EXHIBIT 4.16
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CALPINE CORPORATION
9.875% SECOND PRIORITY SENIOR SECURED NOTES DUE 2011
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INDENTURE
Dated as of November 18, 2003
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WILMINGTON TRUST COMPANY
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A.
(a)(5)................................................................... 7.10
(b)...................................................................... 7.10
(c)...................................................................... N.A.
311(a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312(a)...................................................................... 2.05
313(a)...................................................................... 7.06
(b)(1)................................................................... 10.03
(b)(2)................................................................... 7.06; 7.07
(c)...................................................................... 7.06
(d)...................................................................... 7.06
314(a)...................................................................... 4.03
(a)(4)................................................................... 12.05
(b)...................................................................... N.A.
(c)(3)................................................................... N.A.
(e)...................................................................... 12.05
(f)...................................................................... N.A.
315(a)...................................................................... 7.01
(b)...................................................................... 7.05
(c)...................................................................... 7.01
(d)...................................................................... 7.01
(e)...................................................................... 6.11
316(a) (last sentence)...................................................... 2.09
(a)(1)(A)................................................................ 6.05
(a)(1)(B)................................................................ 6.04
(a)(2)................................................................... N.A.
(b)...................................................................... 6.07
(c)...................................................................... 2.12
317(a)(1)................................................................... 6.08
(a)(2)................................................................... 6.09
(b)...................................................................... 2.04
318(a)...................................................................... N.A.
(b)...................................................................... 12.03
(c)...................................................................... 12.01; 12.02; 12.03
N.A. means not applicable.
* This Cross Reference Table is not part of this Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.................................................................................. 1
Section 1.02 Other Definitions............................................................................ 28
Section 1.03 Incorporation by Reference of Trust Indenture Act............................................ 28
Section 1.04 Rules of Construction........................................................................ 29
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.............................................................................. 30
Section 2.02 Execution and Authentication................................................................. 30
Section 2.03 Registrar and Paying Agent................................................................... 31
Section 2.04 Paying Agent to Hold Money in Trust.......................................................... 31
Section 2.05 Holder Lists................................................................................. 31
Section 2.06 Transfer and Exchange........................................................................ 31
Section 2.07 Replacement Notes............................................................................ 38
Section 2.08 Outstanding Notes............................................................................ 38
Section 2.09 Treasury Notes............................................................................... 38
Section 2.10 Temporary Notes.............................................................................. 38
Section 2.11 Cancellation................................................................................. 39
Section 2.12 Defaulted Interest........................................................................... 39
ARTICLE 3.
REPURCHASE AND PREPAYMENT
Section 3.01 [Reserved]................................................................................... 39
Section 3.02 Selection of Notes to Be Purchased........................................................... 39
Section 3.03 Deposit of Purchase Price.................................................................... 40
Section 3.04 Notes Purchased in Part...................................................................... 40
Section 3.05 Optional Redemption.......................................................................... 40
Section 3.06 Mandatory Redemption......................................................................... 40
Section 3.07 Offer to Purchase by Application of Excess Proceeds.......................................... 40
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes............................................................................. 42
Section 4.02 Maintenance of Office or Agency.............................................................. 42
Section 4.03 Reports...................................................................................... 43
Section 4.04 Compliance Certificate....................................................................... 43
Section 4.05 Taxes........................................................................................ 44
Section 4.06 Stay, Extension and Usury Laws............................................................... 44
Section 4.07 Restricted Payments.......................................................................... 44
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries............................... 47
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock................................... 48
Section 4.10 Asset Sales.................................................................................. 51
Section 4.11 Transactions with Affiliates................................................................. 53
Section 4.12 Liens........................................................................................ 54
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Section 4.13 Limitation on Changes in the Nature of the Business.......................................... 54
Section 4.14 Corporate Existence.......................................................................... 55
Section 4.15 Offer to Repurchase Upon Change of Control................................................... 55
Section 4.16 Limitation on Sale and Leaseback Transactions................................................ 56
Section 4.17 Limitation on Issuances of Guarantees of Indebtedness........................................ 56
Section 4.18 Payments for Consent......................................................................... 57
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries...................................... 57
Section 4.20 Changes in Covenant When Notes Rated Investment Grade........................................ 57
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets..................................................... 58
Section 5.02 Successor Corporation Substituted............................................................ 59
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default............................................................................ 59
Section 6.02 Acceleration................................................................................. 61
Section 6.03 Other Remedies............................................................................... 61
Section 6.04 Waiver of Past Defaults...................................................................... 61
Section 6.05 Control by Majority.......................................................................... 62
Section 6.06 Limitation on Suits.......................................................................... 62
Section 6.07 Rights of Holders of Notes to Receive Payment................................................ 62
Section 6.08 Collection Suit by Trustee................................................................... 62
Section 6.09 Trustee May File Proofs of Claim............................................................. 63
Section 6.10 Priorities................................................................................... 63
Section 6.11 Undertaking for Costs........................................................................ 63
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee............................................................................ 64
Section 7.02 Rights of Trustee............................................................................ 65
Section 7.03 Individual Rights of Trustee................................................................. 65
Section 7.04 Trustee's Disclaimer......................................................................... 66
Section 7.05 Notice of Defaults........................................................................... 66
Section 7.06 Reports by Trustee to Holders of the Notes................................................... 66
Section 7.07 Compensation and Indemnity................................................................... 66
Section 7.08 Replacement of Trustee....................................................................... 67
Section 7.09 Successor Trustee by Merger, etc............................................................. 68
Section 7.10 Eligibility; Disqualification................................................................ 68
Section 7.11 Preferential Collection of Claims Against Company............................................ 68
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance..................................... 68
Section 8.02 Legal Defeasance and Discharge............................................................... 68
Section 8.03 Covenant Defeasance.......................................................................... 69
Section 8.04 Conditions to Legal or Covenant Defeasance................................................... 69
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions 70
Section 8.06 Repayment to the Company..................................................................... 71
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Section 8.07 Reinstatement................................................................................ 71
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.......................................................... 72
Section 9.02 With Consent of Holders of Notes............................................................. 73
Section 9.03 Compliance with Trust Indenture Act.......................................................... 74
Section 9.04 Revocation and Effect of Consents............................................................ 74
Section 9.05 Notation on or Exchange of Notes............................................................. 74
Section 9.06 Trustee to Sign Amendments, etc.............................................................. 74
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Parity Lien Debt; Sharing Confirmation. 75
Section 10.02 Ranking of Note Liens........................................................................ 75
Section 10.03 Release of Security Interest in Respect of Notes............................................. 76
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge................................................................... 76
Section 11.02 Application of Trust Money................................................................... 77
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls................................................................. 77
Section 12.02 Notices...................................................................................... 78
Section 12.03 Communication by Holders of Notes with Other Holders of Notes................................ 79
Section 12.04 Certificate and Opinion as to Conditions Precedent........................................... 79
Section 12.05 Statements Required in Certificate or Opinion................................................ 79
Section 12.06 Rules by Trustee and Agents.................................................................. 79
Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders..................... 79
Section 12.08 Governing Law................................................................................ 80
Section 12.09 No Adverse Interpretation of Other Agreements................................................ 80
Section 12.10 Successors................................................................................... 80
Section 12.11 Severability................................................................................. 80
Section 12.12 Counterpart Originals........................................................................ 80
Section 12.13 Table of Contents, Headings, etc............................................................. 80
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
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INDENTURE dated as of November 18, 2003 between Calpine Corporation, a
Delaware corporation and Wilmington Trust Company (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders (as defined) of the
9.875% Second Priority Senior Secured Notes due 2011 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that shall be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Restricted Subsidiary
of such specified Person, whether or not such Indebtedness is incurred
in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Restricted Subsidiary of, such specified
Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
Acquired Debt shall be deemed to be incurred on the date the acquired Person
becomes a Restricted Subsidiary.
"Additional Notes" means Notes (other than the Initial Notes) issued
under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part
of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling," "controlled by" and "under common control
with" have correlative meanings. For purposes of Section 4.11 herein,
"Affiliate" shall also mean any Person of which the Company owns 10% or more of
any class of Capital Stock or rights to acquire 10% or more of any class of
Capital Stock and any Person who would be an Affiliate of any such Person
pursuant to the first sentence hereof.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights; provided that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company
and
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its Restricted Subsidiaries taken as a whole shall be governed by
Section 4.15 of this Indenture and/or Section 5.01 and not by Section
4.10; and
(2) the issuance of Equity Interests in any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Subsidiaries.
Notwithstanding the preceding, none of the following items shall be deemed to be
an Asset Sale:
(1) (A) any single transaction or series of related
transactions that involves the sale of uninstalled turbines and related
equipment, and (B) any single transaction or series of related
transactions that involves other assets having a Fair Market Value of
less than $50.0 million, it being understood that, in connection with
any sale, lease, conveyance or other disposition of any Designated
Assets or rights relating thereto in connection with a farm-out
transaction, such transaction shall be valued as at the time of
execution and delivery of binding contractual arrangements relating
thereto;
(2) a transfer of assets between or among the Company and its
Restricted Subsidiaries,
(3) an issuance of Equity Interests by a Restricted Subsidiary
to the Company or to a Restricted Subsidiary of the Company;
(4) the sale or lease of products, services or accounts
receivable in the ordinary course of business and any sale or other
disposition of damaged, worn-out or obsolete assets in the ordinary
course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) a Restricted Payment that does not violate Section 4.07
herein or a Permitted Investment; and
(7) the sale or other disposition of all or any part of the
Company's right to amounts that have or are to become due and payable
by Pacific Gas & Electric Company under that certain Agreement dated as
of July 1, 1999, as amended, between Pacific Gas & Electric Company and
Calpine Xxxxxx X.X., a California limited partnership (PG&E Log No.
08C002) For Termination and Buy-Out of Standard Offer 4 Power Purchase
Agreement, as such rights were purchased from Calpine Gilroy Xxxxx X.X.
by the Company pursuant to the Purchase Agreement dated as of March 8,
2002, as amended, between Calpine Gilroy Xxxxx X.X. and the Company.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP; provided, that
if such sale and leaseback transaction results in a Capital Lease Obligation,
the amount of Indebtedness represented thereby shall be determined in accordance
with the definition of "Capital Lease Obligation."
"Bankruptcy Case" means any case under Title 11 of the United States
Code or any successor bankruptcy law commenced voluntarily or involuntarily
against the Company or any other Obligor.
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"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the Board of Directors of
the corporation or any committee thereof duly authorized to act on
behalf of such board;
(2) with respect to a partnership, the Board of Directors of
the general partner of the partnership;
(3) with respect to a limited liability company, the managing
member or members or any controlling committee of managing members
thereof; and
(4) with respect to any other Person, the board or committee
of such Person serving a similar function.
"Business Day" means any day other than a Legal Holiday.
"Canadian Gas Assets" means Designated Assets owned by a direct or
indirect Restricted Subsidiary of one or more Canadian Guarantors.
"Canadian Guarantors" means Xxxxxxxx Minerals (USA) Inc., a Delaware
corporation, JOQ Canada, Inc., a Delaware limited liability company and Xxxxxxxx
Canada Holdings LLC, a Delaware limited liability company, and any successor to
any of the foregoing.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP, and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be prepaid by the lessee without payment of a penalty.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership interests (whether general or limited) or membership
interests; and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person, but excluding from all
of
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the foregoing any debt securities convertible into Capital Stock,
whether or not such debt securities include any right of participation
with Capital Stock.
"Cash Equivalents" means:
(1) the lawful currency of any country where the Company owns
or operates a Facility;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any state thereof (or any
agency or instrumentality thereof), by the Canadian government (or any
agency or instrumentality thereof), or by the government of a member
state of the European Union (or any agency or instrumentality thereof),
in each case the payment of which is backed by the full faith and
credit of the United States, Canada or the relevant member state of the
European Union, as the case may be, and having maturities of not more
than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Credit Agreement
or with any domestic commercial bank having capital and surplus in
excess of $500.0 million and a Thomson Bank Watch or successor rating
agency rating of "B" or better;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2)
and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having one of the two highest ratings
obtainable from Moody's or S&P and maturing within six months after the
date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
"CCEC" means Calpine Canada Energy Ltd., a Nova Scotia limited
liability company that is wholly-owned by the Canadian Guarantors.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as that term is used in Section 13(d)
of the Exchange Act);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including any merger
or consolidation) the result of which is that any "person" (as defined
above) becomes the Beneficial Owner, directly or indirectly, of more
than 50% of the Voting Stock of the Company, measured by voting power
rather than number of shares;
(4) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company or such other Person is
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converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of the Company
outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance); or
(5) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
"Clearstream" means Clearstream Banking, S.A.
"Collateral" means all properties and assets at any time owned or
acquired by the Company, except the Excluded Assets, and the Canadian
Guarantors' ownership interest in 65% of the aggregate outstanding voting stock
of CCEC.
"Collateral Trust Agreement" means that certain Collateral Trust
Agreement dated as of July 16, 2003, as amended, among the Company, the Canadian
Guarantors, the Credit Agreement Agent, the Trustee and the Bank of New York.
"Collateral Trustee" means The Bank of New York in its capacity as
collateral trustee under the Collateral Trust Agreement, together with its
successors and assigns in such capacity.
"Company" means Calpine Corporation, a Delaware Corporation and any and
all successors thereto.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(1) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted
in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) the Fixed Charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such Fixed Charges
were deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person
and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income;
minus non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business;
in each case, on a consolidated basis and determined in accordance with GAAP.
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"Consolidated Current Liabilities," as of the date of determination,
means the aggregate amount of liabilities of the Company and its Restricted
Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated), after eliminating (i) all inter-company items
between the Company and any consolidated Subsidiary and (ii) all current
maturities of long-term Indebtedness, all as determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of
dividends or similar distributions paid in cash to the specified Person
or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its
stockholders; and
(3) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any specified Person as
of any date, the sum of:
(1) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance
sheet as of such date with respect to any series of preferred stock
(other than Disqualified Stock) that by its terms is not entitled to
the payment of dividends unless such dividends may be declared and paid
only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person
upon issuance of such preferred stock.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors as of July 16,
2003; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
then still in office or with the approval of a majority of Directors
whose election was previously so approved from time to time.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Amended and Restated Credit
Agreement, dated as of July 16, 2003, by and among the Company and The Bank of
Nova Scotia and Bayerische Landesbank, as lead arrangers and bookrunners,
providing for up to $500.0 million of revolving credit and term loan
6
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, restated, modified, renewed, refunded, replaced or refinanced
(including by means of sales of debt securities to institutional investors) in
whole or in part from time to time.
