarantor:
Interline Brands, Inc.
000 X. Xxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xx. 0X
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Corporate Trust Administration
The Company, any Subsidiary Guarantor or the Trustee by notice
to the other may designate additional or different addresses for subsequent
notices or communications.
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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 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, each Subsidiary Guarantor, the Trustee, the Registrar
and anyone else shall have the protection of TIA ss. 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. 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;
119
(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 13.06. 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 Affiliate of 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 13.07. 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.
SECTION 13.08. LEGAL HOLIDAYS. 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 13.09. GOVERNING LAW. This Indenture and the
Securities shall be governed by, and construed in accordance with, the laws of
the State of New York.
SECTION 13.10. NO RECOURSE AGAINST OTHERS. A director,
officer, manager, employee, incorporator, member, partner or stockholder, as
such, of the Company or any
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Subsidiary Guarantor shall not have any liability for any obligations of the
Company under the Securities or this Indenture or any such Subsidiary Guarantor
under any Subsidiary Guaranty, as the case may be, 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 or
any Subsidiary Guarantor in this Indenture and the Securities shall bind its
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. TABLE OF CONTENTS; HEADINGS. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
INTERLINE BRANDS, INC.,
a New Jersey corporation,
by /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Executive Vice President, Chief
Financial Officer and Secretary
by /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President of Finance and
Treasurer
WILMAR HOLDINGS, INC.,
WILMAR FINANCIAL, INC.,
by /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
by /s/ Xxxxxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Treasurer
GLENWOOD ACQUISITION LLC,
by /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President and Chief Executive
Officer
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THE BANK OF NEW YORK, as Trustee
by /s/ Xxxx Xxxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
Rule 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO SECURITIES
---------------------------------
1. DEFINITIONS
1.1 DEFINITIONS
Capitalized terms used but not otherwise defined in this Appendix shall
have the meanings assigned in the Indenture. For the purposes of this Appendix
the following terms shall have the meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary Regulation S Global Security or beneficial
interest therein, the rules and procedures of the Depository, Euroclear and
Clearstream for such a Temporary Regulation S Global Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Clearstream" means Clearstream Banking, societe anonyme, or
any successor securities clearing agency.
"Definitive Security" means a certificated Security issued on
the Issue Date or Exchange Security or Private Exchange Security bearing, if
required, the restricted securities legend set forth in Section 2.3(e).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Distribution Compliance Period", with respect to any
Securities, means the period of 40 consecutive days beginning on and including
the later of (i) the day on which such Securities are first offered to Persons
other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the Issue Date with respect to such
Securities.
"Exchange Securities" means (1) the 11 1/2% Senior
Subordinated Notes Due 2011 issued pursuant to the Indenture in connection with
a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2)
Additional Securities, if any, issued pursuant to a registration statement filed
with the SEC under the Securities Act.
Rule 144A/REGULATION S APPENDIX
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, or any successor securities clearing agency.
"Initial Purchasers" means, with respect to the Initial
Securities issued on the Issue Date, Credit Suisse First Boston LLC, X.X. Xxxxxx
Securities Inc., Fleet Securities, Inc., Wachovia Securities, Inc. and BNY
Capital Markets, Inc.
"Initial Securities" means (1) $200,000,000 aggregate
principal amount of 11 1/2% Senior Subordinated Notes Due 2011 issued on the
Issue Date and (2) Additional Securities, if any, issued in a transaction exempt
from the registration requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to
a Registration Rights Agreement, to the Initial Purchasers or such Persons
purchasing such Securities to issue and deliver to each such Initial Purchaser
or Person, in exchange for the Initial Securities held by such Initial Purchaser
or Person as part of the initial distribution of such Initial Securities, a like
aggregate principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 11 1/2% Senior
Subordinated Notes Due 2011 issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated May 12, 2003,
among the Company, the Subsidiary Guarantors and the Initial Purchasers and (2)
with respect to each issuance of Additional Securities, the purchase agreement
or underwriting agreement among the Company and the Persons purchasing such
Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
Rule 144A/REGULATION S APPENDIX
"Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated May 23, 2003 among the Company, the Subsidiary Guarantors and the Initial
Purchasers, and (2) with respect to each issuance of Additional Securities
issued in a transaction exempt from the registration requirements of the
Securities Act, the registration rights agreement, if any, among the Company and
the Persons purchasing such Additional Securities under the related Purchase
Agreement.
"Rule 144A Securities" means all Securities offered and sold
to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto, and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend relating to restrictions on transfer relating to
the Securities Act set forth in Section 2.3(e).
Rule 144A/REGULATION S APPENDIX
1.2 OTHER DEFINITIONS
-----------------------------------------------------------------
DEFINED IN
TERM SECTION:
-----------------------------------------------------------------
Agent Members 2.1(b)
Global Security 2.1(a)
Permanent Regulation S Global Security 2.1(a)
Regulation S 2.1(a)
Rule 144A 2.1(a)
Rule 144A Global Security 2.1(a)
Temporary Regulation S Global Security 2.1(a)
2. THE SECURITIES
2.1 (1) FORM AND DATING. The Securities will be offered and sold
by the Company pursuant to a Purchase Agreement. The Securities will be resold
initially only to (i) QIBs in reliance on Rule 144A under the Securities Act
("Rule 144A") and (ii) Persons other than U.S. Persons (as defined in Regulation
S) in reliance on Regulation S under the Securities Act ("Regulation S").
