EXHIBIT 4.7
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HAWK CORPORATION,
THE GUARANTORS NAMED HEREIN
and
HSBC BANK USA
as Trustee
--------------------
INDENTURE
Dated as of October _____, 2002
--------------------
$100,000,000
12% Senior Notes due 2006
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
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310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.8; 7.10
(b) 7.8; 7.10; 11.2
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.6
(b) 11.3
(c) 11.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6; 11.2
(d) 7.6
314(a) 4.6; 4.9; 11.2
(b) N.A.
(c)(1) 11.4
(c)(2) 11.4
(c)(3) N.A.
(d) N.A.
(e) 11.5
(f) N.A.
315(a) 7.1(b)
(b) 7.5; 11.2
(c) 7.1(a)
(d) 7.1(c)
(e) 6.11
316(a) (last sentence) 2.10
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N.A.
(b) 6.7
(c) 9.4
317(a)(1) 6.8
(a)(2) 6.9
(b) 2.5
318(a) 11.1
(b)
(c) 11.1
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N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed to be
a part of this Indenture.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................................1
SECTION 1.1 Definitions..............................................................................1
SECTION 1.2 Incorporation by Reference of TIA.......................................................16
SECTION 1.3 Rules of Construction...................................................................16
ARTICLE II THE NOTES.......................................................................................17
SECTION 2.1 Form and Dating.........................................................................17
SECTION 2.2 Execution and Authentication; Aggregate Principal Amount................................17
SECTION 2.3 Additional Interest upon Excess Consolidated Leverage Ratio.............................18
SECTION 2.4 Registrar and Paying Agent..............................................................20
SECTION 2.5 Paying Agent To Hold Assets in Trust....................................................20
SECTION 2.6 Noteholder Lists........................................................................21
SECTION 2.7 Transfer and Exchange...................................................................21
SECTION 2.8 Replacement Notes.......................................................................22
SECTION 2.9 Outstanding Notes.......................................................................22
SECTION 2.10 Treasury Notes..........................................................................22
SECTION 2.11 Temporary Notes.........................................................................22
SECTION 2.12 Cancellation............................................................................23
SECTION 2.13 Defaulted Interest......................................................................23
SECTION 2.14 CUSIP Numbers...........................................................................24
SECTION 2.15 Deposit of Monies and Additional PIK Notes..............................................24
SECTION 2.16 Restrictive Legends.....................................................................24
SECTION 2.17 Book-Entry Provisions for Global Security...............................................25
ARTICLE III REDEMPTION.....................................................................................26
SECTION 3.1 Notices to Trustee......................................................................26
SECTION 3.2 Selection of Notes To Be Redeemed.......................................................26
SECTION 3.3 Notice of Redemption....................................................................27
SECTION 3.4 Effect of Notice of Redemption..........................................................28
SECTION 3.5 Deposit of Redemption Price.............................................................28
SECTION 3.6 Notes Redeemed in Part..................................................................28
ARTICLE IV COVENANTS.......................................................................................28
SECTION 4.1 Payment of Notes........................................................................28
SECTION 4.2 Maintenance of Office or Agency.........................................................29
SECTION 4.3 Corporate Existence.....................................................................29
SECTION 4.4 Payment of Taxes and Other Claims.......................................................29
SECTION 4.5 Maintenance of Properties and Insurance.................................................29
SECTION 4.6 Compliance Certificate; Notice of Default...............................................30
SECTION 4.7 Compliance with Laws....................................................................31
SECTION 4.8 Waiver of Stay, Extension or Usury Laws.................................................31
SECTION 4.9 Provision of Financial Statements and Information.......................................31
SECTION 4.10 Limitation on Incurrence of Indebtedness................................................31
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SECTION 4.11 Limitation on Restricted Payments.......................................................34
SECTION 4.12 Limitation on Liens.....................................................................37
SECTION 4.13 Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.............................................................37
SECTION 4.14 Limitation on Transactions with Affiliates..............................................38
SECTION 4.15 Change of Control.......................................................................39
SECTION 4.16 Limitation on Asset Sales...............................................................41
SECTION 4.17 Limitation on Designation of Unrestricted Subsidiaries..................................43
ARTICLE V SUCCESSOR CORPORATION............................................................................45
SECTION 5.1 Merger, Consolidation and Sale of Assets................................................46
SECTION 5.2 Successor Corporation Substituted.......................................................46
ARTICLE VI DEFAULT AND REMEDIES............................................................................46
SECTION 6.1 Events of Default.......................................................................46
SECTION 6.2 Acceleration............................................................................47
SECTION 6.3 Other Remedies..........................................................................48
SECTION 6.4 Waiver of Past Defaults.................................................................49
SECTION 6.5 Control by Majority.....................................................................49
SECTION 6.6 Limitation on Suits.....................................................................49
SECTION 6.7 Rights of Holders To Receive Payment....................................................50
SECTION 6.8 Collection Suit by Trustee..............................................................50
SECTION 6.9 Trustee May File Proofs of Claim........................................................50
SECTION 6.10 Priorities..............................................................................51
SECTION 6.11 Undertaking for Costs...................................................................51
ARTICLE VII TRUSTEE........................................................................................51
SECTION 7.1 Duties of Trustee.......................................................................51
SECTION 7.2 Rights of Trustee.......................................................................53
SECTION 7.3 Individual Rights of Trustee............................................................54
SECTION 7.4 Trustee's Disclaimer....................................................................54
SECTION 7.5 Notice of Default.......................................................................54
SECTION 7.6 Reports by Trustee to Holders...........................................................54
SECTION 7.7 Compensation and Indemnity..............................................................55
SECTION 7.8 Replacement of Trustee..................................................................55
SECTION 7.9 Successor Trustee by Merger, Etc........................................................56
SECTION 7.10 Eligibility; Disqualification...........................................................56
SECTION 7.11 Preferential Collection of Claims Against Company.......................................57
ARTICLE VIII SATISFACTION AND DISCHARGE; DEFEASANCE........................................................57
SECTION 8.1 Satisfaction and Discharge of Indenture.................................................57
SECTION 8.2 Defeasance or Covenant Defeasance.......................................................58
SECTION 8.3 Application of Trust Money..............................................................60
SECTION 8.4 Repayment to the Company................................................................61
SECTION 8.5 Reinstatement...........................................................................61
SECTION 8.6 Acknowledgment of Discharge by Trustee..................................................61
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ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS.............................................................61
SECTION 9.1 Without Consent of Holders and any Guarantor............................................61
SECTION 9.2 With Consent of Holders.................................................................62
SECTION 9.3 Compliance with TIA.....................................................................63
SECTION 9.4 Payment for Consent.....................................................................64
SECTION 9.5 Revocation and Effect of Consents.......................................................64
SECTION 9.6 Notation on or Exchange of Notes........................................................64
SECTION 9.7 Trustee To Sign Amendments, Etc.........................................................65
ARTICLE X GUARANTEES.......................................................................................65
SECTION 10.1 Unconditional Guarantee.................................................................65
SECTION 10.2 Severability............................................................................66
SECTION 10.3 Successors and Assigns; Release of a Guarantor..........................................66
SECTION 10.4 Limitation of Guarantor's Liability.....................................................67
SECTION 10.5 Contribution............................................................................67
SECTION 10.6 Waiver of Subrogation...................................................................67
SECTION 10.7 Execution of Note Guarantee.............................................................68
SECTION 10.8 Waiver of Stay, Extension or Usury Laws.................................................68
SECTION 10.9 Additional Guarantors...................................................................69
SECTION 10.10 Modification............................................................................69
ARTICLE XI MISCELLANEOUS...................................................................................69
SECTION 11.1 TIA Controls............................................................................69
SECTION 11.2 Notices.................................................................................69
SECTION 11.3 Communications by Holders with Other Holders............................................70
SECTION 11.4 Certificate and Opinion as to Conditions Precedent......................................70
SECTION 11.5 Statements Required in Certificate or Opinion...........................................70
SECTION 11.6 Rules by Trustee, Paying Agent, Registrar...............................................71
SECTION 11.7 Legal Holidays..........................................................................71
SECTION 11.8 Governing Law...........................................................................71
SECTION 11.9 No Adverse Interpretation of Other Agreements...........................................71
SECTION 11.10 No Recourse Against Others..............................................................72
SECTION 11.11 Successors..............................................................................72
SECTION 11.12 Duplicate Originals.....................................................................72
SECTION 11.13 Severability............................................................................72
SECTION 11.14 Independence of Covenants...............................................................72
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INDENTURE, dated as of October _____, 2002, between Hawk Corporation, a
Delaware corporation (the "Company"), the Guarantors (as defined herein), and
HSBC Bank USA, a New York banking corporation and trust company, as Trustee (the
"Trustee").
The Company has duly authorized the creation of an issue of 12% Senior
Notes due 2006 (collectively, the "Notes") such Notes to be issued initially in
connection with the exchange of certain 10 1/4% Senior Notes due 2003
(collectively, the "Old Notes") issued by the Company pursuant to an indenture
dated November 27, 1996 (as amended and supplemented, the "Old Indenture") and,
to provide therefor, the Company has duly authorized the execution and delivery
of this Indenture. All things necessary to make the Notes, when duly issued and
executed by the Company, and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid and binding
agreement of the Company, have been done.
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Acquired Debt" means Indebtedness of an Acquired Person
existing at the time the Acquired Person merges with or into, or becomes a
Restricted Subsidiary of, such specified Person, including Indebtedness incurred
in connection with, or in contemplation of, the Acquired Person merging with or
into, or becoming a Restricted Subsidiary of, such specified Person; provided,
however, that Indebtedness of such Acquired Person which is redeemed, defeased,
retired or otherwise repaid at the time of or immediately upon consummation of
the transactions by which such Acquired Person merges with or into or becomes a
Restricted Subsidiary of such specified Person shall not be Acquired Debt.
"Acquired Person" means a person merged with or into the
Company.
"Additional Notes" means Notes issued from time to time by the
Company under this Indenture as provided in Section 2.2 in addition to the
Initial Notes.
"Additional PIK Notes" means any Note issued by the Company in
order to make a PIK Interest Payment.
"Adjusted Consolidated Leverage Ratio" means, with respect to
any period, the Consolidated Leverage Ratio; provided that (i) pro forma effect
is given to any Asset Sales (including the application of the proceeds of any
Asset Sales) that occur during the period, as if they had occurred and the
proceeds had been applied on the first day of the period, and (ii) pro forma
effect is given to any Asset Sales (including the application of the proceeds of
any Asset Sales) that have been made by any Person that has become a Restricted
Subsidiary or has merged with or into the Company or any of its Restricted
Subsidiaries during the period and
would have constituted Asset Sales had the transactions occurred when that
Person was a Restricted Subsidiary as if they were Asset Sales that occurred on
the first day of the period.
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes of this
definition, "Control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") of any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.17(a).
"Asset Sale" means (i) any sale, lease, conveyance or other
disposition by the Company or any Restricted Subsidiary of any assets (including
by way of a sale-and-leaseback) other than inventory in the ordinary course of
business or equipment not used or no longer useable in the ordinary course of
business, or (ii) the issuance or sale of Capital Stock of any Restricted
Subsidiary, in the case of each of (i) and (ii), whether in a single transaction
or a series of related transactions, to any Person (other than to the Company or
a Restricted Subsidiary and other than directors' qualifying shares) for Net
Proceeds in cash or Cash Equivalents in excess of $100,000.
"Asset Sale Offer" has the meaning provided in Section
4.16(c).
"Asset Sale Offer Purchase Date" has the meaning provided in
Section 4.16(d).
"Asset Sale Offer Trigger Date" has the meaning provided in
Section 4.16(c).
"Authenticating Agent" has the meaning provided in Section
2.2.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"Board of Directors" means, as to (a) any corporate Person,
the board of directors of such Person or any duly authorized committee thereof,
(b) any partnership, limited liability company or comparably organized Person
which is ultimately controlled by a corporate general partner, managing member
or other corporation, the "Board of Directors" of such corporation as specified
in clause (a) of this definition and (c) any partnership, limited liability
company or comparably organized Person which is ultimately controlled by
individuals, such controlling individuals.
"Board Resolution" means, with respect to any Person, a copy
of a resolution of the Board of Directors certified by an executive officer of
such Person to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and delivered to the
Trustee.
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"Business Day" means a day that is not a Legal Holiday.
"Capital Lease Obligation" of any Person means, at the time
any determination thereof is to be made, the amount of the liability in respect
of a capital lease for property leased by such Person that would at such time be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership and limited liability company
interests, whether general or limited, of such Person, including any Preferred
Stock.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Rating Services or
Xxxxx'x Investors Service, Inc.; (iii) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from Standard & Poor's Rating Services or at
least P-1 from Xxxxx'x Investors Service, Inc.; (iv) certificates of deposit or
bankers' acceptances (or, with respect to foreign banks, similar instruments)
maturing within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than $200
million; (v) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iv) above; and
(vi) investments in money market funds that invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"Cash Flow" means, with respect to any period, Consolidated
Net Income for such period, plus, to the extent deducted in computing such
Consolidated Net Income: (i) provision for taxes based on income or profits and
any provision for taxes utilized in computing extraordinary gains and losses,
plus (ii) Consolidated Interest Expense, plus (iii) depreciation, amortization
and all other non-cash charges (including amortization of goodwill and other
intangibles but excluding any such non-cash charge to the extent it represents
an accrual of a reserve, cash charges in any future period or amortization of a
pre-paid cash expense that was paid in a prior period not included in the prior
calculation), less (iv) any non-cash items to the extent that they increase
Consolidated Net Income (including the partial or entire reversal of reserves
taken in a prior period) for such period for the Company and any Restricted
Subsidiary; provided that if any Restricted Subsidiary is not a wholly owned
Restricted Subsidiary of the Company, then Cash Flow shall be reduced (to the
extent not otherwise reduced in accordance with GAAP) by an amount equal to (A)
the amount of Cash Flow attributable to such Restricted Subsidiary, multiplied
by (B) the percentage ownership interest
3
in such Restricted Subsidiary not owned by the Company or any of its Restricted
Subsidiaries on the last day of such period.
"Change of Control" means the occurrence of any of the
following events after the Issue Date: (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other than one
or more Permitted Holders) is or becomes (including by merger, consolidation or
otherwise) the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have beneficial ownership
of all shares that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the voting power of the total outstanding Voting
Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the stockholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such Board of Directors of the Company then in office;
(iii) the approval by the holders of Capital Stock of the Company of any plan or
proposal for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the terms of this Indenture); or (iv) the sale or
other disposition (including by merger, consolidation or otherwise) of all or
substantially all of the Capital Stock or assets of the Company to any Person or
group (as defined in Rule 13d-5 of the Exchange Act) (other than to one or more
of the Permitted Holders) as an entirety or substantially as an entirety in one
transaction or a series of related transactions.
"Change of Control Offer" has the meaning provided in Section
4.15(a).
"Change of Control Purchase Date" has the meaning provided in
Section 4.15(b).
"Commission" means the Securities and Exchange Commission, as
from time to time constituted or, if at any time after the execution of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the TIA, then the body performing such duties at such time.
"Common Stock" of any Person means any and all shares,
interests, participations, or other equivalents (however designated) of such
Person's common stock whether now outstanding or issued after the Issue Date.
"Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Consolidated Cash Flow Coverage Ratio" means, for any period,
the ratio of (i) the aggregate amount of Cash-Flow for such period, to (ii)
Consolidated Interest Expense for such period, determined on a pro forma basis
after giving pro forma effect to (a) the incurrence of the Indebtedness giving
rise to the calculation of the Consolidated Cash Flow Coverage Ratio and (if
applicable) the application of the net proceeds therefrom, including to
refinance
4
other Indebtedness, as if such Indebtedness was incurred, and the application of
such proceeds occurred, at the beginning of such period; (b) the incurrence,
repayment or retirement of any other Indebtedness by the Company and its
Restricted Subsidiaries since the first day of such period as if such
Indebtedness was incurred, repaid or retired at the beginning of such period
(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average balance of
such Indebtedness at the end of each month during such period); (c) in the case
of Acquired Debt, the related acquisition as if such acquisition had occurred at
the beginning of such period; and (d) any acquisition or disposition by the
Company and its Restricted Subsidiaries of any company or any business or any
assets out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such period, assuming such
acquisition or disposition had been consummated on the first day of such period.