"Credit Agreement Agent" means, at any time, the Person serving at such
time as the "Agent" or "Administrative Agent" under the Credit Agreement or any
other representative of the Lenders then most recently designated by a majority
of the Lenders, in a written notice delivered to each Parity Debt Representative
and the Collateral Trustee, as the Credit Agreement Agent for the purposes of
the Parity Lien Debt Documents.
"Credit Facilities" means one or more debt facilities (including the
Credit Agreement) with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
(including by means of sales of debt securities to institutional investors) in
whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Assets" means all geothermal energy assets (including any
related extraction, processing or similar equipment and geothermal power plants)
and all natural gas assets (including any related extraction, processing or
similar equipment, other than natural gas power plants) owned by the Company or
any of its Restricted Subsidiaries from time to time, including the equity
interests of any Restricted Subsidiary owning any Designated Assets, but
excluding (i) any geothermal energy assets that are both unproven and
undeveloped and (ii) contracts for the purchase or sale of natural gas and
natural gas supplied under such contracts.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes issued pursuant to this Indenture
mature. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders of the Capital Stock
have the right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock. The amount of Disqualified Stock deemed to be outstanding at
any time for
7
purposes of this Indenture shall be the maximum amount that the Company and its
Restricted Subsidiaries may become obligated to pay upon the maturity of, or
pursuant to any mandatory redemption provisions of, such Disqualified Stock,
exclusive of accrued dividends.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Assets" means:
(1) any lease of property other than (i) a lease of a
geothermal energy or natural gas interest or property, (ii) a lease of
real estate underlying a power generation property or (iii) a capital
lease;
(2) all deposit accounts (as defined in Article 9 of the
Uniform Commercial Code of any relevant jurisdiction) and deposits
therein to the extent not exceeding $50.0 million in the aggregate,
except for the Designated Assets Sale Proceeds Account and any deposit
account and deposits therein holding amounts referred to in clause (7)
of this definition;
(3) the fixtures and equipment relating to any pipeline if, to
the extent that and for so long as (i) the ownership or operation of
such pipeline is regulated by any federal or state regulatory authority
and (ii) under the law applicable to such regulatory authority the
grant of a security interest in such fixtures and equipment is
prohibited or a security interest in such fixtures and equipment may be
granted only after completion of a filing with, or receipt of consent
from, such regulatory authority which has not been effectively
completed or received; provided, that (a) such fixtures and equipment
shall be an Excluded Asset only to the extent and for so long as the
conditions set forth in clauses (i) and (ii) in this clause (3) are and
remain satisfied and to the extent such assets otherwise constitute
Collateral, shall cease to be an Excluded Asset, and shall become
subject to the security interests granted to the Collateral Trustee
under the Security Documents, immediately and automatically at such
time as such conditions cease to exist, including by reason of the
effective completion of any required filing or effective receipt of any
required regulatory approval, and (b) unless prohibited by law, the
proceeds of any sale, lease or other disposition of any such fixtures
or equipment that are Excluded Assets shall not be an Excluded Asset
and shall at all times be and remain subject to the security interests
granted to the Collateral Trustee under the Security Documents except
as such proceeds are applied and used by the Company in the ordinary
course of business and applied in accordance with Section 4.10 herein;
(4) all easements, rights-of-way, licenses and other real
property interests for or pertaining to the construction, operation,
use or maintenance of any pipeline over, upon or under land owned by
another Person;
(5) with respect to personal property, any lease, license,
permit, franchise, power, authority or right if, to the extent that and
for so long as (i) the grant of a security interest therein constitutes
or would result in the abandonment, invalidation or unenforceability of
such lease, license, permit, franchise, power, authority or right or
the termination of or a default under the instrument or agreement by
which such lease, license, permit, franchise, power, authority or right
is governed and (ii) such abandonment, invalidation, unenforceability,
termination or default is not
8
rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409
of the Uniform Commercial Code (or any successor provisions) of any
relevant jurisdiction or any other applicable law (including the United
States bankruptcy code); provided, that (a) such lease, license,
permit, franchise, power, authority or right shall be an Excluded Asset
only to the extent and for so long as the conditions set forth in
clauses (i) and (ii) of this clause (5) are and remain satisfied and to
the extent that such assets otherwise constitute Collateral, shall
cease to be an Excluded Asset, and shall become subject to the security
interests granted to the Collateral Trustee under the Security
Documents, immediately and automatically at such time as such
conditions cease to exist, including by reason of any waiver or consent
under the applicable instrument or agreement, and (b) the proceeds of
any sale, lease or other disposition of any such lease, license,
permit, franchise, power, authority or right that is or becomes an
Excluded Asset shall not be an Excluded Asset and shall at all times be
and remain subject to the security interests granted to the Collateral
Trustee under the Security Documents except as such proceeds are
applied and used by the Company in the ordinary course of business and
applied in accordance with Section 4.10 herein;
(6) with respect to any real property, any lease, license,
permit, franchise, power, authority or right if, to the extent that and
for so long as the grant of a security interest therein (i) requires a
third party consent which has not been obtained or (ii) constitutes or
would result in the abandonment, invalidation or unenforceability of
such lease, license, permit, franchise, power, authority or right or
the termination of or a default under the instrument or agreement by
which such lease, license, permit, franchise, power, authority or right
is governed; provided, that such lease, license, permit, franchise,
power, authority or right shall be an Excluded Asset only to the extent
and for as long as the conditions set forth in clause (i) or (ii) of
this clause (6) are and remain satisfied and to the extent such assets
otherwise constitute Collateral, shall cease to be an Excluded Asset,
and shall become subject to the security interests granted to the
Collateral Trustee under the Security Documents immediately and
automatically at such time as such conditions cease to exist except as
such proceeds are applied and used by the Company in the ordinary
course of business and applied in accordance with Section 4.10 herein;
(7) any cash proceeds (including any earnings thereon) of
Priority Lien Debt that are pledged to cash collateralize letters of
credit;
(8) any turbines which serve as collateral pursuant to that
certain General Agreement dated as of January 31, 2002 among the
Company, various Subsidiaries of the Company and Siemens Westinghouse
Power Corporation relating to various purchase contracts and letters of
intent for gas turbine generators, steam turbine generators and related
accessories;
(9) proved oil and gas reserves located in Oklahoma and
undeveloped reserves and unproven acreage located in California, Texas,
Wyoming, Montana, Colorado, New Mexico and offshore Louisiana; provided
that such reserves and acreage has a Fair Market Value not exceeding
$20.0 million in the aggregate;
(10) Capital Stock of Subsidiaries designated by the Company,
but only for so long as (i) the Capital Stock of such Subsidiaries is
not pledged to any Person (other than the Collateral Trustee on behalf
of all holders of all Secured Debt) and (ii) such Subsidiaries
collectively own less than 5.0% of the Company's total consolidated
assets and collectively account for less than 5.0% of the Company's
Consolidated Cash Flow; and
9
(11) any other property in which a security interest cannot be
perfected by the filing of a financing statement under the Uniform
Commercial Code of the relevant jurisdiction; provided that such
property has a Fair Market Value not exceeding $25.0 million in the
aggregate.
"Existing Guarantees" means the Guarantees of the Term Loans, the
Second Priority Senior Secured Notes, the Notes and certain obligations under
the Credit Agreement that exist on the date of this Indenture.
"Existing Indebtedness" means the Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of this Indenture, until such amounts are repaid.
"Facility" means a power generation facility or energy producing
facility, including any related fuel reserves.
"Fair Market Value" means the value that would be paid by a willing
buyer to a willing seller in a transaction not involving distress or necessity
of either party, determined in good faith by the Board of Directors of the
Company (unless otherwise provided in this Indenture).
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise
discharges any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated and on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase, redemption, defeasance or other
discharge of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, as if the same had
occurred at the beginning of the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person
or any of its Restricted Subsidiaries, including through mergers or
consolidations or acquisitions of assets, or any Person or any of its
Restricted Subsidiaries acquired by merger, consolidation, or the
acquisition of all or substantially all of its assets by the specified
Person or any of its Restricted Subsidiaries, and including any related
financing transactions and including increases in ownership of
Restricted Subsidiaries, during the four-quarter reference period or
subsequent to such reference period and on or prior to the Calculation
Date shall be given pro forma effect (in accordance with Regulation S-X
under the Securities Act) as if they had occurred on the first day of
the four-quarter reference period;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Calculation Date, shall be excluded;
(3) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
(and ownership interests therein) disposed of prior to the Calculation
Date, shall be excluded, but only to the extent that the obligations
giving rise to
10
such Fixed Charges shall not be obligations of the specified Person or
any of its Restricted Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the
Calculation Date shall be deemed to have been a Restricted Subsidiary
at all times during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on such
Calculation Date shall be deemed not to have been a Restricted
Subsidiary at any time during such four-quarter period; and
(6) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness shall be calculated as if the
rate in effect on the Calculation Date had been the applicable rate for
the entire period (taking into account any Hedging Obligation
applicable to such Indebtedness if such Hedging Obligation has a
remaining term as at the Calculation Date in excess of 12 months).
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations in respect of interest
rates, plus one-third of all payments with respect to operating leases;
plus
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period, except
interest on Indebtedness incurred to finance the development or
construction of a Facility; plus
(3) any interest accruing on Indebtedness of another Person
that is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries, whether or not such Guarantee or Lien is called upon, but
excluding any such Guarantee or Lien in effect on July 16, 2003 unless
the same is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued
and whether or not in cash, on any series of preferred stock of such
Person or any of its Restricted Subsidiaries, other than dividends on
Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted
Subsidiary of the Company, times (b) a fraction, the numerator of which
is one and the denominator of which is one minus the effective combined
federal, state and local statutory tax rate of such Person for the
immediately preceding fiscal year, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
"Foreign Asset Sale" means an Asset Sale in respect of the Capital
Stock or assets of a Foreign Subsidiary or a Restricted Subsidiary of the type
described in Section 936 of the Internal Revenue Code of 1986, as amended, to
the extent that the proceeds of such Asset Sale are received by a Person subject
in respect of such proceeds to the tax laws of a jurisdiction other than the
United States of America or any State thereof or the District of Columbia.
11
"Foreign Subsidiary" means a Subsidiary that is incorporated in a
jurisdiction other than the United States of America or a State thereof or the
District of Columbia.
"GAAP" means generally accepted accounting principles set forth in the
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect and, to
the extent optional, adopted by the Company, on the applicable date of
determination.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes, substantially in the form of Exhibit A hereto issued in
accordance with Section 2.01 or 2.06(b)(3) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(e)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or
otherwise).
"Guarantor" means each Subsidiary of Calpine that Guarantees the Notes.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to
floating or from floating to fixed), interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed to manage
interest rate risk; and
(3) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates or commodity
prices.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that shall be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
12
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or Attributable
Debt in respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the
purchase price of any property or services due more than six months
after such property is acquired or such services are completed; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP. In
addition, the term "Indebtedness" includes all Indebtedness of others secured by
a Lien on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case of
any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured by a
Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such asset at such date
of determination, and
(B) the amount of the Indebtedness of such other
Person.
Notwithstanding anything to the contrary in this definition of
Indebtedness, with respect to any contingent obligations (other than with
respect to contractual obligations to repurchase goods sold or distributed,
which shall be included to the extent reflected on the balance sheet of such
Person in accordance with GAAP) of a Person, the maximum liability of such
Indebtedness shall be as determined by such Person's Board of Directors, in good
faith, as, in light of the facts and circumstances existing at the time,
reasonably likely to be incurred upon the occurrence of the contingency giving
rise to such obligation.
"Indenture" means this indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $400,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Insolvency Proceeding" means:
13
(1) any proceeding for the reorganization, recapitalization or
adjustment or marshalling of the assets or liabilities of the Company
or any other Obligor, any receivership or assignment for the benefit of
creditors relating to the Company or any other Obligor or any similar
case or proceeding relative to the Company or any other Obligor or its
creditors, as such, in each case whether or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or
liabilities or other winding up of or relating to the Company or any
other Obligor, in each case whether or not voluntary and whether or not
involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which
substantially all claims of creditors of the Company or any other
Obligor are determined and any payment or distribution is or may be
made on account of such claims.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, 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 Company's Investments in such Subsidiary that were not sold or
disposed of in an amount determined as provided in Section 4.07(b). Except as
otherwise provided in this Indenture, the amount of an Investment shall be
determined at the time the Investment is made and without giving effect to
subsequent changes in value.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Lenders" means, at any time, the parties to the Credit Agreement then
holding (or committed to provide) loans, letters of credit or other extensions
of credit that constitute (or when provided shall constitute) Priority Lien Debt
outstanding under the Credit Agreement.
"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 and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Magic Valley Generating Assets" means the Magic Valley Generating
Station, a natural gas fired power plant in commercial operation in Edinburg,
Texas.
14
"Material Designated Assets" means Designated Assets having a Fair
Market Value in the aggregate in excess of $50.0 million.
"Moody's" means Xxxxx'x Investors Service, Inc. (or, if such entity
ceases to rate the applicable notes for reasons outside of the control of the
Company, the equivalent investment grade credit rating from any other
"nationally recognized statistical rating organization" (or successor concept)
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act (or
successor provision) selected by the Company as a replacement agency).
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, without
duplication:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with: (a) any Asset Sale; or (b) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the extinguishment
of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct costs relating to
such Asset Sale, including legal, accounting and investment banking fees, and
sales commissions, and any relocation expenses incurred as a result of the Asset
Sale, taxes paid or payable as a result of the Asset Sale, in each case, after
taking into account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness, other than Priority Debt, secured by a Lien on the asset or assets
that were the subject of such Asset Sale and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP.
"Non-Recourse Debt" means Indebtedness of any Restricted Subsidiary
that is incurred to finance the exploration, drilling, development, construction
or purchase of or by, or repairs, improvements or additions to, property or
assets of the Company or any Restricted Subsidiary; provided that such
Indebtedness is without recourse to the Company (except as permitted by clause
(8) of the definition of Permitted Debt) or any Restricted Subsidiary or to any
property or assets of the Company or any Restricted Subsidiary other than
property or assets (including Capital Stock) of a Restricted Subsidiary subject
to a Lien permitted pursuant to clause (8) of the definition of Permitted Liens
or property or assets (including Capital Stock) of a Restricted Subsidiary
subject to a Lien permitted pursuant to clause (19) of the definition of
Permitted Liens.