Securities may thereafter be transferred to, among others, QIBs and purchasers
in reliance on Regulation S, subject to the restrictions on transfer set forth
herein. Securities initially resold pursuant to Rule 144A (collectively, the
"Rule 144A Global Security") shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form, and
Securities initially resold pursuant to Regulation S (collectively, the
"Temporary Regulation S Global Security") shall be issued initially in the form
of one or more temporary global securities in definitive, fully registered form,
in each case without interest coupons and with the global securities legend and
restricted securities legend set forth in Exhibit 1 hereto, which shall be
deposited on behalf of the purchasers of the Securities represented thereby with
the Securities Custodian and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by the
Trustee as provided in this Indenture. Beneficial ownership interests in the
Temporary Regulation S Global Security will not be exchangeable for interests in
the Rule 144A Global Security, a permanent global security (the "Permanent
Regulation S Global Security") or any other Security without a legend containing
restrictions on transfer of such Security prior to the expiration of the
Distribution
Rule 144A/REGULATION S APPENDIX
Compliance Period and then only upon certification in form reasonably
satisfactory to the Trustee that beneficial ownership interests in such
Temporary Regulation S Global Security are owned either by non-U.S. persons or
U.S. persons who purchased such interests in a transaction that did not require
registration under the Securities Act. The Rule 144A Global Security, the
Temporary Regulation S Global Security and the Permanent Regulation S Global
Security are collectively referred to herein as "Global Securities". The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depository or its nominee as hereinafter provided.
(2) BOOK-ENTRY PROVISIONS. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the
Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
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 Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat
the Depository as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(3) CERTIFICATED SECURITIES. Except as provided in this
Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in
Global Securities shall not be
Rule 144A/REGULATION S APPENDIX
entitled to receive physical delivery of Definitive Securities.
2.2 AUTHENTICATION
The Trustee shall authenticate and deliver: (1) on the Issue
Date, an aggregate principal amount of $200,000,000 11 1/2% Senior Subordinated
Notes Due 2011, (2) any Additional Securities for an original issue in an
aggregate principal amount specified in the written order of the Company
pursuant to Section 2.02 of the Indenture and (3) Exchange Securities or Private
Exchange Securities for issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to a Registration Rights Agreement, for a like
principal amount of Initial Securities, 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, in the case of any issuance of
Additional Securities pursuant to Section 2.13 of the Indenture after the Issue
Date, shall certify that such issuance is in compliance with Section 4.03 of the
Indenture.
2.3 TRANSFER AND EXCHANGE
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When
Definitive Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Securities;
or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; PROVIDED, HOWEVER,
that the Definitive Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar or co-
Rule 144A/REGULATION S APPENDIX
registrar, duly executed by the Holder thereof or its attorney duly
authorized in writing; and
(ii) if such Definitive Securities are required to bear a
restricted securities legend, they are being transferred or exchanged
pursuant to an effective registration statement under the Securities
Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C)
below, and are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Definitive Securities are being
transferred to the Company, a certification to that effect; or
(C) if such Definitive Securities are being
transferred (x) pursuant to an exemption from registration in
accordance with Rule 144A, Regulation S or Rule 144 under the
Securities Act; or (y) in reliance upon another exemption from
the requirements of the Securities Act: (i) a certification to
that effect (in the form set forth on the reverse of the
Security) and (ii) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to
the compliance with the restrictions set forth in the legend
set forth in Section 2.3(e)(i).
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be
exchanged for a beneficial interest in a Rule 144A Global Security or a
Permanent Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of
the Security, that such Definitive Security is either (A) being
transferred to a QIB in accordance with Rule 144A or (B) is being
transferred after
Rule 144A/REGULATION S APPENDIX
expiration of the Distribution Compliance Period by a Person who
initially purchased such Security in reliance on Regulation S to a
buyer who elects to hold its interest in such Security in the form of a
beneficial interest in the Permanent Regulation S Global Security; and
(ii) written instructions directing the Trustee to make, or
to direct the Securities Custodian to make, an adjustment on its books
and records with respect to such Rule 144A Global Security (in the case
of a transfer pursuant to clause (b)(i)(A)) or Permanent Regulation S
Global Security (in the case of a transfer pursuant to clause
(b)(i)(C)) to reflect an increase in the aggregate principal amount of
the Securities represented by the Rule 144A Global Security or
Permanent Regulation S Global Security, as applicable, such
instructions to contain information regarding the Depository account to
be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, to be
increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global
Security or Permanent Regulation S Global Security, as applicable, equal to the
principal amount of the Definitive Security so canceled. If no Rule 144A Global
Securities or Permanent Regulation S Global Securities, as applicable, are then
outstanding, the Company shall issue and the Trustee shall authenticate, upon
written order of the Company in the form of an Officers' Certificate of the
Company, a new Rule 144A Global Security or Permanent Regulation S Global
Security, as applicable, in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository,
in accordance with
Rule 144A/REGULATION S APPENDIX
this Indenture (including applicable restrictions on transfer set forth
herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security shall deliver
to the Registrar a written order given in accordance with the
Depository's procedures containing information regarding the
participant account of the Depository to be credited with a beneficial
interest in the Global Security. The Registrar shall, in accordance
with such instructions, instruct the Depository to credit to the
account of the Person specified in such instructions a beneficial
interest in the Global Security and to debit the account of the Person
making the transfer the beneficial interest in the Global Security
being transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another
Global Security, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Security
to which such interest is being transferred in an amount equal to the
principal amount of the interest to be so transferred, and the
Registrar shall reflect on its books and records the date and a
corresponding decrease in the principal amount of the Global Security
from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security
may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such
nominee to a successor Depository or a nominee of such successor
Depository.