"Consolidated Interest Expense" means, with respect to any
period, the sum of (i) the interest expense of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (a) amortization of
debt discount, (b) the net payments, if any, under interest rate contracts
(including amortization of discounts), (c) the interest portion of any deferred
payment obligation and (d) accrued interest, plus (ii) the interest component of
the Capital Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and its Restricted Subsidiaries during such period, and
all capitalized interest of the Company and its Restricted Subsidiaries, plus
(iii) any payments or fees with respect to letters of credit, bankers'
acceptances and similar facilities, plus (iv) interest on Indebtedness
guaranteed by the Company and its Restricted Subsidiaries to the extent paid by
the Company or any Restricted Subsidiary, plus (v) all dividends paid during
such period by the Company and its Restricted Subsidiaries with respect to any
Disqualified Stock (other than by any Restricted Subsidiary to the Company or
any other Restricted Subsidiary and other than any dividend paid in Capital
Stock (other than Disqualified Stock)), and all dividends paid during such
period by any Restricted Subsidiary with respect to any Preferred Stock, in each
case, as determined on a consolidated basis in accordance with GAAP consistently
applied; provided that, if any Restricted Subsidiary is not a wholly owned
subsidiary of the Company, then Consolidated Interest Expense shall be reduced
(to the extent not otherwise reduced in accordance with GAAP) by an amount equal
to (A) the amount of Consolidated Interest Expense attributable to such
Restricted Subsidiary, multiplied by (B) the percentage ownership of such
Restricted Subsidiary not owned by the Company or any of its Restricted
Subsidiaries on the last day of such period.
"Consolidated Leverage Ratio" means, with respect to any
period, the ratio of (i) the aggregate actual amount of Indebtedness, including
any Permitted Indebtedness, of the Company and its Restricted Subsidiaries
outstanding at the end of that period to (ii) the aggregate actual amount of
Cash Flow of the Company and its Restricted Subsidiaries for the four fiscal
quarter period ending with that period.
"Consolidated Net Income" means, with respect to any period,
the net income (or loss) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP consistently
applied, adjusted to the extent included in calculating such net income (or
loss), by excluding, without duplication, (i) all extraordinary gains and losses
(less all fees and expenses relating thereto), (ii) the portion of net
5
income (or loss) of the Company and its Restricted Subsidiaries allocable to
interests in unconsolidated Persons or Unrestricted Subsidiaries, except to the
extent of the amount of dividends or distributions actually paid to the Company
or its Restricted Subsidiaries by such other Person during such period, (iii)
net income (or loss) of any Person combined with the Company or any of its
Restricted Subsidiaries on a "pooling of interests" basis attributable to any
period prior to the date of combination, (iv) net gains and losses (less all
fees and expenses relating thereto) in respect of disposition of assets
(including, without limitation, pursuant to sale and leaseback transactions)
other than in the ordinary course of business, (v) the net income of any
Restricted Subsidiary to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income to the Company is not
at the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (vi) the net income of any Person that is not a Restricted
Subsidiary, except to the extent of the actual amount of dividends or other
distributions paid to the Company or a Restricted Subsidiary by such Person
during such period, (vii) the cumulative effect of changes in accounting
principles, or (viii) any gain or loss realized on the termination of any
employee pension benefit plan.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Stock of such person.
"Covenant Defeasance" has the meaning provided in Section
8.2(b).
"Currency Agreement Obligations" means the obligations of any
person under a foreign exchange contract, currency swap agreement or other
similar agreement or arrangement to protect such person against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or after the giving of
notice or passage of time or both would be, an Event of Default.
"Default Interest" has the meaning provided in Section 2.13.
"Default Interest Payment Date" has the meaning provided in
Section 2.13.
"Defeasance" has the meaning provided in Section 8.2(a).
"Designation" has the meaning provided in Section 4.17(a).
"Designation Amount" has the meaning provided in Section
4.17(a).
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
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"Disqualified Stock" means (i) any Preferred Stock of any
Restricted Subsidiary and (ii) that portion of any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof (other than upon a change of
control of the Company in circumstances where the holders of the Notes would
have similar rights), in whole or in part on or prior to the stated maturity of
the Notes.
"Dollars" and "$" means lawful money of the United States of
America.
"DTC" means The Depository Trust Company, its nominees and
successors.
"Event of Default" has the meaning provided in Section 6.1.
"Excess Proceeds" has the meaning provided in Section 4.16(b).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" has the meaning provided in Section
4.10(b)(iii).
"Fair Market Value" means, with respect to any asset or
property, the sale value that would be obtained in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy.
"Foreign Subsidiary" means a Restricted Subsidiary not
organized under the laws of the United States or any political subdivision
thereof and the operations of which are located entirely outside the United
States.
"GAAP" means generally accepted accounting principles in the
United States set forth in the Statements of Financial Accounting Standards and
the Interpretations, Accounting Principles Board Opinions and American Institute
of Certified Public Accountants Accounting Research Bulletins.
"Global Note" means a Note that evidences all or part of the
Note that is issued to a Depositary or a nominee thereof in accordance with
Section 2.1.
"Guarantee" means, as applied to any obligation, (1) a
guarantee (other than endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (2) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Guarantor" means (i) each Subsidiary of the Company in
existence on the Issue Date which are each of Allegheny Clearfield, Inc.,
Friction Products Co., Hawk MIM, Inc., Hawk Motors, Inc., Hawk Precision
Components Group, Inc., Xxxxxx, Inc., Xxxxx Metal Stamping, Inc., Net Shape
Technologies LLC, Quarter Master Industries, Inc., X.X. Xxxxxxx
7
Corp., X.X. Xxxxxxx Holdings, Inc., Sinterloy Corp., Tex Racing Enterprises,
Inc. and (ii) each Subsidiary (other than Foreign Subsidiaries and Unrestricted
Subsidiaries) created or acquired by the Company after the Issue Date that
guarantees the Notes.
"Holder" means the Person in whose name a Note is registered
on the Registrar's books.
"incur" has the meaning provided in Section 4.10(a).
"Indebtedness" means, with respect to any Person, without
duplication, and whether or not contingent, (i) all indebtedness of such Person
for borrowed money or which is evidenced by a note, bond, debenture or similar
instrument, (ii) all obligations of such Person to pay the deferred or unpaid
purchase price of property or services, which purchase price is due more than
six months after the date of placing such property in service or taking delivery
and title thereto or the completion of such service, (iii) all Capital Lease
Obligations of such Person, (iv) all obligations of such Person in respect of
letters of credit or bankers' acceptances issued or created for the account of
such Person, (v) to the extent not otherwise included in this definition, all
net obligations of such Person under Interest Rate Agreement Obligations or
Currency Agreement Obligations of such Person, (vi) all liabilities of others of
the kind described in the preceding clause (i), (ii) or (iii) secured by any
Lien on any property owned by such Person; provided, however, if the obligations
secured by a Lien (other than a Permitted Lien not securing any liability that
would itself constitute Indebtedness) on any assets or property have not been
assumed by such Person in full or are not such Person's legal liability in full,
the amount of such Indebtedness for purposes of this definition shall be limited
to the lesser of the amount of Indebtedness secured by such Lien and the Fair
Market Value of the property subject to such Lien, (vii) all Disqualified Stock
issued by such Person and all Preferred Stock issued by a Subsidiary of such
Person (provided that such Disqualified Stock shall be valued at the maximum
fixed redemption or repurchase price thereof), and (viii) to the extent not
otherwise included, any guarantee by such Person of any other Person's
indebtedness or other obligations described in clauses (i) through (vii) above
(provided that such guarantee shall be valued at the maximum principal amount
thereof). "Indebtedness" of the Company and the Restricted Subsidiaries shall
not include current trade payables incurred in the ordinary course of business
and payable in accordance with customary practices, and non-interest bearing
installment obligations and accrued liabilities incurred in the ordinary course
of business that are not more than 90 days past due. The principal amount
outstanding of any Indebtedness issued with original issue discount is the
accreted value of such Indebtedness. Notwithstanding the foregoing, Indebtedness
shall not include Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business; provided
that such Indebtedness is extinguished within 3 Business Days of the incurrence
thereof.
"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.
"Independent Director" means a director of the Company other
than a director (i) who (apart from being a director of the Company or any
Subsidiary of the Company) is an employee, associate or Affiliate of the Company
or a Subsidiary of the Company, or (ii) who is
8
a director, employee, associate or Affiliate of another party (other than the
Company or any of its Subsidiaries) to the transaction in question.
"Initial Notes" means the Notes issued under this Indenture in
exchange for the Old Notes as provided in Section 2.2 hereof.
"Insider" has the meaning given such term in Title 11 of
Chapter 11 of the U.S. Code, as amended, to the date hereof and from time to
time hereafter.
"Interest" on the Notes means interest, including any Default
Interest, on the Notes.
"Interest Payment Date" means the stated maturity of a cash
payment of interest on the Notes.
"Interest Rate Agreement Obligations" means, with respect to
any Person, the Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person. "Investment" shall exclude travel and similar
advances to officers and employees of the Company in the ordinary course of
business and extensions of trade credit by the Company and its Restricted
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company or such Restricted Subsidiary, as the case may be. For
the purposes of Section 4.11, (i) "Investment" shall include and be valued at
the Fair Market Value of the net assets of any Restricted Subsidiary (to the
extent of the Company's equity interest in such Restricted Subsidiary) at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary
and shall exclude the Fair Market Value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary and (ii) the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments by
the Company or any of its Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of dividends or distributions
in connection with such Investment or any other amounts received in respect of
such Investment; provided, however, that no such payment of dividends or
distributions or receipt of any such other amounts shall reduce the amount of
any Investment if such payment of dividends or distributions or receipt of any
such amounts would be included in Consolidated Net Income. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Common
Stock of any direct or indirect Restricted Subsidiary of the Company such that,
after giving effect to any such sale or disposition, the Company no longer owns,
9
directly or indirectly, greater than 50% of the outstanding Common Stock of such
Restricted Subsidiary, the Company shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the Fair Market Value of the
Common Stock of such Restricted Subsidiary not sold or disposed of.
"Issue Date" means October _____, 2002, the date the Initial
Notes are issued under this Indenture.
"Junior PIK Indebtedness" means any Indebtedness of the
Company that: (i) is unsecured; (ii) is junior in right of payment to the Notes;
(iii) does not permit payments of cash interest prior to the Maturity Date; and
(iv) does not mature, allow or require any principal or other payments prior to
(a) one year after the Maturity Date in the event the payments on such Junior
PIK Indebtedness are owed to an Insider of the Company or (b) 90 days after the
Maturity Date in all other cases.
"Legal Holiday" has the meaning provided in Section 11.7.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in any asset and any filing of any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Maturity Date" means December 1, 2006.
"Net Proceeds" means, with respect to any Asset Sale by any
Person, the aggregate cash or Cash Equivalent proceeds received by such Person
and/or its Affiliates in respect of such Asset Sale, which amount is equal to
the excess, if any, of (i) the cash or Cash Equivalent received by such Person
and/or its Affiliates (including any cash payments received by way of deferred
payment pursuant to, or monetization of, a note or installment receivable or
otherwise, but only as and when received) in connection with such Asset Sale,
over (ii) the sum of (a) the amount of any Indebtedness that is secured by such
asset and which is required to be repaid by such Person in connection with such
Asset Sale, plus (b) all fees, commissions and other expenses incurred by such
Person in connection with such Asset Sale, plus (c) provision for taxes,
including income taxes, directly attributable to the Asset Sale or to required
prepayments or repayments of Indebtedness with the proceeds of such Asset Sale,
plus (d) if such Person is not a wholly-owned Restricted Subsidiary, any
dividends or distributions payable to holders of minority interests in such
Restricted Subsidiary from the proceeds of such Asset Sale.
"New Credit Facility" means any new senior secured credit
facility among the Company, certain of its Subsidiaries, and the lenders named
therein as the same may be amended, modified, renewed, refunded, replaced or
refinanced from time to time, including (i) any related notes, letters of
credit, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time, and (ii) any notes, guarantees,
collateral
10
documents, instruments and agreements executed in connection with any such
amendment, modification, renewal, refunding, replacement or refinancing.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Note Guarantee" means the guarantee of the Notes by a
Guarantor as described in Section 10.1.
"Notes" mean the Initial Notes, any Additional Notes and any
Additional PIK Notes, treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness including all
obligations of the Company and the Guarantors under this Indenture, the Notes
and the Note Guarantees.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Senior Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Operating Officer, the Controller, or
the Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 11.4 and 11.5, as they relate to the making of an
Officers' Certificate, and delivered to the Trustee.
"Old Indenture" has the meaning provided in the preamble to
this Indenture.
"Old Notes" has the meaning provide in the preamble to this
Indenture.
"Original Issue Date" means November 27, 1996, the issue date
of the Old Notes under the Old Indenture.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee complying with the
requirements of Sections 11.4 and 11.5, as they relate to the giving of an
Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.4.
"Permitted Holders" means any of Xxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxxx, Xxxxx X. Xxxxxx or any "group" (as defined in Rule 13d-5 of the
Exchange Act) consisting of any or all of the foregoing.
"Permitted Indebtedness" has the meaning provided in Section
4.10(b).
11
"Permitted Investments" means (i) any Investment in the
Company or any Restricted Subsidiary that is a Guarantor of the Notes; (ii) any
investment in cash or Cash Equivalents; (iii) any Investment in an Acquired
Person if, as a result of such Investment, (a) the Acquired Person becomes a
Restricted Subsidiary and becomes a Guarantor of the Notes or (b) the Acquired
Person either (1) is merged, consolidated or amalgamated with or into the
Company or one of its Restricted Subsidiaries that is a Guarantor of the Notes
and the Company or such Restricted Subsidiary is the Surviving Person, or (2)
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or one of its Restricted Subsidiaries that is a Guarantor of the
Notes; provided that any Investment pursuant to this clause (iii) in a Person
that is or becomes a Foreign Subsidiary shall not constitute the transfer of
property (other than cash); (iv) Investments in accounts and notes receivable
acquired in the ordinary course of business; (v) any notes, obligations or other
securities received in connection with an Asset Sale that complies with Section
4.16; (vi) Interest Rate Obligations and Currency Agreement Obligations
permitted pursuant to Section 4.10(b)(v); and (vii) investments in or
acquisitions of Capital Stock or similar interests in Persons (other than
Affiliates of the Company) received in the bankruptcy or reorganization of or by
such Person or any exchange of such investment with the issuer thereof or taken
in settlement of or other resolution of claims or disputes.
"Permitted Liens" means (i) Liens securing Indebtedness under
any New Credit Facility securing Indebtedness permitted to be incurred pursuant
to Section 4.10(b)(i); (ii) Liens securing Indebtedness of a Person existing at
the time that such Person is merged into or consolidated with the Company or a
Restricted Subsidiary; provided, however, that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of such Person; (iii) Liens on property acquired by
the Company or a Restricted Subsidiary; provided, however, that such Liens were
in existence prior to the contemplation of such acquisition and do not extend to
any other property; (iv) Liens in respect of Interest Rate Obligations and
Currency Agreement Obligations permitted under this Indenture; (v) Liens in
favor of the Company, any Restricted Subsidiary or any Guarantor; (vi) Liens
existing on the Issue Date; (vii) Liens securing the Notes or the Note
Guarantees, if any; and (viii) Liens securing Permitted Indebtedness of the
Company or any Restricted Subsidiary incurred under Section 4.10(b)(viii)
hereof.
"Permitted Payments" has the meaning provided in Section
4.11(b).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PIK Accrual Period" has the meaning provided in Section 2.3.
"PIK Interest Payment" means the payment of the additional
interest payable by the issuance of Additional PIK Notes pursuant to Section 2.3
of this Indenture.
"PIK Interest Payment Date" has the meaning provided in
Section 2.3.
"PIK Record Date" means the date 15 days prior to the
applicable PIK Interest Payment Date.
12
"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 Capital Stock of any other class of such
Person.
"Principal" of any Indebtedness (including the Notes) means
the principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Public Equity Offering" means an underwritten public offering
of Capital Stock (other than Disqualified Capital Stock) of the Company pursuant
to an effective registration statement filed under the Securities Act.