"Note Documents" means this Indenture, the Notes, each Sharing
Confirmation and the Security Documents.
"Note Obligations" means the Notes (including any Additional Notes
issued under the this Indenture) and all other Obligations of any Obligor under
this Indenture, the Notes (including any Additional Notes issued under this
Indenture) and the Security Documents.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture, and unless the
15
context otherwise requires, all references to the Notes shall include the
Initial Notes and any Additional Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness (including the Notes and this
Indenture).
"Obligor" means the Company and each Restricted Subsidiary of the
Company (if any) that at any time guarantees or provides collateral security or
credit support for any Secured Obligations.
"Offering Memorandum" means that certain offering memorandum dated as
of November 7, 2003, with respect to the $400.0 million in aggregate principal
amount offering of the Initial Notes.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officer's Certificate" means a certificate signed on behalf of the
Company by one Officer of the Company that meets the requirements of Section
12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Parity Debt Representative" means:
(1) in the case of each of the Second Priority Senior Secured
Notes and the Notes, the applicable trustee thereof;
(2) in the case of the Term Loans, the Term Loan
Administrative Agent; or
(3) in the case of any other Series of Parity Debt, the
trustee, agent or representative of the holders of such Series of
Parity Lien Debt who maintains the transfer register for such Series of
Parity Lien Debt and is appointed as a Parity Debt Representative (for
purposes related to the administration of the Security Documents)
pursuant to this Indenture or other agreement governing such Series of
Parity Lien Debt.
"Parity Lien" means a Lien granted by a Security Document to the
Collateral Trustee upon any property of the Company or any other Obligor to
secure Parity Lien Obligations.
"Parity Lien Debt" means:
(1) the Notes and the Second Priority Senior Secured Notes;
(2) the Term Loans; and
(3) any other Indebtedness (including additional notes and
Term Loans) that:
(A) is permitted to be incurred under Section 4.09
herein; and
16
(B) is permitted to be secured by Parity Liens by
clause (2) of the definition of Permitted Liens;
provided, in the case of each issue or series of Indebtedness referred to in
this clause (3), that:
(i) on or before the date on which such Indebtedness was
incurred by the Company such Indebtedness is designated by the Company,
in an Officer's Certificate delivered to each Parity Debt
Representative and the Collateral Trustee on or before such date, as
Parity Lien Debt for the purposes of this Indenture and the Collateral
Trust Agreement,
(ii) such Indebtedness is governed by an indenture or other
agreement that includes a Sharing Confirmation and
(iii) all requirements set forth in the Collateral Trust
Agreement as to the confirmation, grant or perfection of the Collateral
Trustee's Liens to secure such Indebtedness or Obligations in respect
thereof are satisfied
(and the satisfaction of such requirements and the other provisions of this
clause (3) shall be conclusively established, for purposes of entitling the
holders of such Indebtedness to share equally and ratably with the other holders
of Parity Lien Debt in the benefits and proceeds of the Collateral Trustee's
Liens on the Collateral, if the Company delivers to the Collateral Trustee an
Officer's Certificate in the form required pursuant to the Collateral Trust
Agreement stating that such requirements and other provisions have been
satisfied and that such Indebtedness is Parity Lien Debt, together with an
opinion of counsel stating that such Officer's Certificate has been duly
authorized by the Board of Directors of the Company and has been duly executed
and delivered, and the holders of such Indebtedness and Obligations in respect
thereof shall be entitled to rely conclusively thereon).
"Parity Lien Debt Documents" means, collectively, the Term Loan
Documents, the Note Documents, and the indenture or agreement governing each
other Series of Parity Lien Debt and all agreements binding on any Obligor
related thereto.
"Parity Lien Obligations" means Parity Lien Debt and all other
Obligations in respect thereof.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means the business of acquiring, constructing,
managing, developing, improving, owning and operating Facilities, as well as any
other activities reasonably related to the foregoing activities (including
acquiring and holding reserves), including investing in Facilities.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of
the Company; or
17
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 herein;
(5) any acquisition of assets or Capital Stock solely in
exchange for the issuance of Equity Interests (other than Disqualified
Stock) of the Company;
(6) any Investments received in compromise or resolution of
(A) obligations of trade creditors or customers that were incurred in
the ordinary course of business of the Company or any of its Restricted
Subsidiaries, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade
creditor or customer; or (B) litigation, arbitration or other disputes
with Persons who are not Affiliates;
(7) Investments represented by Hedging Obligations;
(8) loans or advances to employees made in the ordinary course
of business consistent with past practices of the Company or such
Restricted Subsidiary in an aggregate principal amount not to exceed
$5.0 million at any one time outstanding;
(9) repurchases of the Notes; and
(10) other Investments in any Person having an aggregate Fair
Market Value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (10)
that are at the time outstanding not to exceed $100.0 million;
provided that Designated Assets held by the Company may not be invested
in, leased to or otherwise transferred to any Restricted Subsidiary;
provided, however, that the Company may transfer proven undeveloped gas
reserves to its Restricted Subsidiaries in the ordinary course of
business for consumption in the power generating business of such
Restricted Subsidiaries during the 12-month period following transfer.
"Permitted Liens" means:
(1) Liens on assets of the Company or any Canadian Guarantor
securing Obligations of the Company or such Canadian Guarantor under
one or more Credit Facilities in an aggregate amount not exceeding the
Priority Lien Cap;
(2) Liens held by the Collateral Trustee equally and ratably
securing the Notes to be issued on the date of this Indenture, the
Second Priority Senior Secured Notes and the Term Loans and all future
Parity Lien Debt and other Parity Lien Obligations; provided that the
Collateral Trustee's Liens may secure Parity Lien Debt incurred after
the date of this Indenture or Obligations in respect thereof only if,
on the date of the incurrence of such Parity Lien Debt, after giving
pro forma effect to the incurrence thereof and the application of the
proceeds therefrom, the Secured Leverage Ratio is not greater than
2.75:1.0;
(3) Liens in favor of the Company;
18
(4) Pledges or deposits made under workers' compensation,
unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for
payment of Indebtedness) or leases to which such Person is a party, and
Liens or deposits to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(5) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of the definition of Permitted
Debt covering only the assets acquired, designed, constructed,
installed or improved with or financed by such Indebtedness;
(6) Liens existing on the date of this Indenture;
(7) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or a Restricted Subsidiary;
(8) (A) Liens on assets or property of a Restricted Subsidiary
(other than Material Designated Assets) incurred by any Restricted
Subsidiary to secure Indebtedness of such Restricted Subsidiary
incurred to finance the exploration, drilling, development,
construction or purchase of or by, or repairs, improvements or
additions to, property or assets of the Company or such Restricted
Subsidiary, which Liens may include Liens on the Capital Stock of such
Restricted Subsidiary (other than a Restricted Subsidiary that (i) is a
direct Subsidiary of the Company or (ii) owns, directly or indirectly,
Material Designated Assets), (B) Liens (other than Liens on Material
Designated Assets) incurred by any Restricted Subsidiary that does not
own, directly or indirectly, at the time of original incurrence of such
a Lien under this clause (B) any Material Designated Assets or any
operating properties or assets, securing Indebtedness incurred to
finance the exploration, drilling, development, construction or
purchase of or by, or repairs, improvements or additions to, property
or assets of any Restricted Subsidiary that does not, directly or
indirectly, own any operating properties or assets at the time of the
original incurrence of such Lien, which Liens contemplated by this
clause (8) may include Liens on the Capital Stock of one or more
Restricted Subsidiaries that (i) are not direct Subsidiaries of the
Company and (ii) do not, directly or indirectly, own any Material
Designated Assets or operating properties or assets at the time of
original incurrence of such Lien; or (C) without duplication, Liens
(other than Liens on Material Designated Assets) incurred by any
Restricted Subsidiary (which Liens may include Liens on Capital Stock
of such Restricted Subsidiary so long as the Capital Stock of such
Restricted Subsidiary is not pledged as Collateral) that owned as of
July 16, 2003 all or part of one or more of the peaking power plants
(and no other significant unrelated assets) constructed for the purpose
of providing peaking capacity and energy to the California Department
of Water Resources; provided, that the Indebtedness secured by any such
Lien contemplated by this clause (8) may not be issued more than 365
days (or, in the case of clause (C) above, two years) after the later
of the exploration, drilling, development, completion of construction,
purchase, repair, improvement, addition or commencement of full
commercial operation of the property or asset being so financed;
(9) Liens on property or shares of Capital Stock of a
Subsidiary at the time such Person becomes a Subsidiary; provided that
any such Lien may not extend to any other property owned by the
Company;
(10) Liens on property at the time a Subsidiary acquires the
property, including any acquisition by means of a merger or
consolidation with or into the Subsidiary; provided that such Liens are
not incurred in connection with, or in contemplation of, such merger or
consolidation;
19
and provided, further, that the Lien may not extend to any other
property owned by the Company or any Restricted Subsidiary;
(11) Liens incurred by a Person other than the Company or any
Subsidiary on assets that are the subject of a Capitalized Lease
Obligation to which the Company or a Subsidiary is a party; provided
that any such Lien may not secure Indebtedness of the Company or any
Subsidiary (except Indebtedness secured by a Lien on any property or
assets of the Company or such Subsidiary incurred in connection with
Indebtedness of another Person), with the amount of such obligation
being deemed to be the lesser of the value of such property or assets
or the amount of the obligation so secured) and may not extend to any
other property owned by the Company or any Restricted Subsidiary;
(12) Liens on assets of the Company Construction Finance
Company, L.P. (and/or any other Restricted Subsidiary that subsequently
owns any such assets) relating to the Magic Valley Generating Station;
(13) Liens not in respect of Indebtedness arising from Uniform
Commercial Code financing statements for informational purposes with
respect to leases incurred in the ordinary course of business and not
otherwise prohibited by this Indenture;
(14) Liens not in respect of Indebtedness consisting of the
interest of the lessor under any lease entered into in the ordinary
course of business and not otherwise prohibited by this Indenture; and
Liens on shares of Capital Stock of a subsidiary that does not own any
significant assets other than a lessee's interest in a Facility or on
the Capital Stock of a subsidiary whose only significant asset is its
direct or indirect interest in such lessee subsidiary; provided that in
no event shall this clause (14) allow a lien on any Capital Stock
constituting Collateral;
(15) Liens which constitute banker's liens, rights of set-off
or similar rights and remedies as to deposit accounts or other funds
maintained with any bank or other financial institution, whether
arising by operation of law or pursuant to contract;
(16) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision as
is required in conformity with GAAP has been made therefor;
(17) Liens imposed by law such as carriers', warehousemen's
and mechanics' Liens, in each case, arising in the ordinary course of
business and with respect to amounts not yet due or being contested in
good faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall
have been made; or other Liens arising out of judgments or awards
against such Person with respect to which such Person shall then be
diligently prosecuting appeal or other proceedings for review;
(18) survey exceptions, easements or reservations of, or
rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real property or Liens incidental
to the conduct of the business of the Company or any Restricted
Subsidiary or to the ownership of its properties that were not incurred
in connection with Indebtedness and that do not in the aggregate
materially adversely affect the value of said properties or materially
impair their use in the operation of the business of the Company or any
Restricted Subsidiary;
20
(19) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses
(6), (8), (9) and (10); provided that (A) such new Lien shall be
limited to all or part of the same property or assets that secured the
original Lien (plus repairs, improvements and additions to such
property or assets and Liens on the stock or other ownership interest
in one or more Restricted Subsidiaries beneficially owning such
property or assets) and (B) the amount of the Indebtedness secured by
such Lien at such time (or, if the amount that may be realized in
respect of such Lien is limited, by contract or otherwise, such limited
lesser amount) is not increased (other than by an amount necessary to
pay fees and expenses, including premiums, related to the refinancing,
refunding, extension, renewal or replacement of such Indebtedness);
(20) Liens on assets of Restricted Subsidiaries to secure
letters of credit issued pursuant to clause (14) of the definition of
Permitted Debt; provided if and to the extent such letters of credit
are drawn upon, such drawing is reimbursed no later than the tenth
Business Day following a demand for reimbursement following payment on
the letter of credit and Liens to secure letters of credit incurred
pursuant to clause (15) of the definition of Permitted Debt on cash
collateral constituting the proceeds of Priority Lien Debt;
(21) Liens (A) on cash and short-term investments of
Restricted Subsidiaries to secure obligations with respect to (i)
contracts for commercial and trading activities in the ordinary course
of business and contracts (including physical delivery, option (whether
cash or financial), exchange, swap and futures contracts) for the
purchase, transmission, distribution, sale, lease or hedge of any
energy-related commodity or service or (ii) interest rate, commodity
price, or currency rate management contracts or derivatives and (B)
encumbering assets of a Restricted Subsidiary, other than (i) Material
Designated Assets or (ii) accounts or receivables, which Liens arise
out of contracts or agreements relating to the generation, distribution
or transmission or sale of energy and/or fuel; provided that all such
agreements or contracts are entered into in the ordinary course of
business; and
(22) other Liens to secure Indebtedness in an aggregate amount
not to exceed $50.0 million at any time outstanding.
"Permitted Prior Liens" means (a) Liens securing Priority Lien
Obligations not exceeding the Priority Lien Cap, (b) Liens described in clauses
(5), (6), (10) or (11) of the definition of "Permitted Liens" and (c) Liens that
arise by operation of law and are not voluntarily granted, to the extent
entitled by law to priority over the security interests created by the Security
Documents.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund, other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
or accumulated interest on the Indebtedness and the amount of all fees,
costs, expenses and premiums, including swap breakage and defeasance
costs, incurred in connection therewith);
21
(2) such Permitted Refinancing Indebtedness has a final
maturity date equal to or later than the final maturity date of, and
has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; provided that such
Permitted Refinancing Indebtedness may have such shorter final maturity
date and Weighted Average Life to Maturity as is equal to or greater
than the latest maturity date of any Notes issued under this Indenture;
and
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity
date equal to or later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least as
favorable to the holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
provided that Permitted Refinancing Indebtedness shall not include (A)
Indebtedness of the Company incurred to refinance Non-Recourse Debt of a
Restricted Subsidiary, (B) Indebtedness of a Restricted Subsidiary of the
Company that refinances Indebtedness of the Company or (C) Indebtedness of the
Company or a Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Placement Agent" means Xxxxxx Xxxxxxx & Co. Incorporated.