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 2.4 of this Appendix, prior
to the consummation of a Registered Exchange Offer or the effectiveness
of a Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the
Rule 144A/REGULATION S APPENDIX
Securities intended to ensure that such transfers comply with Rule
144A, Regulation S or another applicable exemption under the Securities
Act, as the case may be) and such other procedures as may from time to
time be adopted by the Company.
(d) RESTRICTIONS ON TRANSFER OF TEMPORARY REGULATION S
GLOBAL SECURITIES. During the Distribution Compliance Period, beneficial
ownership interests in Temporary Regulation S Global Securities may only be
sold, pledged or transferred through Euroclear or Clearstream in accordance with
the Applicable Procedures and only (i) to the Company, (ii) so long as such
Security is eligible for resale pursuant to Rule 144A, to a Person whom the
selling holder reasonably believes is a QIB that purchases for its own account
or for the account of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (iii) in an offshore
transaction in accordance with Regulation S, (iv) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if applicable) under
the Securities Act or (v) pursuant to an effective registration statement under
the Securities Act, in each case in accordance with any applicable securities
laws of any State of the United States.
(e) LEGEND.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the
following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
Rule 144A/REGULATION S APPENDIX
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (IV) PURSUANT TO EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
Each Definitive Security shall also bear the following
additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
(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, the
Registrar shall permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the transferor thereof certifies
in writing to the Registrar that such sale or transfer was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
Rule 144A/REGULATION S APPENDIX
(iii) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the
effectiveness of a Shelf Registration Statement with respect to such
Initial Securities or Private Exchange Securities, as the case may be,
all requirements pertaining to legends on such Initial Security or such
Private Exchange Security will cease to apply, the requirements
requiring any such Initial Security or such Private Exchange Security
issued to certain Holders be issued in global form will cease to apply,
and a certificated Initial Security or Private Exchange Security or an
Initial Security or Private Exchange Security in global form, in each
case without restrictive transfer legends, will be available to the
transferee of the Holder of such Initial Securities or Private Exchange
Securities upon exchange of such transferring Holder's certificated
Initial Security or Private Exchange Security or directions to transfer
such Holder's interest in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Securities, all requirements pertaining to
such Initial Securities that Initial Securities issued to certain
Holders be issued in global form will still apply with respect to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form will
be available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued
in global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Private
Exchange Securities in global form with the global securities legend
and the Restricted Securities Legend set forth in Exhibit 1 hereto will
be available to Holders that exchange such Initial Securities in such
Private Exchange.
(f) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive
Rule 144A/REGULATION S APPENDIX
Securities, redeemed, purchased or canceled, such Global Security shall be
returned to the Depository for cancellation or retained and canceled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Security is exchanged for certificated Securities, redeemed, purchased or
canceled, the principal amount of Securities represented by such Global Security
shall be reduced and an adjustment shall be made on the books and records of the
Trustee (if it is then the Securities Custodian for such Global Security) with
respect to such Global Security, by the Trustee or the Securities Custodian, to
reflect such reduction.
(g) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
SECURITIES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.09 and
9.05 of the Indenture).
(iii) The 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 3 of the Indenture,
except the unredeemed portion of any Definitive Security being redeemed
in part or (b) any Security for a period beginning 15 Business Days
before the mailing of a notice of an offer to repurchase or redeem
Securities or 15 Business Days before an interest payment date.
Notwithstanding the foregoing, the Registrar shall be required to
register the transfer of or exchange of any Security pursuant to
paragraph 6 of the Securities.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent or
the Registrar may
Rule 144A/REGULATION S APPENDIX
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 or the Registrar shall be
affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(h) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Security, a member of, or a
participant in the Depository or 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, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to 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 by the Depository with respect to
its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among
Rule 144A/REGULATION S APPENDIX
Depository participants, members or beneficial owners in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
2.4 CERTIFICATED SECURITIES
(a) A Global Security deposited with the Depository or with
the Trustee as Securities Custodian for the Depository pursuant to Section 2.1
shall be transferred to the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 hereof and (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security and the Depository fails to appoint a successor depositary or if at any
time such Depository ceases to be a "clearing agency" registered under the
Exchange Act and, in either case, a successor Depository is not appointed by the
Company within 90 days of such notice, or (ii) an Event of Default has occurred
and is continuing or (iii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive Securities
under this Indenture.
(b) Any Global Security that is transferable to the
beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by
the Depository to the Trustee located at its principal corporate trust office in
the Borough of Manhattan, The City of New York, to be so transferred, in whole
or from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Global Security, an
equal aggregate principal amount of Definitive Securities of authorized
denominations. Any portion of a Global Security transferred pursuant to this
Section 2.4 shall be executed, authenticated and delivered only in denominations
of $1,000 principal amount and any integral multiple thereof and registered in
such names as the Depository shall direct. Any Definitive Security delivered in
exchange for an interest in the Transfer Restricted Security shall, except as
otherwise provided by
Rule 144A/REGULATION S APPENDIX
Section 2.3(e) hereof, bear the restricted securities legend set forth in
Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(d) In the event of the occurrence of one of the events
specified in Section 2.4(a) hereof, the Company shall promptly make available to
the Trustee a reasonable supply of Definitive Securities in definitive, fully
registered form without interest coupons.