"Purchase Money Obligation" means any Indebtedness secured by
a Lien on assets related to the business of the Company or the Restricted
Subsidiaries, and any additions and accessions thereto, which are purchased,
constructed or improved by the Company or any Restricted Subsidiary at any time
after the Issue Date; provided, however, that (i) any security agreement or
conditional sales or other title retention contract pursuant to which the Lien
on such assets is created (collectively, a "Security Agreement") shall be
entered into within 90 days after the purchase or substantial completion of the
construction or improvement of such assets and shall at all times be confined
solely to the assets so purchased, constructed or improved, any additions and
accessions thereto and any proceeds therefrom, (ii) at no time shall the
aggregate principal amount of the outstanding Indebtedness secured thereby be
increased, except in connection with the purchase of additions and accessions
thereto and except in respect of fees and other obligations in respect of such
indebtedness and (iii) (a) the aggregate outstanding principal amount of
Indebtedness secured thereby (determined on a per asset basis in the case of any
additions and accessions) shall not at the time such Security Agreement is
entered into exceed 100% of the purchase price or cost of construction or
improvement to the Company or any Restricted Subsidiary of the assets subject
thereto or (b) the Indebtedness secured thereby shall be with recourse solely to
the assets so purchased, constructed or improved, any additions and accessions
thereto and any proceeds therefrom.
"Record Date" means the Record Dates specified in the Notes;
provided, however, that if any such date is a Legal Holiday, the Record Date
shall be the first day immediately preceding such specified day that is not a
Legal Holiday.
"Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Notes.
"Redemption Price," when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Notes.
"Redesignation" has the meaning provided in Section 4.17(b).
"Refinancing" has the meaning provided in Section
4.10(b)(vii).
"Refinancing Indebtedness" has the meaning provided in Section
4.10(b)(vii).
"Registrar" has the meaning provided in Section 2.4.
13
"Required Filing Dates" has the meaning provided in Section
4.9(a).
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Payment" means (i) any dividend or other
distribution declared or paid on any Capital Stock of the Company (other than
(a) dividends or distributions payable solely in Capital Stock (other than
Disqualified Stock) of the Company or (b) dividends or distributions payable to
the Company or any Restricted Subsidiary); (ii) any payment to purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company or a
Restricted Subsidiary (other than for the Company or a Restricted Subsidiary);
(iii) any payment to purchase, redeem, defease or otherwise acquire or retire
for value, prior to any scheduled maturity, repayment or sinking fund payment,
any Subordinated Indebtedness other than a purchase, redemption, defeasance or
other acquisition or retirement for value that is paid for with the proceeds of
Refinancing Indebtedness that is permitted under Section 4.10(b)(vii); or (iv)
any Restricted Investment.
"Restricted Subsidiary" means each direct or indirect
Subsidiary of the Company other than an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Senior Debt" means the principal of and interest (including
post-petition interest) on, and all other amounts owing in respect of, any New
Credit Facility and Indebtedness evidenced by the Notes. Notwithstanding the
foregoing, Senior Debt shall not include (i) any Indebtedness for federal,
state, local or other taxes, (ii) any Indebtedness of the Company to any of its
Subsidiaries or any of its Affiliates, (iii) any Indebtedness incurred for the
purchase of goods or materials, or for services obtained, in the ordinary course
of business or any obligations in respect of any such Indebtedness, (iv) any
Indebtedness that is incurred in violation of this Indenture or (v) Indebtedness
of the Company that is expressly subordinate or junior in right of payment
(other than as a result of the indebtedness being unsecured) to any other
Indebtedness of the Company.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X
promulgated pursuant to the Securities Act, as such Regulation S-X is in effect
on the Issue Date.
"Subordinated Indebtedness" means Indebtedness of the Company
or a Guarantor that is subordinated in right of payment to the Notes.
"Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding voting power of the Voting Stock of which is owned or
controlled, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof, or (ii) any limited partnership of which such Person or
any Subsidiary of such Person is a general partner, or (iii) any limited
liability company of which such Person or any Subsidiary of such Person is a
manager, or (iv) any other Person (other than a corporation, limited liability
company or limited partnership) in which such Person or one or more other
Subsidiaries of such Person, or such Person and one or more
14
other Subsidiaries thereof, directly or indirectly, has more than 50% of the
outstanding partnership, limited liability company or similar interests or has
the power, by contract or otherwise, to direct or cause the direction of the
policies, management and affairs thereof.
"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.3.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer this Indenture, or in the case of
a successor trustee, an officer assigned to the department, division or group
performing the corporation trust work of such successor and assigned to
administer this Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 4.17 and not
redesignated a Restricted Subsidiary in compliance with such covenant.
"U.S. Government Obligations" mean direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Voting Stock" of a Person means Capital Stock of such Person
of the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such Person (irrespective of whether
or not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment at final maturity, in respect thereof, with (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
aggregate principal amount of such Indebtedness.
15
SECTION 1.2 INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this indenture have the following meanings:
"Indenture Securities" means the Notes.
"Indenture Security Holder" means a Holder or a Noteholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the
Trustee.
"Obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.3 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
1. a term has the meaning assigned to it;
2. an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the date hereof;
3. unless otherwise specifically set forth herein, all
calculations or determinations of a Person shall be performed or made on a
consolidated basis in accordance with GAAP but shall not include the accounts of
Unrestricted Subsidiaries, except to the extent of dividends and distributions
actually paid to the Company or any of its Restricted Subsidiaries;
4. the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in accordance
with GAAP;
5. unless otherwise expressly provided herein, the principal
amount of any Preferred Stock shall be greater of (a) the maximum liquidation
value of such Preferred Stock, or (b) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Stock;
6. "or" is not exclusive;
7. words in the singular include the plural, and words in the
plural include the singular;
16
8. a reference to a Section or Article shall be to a Section
or Article of this Indenture;
9. "herein", "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
10. any reference to a statute, law or regulation means that
statute, law or regulation as amended and in effect from time to time and
includes any successor statute, law or regulation; provided, however, that any
reference to the Bankruptcy Law shall mean the Bankruptcy Law as applicable to
the relevant case.
ARTICLE II
THE NOTES
SECTION 2.1 FORM AND DATING.
The Notes and the Trustee's certificate of authentication relating
thereto shall be substantially in the form of EXHIBIT A hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as
EXHIBIT A, shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
The Notes shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth
in EXHIBIT A (the "Global Notes"), deposited with the Trustee, as custodian for
DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Section 2.16. The
aggregate principal amount of the Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
DTC, as hereinafter provided.
SECTION 2.2 EXECUTION AND AUTHENTICATION; AGGREGATE PRINCIPAL AMOUNT.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
17
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Notes for original issue in an
aggregate principal amount not to exceed $66,700,000 upon a written order of the
Company (the "Initial Notes") and (ii) Additional Notes upon a written order
issued from time to time by the Company. In addition, the Trustee shall
authenticate Additional PIK Notes from time to time upon a written order of the
Company. Such order or orders shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated, whether
the Notes are to be issued as definitive Notes or Global Notes or such other
information as the Trustee may reasonably request. The aggregate principal
amount of Notes outstanding at any time may not exceed $100,000,000, including,
but not limited to, the aggregate principal amount of Additional PIK Notes
issued pursuant to Section 2.3 of this Indenture, except as provided in Section
2.8.
The aggregate principal amount of the Notes may be changed from time to
time in an aggregate principal amount not to exceed $100,000,000, except as
provided in Section 2.8. All of the Notes need not be issued at the same time
and, unless otherwise provided, a previous issuance of Notes may be reopened,
without notice to or the consent of any Holder, for issuance of Additional Notes
of the same tranche, and the Additional Notes will be consolidated and form a
single tranche with the previously issued Notes.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.
Unless otherwise specified in the written order of the Company
pertaining to an issuance of Notes, the Notes shall be issuable in fully
registered form only, without coupons, and in denominations of $1,000 and
integral multiples thereof. Notwithstanding the foregoing, Additional PIK Notes
may be issued in any denomination.
SECTION 2.3 ADDITIONAL INTEREST UPON EXCESS CONSOLIDATED LEVERAGE
RATIO.
The Company will determine on March 31 (or if earlier, on the Required
Filing Date for an annual report) and August 14 (or if earlier, on the Required
Filing Date for a quarterly report for the second quarter) of each year (a "PIK
Interest Payment Date"), the Consolidated Leverage Ratio of the Company as of
the end of the immediately preceding six-month, semi-annual period ending on the
immediately preceding Interest Payment Date (a "PIK Accrual Period"). If the
Consolidated Leverage Ratio of the Company exceeds 4.00 to 1.00 as of the end of
such PIK Accrual Period, beginning with the PIK Accrual Period ending on
December 31, 2002, then the Company shall pay, to each Holder of record on the
PIK Record Date immediately preceding such PIK Interest Payment Date, an amount
of additional interest on the principal amount of the Notes held by that Holder,
from the first day of the applicable PIK
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Accrual Period (or, in the case of the PIK Accrual Period ending December 31,
2002, from the Issue Date) through the immediately preceding Interest Payment
Date, at the applicable rate per annum set forth below:
Rate of PIK Interest
Consolidated Leverage Ratio Payment
--------------------------- -------
More than 4.00 and equal to or less than 4.24 to 1.00 0.25%
4.25 or more and to equal to or less than 4.49 to 1.00 0.50%
4.50 or more and to equal to or less than 4.74 to 1.00 0.75%
4.75 or more and to equal to or less than 4.99 to 1.00 1.00%
5.00 or more and to equal to or less than 5.24 to 1.00 1.25%
5.25 or more and to equal to or less than 5.49 to 1.00 1.50%
5.50 or more and to equal to or less than 5.74 to 1.00 1.75%
5.75 or more to 1.00 2.00%
Any such interest payable pursuant to this Section shall be paid by the
Company in the form of Additional PIK Notes that are (a) identical in all
respects to the Notes with respect to which such Additional PIK Notes are issued
and (b) dated as of the day following the Interest Payment Date immediately
preceding the applicable PIK Interest Payment Date. Interest on such Additional
PIK Notes shall accrue from the day following the Interest Payment Date
immediately preceding the applicable PIK Interest Payment Date. The Additional
PIK Notes shall be issued in an aggregate principal amount equal to the amount
of additional interest that is to be paid on the aggregate principal amount of
Notes (including any previously issued Additional PIK Notes) outstanding as of
the applicable PIK Record Date at the applicable rate of additional interest set
forth above, calculated on the basis of a 360-day year (without any compounding
of such interest). The Additional PIK Notes shall be issued on or as soon as
practicable (and in any event within ten days) after the applicable PIK Interest
Payment Date. Notwithstanding the foregoing, if the Company shall be required to
pay any additional interest in a denomination less than $1,000, the Company,
may, at its option, pay such additional interest by making cash payments in the
amount of any Additional PIK Note that would be required pursuant to this
Section 2.3.
By way of example, if on August 14, 2003 (the PIK Interest Payment
Date) the Company determines that its Consolidated Leverage Ratio for the PIK
Accrual Period ending June 30, 2003 is 4.25 to 1.00, then the Company will issue
Additional PIK Notes to each Holder of record of Notes on July 30, 2003 (the PIK
Record Date) in a principal amount equal to $2.50 for each $1,000 of Notes held
by that Holder ($2.50 being the amount of additional interest accrued during
that PIK Accrual Period on $1,000 of Notes at the rate of 0.50% per
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annum). Those Additional PIK Notes will be dated as of July 1, 2003, and will
start accruing cash interest as of July 1, 2003, but will be issued on or within
ten days after August 14, 2003.
If a Redemption Date, Change of Control Purchase Date or Asset Sale
Offer Purchase Date occurs during the period after the immediately preceding PIK
Accrual Period but before the next PIK Interest Payment Date, then the Company
shall pay to the Holder of any redeemed or purchased Note an amount in cash
equal to the sum of (a) the principal amount of the Additional PIK Note, if any,
that would have been issued to that Holder with respect to the preceding PIK
Accrual Period, plus (b) the premium, if any, payable on that Additional PIK
Note had it been issued and outstanding on the Redemption Date, Change of
Control Purchase Date or Asset Sale Offer Purchase Date, plus (c) all accrued
and unpaid cash interest due in respect of such Additional PIK Note from the day
after the preceding Interest Payment Date.
SECTION 2.4 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in The City of New York, State of New York) where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their registration of transfer and exchange. The
Company, upon prior written notice to the Trustee, may have one or more
co-Registrars and one or more additional Paying Agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional Paying Agent. The
Company may act as its own Paying Agent, except that for the purposes of
payments on the Notes pursuant to Sections 4.15 and 4.16, neither the Company
nor any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. Any of
the Registrar, the Paying Agent or any other agent may resign upon 30 days'
notice to the Company.
SECTION 2.5 PAYING AGENT TO HOLD ASSETS IN TRUST.
------------------------------------
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any
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assets disbursed and the Trustee may at any time during the continuance of any
payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent shall
have no further liability for such assets.
SECTION 2.6 NOTEHOLDER 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
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee before each Record Date and at
such other times as the Trustee may request in writing a list as of such date
and in such form as the Trustee may reasonably require of the names and
addresses of the Holders, which list may be conclusively relied upon by the
Trustee.
SECTION 2.7 TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company or the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company or the Trustee may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.11, 3.6, 4.15, 4.16 or 9.5, in
which event the Company shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Note being redeemed in part and (iii) during a Change of Control
Offer or an Asset Sale Offer if such Note is tendered pursuant to such Change of
Control Offer or Asset Sale Offer and not withdrawn.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book-entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book-entry system.
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SECTION 2.8 REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity of reasonable tenor,
sufficient in the reasonable judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. Every replacement Note shall constitute an
additional obligation of the Company.
SECTION 2.9 OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.10, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.8 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
protected purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.8.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company) holds U.S. Legal Tender or U.S. Government Obligations
sufficient to pay all of the principal and interest due on the Notes payable on
that date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such Notes
cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10 TREASURY NOTES.
In determining (i) whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver, consent or notice or (ii) how
much principal amount of Notes remains outstanding after a redemption under
Paragraph 6(b) of the Notes, Notes owned by the Company or an Affiliate shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent under clause (i) above, only Notes which a Trust
Officer of the Trustee actually knows are so owned shall be so considered.
The Company shall notify the Trustee, in writing, when it or, to the
Company's knowledge, any of its Affiliates repurchases or otherwise acquires
Notes, of the aggregate principal amount of such Notes so repurchased or
otherwise acquired.
SECTION 2.11 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt, or a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary
22
Notes to be authenticated and the date on which the temporary Notes are to be
authenticated. Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes and so indicates in the Officers' Certificate. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
upon receipt of a written order of the Company pursuant to Section 2.2
definitive Notes in exchange for temporary Notes.
SECTION 2.12 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel and, at the written direction of the
Company, shall dispose, in its customary manner, of all Notes surrendered for
registration of transfer, exchange, payment or cancellation. Subject to Section
2.8, the Company may not issue new Notes to replace Notes that it has paid or
delivered to the Trustee for cancellation. If the Company shall acquire any of
the Notes, such acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.12.
SECTION 2.13 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes
(including interest payable in the form of Additional PIK Notes), it shall pay
the defaulted interest, plus (to the extent lawful) (i) any interest payable on
the defaulted interest in cash and (ii) an additional amount equal to 2% per
annum, computed on the basis of a 360-day year of twelve 30-day months and, in
the case of a partial month, the actual number of days elapsed, in cash (the
"Default Rate"), to the Persons who are Holders on a subsequent special record
date, which special record date shall be the fifteenth day next preceding the
date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment (a "Default Interest
Payment Date"), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect
of such defaulted interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such defaulted interest as provided in this Section; provided, however, that in
no event shall the Company deposit monies proposed to be paid in respect of
defaulted interest later than 11:00 a.m. of the proposed Default Interest
Payment Date. At least 15 days before the subsequent special record date, the
Company shall mail (or cause to be mailed) to each Holder, as of a recent date
selected by the Company, with a copy to the Trustee, a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.1(i) shall be paid to
Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of any defaulted interest in any other lawful manner not
23
inconsistent with the requirements of any securities exchange on which
the Notes may be listed, and upon such notice as may be required by
such exchange.
SECTION 2.14 CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers, and, if so,
the Trustee shall use the CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; provided, however, that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
numbers printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
SECTION 2.15 DEPOSIT OF MONIES AND ADDITIONAL PIK NOTES.
Prior to 10:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of Control Purchase Date and Asset Sale
Offer Purchase Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Purchase Date and Asset Sale Control Purchase Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Purchase Date and Asset Sale Offer Purchase Date, as the case may be. On or as
soon as practicable (and in any event within ten days) after each PIK Interest
Payment Date, Redemption Date, Change of Control Purchase Date and Asset Sale
Offer Purchase Date, the Company shall deposit with the Paying Agent duly issued
and authenticated Additional PIK Notes, dated as of the immediately preceding
Interest Payment Date, or in immediately available funds, money sufficient to
make cash payments, for any and all additional interest due on such PIK Interest
Payment Date, Redemption Date, Change of Control Purchase Date or Asset Sale
Offer Purchase Date, as the case may be, pursuant to Section 2.3 hereof.