"Priority Foreclosure Event" means the failure to pay at maturity or
upon acceleration of maturity all outstanding Priority Lien Debt at any time
when no Bankruptcy Case or Insolvency Proceeding is pending.
"Priority Lien" means a Lien granted by a Security Document to the
Collateral Trustee upon any property of the Company or any other Obligor to
secure Priority Lien Obligations not exceeding the Priority Lien Cap.
"Priority Lien Agent" means the Credit Agreement Agent or any other
agent for holders of Priority Lien Debt.
"Priority Lien Cap" means an amount equal to (a) the Indebtedness
outstanding under the Credit Agreement or any other Credit Facility in an
aggregate principal amount not exceeding the greater of (1) $500.0 million, less
the amount of any Net Proceeds of a Sale of Designated Assets applied to repay
Priority Lien Debt and/or cash collateralize letters of credit that constitute
Priority Lien Debt and (2) the dollar amount that, on the date of incurrence of
such Indebtedness, is equal to 50% of the Company's Consolidated Cash Flow for
the then most recent four-quarter period for which financial information is
available, plus (b) any interest (including any interest accruing at the then
applicable rate provided in any applicable Priority Lien Document after the
maturity of the loans and reimbursement obligations therein and interest
accruing at the then applicable rate provided in any applicable Priority Lien
Document after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the Company,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding), penalties, premiums, fees, costs, expenses or other
Obligations in respect of such Indebtedness. For purposes of this definition of
Priority Lien Cap, all letters of credit shall be valued at face amount, whether
or not drawn, and all letters of credit denominated in a currency other than
U.S. dollars shall be valued at all times at the Equivalent Amount (as defined
in the Credit Agreement) thereof on the date of issue thereof.
22
"Priority Lien Debt" means Indebtedness under (a) the Credit Agreement
or (b) any other Credit Facility that is secured by a Priority Lien that was
permitted to be incurred under clause (1) of the definition of "Permitted Liens"
but only if on or before the day on which such Indebtedness under a Credit
Facility described in clause (b) above is incurred by the Company such
Indebtedness is designated by the Company, in an Officer's Certificate delivered
to each Parity Debt Representative and the Collateral Trustee on or before such
date, as Priority Lien Debt for the purposes of each of the Parity Lien Debt
Documents and the Collateral Trust Agreement.
"Priority Lien Documents" means the Credit Agreement or any other
Credit Facility pursuant to which any Priority Lien Debt is incurred and all
other agreements governing, securing or relating to any Priority Lien
Obligations.
"Priority Lien Obligations" means the Priority Lien Debt and all other
Obligations in respect of Priority Lien Debt.
"Private Placement Legend" means the legend set forth in Section
2.06(e)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Public Equity Offering" means an underwritten primary public offering
of the Company's equity securities pursuant to an effective registration
statement under the Securities Act.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Required Parity Debtholders" means, at any time in respect of any
action or matter, holders of a majority in aggregate outstanding principal
amount of all Parity Lien Debt then outstanding, voting together as a single
class. For this purpose, Parity Lien Debt registered in the name of, or
beneficially owned by, the Company or any Affiliate of the Company shall be
deemed not to be outstanding.
"Required Priority Debtholders" means, at any time in respect of any
action or matter, (1) holders of the outstanding principal amount of, or
commitments with respect to, the applicable Priority Lien Debt then outstanding
required pursuant to the terms of the applicable Credit Facility, voting as a
single class, to approve such action or matter or (2) the Priority Lien Agent
acting upon the authorization or consent of the holders referred to in the
immediately preceding clause (1). For this purpose, Priority Lien Debt
registered in the name of, or beneficially owned by, the Company or any
Affiliate of the Company shall be deemed not to be outstanding.
"Responsible Officer," means, with respect to the Collateral Trustee,
any officer within the corporate trust department of the Collateral Trustee
including any vice president, assistant vice president, assistant treasurer,
trust officer or any other officer of the Collateral Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such Person's knowledge of and familiarity
23
with the particular subject and who shall have direct responsibility for the
administration of the Collateral Trust Agreement.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.903(b)(3)
"Restricted Subsidiary" means any Subsidiary of the Company that is not
an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"S&P" means Standard & Poor's Ratings Group (or, if such entity ceases
to rate the Notes for reasons outside of the control of the Company, the
equivalent investment grade credit rating from any other "nationally recognized
statistical rating organization" (or successor concept) within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act (or successor provision)
selected by the Company as a replacement agency).
"Sale of Designated Assets" means any Asset Sale involving a sale or
other disposition of Designated Assets.
"SEC" means the Securities and Exchange Commission.
"Second Priority Senior Secured Notes" means the $500.0 million in
aggregate principal amount of the Company's Second Priority Senior Secured
Floating Rate Notes due 2007, the $1.15 billion in aggregate principal amount of
the Company's 8.500% Second Priority Senior Secured Notes due 2010, and the
$900.0 million in aggregate principal amount of the Company's 8.750% Second
Priority Senior Secured Notes due 2013.
"Secured Debt" means Parity Lien Debt and Priority Lien Debt.
"Secured Debt Documents" means the Parity Lien Debt Documents and the
Priority Lien Documents.
"Secured Debt Representative" means each Parity Debt Representative and
the Priority Lien Agent.
"Secured Leverage Ratio" means, on any date, the ratio of:
24
(1) the aggregate principal amount of Secured Debt outstanding
on such date (and, for this purpose, letters of credit shall be deemed
to have a principal amount equal to the maximum potential liability of
the Company thereunder) to
(2) the aggregate amount of the Company's Consolidated Cash
Flow for the most recent four-quarter period for which financial
information is available.
In addition, for purposes of calculating the Secured Leverage Ratio:
(1) acquisitions that have been made by the specified Person
or any of its Restricted Subsidiaries, including through mergers or
consolidations or acquisitions of assets, or any Person or any of its
Restricted Subsidiaries acquired by merger, consolidation or the
acquisition of all or substantially all of its assets by the specified
Person or any of its Restricted Subsidiaries, and including any related
financing transactions and including increases in ownership of
Restricted Subsidiaries, during the four-quarter reference period or
subsequent to such reference period and on or prior to the date on
which the event for which the calculation of the Secured Leverage Ratio
is made (the "Leverage Calculation Date") shall be given pro forma
effect in accordance with Regulation S-X under the Securities Act) as
if they had occurred on the first day of the four-quarter reference
period;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses (and ownership interests therein) disposed of prior to the
Leverage Calculation Date, shall be excluded;
(3) any Person that is a Restricted Subsidiary on the Leverage
Calculation Date shall be deemed to have been a Restricted Subsidiary
at all times during such four-quarter period;
(5) any Person that is not a Restricted Subsidiary on the
Leverage Calculation Date shall be deemed not to have been a Restricted
Subsidiary at any time during such four-quarter period; and
(6) if any Indebtedness bears a floating rate of interest, the
interest expense on such Indebtedness shall be calculated as if the
rate in effect on the Leverage Calculation Date had been the applicable
rate for the entire period (taking into account any Hedging Obligation
applicable to such Indebtedness if such Hedging Obligation has a
remaining term as at the Calculation Date in excess of 12 months).
"Secured Obligations" means the Parity Lien Obligations and the
Priority Lien Obligations.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Documents" means the Collateral Trust Agreement and one or
more security agreements, pledge agreements, collateral assignments, mortgages,
collateral agency agreements, deeds of trust or other grants or transfers for
security executed and delivered by the Company or any other Obligor creating (or
purporting to create) a Lien upon Collateral in favor of the Collateral Trustee,
in each case, as amended, modified, renewed, restated or replaced, in whole or
in part, from time to time, in accordance with its terms.
"Series of Parity Lien Debt" means, severally, each series of the
Notes, the Second Priority Senior Secured Notes, the Term Loans and each other
issue or series of Parity Lien Debt for which a single transfer register is
maintained.
25
"Series of Secured Debt" means, severally, each series of the Notes,
the Second Priority Senior Secured Notes, the Term Loans, each other issue or
series of Parity Lien Debt for which a single transfer register is maintained
and each issue or series of Priority Lien Debt for which a single register is
maintained.
"Sharing Confirmation" means, as to any Series of Parity Lien Debt, the
written agreement of the holders of such Series of Parity Lien Debt, as set
forth in the indenture or agreement governing such Series of Parity Lien Debt,
for the enforceable benefit of all holders of each other existing and future
Series of Parity Lien Debt and each existing and future Parity Debt
Representative, that all Parity Lien Obligations shall be and are secured
equally and ratably by all Liens at any time granted by the Company or any other
Obligor to secure any Obligations in respect of such Series of Parity Lien Debt,
whether or not upon property otherwise constituting Collateral, that all such
Liens shall be enforceable by the Collateral Trustee for the benefit of all
holders of Parity Lien Obligations equally and ratably, and that the holders of
Obligations in respect of such Series of Parity Lien Debt are bound by the
provisions in the Collateral Trust Agreement relating to the order of
application of proceeds from enforcement of the Collateral Trustee's Liens upon
the Collateral, and consent to and direct the Collateral Trustee to perform its
obligations under the Collateral Trust Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of July 16, 2003, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subsidiary" means, as applied to any Person, any corporation, limited
or general partnership, trust, association or other business entity of which an
aggregate of at least 50% of the outstanding Voting Shares, or an equivalent
controlling interest therein, of such Person is, at the time, directly or
indirectly, owned by such Person and/or one or more Subsidiaries of such Person.
"Term Loan Administrative Agent" means Xxxxxxx Sachs Credit Partners
L.P., as administrative agent under the Term Loan Agreement, together with its
successors in such capacity.
"Term Loan Agreement" means that certain Term Loan Agreement dated as
of July 16, 2003 between the Company and the Term Loan Administrative Agent,
relating to $750.0 million in aggregate principal amount of Term Loans,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as amended, modified, increased,
renewed, restated or replaced, in whole or in part, from time to time.
"Term Loan Documents" means the Term Loan Agreement, each Sharing
Confirmation and the Security Documents.
"Term Loan Obligations" means the Term Loans (including additional Term
Loans) and all other Obligations under the Term Loan Agreement and the Security
Documents.
"Term Loans" means the principal of and interest and premium (if any)
on Indebtedness of the Company incurred under the Term Loan Agreement.
26
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date hereof, except as provided
in Section 9.03 of this Indenture.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary (and any
subsidiary of an Unrestricted Subsidiary) pursuant to a Board Resolution passed
after the date of this Indenture, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Indebtedness that is
non-recourse to the Company and its Restricted Subsidiaries;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries;
provided, however, that a corporation with no significant assets created for the
sole purpose of serving as a co-obligor to facilitate a financing by a
partnership of a limited liability company may be designated as an Unrestricted
Subsidiary.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officer's Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 herein, regarding
Restricted Payments. If, at any time, any Unrestricted Subsidiary would fail to
meet the preceding requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date and, if such Indebtedness
is not permitted to be incurred as of such date under Section 4.09 herein, the
Company shall be in default of such Section 4.09. The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (1) such Indebtedness is permitted under Section 4.09 herein,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
27
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years or portion thereof obtained by
dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (b) the number of
years (calculated to the nearest one-twelfth) that shall elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
Section 1.02 Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"............................................................. 4.11
"Asset Sale Offer".................................................................. 3.07
"Authentication Order".............................................................. 2.02
"Change of Control Offer"........................................................... 4.15
"Change of Control Payment"......................................................... 4.15
"Change of Control Payment Date".................................................... 4.15
"Covenant Defeasance"............................................................... 8.03
"DTC"............................................................................... 2.03
"Event of Default".................................................................. 6.01
"Excess Proceeds"................................................................... 4.10
"incur"............................................................................. 4.09
"Legal Defeasance".................................................................. 8.02
"Offer Amount"...................................................................... 3.07
"Offer Period"...................................................................... 3.07
"Paying Agent"...................................................................... 2.03
"Permitted Debt".................................................................... 4.09
"Purchase Date"..................................................................... 3.07
"Registrar"......................................................................... 2.03
"Restricted Payments"............................................................... 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
28
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Guarantees means the Company and the
Guarantors, respectively, and any successor obligor upon the Notes and the
Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "shall" shall be interpreted to express a command;
(6) provisions apply to successive events and
transactions; and
(7) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.
29
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication 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 usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it represents
the aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and repayments. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream Banking" and "Customer Handbook" of Clearstream shall be applicable
to transfers of beneficial interests in the Global Notes that are held by
Participants through Euroclear or Clearsteam.
Section 2.02 Execution and Authentication.
One Officer must sign the Notes for the Company by manual or facsimile
signature.
If the Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed
by one Officer (an "Authentication Order"), authenticate (i) Initial Notes in an
aggregate principal amount up to $400.0 million on the date of this Indenture
and (ii) Additional Notes from time to time as permitted under this Indenture.
30
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. 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 agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
Section 2.05 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the
31
Depositary or to another nominee of the Depositary, or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes shall be exchanged by the Company for Definitive
Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice
from the Depositary; or
(2) the Company in its sole discretion determines that
the Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee.
Upon the occurrence of either of the preceding events in (1) or (2)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated by the Trustee pursuant to an Authentication Order and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a),
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global
Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend; provided, however, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Regulation
S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than the Placement Agent). No written
orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(1) above, the transferor of such beneficial interest must
deliver to the Registrar both:
(A) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
(B) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase.
32
(3) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any Restricted Global
Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(2) above and
the Registrar receives the following:
(A) if the transferee shall take delivery in the
form of a beneficial interest in the 144A Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transferee shall take delivery in the
form of a beneficial interest in the Regulation S Global Note,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transferee shall take delivery in the
form of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3)(d) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in
Restricted Global Notes to Restricted Definitive Notes. If any holder
of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or
to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt
by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (a) thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (a) thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
(F) if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
33
(G) if such beneficial interest is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(f) hereof, and the
Company shall execute and the Trustee shall authenticate, upon receipt of an
Authentication Order, and deliver to the Person designated in such
Authentication Order a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.06(b) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(b) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained
therein.