Exhibit 1 to
Rule 144A/REGULATION S APPENDIX
[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.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER
THE COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE
UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE
OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
Exhibit 1 to
Rule 144A/REGULATION S APPENDIX
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) WITHIN THE UNITED STATES TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT
TO EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER
JURISDICTIONS, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR
INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT
CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS
OPERATOR OF THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING, SOCIETE ANONYME AND
ONLY (I) TO THE COMPANY, (II) WITHIN THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 OF REGULATION S UNDER THE
Exhibit 1 to
Rule 144A/REGULATION S APPENDIX
SECURITIES ACT, OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER
JURISDICTIONS. HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY WILL NOTIFY ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS
REFERRED TO ABOVE, IF THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF
(1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN
COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL
SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A,
(B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904
OF REGULATION S, RULE 144 (IF AVAILABLE) OR ANOTHER APPLICABLE EXEMPTION UNDER
THE SECURITIES ACT (IF AVAILABLE) AND THAT, IF SUCH TRANSFER OCCURS PRIOR TO THE
EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST
TRANSFERRED WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK S.A./N.A.
OR CLEARSTREAM BANKING SOCIETE ANONYME.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
Exhibit 1 to
Rule 144A/REGULATION S APPENDIX
CUSIP __________
No. ________________ $_________________
11 1/2% Senior Subordinated Note Due 2011
INTERLINE BRANDS, INC., a New Jersey corporation, promises to
pay to , or registered assigns, the principal sum of
Dollars on May 15, 2011.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
Exhibit 1 to
Rule 144A/REGULATION S APPENDIX
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
INTERLINE BRANDS, INC.
by /s/
-----------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Bank of New York,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
------------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF SECURITY]
11 1/2% Senior Subordinated Note Due 2011
1. INTEREST
--------
Interline Brands, Inc., a New Jersey 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; PROVIDED,
HOWEVER, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.50%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The
Company will pay interest semiannually on May 15 and November 15 of each year,
commencing November 15, 2003.
Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from May
23, 2003. Interest on overdue principal will be paid by the Issuer at 1% per
annum in excess of the rate shown above and the Issuer will pay interest on
overdue installments of interest at such higher rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT
-----------------
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on May 1 or November 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
2
Global Security (including principal, premium, if any, and interest) will be
made by wire transfer of immediately available funds to the accounts specified
by the Depository. The Company will make all payments in respect of a
certificated Security (including principal, premium, if any, and interest) by
mailing a check to the registered address of each Holder thereof; PROVIDED,
however, that payments on a certificated Security will be made by wire transfer
to a U.S. dollar account maintained by the payee with a bank in the United
States if such Holder elects payment by wire transfer by giving written notice
to the Trustee or the Paying Agent to such effect designating such account no
later than 30 days immediately preceding the relevant due date for payment (or
such other date as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
--------------------------
Initially, The Bank of New York (the "Trustee"), will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent
or Registrar without notice. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent or Registrar.
4. INDENTURE
---------
The Company issued the Securities under an Indenture dated as
of May 23, 2003 (the "Indenture"), among the Company, the guarantors party
thereto 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) (the "Act"). Terms defined
in the Indenture and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Securities issued on the Issue Date, any Additional Securities and
any Exchange Securities or Private Exchange Securities will be treated as a
single class for all purposes under the Indenture. The Indenture contains
covenants that limit the ability of the Company and its subsidiaries to incur
additional indebtedness; pay
3
dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in transactions
with affiliates; transfer or sell assets; guarantee indebtedness; restrict
dividends or other payments of subsidiaries; and consolidate, merge or transfer
all or substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.
5. OPTIONAL REDEMPTION
-------------------
Except as set forth below and in paragraph 6, the Company
shall not be entitled to redeem the Securities.
On and after May 15, 2007, the Company shall be entitled at
its option to redeem all or a portion of the Securities (which includes
Additional Securities, if any) upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed in percentages of principal amount
on the redemption date), plus accrued 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), if redeemed during the
12-month period commencing on May 15 of the years set forth below:
REDEMPTION
PERIOD PRICE
------ ----------
2007 105.750%
2008 102.875%
2009 and thereafter 100.000%
In addition, prior to May 15, 2006, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 111.500%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds received by
the Company from one or more Equity Offerings; PROVIDED, HOWEVER, that (1) at
least 65% of such aggregate principal amount of Securities (which includes
Additional
4
Securities, if any) remains outstanding immediately after the occurrence of each
such redemption (other than Securities held, directly or indirectly, by the
Company or its Affiliates); and (2) each such redemption occurs within 60 days
after the date of the related Equity Offering.
6. SPECIAL MANDATORY REDEMPTION
----------------------------
In the event the Bank Refinancing is not consummated on or
prior to June 20, 2003, the Company shall redeem all of the Securities on the
second Business Day immediately following June 20, 2003, at a redemption price
equal to 100% of the principal amount of the Securities, plus accrued and unpaid
interest to the date of redemption (a "Special Mandatory Redemption"). In
addition, in the event the Company determines the Bank Refinancing will not
occur by June 20, 2003, the Company shall be entitled at its option to effect a
Special Mandatory Redemption by delivering notice to the Trustee and Escrow
Agent before 10:00 a.m. EST on June 20, 2003. In such an event, the Special
Mandatory Redemption shall occur on the second Business Day immediately
following the date on which such notice is delivered by 10:00 a.m. EST, at a
redemption price equal to 100% of the principal amount of the Securities, plus
accrued and unpaid interest to the date of redemption.
7. NOTICE OF REDEMPTION
--------------------
Notice of redemption (other than a Special Mandatory
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 its registered
address. In the case of a Special Mandatory Redemption, notice will be mailed to
each Holder of Securities on the date notice is delivered to the Trustee
pursuant to paragraph 6. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
Securities in denominations of $1,000 principal amount or less may be redeemed
in whole but not in part. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such
5
Securities (or such portions thereof) called for redemption.