SECTION 2.16 RESTRICTIVE LEGENDS
Each Global Note shall bear the following legend on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE
OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
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 HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER,
24
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 CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE.
SECTION 2.17 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) The Global Note initially shall (i) be registered in the
name of DTC or the nominee of such DTC, (ii) be delivered to the Trustee as
custodian for such DTC and (iii) bear legends as set forth in Section 2.16.
Members of, or participants in, DTC ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by DTC, or the Trustee as its custodian, or under the Global Note,
and DTC may be treated by the Company, the Trustee and any Agent as the absolute
owner of the Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any Agent
from giving effect to any written certification, proxy or other authorization
furnished by DTC or impair, as between DTC and its Agent Members, the operation
of customary practices governing the exercise of the rights of a holder of any
Note.
(b) Transfers of the Global Note shall be limited to transfers
in whole, but not in part, to DTC, its successors or their respective nominees.
Interests of beneficial owners in the Global Note may be transferred or
exchanged for definitive Notes in accordance with the rules and procedures of
DTC. In addition, definitive Notes shall be transferred to all beneficial owners
in exchange for their beneficial interest in the Global Note if (i) DTC notifies
the Company that it is unwilling or unable to continue as DTC for the Global
Note and a successor depositary is not appointed by the Company within 90 days
of such notice or (ii) an Event of Default has occurred and is continuing and
the Registrar has received a written request from DTC to issue definitive Notes.
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
definitive Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note
to beneficial owners pursuant to paragraph (b), the Global Note shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by DTC in exchange for its beneficial interest in the Global
Note, an equal aggregate principal amount of definitive Notes of authorized
denominations.
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(e) The Holder of the Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(f) The Registrar shall retain copies of all letters, notices
and other written communications received pursuant to this Section 2.17. The
Company shall have the right to inspect and make copies of all such letters,
notices and other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
ARTICLE III
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.1 at
least 60 days before the Redemption Date (unless a shorter notice period shall
be satisfactory to the Trustee, as evidenced in a writing signed on behalf of
the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If fewer than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not listed on a national securities
exchange, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that if the Notes are redeemed pursuant to
Paragraph 6(b) of the Notes, the Notes shall be redeemed solely on a pro rata
basis or on as nearly a pro rata basis as practicable (subject to the procedures
of DTC or any other depositary), unless such method is otherwise prohibited. If
the Notes are listed on any national securities exchange, the Company shall
notify the Trustee of the requirements of such exchange in respect of any
redemption. The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 or less may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Notes that have denominations larger than
$1,000. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
26
SECTION 3.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail to each Holder whose Notes are to be redeemed, with a copy to the
Trustee and any Paying Agent. At the Company's request, the Trustee shall give
the notice of redemption in the Company's name and at the Company's expense. The
Company shall provide such notices of redemption to the Trustee at least five
days before the intended mailing date.
Each notice for redemption shall identify (including the CUSIP number)
the Notes to be redeemed and shall state:
1. the Redemption Date and, if applicable, the next PIK
Interest Payment Date;
2. the Redemption Price and the amount of accrued interest, if
any, to be paid;
3. the procedures, if applicable, for the redemption of any
Additional PIK Notes that would otherwise be issued on the next PIK Interest
Payment Date;
4. the name and address of the Paying Agent;
5. the subparagraph of the Notes pursuant to which such
redemption is being made;
6. that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;
7. that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the Redemption Date (except as described in Section 2.3 hereof with respect to
any Additional PIK Notes that would be issuable with regard to such Notes on the
next PIK Interest Payment Date, if such redemption shall occur after the
immediately preceding Interest Payment Date and on or prior to such PIK Interest
Payment Date), and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price plus accrued interest, if any, upon
surrender to the Paying Agent of the Notes redeemed;
8. if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued; and
9. if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed, as
well as the aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption.
27
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price plus accrued interest thereon to the Redemption Date, but
installments of interest, the maturity of which is on or prior to the Redemption
Date, shall be payable to Holders of record at the close of business on the
relevant record dates referred to in the Notes.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
On or before 10:00 a.m., New York City time, on any the Redemption Date
and in accordance with Section 2.15 hereof, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient into pay the Redemption Price plus
accrued interest, if any, of all Notes to be redeemed on that date, plus an
amount in cash sufficient to redeem any Additional PIK Notes after the
Redemption Date pursuant to the procedures provided in Section 2.3 therefor. The
Paying Agent shall promptly return to the Company any U.S. Legal Tender so
deposited which is not required for those purposes, except with respect to
monies owed as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
(a) The Company shall pay the principal of and interest on the
Notes on the dates and in the manner provided in the Notes and in this
Indenture.
(b) An installment of principal of or interest on the Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Company or any of its Affiliates) holds, prior to 10:00 a.m. New
York City time on that date, U.S. Legal Tender (or Additional PIK Notes, in the
case of a PIK Interest Payment) designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture or the Notes.
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(c) The Company shall pay in cash, to the extent such payments
are lawful, interest on overdue principal and on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the Default Rate. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
(d) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required under Section
2.4. The Company shall give prior written notice to the Trustee of the location,
and any change in the location of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address, of the Trustee set
forth in Section 11.2.
SECTION 4.3 CORPORATE EXISTENCE.
Except as otherwise permitted by Article V or by Section 4.16, the
Company shall do or cause to be done, at its own cost and expense, all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of the Restricted Subsidiaries in accordance
with the respective organizational documents of each such Restricted Subsidiary
and the material rights (charter and statutory) and franchises of the Company
and each such Restricted Subsidiary; provided, however, that the Company shall
not be required to preserve, with respect to itself, any material right or
franchise and, with respect to any Restricted Subsidiary, any such existence,
material right or franchise, if the Board of Directors of the Company shall
determine in good faith that the preservation thereof is no longer desirable in
the conduct of the business of the Company and the Restricted Subsidiaries,
taken as a whole.
SECTION 4.4 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any Restricted Subsidiary
or properties of it or any Subsidiary and (ii) all material lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any Restricted Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate negotiations or
proceedings properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.
SECTION 4.5 MAINTENANCE OF PROPERTIES AND INSURANCE.
29
(a) The Company shall, and shall cause each Restricted
Subsidiary to, maintain all properties used or useful in the conduct of its
business in good working order and condition (subject to ordinary wear and tear)
and make all necessary repairs, renewals, replacements, additions, betterments
and improvements thereto and actively conduct and carry on its business;
provided, however, that nothing in this Section 4.5 shall prevent the Company or
any Restricted Subsidiary from discontinuing the operation and maintenance of
any of its properties, if such discontinuance is (i) in the ordinary course of
business pursuant to customary business terms or (ii) in the good faith judgment
of the Board of Directors or other governing body of the Company or the
Restricted Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Holders.
(b) The Company shall provide or cause to be provided, for
itself and each Restricted Subsidiary, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Company, are adequate and appropriate for the conduct of the
business of the Company and such Restricted Subsidiary in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the good faith judgment of the
Company, for companies similarly situated in the industry.
SECTION 4.6 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 105 days
after the end of the Company's fiscal year, a certificate signed by the Chairman
of the Board of Directors, the Vice-Chairman of the Board of Directors, the
Chief Executive Officer, the President or any Vice President and by the Chief
Financial Officer, Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company (provided, however, that one of such
signatories shall be the Company's principal executive officer, principal
financial officer or principal accounting officer), as to such Officers'
knowledge of the Company's compliance with all conditions and covenants under
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and in the event any Default exists, such Officers shall
specify the nature of such Default. The Officers' Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes its
fiscal year end or change its independent certified public accountants.
(b) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.2 hereof,
by registered or certified mail or by facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware of
such occurrence.
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SECTION 4.7 COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each Restricted Subsidiary to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
hereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not singly or in the
aggregate have a material adverse effect on the financial condition, business or
results of operations of the Company and the Restricted Subsidiaries, taken as a
whole.
SECTION 4.8 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.9 PROVISION OF FINANCIAL STATEMENTS AND INFORMATION.
(a) So long as any Notes are outstanding, whether or not the
Company is then subject to Section 13(a) or 15(d) of the Exchange Act, the
Company will file with the Commission, the annual reports, quarterly reports and
other periodic reports which the Company would have been required to file with
the Commission pursuant to such Section 13(a) or 15(d) if the Company were so
subject, and such documents shall be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so subject;
provided the Commission will accept such filings.
(b) The Company will also in any event (i) within 15 days of
each Required Filing Date, file with the Trustee, and supply the Trustee with
copies for delivery to the holders of the Notes, the annual reports, quarterly
reports and other periodic reports which the Company would have been required to
file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
if the Company were subject to such Sections and (ii) if the Commission will not
accept the filing of such documents promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents
to any prospective holder of the Notes.
SECTION 4.10 LIMITATION ON INCURRENCE OF INDEBTEDNESS.
(a) On and after the Issue Date, the Company shall not, and
shall not permit any Restricted Subsidiary to, create, incur, issue, assume or
directly or indirectly guarantee or
31
in any other manner become directly or indirectly liable for ("incur") any
Indebtedness (including Acquired Debt), except that the Company may incur
Indebtedness (including Acquired Debt) if, at the time of, and immediately after
giving pro forma effect to, such incurrence of Indebtedness, (i) the
Consolidated Cash Flow Coverage Ratio of the Company for the most recently ended
four fiscal quarters would be at least 2.5 to 1.0 and (ii) the Adjusted
Consolidated Leverage Ratio for the most recently ended four fiscal quarters of
the Company would be no greater than 3.5 to 1.0.
(b) The foregoing limitations will not apply to the incurrence
of any of the following (collectively, "Permitted Indebtedness"), each of which
shall be given independent effect:
(i) Indebtedness of the Company and any Restricted
Subsidiary arising under the New Credit Facility in an aggregate
principal amount not to exceed, at any time outstanding, the lesser of
(A) $53.0 million or (B) the amount permitted to be borrowed under the
New Credit Facility at such time;
(ii) Indebtedness of the Company represented by the
Additional PIK Notes and Indebtedness in the form of Note Guarantees
issued by any Subsidiaries that the Company directly or indirectly
creates or acquires after the Issue Date;
(iii) other Indebtedness of the Company or any Restricted
Subsidiary that is outstanding on the Issue Date in an aggregate
principal amount not to exceed $6.0 million ("Existing Indebtedness");
(iv) Indebtedness owed by any Restricted Subsidiary to the
Company or to another Restricted Subsidiary, or owed by the Company to
any Restricted Subsidiary that, if owed to a Restricted Subsidiary that
is not a Guarantor, is unsecured and subordinated in right of payment
to the payment and performance of the Company's obligations under the
Indenture and the Notes; provided, however, that any such Indebtedness
shall at all times be held by a Person which is either the Company or a
Restricted Subsidiary; provided, further, however, that upon either (A)
the transfer or other disposition of any such Indebtedness to a Person
other than the Company or another Restricted Subsidiary or (B) the
sale, lease, transfer or other disposition of shares of Capital Stock
(including by consolidation or merger) of any such Restricted
Subsidiary to a Person other than the Company or another Restricted
Subsidiary, the incurrence of such Indebtedness shall be deemed to be
an incurrence that is not permitted by this clause (iv);
(v) Indebtedness of the Company or any Restricted
Subsidiary arising with respect to Interest Rate Agreement Obligations
and Currency Agreement Obligations incurred for the purpose of fixing
or hedging interest rate risk or currency risk with respect to any
fixed or floating rate Indebtedness that is permitted by the terms of
this Indenture to be outstanding or with respect to any receivable or
liability the payment of which is determined by reference to a foreign
currency;
32
(vi) Indebtedness represented by performance, completion,
guarantee, surety and similar bonds provided by the Company or any
Restricted Subsidiary in the ordinary course of business consistent
with past practice;
(vii) Indebtedness incurred in connection with or given in
exchange for the renewal, extension, substitution, refunding,
defeasance, refinancing or replacement, in whole or in part, (a
"Refinancing") of any Indebtedness of the Company or a Restricted
Subsidiary incurred as permitted under Section 4.10(a) or any
Indebtedness described in clauses (i), (ii) or (iii) above and this
clause (vii) ("Refinancing Indebtedness"); provided, however, that (A)
the principal amount of such Refinancing Indebtedness shall not exceed
the principal amount (or accreted amount, if less) of the Indebtedness
so refinanced (plus the premiums and reasonable expenses to be paid in
connection therewith, which, with respect to such premiums, shall not
exceed the stated amount of any premium or other payment required to be
paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced); (B) the maturity of the Refinancing
Indebtedness shall not be shorter than the maturity of the Indebtedness
being refinanced (provided that such Refinancing Indebtedness does not
permit the redemption or other retirement of such Refinancing
Indebtedness prior to its stated maturity); (C) the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness
being refinanced; and (D) the Refinancing Indebtedness shall be at
least as subordinated in right of payment to the Notes as the
Indebtedness being refinanced;
(viii) Indebtedness of the Company or any Restricted
Subsidiary (A) representing Capitalized Lease Obligations and any
refinancings thereof and/or (B) in respect of Purchase Money
Obligations for property acquired, constructed or improved in the
ordinary course of business and any refinancings thereof, which taken
together in the aggregate do not exceed $5.0 million at any time
outstanding;
(ix) commodity agreements entered into in the ordinary
course of business to protect against fluctuations in the prices of raw
materials and not for speculative purposes;
(x) Indebtedness incurred by the Company or any Restricted
Subsidiary constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business (but not
issued to support Indebtedness for money borrowed), including, without
limitation, letters of credit in respect of workers' compensation
claims or self-insurance, or other Indebtedness with respect to
reimbursement type obligations regarding workers' compensation claims
or self-insurance;
(xi) Guarantees by the Company of Indebtedness of a
Restricted Subsidiary permitted to be incurred under this Indenture;
(xii) Indebtedness of the Company or any Restricted
Subsidiary arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, in each case
incurred or assumed in connection with the disposition
33
of any business, assets or a Subsidiary, other guarantees of
Indebtedness incurred by any Person acquiring all or any portion of
such business, assets or a Subsidiary for the purpose of financing such
acquisition; provided that the maximum liability in respect of such
Indebtedness shall not exceed the gross proceeds actually received by
the Company and its Restricted Subsidiaries in connection with such
disposition; and
(xiii) Junior PIK Indebtedness of the Company in an
aggregate amount not to exceed at any time $25.0 million.
(c) For purposes of determining any particular amount of
Indebtedness under this Section 4.10:
(i) in the event that an item of Indebtedness meets the
criteria of more than one of the categories of Permitted Indebtedness
described in clauses (i) through (xii) of Section 4.10(b) or is
entitled to be incurred pursuant to Section 4.10(a), the Company will,
in its sole discretion, classify that item of Indebtedness on the date
of incurrence in any manner that complies with this Section 4.10, and
(ii) guarantees, Liens or obligations with respect to
letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included.
(d) Accrual of interest, accretion or amortization of original
issue discount, the payment of interest on Indebtedness in the term of
additional indebtedness with the same terms and the payment of dividends in
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of additional
Indebtedness or an issuance of Disqualified Stock for purposes of this Section
4.10.
(e) Indebtedness of any Person which is outstanding at the time
such Person becomes a Restricted Subsidiary or is merged with or into or
consolidated with the Company or a Restricted Subsidiary shall be deemed to have
been incurred at the time such Person becomes a Restricted Subsidiary or is
merged with or into or consolidated with the Company or a Restricted Subsidiary,
and Indebtedness which is assumed at the time of the acquisition of any asset
shall be deemed to have been incurred at the time of such acquisition.