(c) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests
in Restricted Global Notes. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial interest
in a Restricted Global Note, a certificate from such Holder in
the form of Exhibit C hereto, including the certifications in
item (b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d)
thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
34
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(d) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.06(d), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder must present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(d).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer shall be made pursuant to
Rule 144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer shall be made pursuant to
Rule 903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transfer shall be made pursuant to
any other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(e) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Each Global Note and each Definitive Note
(and all Notes issued in exchange therefor or substitution
thereof) shall bear the legend in substantially the following
form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN AND SHALL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE
35
144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR
IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS."
(2) Global Note Legend. Each Global Note shall bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(f) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been repurchased or canceled in
whole and not in part, each such Global Note shall be returned to or retained
and canceled by the Trustee in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who shall take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to
36
a Person who shall take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased accordingly and
an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(g) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Global
Notes and Definitive Notes upon receipt of an Authentication Order in
accordance with Section 2.02 or at the Registrar's request.
(2) No service charge shall be made to a Holder of a
Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.04, 3.07, 4.10, 4.15 and 9.05 hereof).
(3) The Registrar shall not be required to register the
transfer of or exchange any Note selected for repurchase in whole or in
part, except the unpurchased portion of any Note being repurchased in
part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(5) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
repurchase under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to exchange
any Note selected for repurchase in whole or in part, except
the unpurchased portion of any Note being repurchased in part;
or
(C) to register the transfer of or to exchange a
Note between a record date and the next succeeding interest
payment date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(7) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(8) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
37
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements hereunder are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Company to protect the Company, the Trustee, any Agent
and any authenticating agent from any loss that any of them may suffer if a Note
is replaced. The Company may charge the applicable Holder for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a maturity date, money sufficient to pay
Notes payable on that date, then on and after that date such Notes shall be
deemed to be no longer outstanding and shall cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as may be reasonably acceptable to
the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall, upon receipt of an Authentication Order, authenticate definitive
Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
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Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
canceled Notes in accordance with its customary practices (subject to the record
retention requirement of the Exchange Act). Certification of the destruction of
all canceled Notes shall be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
ARTICLE 3.
REPURCHASE AND PREPAYMENT
Section 3.01 [Reserved]
Section 3.02 Selection of Notes to Be Purchased.
If less than all of the Notes are to be purchased in an offer to
purchase pursuant to Sections 4.10 or 4.15 at any time, the Trustee shall select
Notes for purchase as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national
securities exchange, on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate.
In the event of purchase by lot, the particular Notes to be purchased
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the purchase date by the Trustee from the outstanding
Notes not previously called for purchase.
The Trustee shall promptly notify the Company in writing of the Notes
selected for purchase and, in the case of any Note selected for partial
purchase, the principal amount thereof to be purchased. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be purchased, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be purchased. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for purchase also apply
to portions of Notes called for purchase.
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Section 3.03 Deposit of Purchase Price.
Not less than one Business Day prior to the purchase price date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the purchase price of and accrued interest on all Notes to be purchased
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the purchase price of, and accrued
interest on, all Notes to be purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the purchase date, interest shall cease to accrue on the Notes or
the portions of Notes called for purchase. If a Note is purchased on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for purchase is not so paid upon surrender for purchase because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the purchase date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.04 Notes Purchased in Part.
Upon surrender of a Note that is purchased in part, the Company shall
issue and, upon receipt of an Authentication Order, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unpurchased portion of the Note surrendered.
Section 3.05 Optional Redemption.
[Reserved]
Section 3.06 Mandatory Redemption.
The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
Section 3.07 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
with the proceeds of sales and assets. The Asset Sale Offer shall remain open
for a period of at least 20 Business Days following its commencement and not
more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than three Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company shall apply all Excess Proceeds (the "Offer Amount") to the purchase of
Notes and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for any
Notes so purchased shall be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is
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registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The written notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the Asset
Sale Offer. The written notice, which shall govern the terms of the Asset Sale
Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to
this Section 3.07 and Section 4.10 hereof and the length of time the
Asset Sale Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment
shall continue to accrue interest;
(4) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may elect to have Notes purchased in
integral multiples of $1,000 only;
(6) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by book-entry transfer,
to the Company, a Depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before
the Purchase Date;
(7) that Holders shall be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and
other pari passu Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company shall select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal
amount of Notes and such other pari passu Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(9) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officer's Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.07. The Company, either
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directly or through the Depositary or the Paying Agent, as the case may be,
shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee, upon
written request from the Company and receipt of an Authentication Order shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
Other than as specifically provided in this Section 3.07, any purchase
pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.02 through 3.04 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
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Section 4.03 Reports.
(a) Whether or not required by the Commission's rules and
regulations, so long as any Notes are outstanding, the Company shall furnish to
the holders of Notes, within the time periods specified in the Commission's
rules and regulations:
(1) all quarterly and annual reports that would be
required to be filed with the Commission on Forms 10-Q and 10-K if the
Company were required to file such reports; and
(2) all current reports that would be required to be
filed with the Commission on Form 8-K if the Company were required to
file such reports.
(b) All such reports shall be prepared in all material respects in
accordance with all of the rules and regulations applicable to such reports.
Each annual report on Form 10-K shall include a report on the Company's
consolidated financial statements by the Company's certified independent
accountants. In addition, the Company shall file a copy of each of the reports
referred to in clauses (1) and (2) in Section 4.03(a) above with the Commission
for public availability within the time periods specified in the rules and
regulations applicable to such reports (unless the Commission shall not accept
such a filing) and make such information available to securities analysts and
prospective investors upon request.
(c) If, at any time, the Company is no longer subject to the
periodic reporting requirements of the Exchange Act for any reason, the Company
shall nevertheless continue filing the reports specified in Section 4.03(a) with
the Commission within the time periods specified above unless the Commission
shall not accept such a filing. The Company agrees that it shall not take any
action for the purpose of causing the Commission not to accept any such filings.
If, notwithstanding the foregoing, the Commission shall not accept the Company's
filings for any reason, the Company shall post the reports referred to in
Section 4.03(a) on its website within the time periods that would apply if the
Company were required to file those reports with the Commission.
(d) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by Section 4.03(a) shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(e) In addition, the Company agrees that, for so long as any Notes
remain outstanding, at any time it is not required to file the reports required
by Section 4.03(a) with the Commission, it shall furnish to the holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officer's Certificate prescribed by
the TIA stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officer with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture and the Security Documents, and further stating, as to such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and the Security Documents
43
and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture or the Security Documents (or, if a
Default or Event of Default has occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company shall
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officer's Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
Section 4.07 Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment
or distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including any payment in connection
with any merger or consolidation involving the Company or any of its
Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in
their capacity as such (other than dividends or
44
distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or dividends or distributions payable to the
Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for
value (including in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any
direct or indirect parent of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Company that is contractually subordinated to the
Notes (excluding any intercompany Indebtedness between or among the
Company and any of its Restricted Subsidiaries and excluding the
purchase, repurchase or other acquisition of such subordinated
Indebtedness purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition), except a payment of
interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment
(all such payments and other actions set forth in these clauses (1) through (4)
above being collectively referred to as "Restricted Payments"), unless after
giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is
continuing or would occur as a consequence of such Restricted Payment
(other than any Default or Event of Default that is cured as a result
of such Restricted Payment);
(2) the Company would, after giving pro forma effect
thereto as if such Restricted Payment had been made at the beginning of
the applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.09(a) herein; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries since July 16, 2003 (excluding Restricted
Payments permitted by clauses (2), (3), (4), (5), (6), and (9) of the
next succeeding paragraph), is less than the sum, without duplication,
of:
(a) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after July 16, 2003 to
the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds
received by the Company since July 16, 2003 as a contribution to its
common equity capital or from the issue or sale of Equity Interests of
the Company (other than Disqualified Stock) or from the issue or sale
of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity
Interests (or Disqualified Stock or debt securities) sold to a
Subsidiary of the Company), plus
(c) to the extent that any Restricted Investment
that was made after July 16, 2003 is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (ii) the initial amount of such Restricted
Investment, plus
45
(d) to the extent that any Unrestricted
Subsidiary of the Company designated as such after July 16, 2003 is
redesignated as a Restricted Subsidiary after July 16, 2003, the Fair
Market Value of the Company's Investment in such Subsidiary as of the
date of such redesignation, plus
(e) 100% of any payments of interest on
Indebtedness, dividends, repayments of loans or advances, or other
transfers of assets received by the Company or a Restricted Subsidiary
of the Company after July 16, 2003 from an Unrestricted Subsidiary of
the Company, to the extent that such payments, dividends, repayments or
transfers were not otherwise included in Consolidated Net Income of the
Company for such period, plus
(f) $628.3 million.
The preceding provisions shall not prohibit:
(1) the payment of any dividend within 60 days after the
date of declaration of the dividend, if at the date of declaration the
dividend payment would have complied with the provisions of this
Indenture;
(2) the making of any Restricted Payment in exchange for,
or out of the net cash proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of, Equity Interests of the
Company (other than Disqualified Stock) or from the substantially
concurrent contribution of common equity capital to the Company;
provided that the amount of any such net cash proceeds that are
utilized for any such Restricted Payment shall be excluded from clause
(3)(b) of the preceding paragraph;
(3) the defeasance, redemption, repurchase or other
acquisition of Indebtedness of the Company that is contractually
subordinated to the Notes with the net cash proceeds from a
substantially concurrent incurrence of Permitted Refinancing
Indebtedness, so long as no Default has occurred and is continuing or
would be caused thereby;
(4) the payment of any dividend (or, in the case of any
partnership or limited liability company, any similar distribution) by
a Restricted Subsidiary of the Company to the holders of any class or
series of such Restricted Subsidiary's Equity Interests on a pro rata
basis;
(5) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any current or former
officer, direct or employee of the Company (or any of its Restricted
Subsidiaries) pursuant to any equity subscription agreement, stock
option agreement, shareholders' agreement or similar agreement;
provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not exceed $5.0
million in any twelve-month period, so long as no Default has occurred
and is continuing or would be caused thereby;
(6) the repurchase of Equity Interests deemed to occur
upon the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options;
(7) the declaration and payment of dividends to holders
of any class or series of Disqualified Stock of the Company or any
Restricted Subsidiary of the Company issued on or after July 16, 2003
in accordance with the Fixed Charge Coverage test described under
Section
46
4.09 herein; provided that no Default has occurred and is continuing or
would be caused thereby (other than any Default or Event of Default
that is cured as a result of such Restricted Payment); and
(8) any purchase, redemption, defeasance or other
acquisition or retirement for value of subordinated Indebtedness upon a
Change of Control or an Asset Sale to the extent required by this
Indenture or other agreement pursuant to which such subordinated
Indebtedness was issued, but only if the Company (a) in the case of a
Change of Control, has made an offer to repurchase the Notes as
described under Section 4.15 herein or (b) in the case of an Asset
Sale, has applied the Net Proceeds from such Asset Sale in accordance
with the provisions described under Section 4.10 herein, so long as no
Default has occurred and is continuing or would be caused thereby.
(b) The amount of all Restricted Payments (other than cash) shall
be the Fair Market Value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, 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 of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
However, the preceding restrictions shall not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the date of this Indenture and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of those
agreements; provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings are no more restrictive, taken as a whole, with respect to
such dividend and other payment restrictions than those contained in
those agreements on the date of this Indenture;
(2) this Indenture, the Notes, the Second Priority Senior
Secured Notes and the indentures governing such notes, and the Term
Loan Agreement or any other indenture governing letters of credit,
loans or debt securities issued by or on behalf of the Company that are
no more restrictive, taken as a whole, with respect to such dividend,
distribution or other payment restrictions and loan or investment
restrictions than those contained in this Indenture, the Notes, the
Second-Priority Senior Secured Notes and the indentures governing such
notes, and the Term Loan Agreement as in effect on the date of this
Indenture;
47
(3) applicable law, rule, regulation or order;
(4) customary non-assignment provisions in leases,
contracts and licenses entered into in the ordinary course of business
and consistent with past practices;
(5) purchase money obligations for property acquired in
the ordinary course of business and Capital Lease Obligations that
impose restrictions on the property purchased or leased of the nature
described in clause (3) of Section 4.08(a);
(6) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending the sale or other disposition;
(7) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(8) Liens securing Indebtedness otherwise permitted to be
incurred under the provisions of Section 4.12 herein that limit the
right of the debtor to dispose of the assets subject to such Liens;
(9) provisions limiting or prohibiting the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, sale-leaseback agreements, stock sale agreements and
other similar agreements entered into with the approval of the
Company's Board of Directors, which limitation or prohibition is
applicable only to the assets that are the subject of such agreements;
(10) any encumbrance or restriction imposed pursuant to
the terms of any Non-Recourse Debt incurred pursuant to clause (6) of
the definition of Permitted Debt or any preferred stock issued pursuant
to clause (7) of the definition of Permitted Debt; provided that such
encumbrance or restriction, in the written opinion of the President,
Vice Chairman, Chief Operating Officer or Chief Financial Officer of
the Company, (x) is required in order to obtain such financing or to
place such preferred stock, (y) is customary for such financings or
placements and (z) applies only to the assets or revenues of the
applicable Restricted Subsidiary;
(11) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any Acquired
Debt incurred pursuant to clause (10) of the definition of Permitted
Debt; provided that such encumbrance or restriction was not incurred in
connection with or in contemplation of such Restricted Subsidiary
becoming a Restricted Subsidiary; and
(12) restrictions on cash or other deposits or net worth
imposed by customers or suppliers under contracts entered into in the
ordinary course of business.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock if the
Fixed Charge Coverage Ratio
48
for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
(b) Section 4.09(a) shall not prohibit the incurrence of any of
the following items (collectively, "Permitted Debt"):
(1) the incurrence by the Company and the Guarantee by
the Canadian Guarantors of additional Indebtedness and letters of
credit under Credit Facilities in an aggregate principal amount at any
one time outstanding under this clause (1) (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company thereunder) not to exceed on any date of
incurrence the greater of (A) $500.0 million or (B) the dollar amount
that is equal to 50% of the Company's Consolidated Cash Flow for the
then most recent four-quarter period for which financial information is
available;
(2) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Canadian
Guarantors of Indebtedness represented by the Notes and the related
Guarantees;
(4) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each
case, incurred for the purpose of financing all or any part of the
purchase price or cost of design, construction, installation or
improvement of property, plant or equipment used in the business of the
Company or any of its Restricted Subsidiaries, in an aggregate
principal amount (or accreted value, as applicable), including all
Permitted Refinancing Indebtedness incurred to extend, refund,
refinance, renew, replace or defease any Indebtedness incurred pursuant
to this clause (4), not to exceed $100.0 million at any one time
outstanding;
(5) Indebtedness of the Company which is owed to and
owned by a Restricted Subsidiary and Indebtedness of a Restricted
Subsidiary that is owed to and owned by the Company or a Restricted
Subsidiary; provided that any subsequent issuance or transfer of any
Capital Stock that results in any such Restricted Subsidiary ceasing to
be a Restricted Subsidiary or any transfer of such Indebtedness (other
than to the Company or a Restricted Subsidiary) shall be deemed, in
each case, to constitute the incurrence of such Indebtedness by the
Company or by a Restricted Subsidiary, as the case may be;
(6) the incurrence of Non-Recourse Debt by any Restricted
Subsidiary of the Company (other than a Restricted Subsidiary that
owns, directly or indirectly, any Material Designated Assets);
(7) the issuance of preferred stock by a Restricted
Subsidiary of the Company (other than a Restricted Subsidiary that
owns, directly or indirectly, any Material Designated Assets), the net
proceeds of which are applied to finance the exploration, drilling,
development, construction or purchase of or by, or repairs or
improvements or additions to, property or assets of the Company or any
Restricted Subsidiary;
49
(8) the incurrence by the Company of Guarantees of
Indebtedness of Restricted Subsidiaries which, but for such Guarantees,
would be permitted to be incurred pursuant to clause (6) of Section
4.09 (b); provided that the aggregate principal amount of Indebtedness
incurred pursuant to this clause (8) does not exceed $100.0 million at
any one time outstanding;
(9) the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to refund,
refinance, replace, defease or discharge Indebtedness (other than
intercompany Indebtedness) that was permitted by this Indenture to be
incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (6), (8)
or (10) of this Section 4.09(b) or this clause (9);
(10) the incurrence of Acquired Debt by any Restricted
Subsidiary of the Company at the time such Restricted Subsidiary
becomes a Restricted Subsidiary of the Company so long as such Acquired
Debt was not incurred in connection with or in contemplation of such
Person becoming a Restricted Subsidiary of the Company; provided that
the Company would have been able to incur such Indebtedness at the time
of incurrence thereof by the Restricted Subsidiary pursuant to Section
4.09 (a);
(11) the incurrence of Indebtedness pursuant to Hedging
Obligations incurred in the ordinary course of business and not for
speculative purposes;
(12) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness in respect of workers'
compensation claims, self-insurance obligations, bankers' acceptances
and performance and surety bonds in the ordinary course of business;
(13) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar
instrument inadvertently drawn against insufficient funds, so long as
such Indebtedness is covered within five business days;
(14) the incurrence by any Restricted Subsidiary of
Indebtedness represented by letters of credit (or Guarantees thereof)
entered into in the ordinary course of business to the extent that such
letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the tenth Business Day
following a demand for reimbursement following payment on the letter of
credit; provided that such letters of credit shall not constitute
Permitted Debt pursuant to this clause (14) if they are issued in
support of Indebtedness;
(15) the incurrence of Indebtedness by the Company
represented by letters of credit cash collateralized with the proceeds
of Priority Lien Debt; and
(16) the incurrence by the Company or any of its
Restricted Subsidiaries of additional Indebtedness in an aggregate
principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred
to extend, refinance, renew, replace, defease or refund any
Indebtedness incurred pursuant to this clause (16), not to exceed
$100.0 million.