8. PUT PROVISIONS
--------------
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
9. SUBSIDIARY GUARANTY
-------------------
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several senior subordinated basis by each of the Subsidiary Guarantors
to the extent set forth in the Indenture.
10. SUBORDINATION
-------------
The Securities are subordinated to Senior Indebtedness of the
Company and the Subsidiary Guaranties set forth in the Indenture. To the extent
provided in the Indenture, Senior Indebtedness must be paid before the
Securities may be paid. Each Securityholder by accepting a Security agrees to
the subordination provisions contained in the Indenture and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.
11. DENOMINATIONS; TRANSFER; EXCHANGE
---------------------------------
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Company or the Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay a sum sufficient to
pay all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section. The Company shall not be required
to make and the Xxxxxxxxx
0
need not register transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or any Securities for a period of 15 days before a selection
of Securities to be redeemed or 15 days before an interest payment date.
12. PERSONS DEEMED OWNERS
---------------------
The registered Holder of this Security may be treated as the
owner of it for all purposes.
13. 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.
14. DISCHARGE AND DEFEASANCE
------------------------
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture, and the obligations of the Subsidiary Guarantors under their
Subsidiary Guaranties, if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
15. AMENDMENT; WAIVER
-----------------
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the 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 outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee shall be entitled to amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency,
7
or to comply with Article 5 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, including Subsidiary Guaranties, or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company or the Subsidiary Guarantors, or to comply with
any request of the SEC in connection with qualifying the Indenture under the
Act, or to make certain changes in the subordination provisions, or to make any
change that does not adversely affect the rights of any Securityholder.
16. 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
or 6 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company or any Restricted Subsidiary to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company, any
Subsidiary Guarantor or any Significant Subsidiary if the amount accelerated (or
so unpaid) exceeds $12.5 million; (v) certain events of bankruptcy or insolvency
with respect to the Company, a Subsidiary Guarantor or any Significant
Subsidiary; (vi) certain judgments or decrees for the payment of money in excess
of $12.5 million; and (vii) certain defaults with respect to the Subsidiary
Guaranties. 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 indemnity or security
satisfactory to it. Subject to certain limitations,
8
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 (except a Default in payment of
principal or interest) if it determines that withholding notice is not opposed
to the interest of the Holders.
17. TRUSTEE DEALINGS WITH THE COMPANY
---------------------------------
Subject to certain limitations imposed by the Act, 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.
18. NO RECOURSE AGAINST OTHERS
--------------------------
A director, officer, manager, employee, incorporator, member,
partner or stockholder, as such, of the Company, any Subsidiary Guarantor or the
Trustee shall not have any liability for any obligations of the Company under
the Securities or the Indenture or any Subsidiary Guarantor under any Subsidiary
Guaranty, as the case may be, 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 waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
19. AUTHENTICATION
--------------
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. ABBREVIATIONS
-------------
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
9
21. CUSIP NUMBERS
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
22. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
23. GOVERNING LAW.
--------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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:
Interline Brands, Inc.
000 X. Xxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Chief Financial Officer
10
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
--------------------------------------------------------------------------------
Date: Your Signature:
---------------------- ------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) G to the Company;
(2) G pursuant to an effective registration statement under the
Securities Act of 1933;
(3) G inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such
11
transfer is being made in reliance on Rule 144A, in each case
pursuant to and in compliance with Rule 144A under the
Securities Act of 1933;
(4) G outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
(5) G pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933.
If such transfer is being made pursuant to an offshore transaction in
accordance with Rule 904 under the Securities Act, the undersigned further
certifies that:
(i) the offer of the Securities was not made to a person in the
United States;
(ii) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting
on our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(iii) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903 or Rule 904 of
Regulation S, as applicable;
(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(v) we have advised the transferee of the transfer restrictions
applicable to the Securities; and
12
(vi) if the circumstances set forth in Rule 904(b) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation
or other notice stating that the Securities may be offered and sold
during the distribution compliance period specified in Rule 903 of
Regulation S; pursuant to registration of the Securities under the
Securities Act; or pursuant to an available exemption from the
registration requirements under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; PROVIDED, HOWEVER, that if box (4)
or (5) is checked, the Trustee shall be entitled to require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably requested
to confirm that such transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under
such Act.
-------------------------------
Signature
Signature Guarantee:
---------------------------- -------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
13
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
-----------------------------------
NOTICE: To be executed by
an executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal amount in Principal amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or increase) Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[________]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount: $__________
Date: Your Signature:
---------------------- ------------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
----------------------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY] */**/
----------------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Rule 144A/Regulation S Appendix and the attachment from
such Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Rule 144A/Regulation S
Appendix and replace the Assignment Form included in this Exhibit A with the
Assignment Form included in such Exhibit 1.
2
CUSIP __________
No. _____________ $ __________
11 1/2% Senior Subordinated Note Due 2011
INTERLINE BRANDS, INC., a New Jersey corporation, promises to
pay to , or registered assigns, the principal sum of
Dollars on May 15, 2011.
Interest Payment Dates: May 15 and November 15.
Record Dates: May 1 and November 1.
3
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
INTERLINE BRANDS, INC.
by /s/
----------------------------------
Name:
Title:
4
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Bank of New York,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by /s/
-------------------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF SECURITY]
11 1/2% Senior Subordinated Note Due 2011
1. INTEREST
--------
Interline Brands, Inc., a New Jersey 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; PROVIDED,
HOWEVER, that, to the extent provided in the Registration Rights Agreement, if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.25% per annum
(increasing by an additional 0.25% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up
to a maximum additional interest rate of 1.50%) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. The Company will pay interest
semiannually on May 15 and November 15 of each year, commencing November 15,
2003.
Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from May
23, 2003. Interest on overdue principal will be paid by the Issuer at 1% per
annum in excess of the rate shown above and the Issuer will pay interest on
overdue installments of interest at such higher rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT
-----------------
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the May 1 or November 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and
2
private debts. Payments in respect of the Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
wire transfer of immediately available funds to the accounts specified by the
Depository. The Company will make all payments in respect of a certificated
Security (including principal, premium, if any, and interest) by mailing a check
to the registered address of each Holder thereof; PROVIDED, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).
3. PAYING AGENT AND REGISTRAR
--------------------------
Initially, The Bank of New York (the "Trustee"), will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent
or Registrar without notice. The Company or any of its domestically incorporated
Wholly Owned Subsidiaries may act as Paying Agent or Registrar.
4. INDENTURE
---------
The Company issued the Securities under an Indenture dated as
of May 23, 2003 (the "Indenture"), among the Company, the guarantors party
thereto 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) (the "Act"). Terms defined
in the Indenture and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Securities issued on the Issue Date, any Additional Securities and
any Exchange Securities or Private Exchange Securities will be treated as a
single class for all purposes under the Indenture. The Indenture
3
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; issue or sell capital stock of
subsidiaries; engage in transactions with affiliates; transfer or sell assets;
guarantee indebtedness; restrict dividends or other payments of subsidiaries;
and consolidate, merge or transfer all or substantially all of its assets and
the assets of its subsidiaries. These covenants are subject to important
exceptions and qualifications.
5. OPTIONAL REDEMPTION
-------------------
Except as set forth below and in paragraph 6, the Company
shall not be entitled to redeem the Securities.
On and after May 15, 2007, the Company shall be entitled at
its option to redeem all or a portion of the Securities (which includes
Additional Securities, if any) upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed in percentages of principal amount
on the redemption date), plus accrued 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), if redeemed during the
12-month period commencing on May 15 of the years set forth below:
REDEMPTION
PERIOD PRICE
------ ----------
2007 105.750%
2008 102.875%
2009 and thereafter 100.000%
In addition, prior to May 15, 2006, the Company shall be
entitled at its option on one or more occasions to redeem Securities (which
includes Additional Securities, if any) in an aggregate principal amount not to
exceed 35% of the aggregate principal amount of the Securities (which includes
Additional Securities, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 111.500%, plus accrued and
unpaid interest to the redemption date, with the net cash proceeds received by
the Company from one or more Equity Offerings;
4
PROVIDED, HOWEVER, that (1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any) remains outstanding
immediately after the occurrence of each such redemption (other than Securities
held, directly or indirectly, by the Company or its Affiliates); and (2) each
such redemption occurs within 60 days after the date of the related Equity
Offering.
6. SPECIAL MANDATORY REDEMPTION
----------------------------
In the event the Bank Refinancing is not consummated on or
prior to June 20, 2003, the Company shall redeem all of the Securities on the
second Business Day immediately following June 20, 2003, at a redemption price
equal to 100% of the principal amount of the Securities, plus accrued and unpaid
interest to the date of redemption (a "Special Mandatory Redemption"). In
addition, in the event the Company determines the Bank Refinancing will not
occur by June 20, 2003, the Company shall be entitled at its option to effect a
Special Mandatory Redemption by delivering notice to the Trustee and Escrow
Agent before 10:00 a.m. EST on June 20, 2003. In such an event, the Special
Mandatory Redemption shall occur on the second Business Day immediately
following the date on which such notice is delivered by 10:00 a.m. EST, at a
redemption price equal to 100% of the principal amount of the Securities, plus
accrued and unpaid interest to the date of redemption.
7. NOTICE OF REDEMPTION
--------------------
Notice of redemption (other than a Special Mandatory
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 its registered
address. In the case of a Special Mandatory Redemption, notice will be mailed to
each Holder of Securities on the date notice is delivered to the Trustee
pursuant to paragraph 6. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
Securities in denominations of $1,000 principal amount or less may be redeemed
in whole but not in part. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
5
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.
8. PUT PROVISIONS
--------------
Upon a Change of Control, any Holder of Securities will have
the right to cause the Company to repurchase all of the Securities of such
Holder at a repurchase price equal to 101% of the principal amount of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
9. SUBSIDIARY GUARANTY
-------------------
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several senior subordinated basis by each of the Subsidiary Guarantors
to the extent set forth in the Indenture.
10. SUBORDINATION
-------------
The Securities are subordinated to Senior Indebtedness of the
Company and the Subsidiary Guaranties set forth in the Indenture. To the extent
provided in the Indenture, Senior Indebtedness must be paid before the
Securities may be paid. Each Securityholder by accepting a Security agrees to
the subordination provisions contained in the Indenture and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.
11. DENOMINATIONS; TRANSFER; EXCHANGE
---------------------------------
The Securities are in registered form without coupons in
denominations of $1,000 principal amount and whole multiples of $1,000. A Holder
may transfer or exchange Securities in accordance with the Indenture. The
Company or the Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay a sum sufficient to
pay all taxes, assessments or other governmental charges in connection
6
with any transfer or exchange pursuant to this Section. The Company shall not be
required to make and the Registrar need not register transfers or exchanges of
Securities selected for redemption (except, in the case of Securities to be
redeemed in part, the portion thereof not to be redeemed) or any Securities for
a period of 15 days before a selection of Securities to be redeemed or 15 days
before an interest payment date.
12. PERSONS DEEMED OWNERS
---------------------
The registered Holder of this Security may be treated as the
owner of it for all purposes.
13. 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.