SECTION 4.11 LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment, unless at
the time of and immediately after giving effect to the proposed Restricted
Payment (with the value of any such Restricted Payment, if other than cash, to
be determined reasonably and in good faith by the Board of Directors of the
Company):
(i) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof;
(ii) the Company could incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.10(a); and
34
(iii) the aggregate amount of all Restricted Payments made
after the Original Issue Date shall not exceed the sum of:
(A) an amount equal to 50% of the Company's aggregate
cumulative Consolidated Net Income accrued on a cumulative
basis during the period (treated as one accounting period)
beginning on the Original Issue Date and ending on the date of
such proposed Restricted Payment (or, if such aggregate
cumulative Consolidated Net Income for such period shall be a
deficit, minus 100% of such deficit); plus
(B) the aggregate amount of all net cash proceeds
received since the Original Issue Date by the Company from the
issuance and sale (other than to a Restricted Subsidiary) of,
or equity contribution with respect to, Capital Stock (other
than Disqualified Stock) and the principal amount of
Indebtedness of the Company or any Restricted Subsidiary that
has been converted into or exchanged for Capital Stock (other
than Disqualified Stock), in any such case to the extent that
such proceeds are not used (x) to redeem, repurchase, retire
or otherwise acquire Capital Stock or any Indebtedness of the
Company or any Restricted Subsidiary pursuant to clause (ii)
of the next paragraph or (y) to make any Restricted Investment
pursuant to clause (iv) of the next paragraph; plus
(C) the amount of the net reduction in Investments in
Unrestricted Subsidiaries resulting from (x) the payment of
cash dividends or the repayment in cash of the principal of
loans or the cash return on any Investment, in each case to
the extent received by the Company or any Restricted
Subsidiary from Unrestricted Subsidiaries, (y) the release or
extinguishment of any guarantee of Indebtedness of any
Unrestricted Subsidiary, and (z) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued
as provided in the definition of "Investment"), except, in
each case, to the extent that such payment or proceeds are
included in the calculation of Consolidated Net Income, such
aggregate amount of the net reduction in Investments not to
exceed in the case of any Unrestricted Subsidiary the amount
of Restricted Investments previously made by the Company or
any Restricted Subsidiary in such Unrestricted Subsidiary,
which amount was included in the calculation of the amount of
Restricted Payments; plus
(D) to the extent that any Restricted Investment that
was made after the Original Issue Date is sold for cash or
otherwise liquidated or repaid for cash, the amount of cash
proceeds received with respect to such Restricted Investment,
except, in each case, to the extent that such payment or
proceeds are included in the calculation of Consolidated Net
Income, net of taxes and the cost of disposition, which amount
may not exceed the amount of Restricted Investments made after
the Original Issue Date.
(b) Section 4.11(a) shall not prohibit the following
actions (collectively, "Permitted Payments"):
35
(i) the payment of any dividend within 60 days after the
date of declaration thereof, if at such declaration date such payment
would have been permitted under this Indenture (which payment shall be
deemed to have been paid on such date of declaration for purposes of
Section 4.11(a)(iii));
(ii) the redemption, repurchase, retirement or other
acquisition of any Capital Stock or any Subordinated Indebtedness of
the Company or any Restricted Subsidiary in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a
Restricted Subsidiary) of, or equity contribution with respect to,
Capital Stock of the Company (other than any Disqualified Stock);
(iii) any purchase or defeasance of Subordinated
Indebtedness to the extent (A) made with permitted Refinancing
Indebtedness or (B) required by the other agreement or instrument
pursuant to which such Subordinated Indebtedness was issued upon a
change of control or other asset sale (as defined therein), but only if
the Company (x) in the case of such a change of control, has complied
with its obligations under Section 4.15 or (y) in the case of such an
asset sale, has applied the Net Proceeds from such asset sale in
accordance with Section 4.16;
(iv) any Restricted Investment the sole consideration for
which consists of, or is made with the proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary) of, or equity
contribution with respect to, Capital Stock of the Company (other than
any Disqualified Stock);
(v) loans or advances to employees of the Company or any of
its Subsidiaries which loans or advances exist on the Original Issue
Date, and other loans or advances to employees of the Company or any
Subsidiary to pay reasonable relocation expenses;
(vi) Restricted Investments in an amount such that the sum
of the aggregate amount of Restricted Investments made pursuant to this
clause (vi) after the Original Issue Date does not exceed $2.0 million
at any one time outstanding; and
(vii) the payment of any dividend on, or redemption of any
or all of, the Company's redeemable 9.8% cumulative preferred stock,
par value, $0.01 per share, Series D, outstanding on the Original Issue
Date.
provided, however, that in the case of clauses (iii), (iv), (vi) and (vii) of
this Section 4.11(b), no Default or Event of Default shall have occurred and be
continuing.
(c) For purposes of Section 4.11(a)(iii), the Permitted
Payments referred to in clauses (i), (vi) and (vii) of Section 4.11(b) shall be
included in the aggregate amount of Restricted Payments made since the Original
Issue Date, and any other Permitted Payments described above shall be excluded.
(d) Not later than thirty (30) days after the end of any fiscal
quarter of the Company during which any Restricted Payment or Restricted
Investment has been made, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted
36
Payment or Restricted Investment complies with this Indenture and setting forth
in reasonable detail the basis upon which the required calculations were
computed, which calculations may be based upon the Company's latest available
internal quarterly financial statements.
SECTION 4.12 LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Lien
securing Indebtedness (other than Permitted Liens) on any asset now owned or
hereafter acquired, or any income or profits therefrom, or assign or convey any
right to receive income therefrom to secure any such Indebtedness, unless (i) if
such Lien secures Indebtedness that is pari passu with the Notes, then the Notes
are secured on an equal and ratable basis with the obligations so secured until
such time as such obligation is no longer secured by a Lien or (ii) if such Lien
secures Indebtedness that is subordinated to the Notes, any such Lien shall be
subordinated to a Lien granted to the Holders of the Notes in the same
collateral as that securing such Lien to the same extent as such subordinated
Indebtedness is subordinated to the Notes.
SECTION 4.13 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause to become effective any
consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions to
the Company or any other Restricted Subsidiary on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to the Company or any other Restricted Subsidiary,
(ii) make loans or advances to, or issue guarantees for the benefit of, the
Company or any other Restricted Subsidiary or (iii) transfer any of its
properties or assets to the Company or any other Restricted Subsidiary, except
for such encumbrances or restrictions existing under or by reason of:
(a) any New Credit Facility;
(b) applicable law;
(c) any instrument governing Indebtedness or Capital Stock of
an Acquired Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition); provided, however, that no such encumbrance or restriction is
applicable to any Person, or the properties or assets of any Person, other than
the Acquired Person;
(d) customary non-assignment, subletting or net worth
provisions in leases or other agreements entered into the ordinary course of
business and consistent with past practices;
(e) Purchase Money Indebtedness for property acquired in the
ordinary course of business that impose restrictions only on the property so
acquired;
37
(f) an agreement for the sale or disposition of assets or the
Capital Stock of a Restricted Subsidiary; provided, however, that such
restriction or encumbrance is only applicable to such Restricted Subsidiary or
assets, as applicable, and such sale or disposition otherwise is permitted by
Section 4.16; provided, further, however, that such restriction or encumbrance
shall be effective only for a period from the execution and delivery of such
agreement through a termination date not later than 180 days after such
execution and delivery;
(g) this Indenture, the Notes and the Note Guarantees;
(h) Indebtedness (including Refinancing Indebtedness) permitted
to be incurred subsequent to the Issue Date pursuant to Section 4.10; provided,
however, that any such restrictions are ordinary and customary with respect to
the type of Indebtedness being incurred;
(i) encumbrances and restrictions imposed by Liens incurred in
accordance with Section 4.12;
(j) customary provisions in joint venture agreements and other
similar agreements; and
(k) encumbrances and restrictions imposed by amendments,
restatements, renewals, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (a) through (j) above;
provided that such encumbrances and restrictions are, in the good faith judgment
of the Company's Board of Directors, no more restrictive, in any material
respect, than those contained in such contracts, instruments or obligations
immediately prior to such amendment, restatement, renewal, replacement or
refinancing.
SECTION 4.14 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, suffer to exist, renew or
extend any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate of the Company unless (i) such transaction or
series of transactions is on terms that are no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could reasonably
be obtainable at such time in a comparable transaction in arm's-length dealings
with an unrelated third party, and (ii) the Company delivers to the Trustee (A)
with respect to any transaction or series of transactions involving aggregate
payments in excess of $500,000, an Officers' Certificate certifying that such
transaction or series of related transactions complies with clause (i) above and
(B) with respect to any transaction or series of transactions involving
aggregate payments in excess of $2.0 million, an Officers' Certificate
certifying that such transaction or series of related transactions has been
approved by a majority of the members of the Board of Directors of the Company
(and approved by a majority of the Independent Directors or, in the event there
is only one Independent Director, by such Independent Director), and (iii) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $5.0 million, an opinion as to the fairness to the Company
from a financial point of view issued by an investment banking firm of national
standing.
38
(b) Section 4.14(a) will not apply to (i) employment agreements
or compensation or employee benefit arrangements with any officer, director or
employee of the Company or any of its Restricted Subsidiaries entered into in
the ordinary course of business (including customary benefits thereunder and
including reimbursement or advancement of out-of-pocket expenses, and director's
and officer's liability insurance); (ii) the expense sharing arrangement between
the Company and Xxxxxxxx Capital Corporation regarding the expenses incurred
with respect to the Company's Cleveland, Ohio headquarters; (iii) any
transaction entered into by or among the Company or one of its Restricted
Subsidiaries with one or more Restricted Subsidiaries of the Company; (iv) any
transaction permitted by Section 4.11(b); (v) transactions permitted by, and
complying with, Article Five; and (vi) transactions with suppliers or other
purchases or sales of goods or services, in each case in the ordinary course of
business (including, without limitation, pursuant to joint venture agreements)
and otherwise in compliance with the terms of this Indenture which, in the
reasonable determination of the Board of Directors of the Company, are on terms
no less favorable to the Company or its Restricted Subsidiaries than those that
could reasonably have been obtained at such time from an unaffiliated party.
SECTION 4.15 CHANGE OF CONTROL.
(a) In the event of a Change of Control, each Holder of the
Notes shall have the right, unless the Company has given a notice of redemption,
subject to the terms and conditions of this Indenture, to require the Company to
offer to purchase all or any portion (equal to $1,000, or, if lesser
denominations have been issued, such lesser denominations, or an integral
multiple thereof) of such Holder's Notes (and, if the Change of Control Purchase
Date occurs during the period following the immediately preceding Interest
Payment Date to and including the next PIK Interest Payment Date, any Additional
PIK Notes that would be issuable on such PIK Interest Payment Date pursuant to
Section 2.3 hereof) at a purchase price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase, in accordance with the terms set forth below (a "Change of Control
Offer").
In the event of any Change of Control, the Company shall not,
and shall not cause or permit any of the Restricted Subsidiaries to, purchase,
redeem or otherwise acquire or retire any Indebtedness of the Company ranking
junior or subordinate to the Notes pursuant to any analogous provisions relating
to such Indebtedness until after the 91st day after the Change of Control
Payment Date (as such date may be extended).
(b) On or before the 30th day following the occurrence of any
Change of Control, the Company shall mail, by first-class mail (with a copy to
the Trustee), to each Holder at such Holder's registered address a notice
stating:
(i) that a Change of Control has occurred and that such
holder has the right to require the Company to purchase all or a
portion (equal to $1,000, or if lesser denominations have been issued,
such lesser denominations, or an integral multiple thereof) of such
holder's Notes (including any Additional PIK Notes that would be
issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof) at a purchase price in cash equal to 101% of the aggregate
principal amount
39
thereof, plus accrued and unpaid interest, if any, to the date of
purchase (the "Change of Control Purchase Date"), which shall be a
Business Day, specified in such notice, that is not earlier than 30
days or later than 60 days from the date such notice is mailed; (ii)
the amount of accrued and unpaid interest, if any, as of the Change of
Control Purchase Date (including any amounts that would be payable in
respect of any Additional PIK Notes that would be issuable on the next
PIK Interest Payment Date pursuant to Section 2.3 hereof); (iii) that
any Note not tendered will continue to accrue interest; (iv) that,
unless the Company defaults in the payment of the purchase price for
the Notes payable pursuant to the Change of Control Offer, any Notes
accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest on the Change of Control Purchase Date
(excluding the interest payable under Section 2.3 hereof on any
Additional PIK Notes that would be issuable on the next PIK Interest
Payment Date); (v) that Holders electing to have a Note purchased
pursuant to a Change of Control Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the second
Business Day prior to the Change of Control Purchase Date; (vi) that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the second Business Day prior to the Change of
Control Purchase Date, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Notes purchased; (vii) that Holders whose
Notes are purchased only in part will be issued new Notes in a
principal amount equal to the unpurchased portion of the Notes
surrendered; provided, however, that each Note purchased and each new
Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof (or if the Notes purchased were issued in
lesser denominations, such lesser denomination); (viii) the
circumstances and relevant facts regarding such Change of Control; and
(ix) such other information as may be required by applicable laws and
regulations.
(c) On the Change of Control Purchase Date, the Company will
(i) accept for payment all Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
Sufficient to pay the aggregate purchase price of all Notes or portions thereof
accepted for payment, (iii) deposit with the Paying Agent an amount in cash
sufficient to pay the aggregate purchase price of any Additional PIK Notes that
would be issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof, and (iv) deliver or cause to be delivered to the Trustee all Notes
tendered pursuant to the Change of Control Offer. The Paying Agent shall
promptly mail to each holder of Notes or portions thereof accepted for payment
an amount equal to the purchase price for such Notes plus accrued and unpaid
interest, if any, thereon, and the Trustee shall promptly authenticate and mail
to each holder of Notes accepted for payment in part a new Note equal in
principal amount to any unpurchased portion of the Notes, and any Note not
accepted for payment in whole or in part shall be promptly returned to the
holder of such Note. On and after a Change of Control Purchase Date, interest
will cease to accrue on the Notes (excluding any Additional PIK Notes that would
be issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof) or portions thereof accepted for payment, unless the Company defaults in
the payment of the
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purchase price therefor. The Company will publicly announce the results
of the Change of Control Offer on or as soon as practicable after the
Change of Control Purchase Date.
(d) The Company will comply with the applicable tender offer
rules, including the requirements of Section 14(e) and Rule 14e-1 under the
Exchange Act, and all other applicable securities laws and regulations in
connection with any Change of Control Offer and will be deemed not to be in
violation of any of the covenants under this Indenture to the extent such
compliance is in conflict with such covenants.
SECTION 4.16 LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value (as evidenced by a resolution of
the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or other property sold or disposed of in the Asset Sale
and (ii) at least 75% of such consideration consists of either cash or Cash
Equivalents; provided, however, that for purposes of this Section 4.16, "cash"
shall include (x) the amount of any Indebtedness (other than any Indebtedness
that is by its terms subordinated to the Notes) of the Company or such
Restricted Subsidiary as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet or in the notes thereto that is assumed by the
transferee of any such assets or other property in such Asset Sale (and
excluding any liabilities that are incurred in connection with or in
anticipation of such Asset Sale), but only to the extent that such assumption is
effected on a basis such that there is no further recourse to the Company or any
of the Restricted Subsidiaries with respect to such liabilities and (y) any
notes, obligations or securities received by the Company or such Restricted
Subsidiary from such transferee that are converted within 60 days by the Company
or such Restricted Subsidiary into cash (to the extent of the cash received).
(b) Within 180 days after any Asset Sale, the Company may elect
to apply the Net Proceeds from such Asset Sale to (a) permanently reduce any
Senior Debt of the Company and/or (b) make an investment in, or acquire assets
and properties that will be used in, the business of the Company and the
Restricted Subsidiaries existing on the Issue Date or in businesses reasonably
related thereto. Pending the final application of any such Net Proceeds, the
Company or any Restricted Subsidiary may temporarily reduce Indebtedness of the
Company under any New Credit Facility or temporarily invest such Net Proceeds in
any Investments described under clauses (i) through (iii) of the definition of
Permitted Investments. Any Net Proceeds from an Asset Sale not applied or
invested as provided in the first sentence of this Section 4.16(b) within 180
days of such Asset Sale will be deemed to constitute "Excess Proceeds."
(c) Each date that the aggregate amount of Excess Proceeds in
respect of which an Asset Sale Offer (as defined below) has not been made
exceeds $5.0 million shall be deemed an "Asset Sale Offer Trigger Date." As soon
as practicable, but in no event later than 20 business days after each Asset
Sale Offer Trigger Date, the Company shall commence an offer (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes (and, if the Asset
Sale Offer Purchase Date occurs during the period following the immediately
preceding
41
Interest Payment Date to and including the next PIK Interest Payment Date, any
Additional PIK Notes that would be issuable on such PIK Interest Payment Date
pursuant to Section 2.3 hereof) that may be purchased out of the Excess
Proceeds. Any Notes to be purchased pursuant to an Asset Sale Offer shall be
purchased pro rata based on the aggregate principal amount of Notes outstanding,
and all Notes shall be purchased at an offer price in cash in an amount equal to
100% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of purchase. To the extent that any Excess Proceeds remain after
completion of an Asset Sale Offer, the Company may use the remaining amount to
pay Indebtedness for money borrowed (other than Junior PIK Indebtedness) and, if
any Excess Proceeds remain after the payment in full of such Indebtedness, for
general corporate purposes otherwise permitted by this Indenture. In the event
that the Company is prohibited under the terms of any agreement governing
outstanding Senior Debt of the Company from repurchasing Notes with Excess
Proceeds pursuant to an Asset Sale Offer as set forth in the first sentence of
this Section 4.16(c), the Company shall promptly use all Excess Proceeds to
permanently reduce such outstanding Senior Debt of the Company. Upon the
consummation of any Asset Sale Offer, the amount of Excess Proceeds shall be
deemed to be reset to zero.
(d) Notice of an Asset Sale Offer shall be mailed, by
first-class mail (with a copy to the Trustee), by the Company not later than the
20th business day after the related Asset Sale Offer Trigger Date to each holder
of Notes at such holder's registered address, stating: (i) that an Asset Sale
Offer Trigger Date has occurred and that the Company is offering to purchase the
maximum principal amount of Notes (including any Additional PIK Notes that would
be issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof) that may be purchased out of the Excess Proceeds (to the extent provided
in the immediately preceding paragraph), at an offer price in cash in an amount
equal to 100% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of the purchase (the "Asset Sale Offer Purchase Date"),
which shall be a business day, specified in such notice, that is not earlier
than 30 days or later than 60 days from the date such notice is mailed, (ii) the
amount of accrued and unpaid interest, if any, on the Notes (including any
amounts that would be payable in respect of any Additional PIK Notes that would
be issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof) as of the Asset Sale Offer Purchase Date, (iii) that any Note not
tendered will continue to accrue interest, (iv) that, unless the Company
defaults in the payment of the purchase price for the Notes payable pursuant to
the Asset Sale Offer, any Notes accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Asset Sale Offer Purchase Date
(excluding any Additional PIK Notes that would be issuable on the next PIK
Interest Payment Date pursuant to Section 2.3 hereof), (v) that Holders electing
to have a Note purchased pursuant to a Asset Sale Offer will be required to
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
prior to the Asset Sale Offer Purchase Date, (vi) that Holders will be entitled
to withdraw their election if the Paying Agent receives, not later than the
second Business Day prior to the Asset Sale Offer Purchase Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased, (vii) that
Holders whose Notes are purchased only in part will be issued new Notes in a
principal amount equal to the unpurchased portion of the Notes surrendered;
provided, however, that each Note purchased and each new Note issued shall be in
an original
42
principal amount of $1,000 or integral multiples thereof (or if the Notes
purchased were issued in lesser denominations, such lesser denomination), and
(viii) such other information as may be required by applicable laws and
regulations.
(e) On the Asset Sale Offer Purchase Date, the Company will (i)
accept for payment the maximum principal amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer that can be purchased out of Excess
Proceeds from such Asset Sale that are to be applied to an Asset Sale Offer,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
aggregate purchase price of all Notes or portions thereof accepted for payment,
(iii) deposit with the Paying Agent an amount in cash sufficient to pay the
aggregate purchase price of any Additional PIK Notes that would be issuable on
the next PIK Interest Payment Date pursuant to Section 2.3 hereof, and (iv)
deliver or cause to be delivered to the Trustee all Notes tendered pursuant to
the Asset Sale Offer. If less than all Notes tendered pursuant to the Asset Sale
Offer are accepted for payment by the Company for any reason consistent with
this Indenture, selection of the Notes to be purchased by the Company shall be
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis or by lot; provided, however, that Notes accepted
for payment in part shall only be purchased in integral multiples of $1,000, and
provided further, that if all of a Holder's Notes are to be purchased, an amount
shall be retained by the Paying Agent to purchase any Additional PIK Notes that
would be issuable to the Holder on the next PIK Interest Payment Date pursuant
to Section 2.3 hereof. The Paying Agent shall promptly mail to each holder of
Notes or portions thereof accepted for payment an amount equal to the purchase
price for such Notes plus accrued and unpaid interest, if any, thereon, and the
Trustee shall promptly authenticate and mail to such holder of Notes accepted
for payment in part a new Note equal in principal amount to any unpurchased
portion of the Notes, and any Note not accepted for payment in whole or in part
shall be promptly returned to the holder of such Note. On and after an Asset
Sale Offer Purchase Date, interest will cease to accrue on the Notes or portions
thereof accepted for payment (excluding the interest payable under Section 2.3
on any Additional PIK Notes that would be issuable on the next PIK Interest
Payment Date), unless the Company defaults in the payment of the purchase price
therefor. The Company will publicly announce the results of the Asset Sale Offer
on or as soon as practicable after the Asset Sale Offer Purchase Date.
(f) This Section 4.16 will not apply to a transaction
consummated in compliance with Article Five.
(g) The Company will comply with the applicable tender offer
rules, including the requirements of Section 14(e) and Rule 14e-1 under the
Exchange Act, and all other applicable securities laws and regulations in
connection with any Asset Sale Offer and will be deemed not to be in violation
of any of the covenants under this Indenture to the extent such compliance is in
conflict with such covenants.
SECTION 4.17 LIMITATION ON DESIGNATION OF UNRESTRICTED SUBSIDIARIES.
(a) The Company shall not designate any Subsidiary of the
Company (other than a newly created Subsidiary in which no Investment has
previously been made) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") unless:
43
(i) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation;
(ii) immediately after giving effect to such Designation,
the Company would be able to incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.10(a); and
(iii) the Company would not be prohibited under this
Indenture from making an Investment at the time of Designation in an
amount (the "Designation Amount") equal to the greater of (x) the book
value of such Restricted Subsidiary on such date and (y) the Fair
Market Value of such Restricted Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to have made
an Investment constituting a Restricted Payment pursuant to for all purposes of
this Indenture in an amount equal to the Designation Amount.
(b) The Company shall not designate an Unrestricted Subsidiary
as a Restricted Subsidiary (a "Redesignation"), unless:
(i) no Default shall have occurred and be continuing at the
time of and after giving effect to such Redesignation; and
(ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Redesignation shall
be deemed to have been incurred at such time and shall have been
permitted to be incurred for all purposes of this Indenture.
An Unrestricted Subsidiary shall be deemed to be redesignated as a Restricted
Subsidiary at any time if (a) the Company or any other Restricted Subsidiary (i)
provides credit support for, or a guarantee of, any Indebtedness of such
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness) or (ii) is directly or indirectly liable for any
Indebtedness of such Unrestricted Subsidiary, (b) a default with respect to any
Indebtedness of such Unrestricted Subsidiary (including any right which the
holders thereof may have to take enforcement action against it) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its final scheduled maturity, or (c) such Unrestricted Subsidiary incurs
indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any Restricted Subsidiary, except in the case of clause (i) to
the extent permitted under Section 4.11.
(c) All Designations and Redesignations shall be evidenced by
Board Resolutions delivered to the Trustee certifying compliance with the
foregoing provisions. Subsidiaries that are not designated by the Board of
Directors as Restricted or Unrestricted Subsidiaries will be deemed to be
Restricted Subsidiaries. The Designation of a Restricted Subsidiary as an
Unrestricted Subsidiary shall be deemed a Designation of all of the Subsidiaries
of such Unrestricted Subsidiary as Unrestricted Subsidiaries.
44
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS.
(a) The Company shall not, in any single transaction or series
of related transactions, consolidate or merge with or into (whether or not the
Company is the Surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets
(determined on a consolidated basis for the Company and its Restricted
Subsidiaries) in one or more related transactions to, another Person, and the
Company will not permit any Restricted Subsidiary to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the properties and assets of the Company and the Restricted Subsidiaries, taken
as a whole, to another Person, unless (i) the Surviving Person is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia; (ii) the Surviving Person (if other than the Company
or a Guarantor) assumes all the obligations of the Company under the Notes and
this Indenture pursuant to a supplemental indenture or other written agreement,
as the case may be, in a form reasonably satisfactory to the Trustee; (iii)
immediately after such transaction, no Default or Event of Default shall have
occurred and be continuing; (iv) immediately after giving effect to such
transaction or series of related transactions, (a) in the case of a transaction
involving the Company, the Surviving Person shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company immediately
prior to such transaction or series of related transactions or (b) in the case
of a transaction involving a Restricted Subsidiary of the Company, the Surviving
Person shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of such Restricted Subsidiary immediately prior to such
transaction or series of related transactions; and (v) after giving pro forma
effect to such transaction, the Surviving Person would be permitted to incur at
least $1.00 of additional indebtedness (other than Permitted Indebtedness)
pursuant to Section 4.10(a). Notwithstanding clauses (iii), (iv) and (v) above,
any Restricted Subsidiary that is a Guarantor may consolidate with, merge into
or transfer all or part of its properties and assets to the Company or another
Restricted Subsidiary that is a Guarantor.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraph in
which the Company or a Guarantor is not the Surviving Person, such Surviving
Person shall succeed to, and be substituted for, and may exercise every right
and power of, the Company, and the Company shall be discharged from its
obligations under, this Indenture and the Notes.
(b) In connection with any such consolidation, merger,
amalgamation, transfer, lease or disposition, the Company or such Person shall
have delivered to the Trustee (i) an Officers' Certificate and an Opinion of
Counsel, each in form and substance reasonably satisfactory to the Trustee,
stating that such consolidation, amalgamation, merger, sale, assignment,
conveyance, transfer, lease or disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this
45
Indenture and that all conditions precedent therein provided for relating to
such transaction have been complied with, and (ii) if a supplemental indenture
is required in connection with such transaction, an Opinion of Counsel, in form
and substance reasonably satisfactory to the Trustee, that such supplemental
indenture constitutes the legal, valid, binding and enforceable obligation of
the Surviving Entity.
(c) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries, the Capital Stock of which constitutes all or substantially
all of the properties and assets of the Company, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, amalgamation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all or substantially
all of the properties and assets of the Company in accordance with Section 5.1,
the Surviving Entity or the Transaction Survivor, as the case may be, shall
succeed to, and be substituted for, and may exercise every rich and power of the
Company under this Indenture, with the same effect as if such successor had been
named as the Company in this Indenture; and thereafter, except in the case of a
lease, the Company shall be discharged from all obligations and covenants under
this Indenture and the Notes.
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
"Events of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be 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):
(i) the Company defaults in the payment when due of
interest (including the issuance of any Additional PIK Notes) on any
Note and, in the case of cash interest, such default continues for a
period of 30 days;
(ii) the Company defaults in the payment when due of
principal on any Note, whether upon maturity, acceleration, optional or
mandatory redemption, required repurchase or otherwise;
(iii) the Company's or any Guarantor's failure to perform
or comply with any covenant, agreement or warranty in this Indenture
(other than the defaults specified in clauses (i) and (ii) above) which
failure continues for 60 days after written notice thereof has been
given to the Company by the Trustee or to the Company and the
46
Trustee by the Holders of at least 25% in aggregate principal amount of
the then outstanding Notes;
(iv) the occurrence of one or more defaults under any
agreements, indentures or instruments under which the Company or any
Restricted Subsidiary then has outstanding Indebtedness in excess of
$5.0 million in the aggregate and, if not already matured at its final
maturity in accordance with its terms, such Indebtedness shall have
been accelerated and such acceleration is not rescinded, annulled or
cured within 10 days thereafter;
(v) one or more judgments, orders or decrees for the
payment of money in excess of $5.0 million, either individually or in
the aggregate, shall be entered against the Company or any Restricted
Subsidiary or any of their respective properties and which judgments,
orders or decrees are not paid, discharged, bonded or stayed or stayed
pending appeal for a period of 60 days after their entry; or
(vi) the Company or any Significant Subsidiary shall (A)
commence a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consent to the entry of a judgment, decree or
order for relief against it in an involuntary case or proceeding under
any Bankruptcy Law, (C) consent to the appointment of a Custodian of it
or for substantially all of its property, (D) consent to or acquiesce
in the institution of a bankruptcy or an insolvency proceeding against
it, (E) make a general assignment for the benefit of its creditors, (F)
admit in writing its inability to pay its debts as they become due, or
(G) take any corporate action to authorize or effect any of the
foregoing; or
(vii) a court of competent jurisdiction shall enter a
judgment, decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
Bankruptcy Law which shall (A) approve as properly filed a petition
seeking reorganization, arrangement, adjustment or composition in
respect of the Company or any Significant Subsidiary, (B) appoint a
Custodian of the Company or any Significant Subsidiary or for
substantially all of its property or (C) order the winding-up or
liquidation of its affairs; and such judgment, decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(viii) any Note Guarantee ceases to be in full force and
effect (except as contemplated by the terms of this Indenture) or any
Guarantor denies or disaffirms its obligations under this Indenture or
its Note Guarantee.
The Company shall provide an Officers' Certificate to the Trustee
within five days of the occurrence of any Default or Event of Default (provided,
however, that pursuant to Section 4.6 hereof the Company shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.
SECTION 6.2 ACCELERATION.
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(a) If any Event of Default (other than as specified in clause
(vi) or (vii) of Section 6.1 with respect to the Company) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may, and the Trustee at the request of such
Holders shall, declare all the Notes to be due and payable immediately by notice
in writing to the Company, and to the Company and the Trustee if by the Holders,
specifying the respective Event of Default and that such notice is a "notice of
acceleration," and the Notes shall become immediately due and payable. Following
the delivery of such a notice of acceleration, any interest that would have
otherwise been payable through the issuance of Additional PIK Notes shall be
payable in cash. Notwithstanding the foregoing, in the case of an Event of
Default arising from the events specified in clause (vi) or (vii) of Section 6.1
with respect to the Company, the principal of, premium, if any, and any accrued
interest on all outstanding Notes shall ipso facto become immediately due and
payable without further action or notice.
(b) Any time after a declaration of acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in principal amount of the Notes outstanding,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if (i) the Company has paid or deposited with
the Trustee a sum sufficient to pay (A) all sums paid or advanced by the Trustee
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, (B) all overdue interest (including any
interest accrued subsequent to an Event of Default specified in clause (vi) or
(vii) of Section 6.1 hereof) on all Notes, (C) the principal of and premium, if
any, on any Notes which have become due otherwise than by such declaration or
occurrence of acceleration and interest thereon at the rate borne by the Notes,
and (D) to the extent that payment of such interest is lawful, interest upon
overdue interest at the Default Rate; and (ii) all Events of Default, other than
the non-payment of principal of Notes which have become due solely by such
declaration or occurrence of acceleration, have been cured or waived; and (iii)
the rescission would not conflict with any judgment, order or decree of any
court of competent jurisdiction.
(c) The Holders of a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may, on behalf of the
Holders of all of the Notes, waive any existing Default or Event of Default and
its consequences under this Indenture except (i) a continuing Default or Event
of Default in the payment of the principal of, or premium, if any, or interest
on, the Notes (which may be waived only with the consent of each Holder of Notes
affected), or (ii) in respect of a covenant or provision which under this
Indenture cannot be modified or amended without the consent of the Holder of
each affected Note outstanding.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
the principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any
48
Holder in exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS.
Subject to Sections 2.10, 6.2, 6.7 and 9.2, prior to the declaration of
acceleration of the Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes by written notice to the Trustee may on behalf
of all of the Holders waive any past Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Note as specified in clauses (i) and (ii) of Section 6.1 or a Default in respect
of any term or provision of this Indenture that may not be modified or amended
without the consent of each Holder affected as provided in Section 9.2. In case
of any such waiver, the Company, the Trustee and the Holders shall be restored
to their former positions and rights hereunder and under the Notes,
respectively. This paragraph of this Section 6.4 shall be in lieu of Section
316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Notes, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
SECTION 6.5 CONTROL BY MAJORITY.
Subject to Section 2.9, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.3; provided, however, that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
Subject to Section 7.1, however, the Trustee may refuse to follow any direction
that the Trustee reasonably believes conflicts with any law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of another
Holder or that exposes the Trustee to personal liability. This Section 6.5 shall
be in lieu of Section 316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
SECTION 6.6 LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding, judicial or
otherwise with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
49
(b) the Holders of not less than 25% in principal amount of the
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the outstanding Notes.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture or of the Notes,
the right of any Holder to receive payment of the principal of and interest
(including interest in the form of Additional PIK Notes) on a Note, on or after
the respective due dates expressed in such Note and this Indenture, or to bring
suit for the enforcement of any such payment or issuance on or after such
respective dates, shall not be impaired or affected without the express prior
written consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified in
clause (i) or (ii) of Section 6.1 of this Indenture occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor on the Notes for the whole amount
of the principal and accrued interest remaining unpaid, together with interest
on overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest as set forth in Section 4.1 and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such
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payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, taxes, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.7. The Company's payment obligations under this Section 6.9 shall be
secured in accordance with the provisions of Section 7.7 hereunder. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: subject to Article Ten, to Holders for amounts due and unpaid on
the Notes for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees 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 6.6, or a suit by a Holder or group of Holders of
more than 10% in principal amount of the outstanding Notes.
ARTICLE VII
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
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(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to the
Trustee; and
(ii) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of
paragraph(b) of this Section 7.1;
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.2, 6.4 or 6.5.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.1 and Section 7.2.
(f) The Trustee shall not be liable for interest on any money
or assets received by it except as the Trustee may agree in writing with the
Company. Assets held in
52
trust by the Trustee need not be segregated from other assets of the Trustee
except to the extent required by law.
SECTION 7.2 RIGHTS OF TRUSTEE. Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel of its selection and may require an Officers' Certificate
or an Opinion of Counsel, which shall conform to Sections 11.4 and 11.5. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and 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 that it
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice to the Company, to
examine the books, records, and premises of the Company, personally or by agent
or attorney and to consult with the officers and representatives of the Company,
including the Company's accountants and attorneys.
(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, order or
direction of any of the Holders pursuant to the provisions of 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 may be incurred by it in compliance with such request, order
or direction.
(g) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(h) Delivery of reports, information and documents to the
Trustee under Section 4.9 hereof is for informational purposes only and the
Trustee's receipt of the foregoing 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).
53
(i) The Trustee shall not be charged with knowledge of any
Default or Event of Default unless a trust officer of the Trustee (i) has actual
knowledge of such Default or Event of Default or (ii) the Trustee has been
notified in writing by the Company or any Holder of Notes.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary, or their respective Affiliates with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, and it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to a Trust Officer, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment, a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Proceeds Purchase Date pursuant to an Asset
Sale Offer or a Default in compliance with Article Five hereof, the Trustee may
withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders. The foregoing sentence of this Section 7.5 shall be in lieu of
the proviso to Section 315(b) of the TIA and such proviso to Section 315(b) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 of each year beginning with 2003, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and (d).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the Commission and each stock exchange, if
any, on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA Section
313(d).
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SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its services as has been agreed to in writing signed by the
Company and Trustee. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or
made by it in connection with the performance of its duties under this
Indenture. Such expenses shall include the reasonable fees and expenses of the
Trustee's agents and counsel.
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders, Affiliates and directors and
officers for, and hold them harmless against, any and all loss, liability,
damage, claim or expense (including reasonable fees and expenses of counsel),
including taxes (other than taxes based on the income of the Trustee) incurred
by them except for such actions to the extent caused by any negligence, bad
faith or willful misconduct on their part, arising out of or in connection with
the acceptance or administration of this trust including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. At the Trustee's
sole discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; provided, however, that any
settlement of a claim shall be approved in writing by the Trustee.
Alternatively, the Trustee may at its option have separate counsel of
its own choosing and the Company shall pay the reasonable fees and expenses of
such counsel.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(vi) or (vii) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.7 shall survive the resignation or
removal of the Trustee and the termination of this Indenture.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
55
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 shall continue
for the benefit of the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however, that
such corporation shall be otherwise qualified and eligible under this Article
Seven.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition. In
addition, if the Trustee is a corporation included in a bank holding company
56
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met. The provisions of TIA Section 310 shall apply to
the Company, as obligor of the Notes.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company, as
obligor on the Notes.
ARTICLE VIII
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.1 SATISFACTION AND DISCHARGE OF INDENTURE.
(a) This Indenture shall be discharged and shall cease to be
of further effect (except as to surviving rights of registration of transfer or
exchange of Notes herein expressly provided for) as to all outstanding Notes and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when:
(i) either
(A) all Notes theretofore authenticated and delivered
(other than (x) Notes which have been lost, stolen or
destroyed and which have been replaced or paid as provided in
Section 2.8 hereof and (y) Notes for whose payment money has
theretofore been deposited in trust by the Company and
thereafter repaid to the Company or discharged from such
trust) have been delivered to the Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Trustee
for cancellation (other than (x) Notes which have been lost,
stolen or destroyed and which have been replaced or paid as
provided in Section 2.8 hereof and (y) Notes for whose payment
money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust) have been called for
redemption pursuant to the terms of this Indenture or have
otherwise become due and payable, and the Company, in each
case, has irrevocably deposited or caused to be deposited with
the Trustee in trust for the purpose U.S. Legal Tender
sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Trustee for
cancellation, for the principal of,
57
premium, if any, and interest to the date of such deposit or
redemption together with irrevocable instructions from the
Company directing the Trustee to apply such funds to the
payment or redemption thereof, as the case may be, including
in each such case, any amounts required to redeem or purchase
any Additional PIK Notes that would be issuable on the next
PIK Interest Payment Date pursuant to Section 2.3 hereof;
(ii) the Company and the Guarantors have paid or caused to
be paid all other sums payable hereunder by the Company and the
Guarantors; and
(iii) the Company has delivered to the Trustee an
Officers' Certificate and an opinion of Counsel each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 7.7
hereof shall survive and, if money shall have been deposited with the Trustee
pursuant to clause (a)(i)(B) of this Section 8.1, the obligations of the Trustee
under Sections 8.3 and 8.4 shall survive.
SECTION 8.2 DEFEASANCE OR COVENANT DEFEASANCE.
(a) Subject to the satisfaction of the conditions in Section
8.2(c) hereof, the Company may, at its option by Board Resolution, at any time,
with respect to the Notes, elect to have the obligations of the Company and the
Guarantors discharged with respect to the outstanding Notes ("defeasance"). Upon
such defeasance, the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding Notes and the Note
Guarantees, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.4 hereof and the other Sections of and matters under this
Indenture referred to in clauses (i) and (ii) below, and to have satisfied all
its other obligations under such Notes and this Indenture, except for the
following, which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of Notes to receive solely from the trust
fund described in Section 8.2(c) and as more fully set forth in such Section,
payments in respect of the principal of and interest on such Notes when such
payments are due, (ii) the Company's obligations under Sections 2.3, 2.4, 2.6,
2.7, 2.8 and 4.2, the rights, powers, trusts, duties and immunities of the
Trustee hereunder, including, without limitation, the Trustee's rights under
Section 7.7, and (iv) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.2(a)
notwithstanding the prior exercise of its option under Section 8.2(b) with
respect to the Notes.
(b) Subject to the satisfaction of the conditions in Section
8.2(c) hereof, the Company may, at its option by Board Resolution, at any time,
elect to effect covenant defeasance ("covenant defeasance"). On and after the
date such conditions are satisfied, (i) the Company shall be released from its
obligations under any covenant or provision contained in Sections 4.4, 4.5,
4.6(a), 4.7 and 4.9 through 4.19, (ii) clauses (iii) through (vi) of Section 6.1
hereof shall not apply, and (iii) the provisions of Articles Five, Ten and
Eleven shall not apply, and the Notes shall thereafter be deemed to be not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any
58
thereof) in connection with such covenants and the provisions of Articles Five,
Ten and Eleven, but shall continue to be deemed "outstanding" for all other
purposes hereunder. For this purpose, such covenant defeasance means that, with
respect to the Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
Section or Article, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or Article or by reason of any reference in
any such Section or Article to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under clauses (iii) through (vi) of Section 6.1 hereof, but, except
as specified above, the remainder of this Indenture shall be unaffected thereby.
(c) In order to effect defeasance or covenant defeasance, the
following conditions must be satisfied:
(i) the Company shall have irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10
hereof who agrees to comply with the provisions of this Article Eight
applicable to it), as trust funds in trust, for the benefit of the
Holders of such Notes, U.S. Legal Tender, U.S. Government Obligations
or a combination thereof, in such amounts as will be sufficient (in the
opinion of a nationally recognized firm of independent public
accountants or a nationally recognized investment banking firm, as
evidenced by a written report), without consideration of reinvestment
of interest of such U.S. Government Obligations, to pay the principal
of, premium, if any, and interest on the outstanding Notes (including
on any Additional PIK Notes that would be issuable on the next PIK
Interest Payment Date pursuant to Section 2.3 hereof but excluding any
lost, stolen or destroyed Notes which have been replaced or paid) to
maturity or redemption, as the case may be, and the Company shall have
irrevocably instructed the Trustee (or such other trustee) to apply
such U.S. Legal Tender or U.S. Government Obligations to said payments
in respect of the Notes;
(ii) the Company shall have delivered to the Trustee one
or more Opinions of Counsel in the United States (which counsel or
counsels shall be independent of the Company) to the effect that:
(A) the holders of the outstanding Notes will not
recognize income gain or loss for Federal income tax purposes
as a result of such defeasance or covenant defeasance, as the
case may be, 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 or covenant
defeasance, as the case may be, had not occurred (which
opinion, in the case of defeasance, shall be based upon a
ruling of the Internal Revenue Service or a change in
applicable Federal income tax law occurring after the Issue
Date);
(B) the trust funds will not be subject to any rights
of holders of Indebtedness of the Company (other than holders
of the Notes); and
59
(C) assuming no bankruptcy of the Company occurs
between the date of deposit and the 91st day following the
deposit, after the 91st day following the deposit the trust
funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(iii) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit, at any time during the
period ending on the 91st day after the date of such deposit;
(iv) such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under, any
other material agreement or instrument to which the Company is a party
or by which it is bound;
(v) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Company or others;
(vi) no event or condition shall exist that would prevent
the Company from making payments of the principal of and interest on
the Notes on the date of such deposit or at any time during the period
ending on the 91st day after the date of such deposit; and
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent (other than conditions requiring the passage of
time) to either defeasance or covenant defeasance, as the case may be,
have been complied with and that no violations under agreements
governing any other outstanding Indebtedness of the Company would
result therefrom.
Opinions required to be delivered under this Section may have qualifications
customary for opinions of the type required.
SECTION 8.3 APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Section 8.1 or 8.2,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of and interest on the Notes. The Trustee shall be under no obligation
to invest said U.S. Legal Tender or U.S. Government Obligations except as it may
agree in writing with the Company.
The Company shall pay, and indemnify the Trustee against, any tax, fee
or other charge imposed on or assessed against the Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.1 or 8.2 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.
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SECTION 8.4 REPAYMENT TO THE COMPANY.
Subject to Sections 8.1 and 8.2, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for one year; provided, however,
that the Trustee or such Paying Agent, before being required to make any
payment, may at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after a
date specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person.
SECTION 8.5 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender
or U.S. Government Obligations in accordance with Section 8.1 or 8.2 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 and the Guarantors' obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1 or 8.2, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with Section 8.1 or 8.2, as the case may
be; provided, however, that if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. Legal Tender or U.S. Government Obligations
held by the Trustee or Paying Agent.
SECTION 8.6 ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
After (i) the conditions of Section 8.1 or 8.2(a) have been satisfied,
(ii) the Company has paid or caused to be paid all other sums payable hereunder
by the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i), above, relating to the satisfaction and
discharge or defeasance of this Indenture have been complied with, the Trustee
upon request shall acknowledge in writing the discharge of the Company's and the
Guarantors' obligations under this Indenture except for those surviving
obligations specified in Section 8.1 or 8.2, as the case may be.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS AND ANY GUARANTOR.
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The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture, the Notes or the Note
Guarantees without notice to or consent of any Holder or any Guarantor:
(i) to cure any ambiguity, defect or inconsistency;
provided, however, that such amendment or supplement does not adversely
affect the rights of any Holder;
(ii) to effect the assumption by a successor Person of all
obligations of the Company under the Notes and this Indenture in the
event of any Disposition involving the Company in which the Company is
not the Surviving Person;
(iii) to provide for uncertificated Notes in addition to
or in place of certificated Notes;
(iv) to comply with any requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the TIA;
(v) to make any change that would provide any additional
benefit or rights to the Holders;
(vi) to make any other change that does not adversely
affect the rights of any Holder under this Indenture; or
(vii) to add Guarantees with respect to the Notes or to
secure the Notes, or to release any Note Guarantee that is permitted to
be released under this Indenture;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.1.
SECTION 9.2 WITH CONSENT OF HOLDERS.
(a) Subject to Section 6.7, the Company and the Guarantors,
when authorized by a Board Resolution, and the Trustee, together, with the
written consent of the Holder or Holders of not less than a majority in
aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes), may
amend or supplement this Indenture, the Notes and the Note Guarantees without
notice to any other Holder. Subject to Section 6.2 and 6.7, the Holder or
Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes may waive compliance by the Company with any provision of this
Indenture or the Notes without notice to any other Holder.
(b) Notwithstanding Section 9.2(a) hereof, no amendment,
supplement or waiver, including a waiver pursuant to Section 6.4, shall, without
the prior written consent of each Holder of each Note affected thereby:
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(i) reduce the principal amount of the Notes whose holders
must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity
of any Note, or alter or waive the provisions with respect to the
redemption of the Notes in a manner adverse to the holders of the Notes
other than with respect to a Change of Control Offer or an Asset Sale
Offer and except to the extent covered by Section 9.2(b)(vii) hereof;
(iii) reduce the rate of or change the time for payment of
interest (including interest in the form of Additional PIK Notes or
cash in respect thereof) on any Notes;
(iv) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest on the Notes (except that
holders of at least a majority in aggregate principal amount of the
then outstanding Notes may (A) rescind an acceleration of the Notes
that resulted from a non-payment default and (B) waive the payment
default that resulted from such acceleration);
(v) make any Note payable in money other than that stated
in the Notes;
(vi) make any change in the provisions of this Indenture
relating to waivers of (A) past Defaults or Events of Default or (B)
the rights of holders of Notes to receive payments of principal of, or
premium, if any, or interest on, the Notes; or
(vii) following the occurrence of a Change of Control,
amend, change or modify the Company's obligation to make and consummate
a Change of Control Offer in the event of a Change of Control or modify
any of the provisions or definitions with respect thereto in a manner
adverse to the holders of the Notes, or following the occurrence of an
Asset Sale, amend, change or modify the Company's obligation to make
and consummate an Asset Sale Offer or modify any of the provisions or
definitions with respect thereto in a manner adverse to the holders of
the Notes.
(c) It shall not be necessary for the consent of the Holders
under this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
(d) After an amendment, supplement or waiver under this
Section 9.2 becomes effective, the Company shall mail to the Holders affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.3 COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect; provided, however, that this
Section 9.3 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or
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acknowledgment by any party hereto that any such qualification is required prior
to the time this Indenture and the Trustee are required by the TIA to be so
qualified.
SECTION 9.4 PAYMENT FOR CONSENT.
Neither the Company nor any Affiliate of the Company shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes, unless such consideration is offered to be paid to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
SECTION 9.5 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, supplement
or waiver becomes effective upon receipt by the Trustee of such Officers'
Certificate and evidence of consent by the Holders of the requisite percentage
in principal amount of outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes any change described in Section 9.2(b), in
which case, the amendment, supplement or waiver shall bind only each Holder of a
Note who has consented to it and every subsequent Holder of a Note or portion of
a Note that evidences the same debt as the consenting Holder's Note; provided,
however, that any such waiver shall not impair or affect the right of any Holder
to receive payment of principal of and interest on a Note, on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
SECTION 9.6 NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an
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appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Note shall issue and the Trustee shall authenticate a new
Note that reflects the changed terms.
SECTION 9.7 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided, however, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, in addition to the
documents required by Section 11.4, and shall be fully protected in relying
upon, an Opinion of Counsel and an Officers' Certificate each stating that the
execution of any amendment, supplement or waiver authorized pursuant to this
Article Nine is authorized or permitted by this Indenture. Such Opinion of
Counsel shall not be an expense of the Trustee or the Holders.