The Company shall not incur and shall not permit any Guarantor to
incur, any Indebtedness (including Permitted Debt) that is contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Guarantor unless such Indebtedness is also contractually subordinated in
right of payment to the Notes (and the Applicable Guarantee) and the Term Loans
on
50
substantially identical terms; provided, however, that no Indebtedness of the
Company shall be deemed to be contractually subordinated in right of payment to
any other Indebtedness of the Company solely by virtue of being unsecured or by
virtue of being secured on a junior basis.
Section 4.10 Asset Sales.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale (including a Sale of
Designated Assets) unless:
(1) the Company (or the Restricted Subsidiary, as the
case may be) receives consideration at the time of the Asset Sale at
least equal to the Fair Market Value of the assets or Equity Interests
issued or sold or otherwise disposed of;
(2) at least 75% of the consideration received in the
Asset Sale by the Company or such Restricted Subsidiary is in the form
of cash or Cash Equivalents. For purposes of this provision, each of
the following shall be deemed to be cash:
(A) any liabilities, as shown on the Company's
most recent consolidated balance sheet, of the Company or any
Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes)
that are assumed by the transferee of any such assets pursuant
to a customary novation or similar agreement that releases the
Company or such Restricted Subsidiary from further liability;
(B) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from
such transferee that are promptly, subject to ordinary
settlement periods, converted by the Company or such
Restricted Subsidiary into cash, to the extent of the cash
received in that conversion; and
(C) except in the case of a Sale of Designated
Assets, any stock or assets of the kind referred to in clauses
(4) or (6) of Section 4.10(b); and
(3) in the case of a Sale of Designated Assets other than
Canadian Gas Assets, the Company (or the Restricted Subsidiary, as the
case may be) shall deposit the Net Proceeds as cash collateral in a
segregated account (a "Designated Asset Sale Proceeds Account") held by
the Collateral Trustee or its agent to secure the Secured Obligations;
provided, that for so long as the terms of any of the Company's senior
unsecured notes that were issued prior to August 10, 2000 would prevent
such a pledge by a Restricted Subsidiary, the Company shall deposit
with the Collateral Trustee or its agent an amount of cash equal to the
Net Proceeds as cash collateral to secure the Secured Obligations, and
the applicable Restricted Subsidiary shall not be obligated to do so.
(b) Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, other than a Sale of Designated Assets that are not Canadian Gas
Assets, the Company (or the applicable Restricted Subsidiary, as the case may
be) may apply those Net Proceeds:
(1) to repay Priority Lien Debt and/or cash collateralize
letters of credit constituting Priority Lien Debt;
(2) in the case of an Asset Sale by a Restricted
Subsidiary, to repay or repurchase Indebtedness of Calpine Canada
Energy Finance ULC and/or Calpine Canada Energy Finance II ULC existing
as of July 16, 2003;
51
(3) in the case of an Asset Sale by a Restricted
Subsidiary, to repay or repurchase Indebtedness of any Restricted
Subsidiary and, if such Indebtedness is revolving credit Indebtedness,
to correspondingly reduce commitments with respect thereto;
(4) to acquire all or substantially all of the assets of,
or any Capital Stock of, another Permitted Business, if, after giving
effect to any such acquisition of Capital Stock, the Permitted Business
is or becomes a Restricted Subsidiary of the Company;
(5) to make a capital expenditure; or
(6) to acquire other assets that are not classified as
current assets under GAAP and that are used or useful in a Permitted
Business.
(c) Within 180 days after the receipt of any Net Proceeds from an
Asset Sale that constitutes a Sale of Designated Assets other than Canadian Gas
Assets, the Company (or the Restricted Subsidiary that disposed of those
Designated Assets, as the case may be) may apply those Net Proceeds to purchase
other assets that would constitute Designated Assets or to repay Priority Lien
Debt and/or cash collateralize letters of credit constituting Priority Lien Debt
and, if such Priority Lien Debt is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto.
(d) Any Net Proceeds from Asset Sales (including Sales of
Designated Assets) that are not applied or invested as provided in the preceding
clauses of this Section 4.10 shall constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $50.0 million, or at such earlier
point as may be elected by the Company, the Company shall make an offer to all
holders of the Notes and all holders of other Indebtedness that is pari passu
with the Notes and equally and ratably secured with the Notes containing
provisions similar to those set forth in this Indenture with respect to offers
to purchase with the proceeds of sales of assets, including the Second Priority
Senior Secured Notes, the Term Loans and each series of Existing Indebtedness
that contains similar asset sale provisions, when applicable (an "Asset Sale
Offer"), to purchase the maximum principal amount of notes and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds (including
each series of Existing Indebtedness that contains similar asset sale
provisions). The offer price in any Asset Sale Offer shall be equal to 100% of
principal amount plus accrued and unpaid interest, if any, to the date of
purchase, and shall be payable in cash. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use those Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of notes and other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Company shall select
the Notes and such other pari passu Indebtedness to be purchased on a pro rata
basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds
shall be reset at zero.
(e) Notwithstanding the foregoing, to the extent that any or all
of the Net Proceeds of any Foreign Asset Sale is prohibited or delayed by
applicable local law from being repatriated to the United States, the portion of
such Net Proceeds so affected shall not be required to be applied at the time
provided above, but may be retained by the applicable Restricted Subsidiary so
long, but only so long, as the applicable local law shall not permit
repatriation to the United States. The Company shall promptly take or cause the
applicable Restricted Subsidiary to promptly take all actions required by the
applicable local law to permit such repatriation. Once such repatriation of any
of the affected Net Proceeds is permitted under the applicable local law, the
repatriation shall be immediately effected and the repatriated Net Proceeds
shall be applied in the manner set forth in this Section 4.10 as if the Asset
Sale had occurred on the date of such repatriation.
52
(f) Notwithstanding the foregoing, to the extent that the Board of
Directors determines, in good faith, that repatriation of any or all of the Net
Proceeds of any Foreign Asset Sale would have a material adverse tax consequence
to the Company, the Net Proceeds so affected may be retained outside of the
United States by the applicable Restricted Subsidiary for so long as such
material adverse tax consequence would continue.
(g) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent those laws and regulations are applicable in connection with each
repurchase of notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
Section 4.11 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Company (each, an "Affiliate Transaction"),
unless:
(1) the Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by
the Company or such Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $2.5 million, an Officer's Certificate
certifying that such Affiliate Transaction complies with this Section
4.11(a); and
(b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million, a resolution of the Board of
Directors set forth in an Officer's Certificate certifying that such
Affiliate Transaction complies with this Section 4.11 and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors or, if there are no
disinterested members of the Board of Directors, the Board of Directors
shall have received a written opinion of an accounting, appraisal or
investment banking firm of national standing stating that such
Affiliate Transaction or series of Affiliate Transactions is fair to
the Company or such Restricted Subsidiary from a financial point of
view.
(b) The following items shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of Section
4.11(a):
(1) any employment agreement, employee benefit plan,
stock option plan, officer and director indemnification agreement or
any similar arrangement entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business;
(2) transactions between or among the Company and its
Restricted Subsidiaries and between or among the Company's Restricted
Subsidiaries;
53
(3) transactions with a Person (other than an
Unrestricted Subsidiary of the Company) that is an Affiliate of the
Company solely because the Company owns, directly or through a
Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(4) payment of reasonable directors' fees to Persons who
are not otherwise Affiliates of the Company;
(5) any issuance of Equity Interests (other than
Disqualified Stock) of the Company to Affiliates of the Company;
(6) Restricted Payments that do not violate the
provisions of Section 4.07 hereof;
(7) loans or advances to employees in the ordinary course
of business;
(8) any repurchase, redemption or other retirement of
Capital Stock of the Company held by employees of the Company or any of
its Subsidiaries upon death, disability or termination of employment at
a price not in excess of the Fair Market Value thereof approved by the
Board of Directors;
(9) any transaction between or among the Company and any
of its Subsidiaries in the ordinary course of business and consistent
with past practices of the Company and its Subsidiaries; and
(10) any agreement to do any of the foregoing.
(c) Any transaction which has been determined, in the written
opinion of an independent nationally recognized investment banking firm, to be
fair, from a financial point of view, to the Company or the applicable
Restricted Subsidiary shall be deemed to be in compliance with this Section
4.11.
Section 4.12 Liens.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind on any asset now owned or hereafter
acquired, except Permitted Liens.
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, grant or permit to exist a Lien upon any property
(whether then held by it or to be acquired by it at a future time) as security
for any Priority Lien Debt, unless (1) such Lien secures all Priority Lien Debt
on an equal and ratable basis and (2) the Collateral Trustee holds an
enforceable and perfected Lien upon such property as security equally and
ratably for all Parity Lien Obligations in second priority to Priority Lien
Debt.
Section 4.13 Limitation on Changes in the Nature of the Business.
The Company and its Restricted Subsidiaries shall engage only in
Permitted Businesses, except to such extent as would not be material to the
Company and its Restricted Subsidiaries taken as a whole. In addition, the
Company will, and shall cause its Subsidiaries, to conduct their respective
businesses in a manner so as to maintain the exemption of the Company and its
Subsidiaries from treatment as a public utility holding company under PUHCA or
an electric utility or public utility under any federal, state or local law;
provided to the extent that any such law is amended following the date of this
Indenture in such a manner that would (absent application of this proviso) make
non-compliance with this Section 4.13 not result in a material adverse effect on
the Company's results of operations or financial condition, then the
54
Company shall not be required to comply with this Section 4.13, but only to the
extent of actions or failures to act that would (absent application of this
Section 4.13) constitute violations of this Section 4.13 solely as a result of
such amendment.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same
may be amended from time to time) of the Company or any such
Subsidiary; and
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries; provided, however, that
the Company shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any
of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) If a Change of Control occurs, each holder of Notes shall have
the right to require the Company to repurchase all or any part (equal to $1,000
or an integral multiple of $1,000) of that holder's Notes pursuant to the offer
described below (the "Change of Control Offer") on the terms set forth in this
Indenture. In the Change of Control Offer, the Company shall offer a payment in
cash equal to 101% of the aggregate principal amount of Notes repurchased plus
accrued and unpaid interest, if any, on the Notes repurchased (the "Change of
Control Payment"), to but excluding the date of purchase. Within 30 days
following any Change of Control, the Company shall mail a notice to each holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes on the change of control payment date (the
"Change of Control Payment Date") specified in the notice, which date shall be
no earlier than 30 days and no later than 60 days from the date such notice is
mailed, pursuant to the procedures required by this Indenture and described in
such notice. The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change of
Control provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the Change of Control provisions of this
Indenture by virtue of such compliance.
(b) On the Change of Control Payment Date, the Company will, to
the extent lawful:
(1) accept for payment all Notes or portions of Notes
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the paying agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
55
(3) deliver or cause to be delivered to the trustee the
Notes properly accepted together with an Officer's Certificate stating
the aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent shall promptly mail to each holder of Notes
properly tendered the Change of Control Payment for such Notes, and the Trustee
upon receipt of an Authentication Order from the Company shall promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each new note shall be in a principal amount
of $1,000 or an integral multiple of $1,000. The Company shall publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.