14. DISCHARGE AND DEFEASANCE
------------------------
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture, and the obligations of the Subsidiary Guarantors under their
Subsidiary Guaranties, if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
15. AMENDMENT; WAIVER
-----------------
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the 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 outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company, the Subsidiary
Guarantors and the Trustee
7
shall be entitled to amend the Indenture or the Securities to cure any
ambiguity, omission, defect or inconsistency, or to comply with Article 5 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, including Subsidiary Guaranties, or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the Company
or the Subsidiary Guarantors, or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make certain
changes in the subordination provisions, or to make any change that does not
adversely affect the rights of any Securityholder.
16. 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
or 6 of the Securities, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required; (iii) failure by the
Company or any Restricted Subsidiary to comply with other agreements in the
Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company, any
Subsidiary Guarantor or any Significant Subsidiary if the amount accelerated (or
so unpaid) exceeds $12.5 million; (v) certain events of bankruptcy or insolvency
with respect to the Company, a Subsidiary Guarantor or any Subsidiary; (vi)
certain judgments or decrees for the payment of money in excess of $10.0
million; and (vii) certain defaults with respect to the Subsidiary Guaranties.
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
8
Securities unless it receives indemnity or security satisfactory to it. 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
(except a Default in payment of principal or interest) if it determines that
withholding notice is not opposed to the interest of the Holders.
17. TRUSTEE DEALINGS WITH THE COMPANY
---------------------------------
Subject to certain limitations imposed by the Act, 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.
18. NO RECOURSE AGAINST OTHERS
--------------------------
A director, officer, manager, employee, incorporator, member,
partner or stockholder, as such, of the Company, any Subsidiary Guarantor or the
Trustee shall not have any liability for any obligations of the Company under
the Securities or the Indenture or any Subsidiary Guarantor under any Subsidiary
Guaranty, as the case may be, 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 waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
19. AUTHENTICATION
--------------
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
20. ABBREVIATIONS
-------------
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not
9
as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP NUMBERS
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
22. HOLDERS' COMPLIANCE WITH REGISTRATION RIGHTS AGREEMENT
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]2
23. GOVERNING LAW
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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:
Interline Brands, Inc.
000 X. Xxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Chief Financial Officer
---------------
2. Delete if this Security is not being issued in exchange for an Initial
Security.
10
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
-------------------------- ------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[________]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount: $__________
Date: Your Signature:
---------------------- -----------------------------
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:
------------------------------------------
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
ANNEX A
[FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY SUBSIDIARY GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of [ ] among [ ] (the "Subsidiary Guarantor"), a [ ] and a subsidiary of
Interline Brands, Inc., a New Jersey corporation (or its permitted successor)
(the "Company"), the Company, the other Subsidiary Guarantors and The Bank of
New York, as Trustee under the Indenture (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture (the "Indenture"), dated as of May 23, 2003, providing
for the issuance of 11 1/2% Senior Subordinated Notes due 2011 (the
"Securities");
WHEREAS, pursuant to Section 4.10 of the Indenture, the
Company may cause a Domestic Restricted Subsidiary that Incurs Indebtedness or a
Foreign Subsidiary that enters into a Guarantee of any Senior Indebtedness of
the Company, to execute and deliver to the Trustee a Guaranty Agreement pursuant
to which such Restricted Subsidiary will Guarantee payment of the Securities on
the same terms and conditions as those set forth in the Indenture; and
WHEREAS, pursuant to Section 9.01(4) of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Subsidiary Guarantor, the other Subsidiary Guarantors and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Securities as follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used herein
but not defined shall have the meanings assigned to them in the Indenture.
SECTION 2. GUARANTIES. The Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally with the other
Subsidiary Guarantors, to each Holder and to the Trustee and its successors and
assigns
2
(a) the full and punctual payment of principal of and interest on the Securities
when due, whether at maturity, by acceleration, by redemption or otherwise, and
all other monetary obligations of the Company under the Indenture and the
Securities and (b) the full and punctual performance within applicable grace
periods of all other obligations of the Company under the Indenture and the
Securities (all the foregoing being hereinafter collectively called the
"Guaranteed Obligations"). The Subsidiary Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in part, without
notice to or further assent from the Subsidiary Guarantor and that the
Subsidiary Guarantor will remain bound under this Supplemental Indenture
notwithstanding any extension or renewal of any Guaranteed Obligation.
To the fullest extent permitted by law, the Subsidiary
Guarantor waives presentation to, demand of, payment from and protest to the
Company of any of the Guaranteed Obligations and also waives notice of protest
for nonpayment. To the fullest extent permitted by law, the Subsidiary Guarantor
waives notice of any default under the Securities or the Guaranteed Obligations.
The obligations of the Subsidiary Guarantor hereunder shall not be affected by
(a) the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under the
Indenture, this Supplemental Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of the
Indenture, this Supplemental Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Guaranteed Obligations or any of them; (e) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (f) except as set forth in Section 11.06 of the
Indenture, any change in the ownership of the Subsidiary Guarantor.
The Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
3
that any resort be had by any Holder or the Trustee to any security held for
payment of the Guaranteed Obligations.
The Subsidiary Guaranty is, to the extent and in the manner
set forth in Article 12 of the Indenture, subordinated and subject in right of
payment to the prior payment in full of the principal of and premium, if any,
and interest on all Senior Indebtedness of the Subsidiary Guarantor and the
Subsidiary Guaranty is made subject to the provisions of the Indenture.