ARTICLE X
GUARANTEES
SECTION 10.1 UNCONDITIONAL GUARANTEE.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees of a senior unsecured basis (such guarantee to be referred to herein
as a "Note Guarantee") to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns that: (i) the
principal of, premium, if any, and interest on the Notes will be promptly paid
in full when due, subject to any applicable grace period, whether at maturity,
by acceleration or otherwise and interest on the overdue principal and interest
on any overdue interest, to the extent lawful, of the Notes and all other
Obligations of the Company to the Holders of the Notes or the Trustee hereunder
or thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any Notes or of any such other Obligations, the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, subject to any applicable grace period, whether at
stated maturity, by acceleration or otherwise, subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in Section 10.4. Each
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, and action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Note Guarantee will not be discharged except by complete performance
of the Obligations contained in the Notes, this Indenture and in this Note
Guarantee. Each Guarantor hereby further waives
65
its obligation and right to execute, and agrees to be bound by the terms of any,
supplemental indenture entered into by the Company and the Trustee, pursuant to
Section 9.1. If any Holder of the Notes or the Trustee is required by any court
or otherwise to return to the Company or any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or any Guarantor, any amount paid by the Company or any Guarantor to the Trustee
or such Holder, this Note Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders of the Notes and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article VI for the purposes of this
Note Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any acceleration of such Obligations as provided in
Article VI, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor for the purpose of this Note Guarantee.
SECTION 10.2 SEVERABILITY.
In case any provision of this Article X or any Note Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions hereof or thereof shall not in any way be affected or
impaired thereby.
SECTION 10.3 SUCCESSORS AND ASSIGNS; RELEASE OF A GUARANTOR.
This Article X shall be binding upon the Guarantors and their
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 Notes shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions of this Indenture.
If no Default exists or would exist under this Indenture, if all of the
assets of any Guarantor or all of the Capital Stock of any Guarantor is sold or
disposed of (including by merger, consolidation, issuance or otherwise) by the
Company or any of the Restricted Subsidiaries to any person that is not an
Affiliate of the Company or any of the Restricted Subsidiaries if a transaction
constituting an Asset Sale (other than pursuant to a transaction subject to the
provisions of clause (a) or (b) of Section 5.1), and if the Net Proceeds from
such Asset Sale are used in accordance with Section 4.16, then such Guarantor
and each wholly-owned Restricted Subsidiary of such Guarantor that is also a
Guarantor (in the event of a sale or other disposition of all of the Capital
Stock of such Guarantor) or (b) the corporation or other entity acquiring such
assets (in the event of a sale or other disposition of all or substantially all
of the assets of such Guarantor) shall be released and discharged of its Note
Guarantee obligations.
The Trustee shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate of the Company and Opinion of Counsel certifying as to the
compliance with this Section 10.3. Any Guarantor
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not so released remains liable for the full amount of principal of, premium and
interest on the Securities and other Obligations as provided in this Article X.
SECTION 10.4 LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof each Holder of Notes hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Note Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders of Notes and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under its Note
Guarantee shall be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the Obligations of such other Guarantor under its Note
Guarantee or pursuant to Section 10.5, result in the obligations of such
Guarantor under its Note Guarantee not constituting such fraudulent transfer or
conveyance.
SECTION 10.5 CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its Note
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets (as
defined below) of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Notes or any other Guarantor's
obligations with respect to its Note Guarantee. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of (i) the amount by which the fair
value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date
(other than liabilities of such Guarantor under Indebtedness subordinated to
such Guarantor's Note Guarantee)), but excluding liabilities under the Note
Guarantee, of such Guarantor at such date and (ii) the amount by which the
present fair salable value of the assets of such Guarantor at such date exceeds
the amount that will be required to pay the probable liability of such Guarantor
on its debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under its Note Guarantee, if any), excluding debt in respect of the
Note Guarantee of such Guarantor, as they become absolute and matured.
SECTION 10.6 WAIVER OF SUBROGATION.
Until all Note Guarantee Obligations are paid in full, each Guarantor
hereby irrevocably waives any claims or other rights which it may now or
hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under its Note
Guarantee and this Indenture, including, without limitation, any right
67
of subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any holder of Notes against the Company,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim
or other rights. If any amount shall be paid to any Guarantor in violation of
the preceding sentence and the Notes shall not have been paid in full, such
amount shall have been deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, the Holders of the Notes, and
shall forthwith be paid to the Trustee for the benefit of such Holders to be
credited and applied upon the Notes, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
10.6 is knowingly made in contemplation of such benefits.
SECTION 10.7 EXECUTION OF NOTE GUARANTEE.
To evidence its guarantee to the Holders of Notes set forth in this
Article X, each Guarantor hereby agrees to execute its Note Guarantee in
substantially the form included in the Notes, which shall be endorsed on each
Note ordered to be authenticated and delivered by the Trustee. Each Guarantor
hereby agrees that its Note Guarantee set forth in this Article X shall remain
in full force and effect notwithstanding any failure to endorse on each Note a
notation of such Note Guarantee. Each such Note Guarantee shall be signed on
behalf of each Guarantor by two Officers, or an Officer and an Assistant
Secretary or one Officer shall sign and one Officer or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to such Note Guarantee prior to the
authentication of the Notes on which it is endorsed, and the delivery of such
Notes by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Note Guarantee on behalf of such Guarantor. Such
signatures upon the Note Guarantee may be by manual or facsimile signature of
such officers and may be imprinted or otherwise reproduced on the Note
Guarantee, and in case any such officer who shall have signed the Note Guarantee
shall cease to be such officer before the Notes on which such Note Guarantee is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Company, such Notes nevertheless may be authenticated and delivered or
disposed of as though the person who signed the Note Guarantee had not ceased to
be such officer of the Guarantor.
SECTION 10.8 WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive each such Guarantor from
performing its Note Guarantee as contemplated herein, wherever enacted, now or
at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
such Guarantor hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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SECTION 10.9 ADDITIONAL GUARANTORS.
Concurrently with the creation or acquisition by the Company of any
Subsidiary (other than a Foreign Subsidiary and other than an Unrestricted
Subsidiary), the Company, such Subsidiary and the Trustee shall execute and
deliver a supplement to this Indenture providing that such Subsidiary will be a
Guarantor hereunder. Each such supplement shall be in a form reasonably
satisfactory to the Trustee.
SECTION 10.10 MODIFICATION.
No modification, amendment or waiver of any provision of this Article
X, nor the consent to any departure by the Guarantors 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
Guarantors in any case shall entitle the Guarantors to any other or further
notice or demand in the same, similar or other circumstances.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 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; provided, however, that this Section 11.1
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.
SECTION 11.2 NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company or any Guarantor:
Hawk Corporation
000 Xxxxxx Xxxxxx,
Xxxxx 00-0000
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Chief Executive Officer
if to the Trustee:
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HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Issuer Services
Each of the Company, the Guarantors the Trustee by written notice to
the other may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Holder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 11.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with their
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion of the signers, all
conditions precedent to be performed by the Company, if any, provided for in
this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, such action is authorized or permitted by this Indenture and that all
such conditions precedent to be performed by the Company, if any, provided for
in this Indenture relating to the proposed action have been complied with.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
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Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.6 shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he has
made such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with.
SECTION 11.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 11.7 LEGAL HOLIDAYS. A "Legal Holiday" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions in New York, New York or at such place of payment are not required
to be open. If a payment date is a Legal Holiday at such place, payment may be
made at such place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 11.8 GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF OHIO WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICT
OF LAWS. Each of the parties hereto agrees to submit to the jurisdiction of the
courts of the State of Ohio in any action or proceeding arising out of or
relating to this Indenture.
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of the subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
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SECTION 11.10 NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such, of
the Company or of the Trustee shall not have any liability for any obligations
of the Company under the Notes, the Note Guarantees or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes and the Note Guarantees.
SECTION 11.11 SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and
the Notes shall bind their respective successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 11.12 DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 11.13 SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
SECTION 11.14 INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture and the Notes shall be
given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
72
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
HAWK CORPORATION
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
ALLEGHENY CLEARFIELD, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
FRICTION PRODUCTS CO.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK MIM, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK MOTORS, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK PRECISION COMPONENTS GROUP, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
XXXXXX, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
XXXXX METAL STAMPINGS, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
NET SHAPE TECHNOLOGIES LLC
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
QUARTER MASTER INDUSTRIES, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
X.X. XXXXXXX HOLDINGS, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
X.X. XXXXXXX CORP.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
2
SINTERLOY CORPORATION
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
TEX RACING ENTERPRISES, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HSBC BANK USA, as Trustee
By:
--------------------------
Name:
Title:
3
EXHIBIT A
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
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 HEREON 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 CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE.
HAWK CORPORATION
12% SENIOR NOTE DUE 2006
CUSIP No.: ___________
No. __________ $________
HAWK CORPORATION, a Delaware corporation (the "Company", which term
includes any successor entity), for value received promises to pay to or
registered assigns, the principal sum of __________ on December 1, 2006.
Interest Payment Dates: June 30 and December 31
PIK Interest Payment Dates: March 31 (or earlier under certain
circumstances) and August 14 (or earlier under certain circumstances)
Record Dates: June 15 and December 15
PIK Record Date: the date 15 days prior to the applicable PIK Interest
Payment Date
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
HAWK CORPORATION
By:____________________________________
Name:
Title:
Attested to by:
_______________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the 12% Senior Notes due 2006 referred to in the within-mentioned
Indenture.
HSBC BANK USA, as Trustee
By: ____________________________________
Authorized Officer
Date of Authentication:_________________
(REVERSE OF SECURITY)
12% Senior Note due 2006
1. INTEREST. HAWK CORPORATION, a Delaware corporation (the "Company"),
promises to pay cash interest on the principal amount of this Note at the rate
per annum shown above. Cash interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from October _____, 2002. The Company will pay cash interest semi-annually in
arrears on each Interest Payment Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed.
Under certain circumstances set forth in the Indenture, the Company may
be required to pay additional interest on this Note to the holder of record on
the applicable PIK Record Date. Such additional interest shall be payable in the
form of an Additional PIK Note that is identical in all respects to this Note
and dated as of, and starts accruing interest on, the first day of the PIK
Accrual Period in which the applicable PIK Interest Payment Date occurs.
Notwithstanding the foregoing, if the Company is required to pay any such
additional interest in a denomination less than $1,000, then the Company, may,
at its option, pay such additional interest by making cash payments in the
amount of any Additional PIK Note that would be required pursuant to the
Indenture.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful, from time to time on demand at the Default Rate.
2. METHOD OF PAYMENT. The Company shall pay cash interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall 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 ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address. Any Additional PIK
Notes shall be issued and delivered to each Holder at the Company's expense on
or as soon as practicable (and in any event within 10 days) after the applicable
PIK Interest Payment Date.
3. PAYING AGENT AND REGISTRAR. Initially, HSBC Bank USA (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.
4. INDENTURE. The Company issued the Notes under an indenture, dated as
of October _____, 2002 (the "Indenture"), between the Company, the Guarantors
named therein (the "Guarantors") and the Trustee. This Note is one of a duly
authorized issue of Initial Notes of the Company designated as its 12% Senior
Notes due 2006. The Notes are limited in aggregate principal amount to
$100,000,000. All of the Notes need not be issued at the same time and, unless
otherwise provided, a previous issuance of Notes may be reopened, without
notice to or the consent of any Holder, for issuance of Additional Notes of the
same tranche, and the Additional Notes will be consolidated and form a single
tranche with the previously issued Notes. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code Section Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA for a
statement of them. The Notes are general unsecured senior obligations of the
Company. Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time in accordance with its terms.
5. NOTE GUARANTEES. To guarantee the due and punctual payment of the
principal and interest, if any, on the Notes and all other amounts payable by
the Company under the Indenture and the Notes when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, the Guarantors have, jointly and
severally, unconditionally guaranteed such obligations on a senior unsecured
basis pursuant to the terms of the Indenture. The Note Guarantees are general
unsecured senior obligations of the Company.
6. OPTIONAL REDEMPTION. The Notes (including any Additional PIK Notes
that would be issuable on the next PIK Interest Payment Date pursuant to Section
2.3 of the Indenture) are redeemable, at the Company's option, in whole or in
part, at any time on and after December 1, 2002 at the redemption prices
(expressed as percentages of the principal amount of the Notes) if redeemed
during the twelve-month period commencing on December 31 of the year set forth
below, plus, in each case, accrued and unpaid interest thereon, if any, to the
Redemption Date:
Year Percentage
---- ----------
2002 105.000%
2003 102.500%
2004 and thereafter 100.000%
The Notes are not entitled to the benefit of any sinking fund.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes (including any Additional PIK Notes that would be issuable on the next
PIK Interest Payment Date pursuant to Section 2.3 of the Indenture) called for
redemption shall have been deposited with the Paying Agent for redemption on
such Redemption Date, then, unless the Company defaults in the payment of such
Redemption Price plus accrued interest, if any, the Notes called for redemption
will cease to bear interest from and after such Redemption Date and the only
right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.
8. OFFERS TO PURCHASE. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered form,
without coupons, and in denominations of $1,000 and integral multiples of
$1,000, or in such other denominations as the Company may elect. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes (including any
amounts in U.S. Legal Tender required to redeem or purchase any Additional PIK
Notes that would be issuable on the next PIK Interest Payment Date) to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, or comply with Article Five of the Indenture or make any other change
that does not adversely affect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on
the ability of the Company and the Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make Restricted Payments or Restricted
Investments, create or incur Liens, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Restricted Subsidiaries
and issue Preferred Stock of Restricted Subsidiaries, and on the ability of the
Company and the Restricted Subsidiaries to merge or consolidate with any
other Person or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the assets of the Company and the Restricted
Subsidiaries. Such limitations are subject to a number of important
qualifications and exceptions. Pursuant to Section 4.6 of the Indenture, the
Company must annually report to the Trustee on compliance with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest when due, for any reason or a
Default in compliance with Article V of the Indenture) if it determines that
withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company, the Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company or any Guarantor shall have
any liability for any obligation of the Company or any Guarantor under the
Notes, the Note Guarantees or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of a
Note by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the Note
Guarantees.
19. AUTHENTICATION. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of Ohio, as applied to
contracts made and performed within the State of Ohio without regard to
principles of conflict of laws.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. 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 Notes as a convenience to the Holders of the Notes.
No representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Hawk Corporation, 000 Xxxxxx Xxxxxx, Xxxxx
00-0000, Xxxxxxxxx, XX 00000, Attn: Vice President - Finance.
GUARANTEE
The Guarantors (as defined in the Indenture referred to in the Note
upon which this notation is endorsed and each hereinafter referred to as a
"Guarantor," which term includes any successor person under the Indenture) have
unconditionally guaranteed on a senior unsecured basis (such guarantee by each
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of, premium and interest (including interest payable in
the form of Additional PIK Notes) on the Notes, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Notes, to the extent lawful, and
the due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms set forth in Article X
of the Indenture and (ii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or otherwise.
No stockholder, officer, director, employee or incorporator, as such,
past, present or future, of any Guarantor shall have any liability under the
Guarantee by reason of his or its status as such stockholder, officer, director,
employee or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be
signed manually or by facsimile by the respective parties' duly authorized
officers.
GUARANTORS:
ALLEGHENY CLEARFIELD, INC.
By:
-----------------------------
Name:
Title:
FRICTION PRODUCTS CO.
By:
-----------------------------
Name:
Title:
HAWK MIM, INC.
By:
-----------------------------
Name:
Title:
HAWK MOTORS, INC.
By:
-----------------------------
Name:
Title:
HAWK PRECISION COMPONENTS GROUP, INC.
By:
-----------------------------
Name:
Title:
XXXXXX, INC.
By:
-----------------------------
Name:
Title:
XXXXX METAL STAMPINGS, INC.
By:
-----------------------------
Name:
Title:
NET SHAPE TECHNOLOGIES LLC
By:
-----------------------------
Name:
Title:
QUARTER MASTER INDUSTRIES, INC.
By:
-----------------------------
Name:
Title:
X.X. XXXXXXX HOLDINGS, INC.
By:
-----------------------------
Name:
Title:
X.X. XXXXXXX CORP.
By:
-----------------------------
Name:
Title:
SINTERLOY CORPORATION
By:
-----------------------------
Name:
Title:
TEX RACING ENTERPRISES, INC.
By:
-----------------------------
Name:
Title:
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Print or type name, address and zip code and social security or tax ID number
of assignee)
and irrevocably appoint ___________________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Dated: __________________ ___, _____ Signed: _________________________________
(sign exactly as your name appears
on the other side of this Note)
Signature Guarantee: __________________________________________________________
(Signature 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 Exchange
Act.)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [__]
Section 4.16 [__]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$------------------
Dated: __________________ ___, _____ Signed: ___________________________
NOTICE: The signature on
this assignment must
correspond with the name as
it appears upon the face of
the within Note in every
particular without
alteration or enlargement or
any change whatsoever and be
guaranteed.
Signature Guarantee: __________________________________________________________
(Signature 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 Exchange
Act.)