(c) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes properly tendered and not withdrawn
under the Change of Control Offer.
Section 4.16 Limitation on Sale and Leaseback Transactions.
(a) The Company shall not enter into any sale and leaseback
transaction; provided that the Company may enter into a sale and leaseback
transaction if:
(1) the Company could have (a) incurred Indebtedness in
an amount equal to the Attributable Debt relating to such sale and
leaseback transaction under the Fixed Charge Coverage Ratio test in
Section 4.09 (a) herein and (b) incurred a Lien to secure such
Indebtedness pursuant to Section 4.12 herein;
(2) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the Fair Market Value, as determined
in good faith by the Board of Directors and set forth in an Officer's
Certificate delivered to the Trustee, of the property that is the
subject of that sale and leaseback transaction; and
(3) the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, Section 4.10 herein.
(b) This Section 4.16 shall not apply to the Company's
Subsidiaries.
Section 4.17 Limitation on Issuances of Guarantees of Indebtedness.
The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to Guarantee or pledge any assets to secure the payment
of any other Indebtedness of the Company (other than the Existing Guarantees by
the Canadian Guarantors) unless such Restricted Subsidiary simultaneously
executes and delivers (1) supplemental indentures providing for the Guarantees
of the payment of the Notes by such Restricted Subsidiary, which Guarantees
shall be senior to such Restricted Subsidiary's Guarantee of or pledge to secure
such other Indebtedness unless the Indebtedness of the Company so Guaranteed or
secured is senior Indebtedness of the Company, in which case the Guarantees of
the Notes may be pari passu with such Restricted Subsidiary's Guarantee of or
pledge to secure such other Indebtedness of the Company, and (2) a pledge or
security agreement providing for a pledge of such assets to secure the Notes and
all other Parity Lien Debt on an equal and ratable basis (subject only to
Permitted Prior Liens).
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Section 4.18 Payments for Consent.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any holder of
the Notes, the Second Priority Senior Secured Notes or the Term Loans for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture, the Notes, the Second Priority Senior Secured
Notes, the Term Loans, the Term Loan Agreement or any Security Documents unless
such consideration is offered to be paid or agreed to be paid to all holders of
such notes and/or Term Loans that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
Fair Market Value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary designated as Unrestricted shall be
deemed to be an Investment made as of the time of the designation and shall
reduce the remaining amount available for Restricted Payments under Section 4.07
herein or under one or more clauses of the definition of Permitted Investments,
as determined by the Company. That designation shall only be permitted if the
Investment would be permitted at that time and if the Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors may redesignate any Unrestricted Subsidiary to be a Restricted
Subsidiary if that redesignation would not cause a Default.
Section 4.20 Changes in Covenant When Notes Rated Investment Grade.
If on any date following the date of this Indenture:
(1) any series of the notes is rated Baa3 or better by
Xxxxx'x and BBB- or better by S&P; and
(2) no Default or Event of Default shall have occurred
and be continuing, then, beginning on that day and subject to the
provisions of the following paragraph, the provisions of Section 4.07,
4.08, 4.09, 4.10, 4.11, 4.13, 4.19 and clause (4) of Section 5.01
hereof shall be suspended.
Notwithstanding the foregoing, if the rating assigned by either such
rating agency should subsequently decline to below Baa3 or BBB-, respectively,
the foregoing provisions shall be reinstituted as of and from the date of such
rating decline. Calculations under the reinstated Section 4.07 shall be made as
if Section 4.07 had been in effect since July 16, 2003 except that no default
shall be deemed to have occurred solely by reason of a Restricted Payment made
while that Section 4.07 was suspended. These covenant suspension provisions
shall continue to be applicable following any such reinstatement. The Company
shall notify the Trustee if any covenants are suspended or reinstated pursuant
to this Section 4.20.
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ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company may not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either:
(A) the Company is the surviving corporation; or
(B) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other
disposition has been made is a corporation organized or
existing under the laws of the United States, any state of the
United States or the District of Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
has been made assumes all the obligations of the Company under the
Notes, this Indenture, and the Security Documents pursuant to
agreements reasonably satisfactory to the Trustee and the Collateral
Trustee;
(3) immediately after such transaction, no Default or
Event of Default exists;
(4) the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which
such sale, assignment, transfer, conveyance or other disposition has
been made:
(A) shall have Consolidated Net Worth
immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding
the transaction; and
(B) will, on the date of such transaction after
giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 4.09(a)
herein; and
(5) such transaction shall not impair the ability of the
Company or any of its Subsidiaries to conduct their respective
businesses in a manner so as to maintain the exemption of the Company
and its Subsidiaries from treatment as a public utility holding company
under PUHCA or an electric utility or public utility under any federal,
state or local law, unless such exemption is no longer material to the
Company and its Restricted Subsidiaries taken as a whole or to the
Person formed by or surviving any such consolidation or merger (if
other then the Company) and its Restricted Subsidiaries taken as a
whole.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.
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Notwithstanding the foregoing:
(1) the Company may merge with an Affiliate solely for
the purpose of reincorporating the Company in another jurisdiction; and
(2) the Company and its Restricted Subsidiaries may sell,
assign, transfer, lease, convey or otherwise dispose of assets between
or among each other (including by way of merger).
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets in a transaction that is subject to, and that complies with
the provisions of, Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) default for 30 days in the payment when due of
interest on the Notes;
(2) default in payment when due of the principal of, or
premium, if any, on the Notes;
(3) failure to purchase the Notes when required pursuant
to Section 4.10, 4.15 or otherwise as required pursuant to this
Indenture or the Notes;
(4) failure by the Company or any of its Restricted
Subsidiaries for 30 days after written notice from the Trustee or the
holders of at least 25% in outstanding aggregate principal amount of
that series of notes to comply with any of the other agreements in this
Indenture, the Notes or the Security Documents;
(5) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of
this Indenture, if that default:
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(a) is caused by a failure to pay principal of,
or interest or premium, if any, on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default"); or
(b) results in the acceleration of such
Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $50.0 million or more, and such default shall not have
been cured or waived or any such acceleration rescinded, or such Indebtedness
repaid, within 20 days of the Company or such Restricted Subsidiary becoming
aware of such default; provided that the provisions of this clause (5) shall not
apply to any default on Non-Recourse Debt;
(6) failure by the Company or any of its Significant
Subsidiaries to pay final judgments (not covered by insurance)
aggregating in excess of $50.0 million, which judgments are not paid,
discharged or stayed for a period of 30 days;
(7) the repudiation by the Company or any of its
Restricted Subsidiaries of any of its obligations under the Security
Documents or the unenforceability of the Security Documents against the
Company or any of its Restricted Subsidiaries for any reason; provided
that such breach, repudiation or unenforceability relates to Collateral
having an aggregate Fair Market Value of $50.0 million or more;
(8) except as permitted by this Indenture, any note
Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect
or any Canadian Guarantor, or any Person acting on behalf of any
Canadian Guarantor, shall deny or disaffirm its obligations under its
note Guarantee and such condition shall not have been cured within 30
days of written notice from the Trustee or the holders of at least 25%
in outstanding aggregate principal amount of the Notes; and
(9) the Company or any of its Significant Subsidiaries or
any group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a custodian
of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit
of its creditors, or
(E) generally is not paying its debts as they
become due; and
(10) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
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(A) is for relief against the Company or any of
its Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary in an involuntary case;
(B) appoints a custodian of the Company or any
of its Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary or for all or substantially all of the property of
the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary; or
(C) orders the liquidation of the Company or any
of its Significant Subsidiaries or any group of Subsidiaries
that, taken as a whole, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (9) or (10) of
Section 6.01 hereof, with respect to the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, all outstanding Notes shall become due and
payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.
Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (9) of Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
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 Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or
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Event of Default and its consequences hereunder, except a continuing Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on, the Notes (including in connection with an offer to purchase);
provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(1) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(3) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(5) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder; provided that a Holder
shall not have the right to institute any such suit for the enforcement of
payment if and to the extent that the institution or prosecution thereof or the
entry of judgment therein would, under applicable law, result in the surrender,
impairment, waiver or loss of the Lien of this Indenture upon any property
subject to such Lien.
Section 6.08 Collection Suit by Trustee.
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If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
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In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, 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 of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee shall be determined solely
by the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
conclusively determined by a court of competent jurisdiction that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under
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this Indenture at the request of any Holders, unless such Holder has offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely 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
require an Officer's Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officer's Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(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 it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) In no event shall the Trustee be required to take notice of
any default or breach hereof or any Event of Default hereunder, except for
Events of Default specified in Section 6.01(1) and/or 6.01(2) hereof, unless and
until the Trustee shall have received from a Holder of a Note or from the
Company express written notice of the circumstances constituting the breach,
default or Event of Default and stating that said circumstances constitute an
Event of Default hereunder.
(h) If the Trustee is acting as Paying Agent and/or Registrar
hereunder, the rights and protections afforded to the Trustee pursuant to this
Article 7 will also be afforded to such Paying Agent and Registrar.
Section 7.03 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 or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days after ascertaining it
has such conflicting interest, apply to the SEC for permission to continue as
trustee or resign to the extent and in the manner provided by, and
65
subject to the provisions of, the TIA and this Indenture. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2) to the extent applicable. The Trustee
shall also transmit by mail all reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed by the Trustee to the Company and filed by the
Trustee with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA Section 313(d). The Company shall promptly notify the
Trustee when the Notes are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture (and any other Note
Documents to which it is a party) against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company,
or any Holder or any other Person) or liability in connection with the exercise
or performance of any of its powers or duties hereunder, except to the extent
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any such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
(c) The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(9) or (10) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
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(e) If the Trustee, after written request by any Holder who has
been a Holder for at least six months, fails to comply with Section 7.10, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officer's Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company will, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal
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Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in clauses (1) and
(2) below, and to have satisfied all their other obligations under such Notes
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium, if
any, on such Notes when such payments are due from the trust referred
to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection
therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company (to the extent applicable) shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from each of their obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18 and
4.19 hereof and clause (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding 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 covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(3) through 6.01(5) hereof shall not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
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(1) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders, cash in United
States dollars, non-callable Government Securities, or a combination
thereof, in such amounts as shall be sufficient, in the opinion of a
nationally recognized investment bank, appraisal firm or firm of
independent public accountants, to pay the principal of, premium, if
any, and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable repurchase date, as the case may
be, and the Company must specify whether such Notes are being defeased
to maturity or to a particular repurchase date;
(2) in the case of an election under Section 8.02 hereof,
the Company has delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that:
(A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has
been a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes shall not recognize income, gain or loss for
federal income tax purposes as a result of such Legal
Defeasance and shall be subject to federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof,
the Company must deliver to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes shall not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and shall be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit);
(5) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture) to
which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
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Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized
investment bank, appraisal firm or firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.04(1) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter be
permitted to look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall be
repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following 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 money held by the
Trustee or Paying Agent.
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(3) to provide for the assumption of the Company's
obligations to the Holders of the Notes by a successor to the Company
pursuant to Article 5 hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Notes;
(5) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(6) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture as of the
date hereof;
(7) to allow any Guarantor to execute a supplemental
indenture and/or a Guarantee with respect to the Notes;
(8) to make, complete or confirm any grant of Collateral
permitted or required by this Indenture or any of the Security
Documents or any release of Collateral that becomes effective as set
forth in this Indenture or any of the Security Documents;
(9) to conform the text of this Indenture, the Notes or
the Security Documents to any provision of the Description of the Notes
section of the Offering Memorandum to the extent that such provision of
the Description of the Notes section of the Offering Memorandum was
intended to be a verbatim recitation of a provision of this Indenture,
the Notes or the Security Documents; or
(10) to reflect any waiver or termination of any right
arising under the provisions of this Indenture that otherwise would be
enforceable by any holder of the Term Loan Obligations, if such waiver
or termination is set forth in the agreement governing such Term Loan
Obligations, provided that no such waiver or amendment shall adversely
affect the right of holders of Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
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Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Section 3.07, 4.10 and 4.15 hereof), the Guarantees and the Notes with the
consent of the Holders of at least a majority in principal amount of the Notes
(including, without limitation, Additional Notes, if any) then outstanding
voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture, the Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Notes voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes 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 amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity
of any Note or alter or waive any of the provisions with respect to the
repurchase of the Notes except as provided above with respect to
Sections 3.07, 4.10 and 4.15 hereof;
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of, or interest or premium, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of
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at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted
from such acceleration);
(5) make any Note payable in money other than that stated
in the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, or interest or premium, if any, on
the Notes;
(7) waive a repurchase payment with respect to any Note
(other than a payment required under Section 4.10 and Section 4.15);
(8) release (A) any Collateral from the Liens created by
the Security Documents except as specifically provided in this
Indenture and the Security Documents as of the date of this Indenture
or (B) all or substantially all of the Collateral or all or
substantially all of the Canadian Guarantors from their obligations
under the Guarantee and Collateral Agreement dated July 16, 2003
without the prior written consent of all Holders; or
(9) make any change in Section 6.04 or 6.07 hereof or in
the foregoing amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note 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. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of
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Directors approves it. In executing any amended or supplemental indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01 and 7.02
hereof) shall be fully protected in relying upon, in addition to the documents
required by Section 13.04 hereof, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental Indenture is
authorized or permitted by this Indenture.
ARTICLE 10.
COLLATERAL AND SECURITY
Section 10.01 Equal and Ratable Sharing of Collateral by Holders of Parity Lien
Debt; Sharing Confirmation.
Notwithstanding (1) anything to the contrary contained in the Security
Documents, (2) the time of incurrence of any Series of Parity Lien Debt, (3) the
order or method of attachment or perfection of any Liens securing any Series of
Parity Lien Debt, (4) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect any Lien
upon any Collateral, (5) the time of taking possession or control over any
Collateral or (6) the rules for determining priority under any law governing
relative priorities of Liens:
(A) all Liens at any time granted by the Company
or any other Obligor to secure any of the Parity Lien Debt
shall secure, equally and ratably, all present and future
Parity Lien Obligations; and
(B) all proceeds of all Liens at any time
granted by the Company or any Obligor to secure any of the
Parity Lien Debt and other Parity Lien Obligations shall be
allocated and distributed equally and ratably on account of
the Parity Lien Debt and other Parity Lien Obligations;
provided, that, for the avoidance of doubt, in the absence of
an Event of Default, the Company shall be entitled to utilize
cash proceeds of Collateral in the ordinary course of its
business.
The foregoing provision is intended for the benefit of, and shall be
enforceable as a third party beneficiary by, each present and future holder of
Parity Lien Obligations, each present and future Parity Debt Representative and
the Collateral Trustee as holder of Parity Liens. The Company shall not incur
any future Series of Parity Lien Debt unless the agreement governing such Series
of Parity Lien Debt includes a Sharing Confirmation at the time of incurrence of
such Series of Parity Lien Debt.
Section 10.02 Ranking of Note Liens
Notwithstanding:
(1) anything to the contrary contained in the Security
Documents,
(2) the time of incurrence of any Series of Secured Debt,
(3) the order or method of attachment or perfection of
any Liens securing any Series of Secured Debt,
(4) the time or order of filing or recording of financing
statements, mortgages or other documents filed or recorded to perfect
any Lien upon any Collateral,
(5) the time of taking possession or control over any
Collateral or
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(6) the rules for determining priority under any law
governing relative priorities of Liens,
all Liens at any time granted by the Company or any other Obligor to secure any
of the Parity Lien Debt shall be subject and subordinate to Priority Liens
securing Priority Lien Obligations up to the Priority Lien Cap.
The foregoing provision is intended for the benefit of, and shall be
enforceable as a third party beneficiary by, each present and future holder of
Priority Lien Obligations, each present and future Priority Lien Agent and the
Collateral Trustee as holder of Priority Liens. No other Person shall be
entitled to rely on, have the benefit of or enforce this provision.
In addition, the foregoing provision is intended solely to set forth
the relative ranking, as Liens, of the Liens securing Parity Lien Debt as
against the Priority Liens. Neither the Notes, the Second Priority Senior
Secured Notes nor the Term Loans nor any other Parity Lien Obligations nor the
exercise or enforcement of any right or remedy for the payment or collection
thereof are intended to be, or shall ever by reason of the foregoing provision,
in any respect subordinated, deferred, postponed, restricted or prejudiced.
Section 10.03 Release of Security Interest in Respect of Notes
The Collateral Trustee's Liens upon the Collateral shall no longer
secure the Notes or any other Obligations under this Indenture, and the right of
the holders of the Notes and Obligations to the benefits and proceeds of the
Collateral Trustee's Liens on Collateral shall terminate and be discharged:
(1) upon satisfaction and discharge of this Indenture in
accordance with Article 11 hereof;
(2) upon a Legal Defeasance or Covenant Defeasance of the
Notes in accordance with Article 8 hereof; or
(3) upon payment in full and discharge of all Notes
outstanding under this Indenture and all related Obligations that are
outstanding, due and payable under this Indenture at the time the Notes
are paid in full and discharged.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture shall be discharged and shall cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated under
this Indenture (except lost, stolen or destroyed Notes that have been
replaced or paid and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company) have been
delivered to the Trustee for cancellation; or
76
(b) all Notes that have not been delivered to
the Trustee for cancellation shall become due and payable within one
year and the Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as shall be
sufficient without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on the Notes not delivered to
the Trustee for cancellation for principal, premium, if any, and
accrued interest to the date of maturity;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit shall not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company is a party or by which the Company is bound;
(3) the Company has paid or caused to be paid all sums
payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward
the payment of the Notes at maturity date.
In addition, the Company must deliver an Officer's Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 12.02 and Section 8.06 shall
survive. In addition, nothing in this Section 11.01 shall be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 11.01; provided
that if the Company has made any payment of principal of, premium, if any, or
interest on 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 money or Government Securities held by the Trustee
or Paying Agent.
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
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If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties or provisions of
the TIA shall control.
Section 12.02 Notices.
Any notice or communication by the Company or the Trustee to the others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
Calpine Corporation
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Attention: Xxx Xxxxxxx
With a copy to:
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
If to the Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Capital Markets
By notice to the others, the Company or the Trustee may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
78
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 12.04 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:
(1) an Officer's Certificate in form and substance
reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 12.05 hereof) stating that, in the
opinion of the signer, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have
been satisfied; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 12.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, this
79
Indenture, the Security Documents or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.
Section 12.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTATION OF GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.10 Successors.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
Section 12.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 12.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
80
SIGNATURES
Dated as of November 18, 2003
CALPINE CORPORATION
By: /s/ XXXX XXXXX
------------------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President, Finance
81
WILMINGTON TRUST COMPANY
By: /s/ XXXXX X. XXXXX
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Authorized Signer
82
EXHIBIT A
[Face of Note]
CUSIP [ ]
9.875% Second Priority Senior Secured Notes due 2011
No. ___ $____________
CALPINE CORPORATION
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on December 1, 2011.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
CALPINE CORPORATION
By: _____________________________
Name:
Title:
Dated: November 18, 2003
This is one of the Notes referred to
in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By: ______________________________
Authorized Signatory
A-1
[Back of Note]
9.875% Second Priority Senior Secured Notes due 2011
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN AND SHALL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.
Capitalized terms used herein have the meanings assigned to them in
this Indenture referred to below unless otherwise indicated.
A-2
(1) INTEREST. Calpine Corporation, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of
this Note at 9.875% per annum from November 18, 2003 until maturity.
The Company shall pay interest semi-annually in arrears on June 1 and
December 1 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an "Interest Payment Date").
Interest on the Notes shall accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date
of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date
shall be June 1, 2004. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a
rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company shall pay interest on
the Notes (except defaulted interest) to the Persons who are registered
Holders of Notes at the close of business on the May 15 or November 15
next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. The Notes shall be payable as to principal,
premium, if any, and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New
York, or, at the option of the Company, payment of interest may be made
by check mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of
immediately available funds shall be required with respect to principal
of and interest, premium on, all Global Notes and all other Notes the
Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or
currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, Wilmington
Trust Company, the Trustee under the Indenture, shall act as Paying
Agent and Registrar. The Company may change any Paying Agent or
Registrar without prior notice to any Holder. The Company or any of its
Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an
Indenture dated as of November 18, 2003 (the "Indenture") between the
Company and the Trustee. 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, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms.
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall
govern and be controlling. The Notes are secured obligations of the
Company, as evidenced by the Security Documents referred to in the
Indenture.
(5) MANDATORY REDEMPTION. The Company shall not be
required to make mandatory redemption or sinking fund payments with
respect to the Notes.
(6) REPURCHASE AT OPTION OF HOLDER. (a) If a Change of
Control occurs, each holder of Notes shall have the right to require
the Company to repurchase all or any part (equal to $1,000 or an
integral multiple of $1,000) of that holder's Notes pursuant to the
offer described
A-3
below (the "Change of Control Offer") on the terms set forth in the
Indenture. In the Change of Control Offer, the Company shall offer a
payment in cash equal to 101% of the aggregate principal amount of
Notes repurchased plus accrued and unpaid interest, if any, on the
Notes repurchased (the "Change of Control Payment"), to but excluding
the date of purchase. Within 30 days following any Change of Control,
the Company shall mail a notice to each holder as required by the
Indenture. (b) If the Company or a Subsidiary consummates any Asset
Sales, and when the aggregate amount of Excess Proceeds exceeds $50.0
million, or at such earlier point as may be elected by the Company, the
Company shall make an offer to all holders of Notes and all holders of
other Indebtedness that is pari passu with the Notes and equally and
ratably secured with the Notes containing provisions similar to those
set forth in the Indenture with respect to offers to purchase with the
proceeds of sales of assets, including the Term Loans and each series
of Existing Indebtedness that contains similar asset sale provisions,
when applicable (an "Asset Sale Offer"), to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that
may be purchased out of the Excess Proceeds (including each series of
Existing Indebtedness that contains similar asset sale provisions). The
offer price in any Asset Sale Offer shall be equal to 100% of principal
amount plus accrued and unpaid interest, if any, to the date of
purchase, and shall be payable in cash. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, the Company may use those
Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Notes and other pari
passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Company shall select the Notes and such
other pari passu Indebtedness to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds
shall be reset at zero. Holders of Notes that are the subject of an
offer to purchase shall receive an Asset Sale Offer from the Company
prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
(7) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for repurchase,
except for the unpurchased portion of any Note being repurchased in
part. Also, the Company need not exchange or register the transfer of
any Notes for a period of 15 days before a selection of Notes to be
repurchased or during the period between a record date and the
corresponding Interest Payment Date.
(8) PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
(9) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal
amount of the then outstanding Notes and Additional Notes, if any,
voting as a single class, and any existing default or compliance with
any provision of the Indenture or the Notes may be waived with the
consent of the Holders of a majority in principal amount of the then
outstanding Notes and Additional Notes, if any, voting as a single
class. Without the consent of any Holder of a Note, the Indenture, the
Guarantees or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for the
assumption
A-4
of the Company's obligations to Holders of the Notes in case of a
merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does
not adversely affect the legal rights under the Indenture of any such
Holder, to comply with the requirements of the SEC in order to effect
or maintain the qualification of the Indenture under the Trust
Indenture Act, to provide for the issuance of Additional Notes in
accordance with the limitations set forth in the Indenture, to allow
any Guarantor to execute a supplemental indenture to the Indenture
and/or a Guarantee with respect to the Notes, to make, complete or
confirm any grant of Collateral permitted or required by the Indenture
or any of the Security Documents or any release of Collateral that
becomes effective as set forth in the Indenture or any of the Security
Documents, to conform the text of the Indenture, the Notes or the
Security Documents to any provision of the Description of the Notes
section of the Offering Memorandum to the extent that such provision of
the Description of the Notes section of the Offering Memorandum was
intended to be a verbatim recitation of a provision of the Indenture,
the Notes or the Security Documents, or to reflect any waiver or
termination of any right arising under the provisions of the Indenture
that otherwise would be enforceable by any holder of the Term Loan
Obligations, if such waiver or termination is set forth in the
agreement governing such Term Loan Obligations, provided that no such
waiver or amendment shall adversely affect the right of holders of
Notes.
(10) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest on the Notes;
(ii) default in payment when due of principal of or premium, if any, on
the Notes, (iii) failure by the Company to purchase the Notes when
required pursuant to Section 4.10 or 4.15 of the Indenture or otherwise
as required pursuant to the Indenture or Notes; (iv) failure by the
Company or any of its Restricted Subsidiaries for 30 days after written
notice from the Trustee or the holders of at least 25% in outstanding
aggregate principal amount of the Notes to comply with any of the other
agreements in the Indenture, the Notes or the Security Documents; (v)
default under certain other agreements relating to Indebtedness of the
Company which default results in the acceleration of such Indebtedness
prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 30 days;
(vii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Restricted Subsidiaries that would constitute a
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary; (viii) the
repudiation by the Company or any of its Restricted Subsidiaries or the
unenforceability of the Security Documents if such breach, repudiation
or unenforceability relates to Collateral having an aggregate Fair
Market Value of $50.0 million or more and (ix) except as permitted by
the Indenture, any Guarantee shall be held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor or any Person acting on its
behalf shall deny or disaffirm its obligations under such Guarantor's
Guarantee. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, all
outstanding Notes shall become due and payable without further action
or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may
withhold from holders of the Notes notice of any continuing Default or
Event of Default if it determines that withholding Notes is in their
interest, except a Default or Event of Default relating to the payment
of principal or interest. 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 the Indenture
except a continuing Default or Event of Default in the payment
A-5
of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of
any Default or Event of Default under clauses (3) through (8) of the
Section 6.01(a) of the Indenture, to deliver to the Trustee a statement
specifying such Default or Event of Default.
(11) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(12) NO RECOURSE AGAINST OTHERS. A director, officer,
employee, incorporator or stockholder, of the Company as such, shall
not have any liability for any obligations of the Company under the
Notes, the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder 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.
(13) AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(14) ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants
with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
(15) 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 and the Trustee or the Company may use CUSIP numbers in notices
of repurchase as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of repurchase and reliance may be placed only
on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
Calpine Corporation
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxx
A-6
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: __________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: __________________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$______________
Date: _______________
Your Signature: __________________________________
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.: __________________________
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
* This schedule should be included only if the Note is issued in global form.
A-9
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Calpine Corporation
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Wilmington Trust Company
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: 9.875% Second Priority Senior Secured Notes due 2011
Reference is hereby made to the Indenture, dated as of November 18,
2003 (the "Indenture"), between Calpine Corporation, as issuer (the "Company"),
and Wilmington Trust Company, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the beneficial interest or Definitive
Note is being transferred to a Person that the Transferor reasonably believed
and believes is purchasing the beneficial interest or Definitive Note for its
own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note shall be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE SHALL TAKE DELIVERY OF A BENEFICIAL INTEREST
IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a Person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than the Placement
Agent). Upon consummation of the proposed transfer in accordance with the terms
of
B-1
the Indenture, the transferred beneficial interest or Definitive Note shall be
subject to the restrictions on Transfer enumerated in the Private Placement
Legend printed on the Regulation S Global Note and/or the Definitive Note and in
the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE SHALL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and
in accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or
a subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that
it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with
the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit
D to the Indenture and (2) an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note shall be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
___________________________________________
[Insert Name of Transferor]
By:________________________________________
B-2
Name:
Title:
Dated: ___________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP ________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee shall hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP ________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Calpine Corporation
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Wilmington Trust Company
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: 9.875% Second Priority Senior Secured Notes due 2011
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of November 18,
2003 (the "Indenture"), among Calpine Corporation, as issuer (the "Company") and
Wilmington Trust Company, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued shall continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ]144A Global Note, [ ]Regulation S Global Note, [ ]IAI Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued shall be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the relevant Restricted Global Note and in
the Indenture and the Securities Act.
C-1
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
______________________________________________
[Insert Name of Transferor]
By:___________________________________________
Name:
Title:
Dated: _________________
C-2
EXHIBIT D
FORM OF CERTIFICATE OF
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Calpine Corporation
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Wilmington Trust
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Re: 9.875% Second Priority Senior Secured Notes due 2011
Reference is hereby made to the Indenture, dated as of November 18,
2003 (the "Indenture"), among Calpine Corporation, as issuer (the "Company") and
Wilmington Trust Company, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we shall do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we shall be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
shall bear a legend to the foregoing effect.
D-1
EXHIBIT D
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
______________________________________________
[Insert Name of Accredited Investor]
By:___________________________________________
Name:
Title:
Dated: __________________
D-2