Except as expressly set forth in Section 8.01(b), 11.02 and
11.06 of the Indenture, to the fullest extent permitted by law, the obligations
of the Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and, to the fullest extent
permitted by law, shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of the Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under the Indenture, this Supplemental Indenture, the Securities or any
other agreement, by any waiver or modification of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Guaranteed
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
the Subsidiary Guarantor or would otherwise operate as a discharge of the
Subsidiary Guarantor as a matter of law or equity.
The Subsidiary Guarantor further agrees that its Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Guaranteed Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
4
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against the
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, the
Subsidiary Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (1) the unpaid amount of
such Guaranteed Obligations, (2) accrued and unpaid interest on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (3) all other
monetary Guaranteed Obligations of the Company to the Holders and the Trustee.
The Subsidiary Guarantor agrees that it shall not be entitled
to any right of subrogation in respect of any Guaranteed Obligations guaranteed
hereby until payment in full of all Guaranteed Obligations and all obligations
to which the Guaranteed Obligations are subordinated as provided in Article 12
of the Indenture. The Subsidiary Guarantor agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (x) the maturity
of the Guaranteed Obligations may be accelerated as provided in Article 6 of the
Indenture for the purposes of the Subsidiary Guarantor's Subsidiary Guaranty
herein, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Guaranteed Obligations, and (y) in the event
of any declaration of acceleration of such Guaranteed Obligations as provided in
Article 6 of the Indenture, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by the Subsidiary Guarantor for
the purposes of this Supplemental Indenture.
The Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including attorneys' fees) incurred by the Trustee or any Holder
in enforcing any rights under this Section 2.
SECTION 3. LIMITATION ON LIABILITY. Any term or provision of
this Supplemental Indenture to the contrary notwithstanding, the maximum
aggregate amount of the
5
Guaranteed Obligations by the Subsidiary Guarantor shall not exceed the maximum
amount that can be hereby guaranteed without rendering this Supplemental
Indenture, as it relates to the Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance, fraudulent transfer or similar laws
affecting the rights of creditors generally.
SECTION 4. SUCCESSORS AND ASSIGNS. This Supplemental
Indenture shall be binding upon the Subsidiary Guarantor and its successors and
assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Supplemental Indenture and in the Securities shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Supplemental Indenture.
SECTION 5. NO WAIVER. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Supplemental Indenture shall operate as a waiver thereof,
nor shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits of
the Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Supplemental Indenture at law, in equity, by statute or otherwise.
SECTION 6. MODIFICATION. No modification, amendment or
waiver of any provision of this Supplemental Indenture, nor the consent to any
departure by the Subsidiary Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Trustee, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Subsidiary Guarantor in
any case shall entitle the Subsidiary Guarantor to any other or further notice
or demand in the same, similar or other circumstances.
SECTION 7. RELEASE. The Subsidiary Guarantor will be
released from its obligations under this
6
Supplemental Indenture without any further action required on the part of the
Trustee or any Holder (other than any obligation that may have arisen under
Section 8 prior to such release)
(i) upon the sale (including any sale pursuant to any exercise of
remedies by a holder of Senior Indebtedness of the Company or of such
Subsidiary Guarantor) or other disposition (including by way of
consolidation or merger) of the Subsidiary Guarantor,
(ii) upon the sale or disposition of all or substantially all the
assets of the Subsidiary Guarantor,
(iii) upon the designation of the Subsidiary Guarantor as an
Unrestricted Subsidiary pursuant to the terms of the Indenture,
(iv) in connection with any sale or other disposition (including by
way of a merger or consolidation) of Capital Stock of a Subsidiary
Guarantor to a Person in accordance with the Indenture that results in
the Subsidiary Guarantor no longer being a Restricted Subsidiary;
PROVIDED, HOWEVER, that after giving effect to such sale, such former
Subsidiary Guarantor shall have no Guaranties outstanding of any
Indebtedness of the Company or any Restricted Subsidiary, or
(iv) at such time as such Subsidiary Guarantor no longer has any other
Indebtedness outstanding;
PROVIDED, HOWEVER, that in the case of clauses (i), (ii) and (iv) above, (A)
such sale or other disposition is made to a Person other than the Company or a
Subsidiary of the Company, (B) such sale or disposition is otherwise permitted
by this Indenture and (C) the Company provides an Officers' Certificate to the
Trustee to the effect that the Company will comply with its obligations under
Section 4.06 of the Indenture with respect to such sale or disposition.
SECTION 8. CONTRIBUTION. The Subsidiary Guarantor shall be
entitled upon payment in full of all guarantied obligations under this
Supplemental Indenture to a contribution from each other Subsidiary Guarantor in
an amount equal to such other Subsidiary Guarantor's pro rata
7
portion of such payment based on the respective net assets of all the Subsidiary
Guarantors at the time of such payment determined in accordance with GAAP.
SECTION 9. GOVERNING LAW. This Supplemental Indenture shall
be governed by, and construed in accordance with, the laws of the State of New
York.
SECTION 10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator, partner, stockholder, member or manager, as such, of the
Subsidiary Guarantor shall not have any liability for any obligations of the
Company under the Securities or the Indenture or of the Subsidiary Guarantor
under its Subsidiary Guaranty, the Indenture or this Supplemental Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and releases all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 11. MULTIPLE ORIGINALS. The parties may sign any
number of copies of this Supplemental 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 Supplemental Indenture.
SECTION 12. HEADINGS. The headings of the Sections of this
Supplemental 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.
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed as of the date first written above.
[SUBSIDIARY GUARANTOR]
by /s/
-----------------------------------
Name:
Title:
8
INTERLINE BRANDS, INC.
by /s/
-----------------------------------
Name:
Title:
[OTHER SUBSIDIARY GUARANTORS]
by /s/
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
by /s/
-----------------------------------
Name:
Title:
