L&W DRAFT 7/26/97
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QUAKER HOLDING CO.
___% SENIOR DISCOUNT DEBENTURES DUE 2008
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INDENTURE
Dated as of August ___, 1997
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STATE STREET BANK AND TRUST COMPANY
TRUSTEE
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE........................................................ 1
Section 1.01. Definitions............................................................................... 1
Section 1.02. Other Definitions. ....................................................................... 15
Section 1.03. Incorporation By Reference of Trust Indenture Act......................................... 16
Section 1.04. Rules of Construction..................................................................... 17
Section 1.05. Compliance Certificates and Opinions...................................................... 17
Section 1.06. Form of Documents Delivered To Trustee.................................................... 17
Section 1.07. Acts of Holders........................................................................... 18
ARTICLE 2 THE NOTES......................................................................................... 19
Section 2.01. Form and Dating........................................................................... 19
Section 2.02. Execution and Authentication.............................................................. 19
Section 2.03. Registrar and Paying Agent................................................................ 22
Section 2.04. Paying Agent to Hold Money in Trust....................................................... 22
Section 2.05. Lists of Holders of the Notes............................................................. 22
Section 2.06. Transfer and Exchange..................................................................... 23
Section 2.07. Replacement Notes......................................................................... 23
Section 2.08. Outstanding Notes......................................................................... 24
Section 2.09. Treasury Notes............................................................................ 24
Section 2.10. Temporary Notes........................................................................... 24
Section 2.11. Cancellation.............................................................................. 24
Section 2.12. Defaulted Interest........................................................................ 24
Section 2.13. Record Date............................................................................... 25
Section 2.14. CUSIP Number.............................................................................. 25
Section 2.15. Computation of Interest................................................................... 25
ARTICLE 3 REDEMPTION AND PREPAYMENT......................................................................... 25
Section 3.01. Election to Redeem; Notice to Trustee..................................................... 25
Section 3.02. Selection by Trustee of Notes to Be Redeemed.............................................. 25
Section 3.03. Notice of Redemption...................................................................... 26
Section 3.04. Effect of Notice of Redemption............................................................ 27
Section 3.05. Deposit of Redemption Price............................................................... 27
Section 3.06. Notes Payable on Redemption Date.......................................................... 27
Section 3.07. Notes Redeemed in Part.................................................................... 27
Section 3.08. Optional Redemption....................................................................... 27
Section 3.09. Mandatory Redemption...................................................................... 28
Section 3.10. Offer to Purchase by Application of Excess Proceeds....................................... 28
ARTICLE 4 COVENANTS......................................................................................... 30
Section 4.01. Payment of Principal, Premium and Interest................................................ 30
Section 4.02. Maintenance of Office or Agency........................................................... 30
Section 4.03. Money for Payments to Be Held In Trust.................................................... 31
Section 4.04. Reports................................................................................... 32
Section 4.05. Statement as to Compliance; Notice of Default............................................. 32
Section 4.06. Payment of Taxes and Other Claims......................................................... 33
Section 4.07. Stay, Extension, Usury Laws............................................................... 33
Section 4.08. Corporate Existence....................................................................... 33
Section 4.09. Offer to Repurchase Upon Change of Control................................................ 34
Section 4.10. Asset Sales............................................................................... 35
Section 4.11. Limitation on Restricted Payments......................................................... 36
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Section 4.12. Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock.................. 40
Section 4.13. Transactions with Affiliates.............................................................. 43
Section 4.14. Dividend and Other Payment Restrictions Affecting Subsidiaries............................ 43
Section 4.16 Sales of Accounts Receivables............................................................. 44
Section 4.17. No Restrictions on Consummation of Merger................................................. 45
ARTICLE 5 SUCCESSORS........................................................................................ 45
Section 5.01. Merger, Consolidation, or Sale of All or Substantially All Assets......................... 45
Section 5.02. Successor Corporation Substituted......................................................... 46
ARTICLE 6 DEFAULTS AND REMEDIES............................................................................. 46
Section 6.01. Events of Default and Notice Thereof...................................................... 46
Section 6.02. Acceleration.............................................................................. 47
Section 6.03. Other Remedies............................................................................ 48
Section 6.04. Waiver of Past Defaults................................................................... 48
Section 6.05. Control by Majority. ............................................................... 48
Section 6.06. Limitation on Suits....................................................................... 48
Section 6.07. Rights of Holders of Notes to Receive Payment............................................. 49
Section 6.08. Collection Suit by Trustee................................................................ 49
Section 6.09. Trustee May File Proofs of Claim.......................................................... 49
Section 6.10. Priorities................................................................................ 49
Section 6.11. Undertaking for Costs..................................................................... 50
ARTICLE 7 TRUSTEE........................................................................................... 50
Section 7.01. Duties of Trustee......................................................................... 50
Section 7.02. Rights of Trustee......................................................................... 51
Section 7.03. Individual Rights of Trustee.............................................................. 52
Section 7.04. Trustee's Disclaimer...................................................................... 52
Section 7.05. Notice of Defaults........................................................................ 52
Section 7.06. Reports by Trustee to Holders of the Notes................................................ 52
Section 7.07. Compensation and Indemnity................................................................ 53
Section 7.08. Replacement of Trustee.................................................................... 53
Section 7.09. Successor Trustee by Xxxxxx, etc.......................................................... 54
Section 7.10. Eligibility; Disqualification............................................................. 54
Section 7.11. Preferential Collection of Claims Against the Company..................................... 55
Section 7.12. Rights of Holders with Respect to Time Method and Place................................... 55
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.......................................................... 55
Section 8.01. Option to Effect Defeasance or Covenant Defeasance........................................ 55
Section 8.02. Legal Defeasance and Discharge............................................................ 55
Section 8.03. Covenant Defeasance....................................................................... 56
Section 8.04. Conditions to Defeasance or Covenant Defeasance........................................... 56
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Section 8.05. Deposited Money and U.S. Government Obligations to be Held in Trust;
Other Miscellaneous Provisions............................................................ 57
Section 8.06. Repayment to Company...................................................................... 58
Section 8.07. Reinstatement............................................................................. 58
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER...................................................................59
Section 9.01. Without Consent of Holders of Notes....................................................... 59
Section 9.02. With Consent of Holders of Notes.......................................................... 59
Section 9.03. Compliance with TIA....................................................................... 61
Section 9.04. Revocation and Effect of Consents......................................................... 61
Section 9.05. Notation on or Exchange of Notes.......................................................... 61
ARTICLE 10 SATISFACTION AND DISCHARGE........................................................................ 61
Section 10.01 Satisfaction and Discharge of Indenture................................................... 61
Section 10.02 Application of Trust Money............................................................... 62
ARTICLE 11 MISCELLANEOUS..................................................................................... 63
Section 11.01. Conflict of Any Provision of Indenture with TIA........................................... 63
Section 11.02. Notices................................................................................... 63
Section 11.03. Communication by Holders of Notes with Other Holders of Notes............................. 64
Section 11.04. Certificate and Opinion as to Conditions Precedent........................................ 64
Section 11.05. Legal Holidays............................................................................ 64
Section 11.06. No Personal Liability of Directors, Officers, Employees and Stockholders.................. 65
Section 11.07. Governing Law............................................................................. 65
Section 11.08. No Adverse Interpretation of Other Agreements............................................. 65
Section 11.09. Successors and Assigns.................................................................... 65
Section 11.10. Severability.............................................................................. 65
Section 11.11. Counterpart Originals..................................................................... 65
Section 11.12. Table of Contents, Headings, etc.......................................................... 66
EXHIBITS
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF ASSUMPTION AGREEMENT
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
--------------- ---------
Section
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Act Section
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310(a)(1).......................................... 7.10
(a)(2)........................................ 7.10
(a)(3)........................................ N.A.
(a)(4)........................................ N.A.
(a)(5)........................................ 7.10
(b)........................................... 7.10
(c)........................................... N.A.
311(a)............................................. 7.11
(b)........................................... 7.11
(c)........................................... N.A.
312(a)............................................. 11.03
(b)........................................... 11.03
(c)........................................... 11.03
313(a)............................................. 7.06
(b)(1)........................................ N.A.
(b)(2)........................................ 7.06; 7.07
(c)........................................... 7.06; 10.02
(d)........................................... 7.06
314(a)............................................. 4.04; 11.02
(b)........................................... N.A.
(c)(1)........................................ 11.04
(c)(2)........................................ 11.04
(c)(3)........................................ N.A.
(d)........................................... N.A.
(f)........................................... N.A.
315(a)............................................. 7.01
(b)........................................... 7.05; 11.02
(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
317(a)(1).......................................... 6.08
(a)(2)........................................ 6.09
(b)........................................... 2.04
318(a)............................................. 11.01
(b)........................................... N.A.
(c)........................................... 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
iv
INDENTURE dated as of August ___, 1997 between Quaker Holding Co., a
Delaware corporation (the "Issuer"), and State Street Bank and Trust Company,
as trustee (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
of the __% Senior Discount Debentures due 2008 (the "Notes").
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
Set forth below are certain defined terms used in this Indenture.
Reference is made to the Indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided.
"Accounts Receivable Subsidiary" means any newly created, Wholly
Owned Subsidiary of the Company (i) which is formed solely for the purpose of,
and which engages in no activities other than activities in connection with,
financing accounts receivable of the Company and/or its Restricted
Subsidiaries, (ii) which is designated by the Board of Directors of the
Company as an Accounts Receivables Subsidiary pursuant to a Board Resolution
set forth in an Officers' Certificate and delivered to the Trustee, (iii) that
has total assets at the time of such designation with a book value not
exceeding $500,000 plus the reasonable fees and expenses required to establish
such Accounts Receivable Subsidiary and any accounts receivable financing,
(iv) no portion of Indebtedness or any other obligation (contingent or
otherwise) of which (a) is at any time recourse to or obligates the Company or
any Restricted Subsidiary of the Company in any way, other than pursuant to
(I) representations and covenants entered into in the ordinary course of
business in connection with the sale of accounts receivable to such Accounts
Receivable Subsidiary or (II) any guarantee of any such accounts receivable
financing by the Company or any Restricted Subsidiary that is permitted to be
incurred pursuant to the covenant described in Section 4.12 hereof, or (b)
subjects any property or asset of the Company or any Restricted Subsidiary of
the Company, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to (I) representations and covenants
entered into in the ordinary course of business in connection with sales of
accounts receivable or (II) any guarantee of any such accounts receivable
financing by the Company or any Restricted Subsidiary that is permitted to be
incurred pursuant to the covenant described in Section 4.12 hereof, (v) with
which neither the Company nor any Restricted Subsidiary of
the Company has any contract, agreement, arrangement or understanding other
than contracts, agreements, arrangements and understandings entered into in
the ordinary course of business in connection with sales of accounts
receivable in accordance with the covenant described in Section 4.16 hereof
and fees payable in the ordinary course of business in connection with
servicing accounts receivable and (vi) with respect to which neither the
Company nor any Restricted Subsidiary of the Company has any obligation (a) to
subscribe for additional shares of Capital Stock or other Equity Interests
therein or make any additional capital contribution or similar payment or
transfer thereto other than in connection with the sale of accounts receivable
to such Accounts Receivable Subsidiary in accordance with the covenant
described in Section 4.16 hereof or (b) to maintain or preserve the solvency
or any balance sheet term, financial condition, level of income or results of
operations thereof.
"Accreted Value" means, as of any date of determination prior to ,
2002, with respect to any Note, the sum of (a) the initial offering price
(which shall be calculated by discounting the aggregate principal amount at
maturity of such Note at a rate of % per annum, compounded semi-annually on
each and from , 2002 to the date of issuance) of such Note and (b) the portion
of the excess of the principal amount of such Note over such initial offering
price which shall have been accreted thereon through such date, such amount to
be so accreted on a daily basis at a rate of % per annum of the initial
offering price of such Note, compounded semi-annually on each and from the
date of issuance of the Notes through the date of determination, computed on
the basis of a 360-day year of twelve 30-day months.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person merges
with or into or becomes a Subsidiary of such specified Person including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person or assumed in
connection with the acquisition of any asset used or useful in a Permitted
Business acquired by such Person.
"Adjusted Consolidated Net Income" means, with respect to any Person
for any period, the Consolidated Net Income of such Person for such period
plus, to the extent deducted in calculating Consolidated Net Income, the sum
of (i) 100% of the aggregate amortization of intangibles (less any tax benefit
recorded by such Person as a result of such amortization), plus, with respect
to the Company, up to $25.0 million of charges arising from any write-off of
intangibles reflected on the Company's balance sheet as of March 31, 1997, for
such period of such Person and its Restricted Subsidiaries, (ii) 100% of
non-cash compensation expense for such period incurred by such Person and its
Restricted Subsidiaries related to stock options or other Equity Interests
granted to the employees or directors of such Person and its Restricted
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Subsidiaries and (iii) expenses and charges of the Company and DecisionOne
Corp. related to the Merger which are paid, taken or otherwise accounted for
within 90 days of the consummation of the Merger.
"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"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with") as used with respect to any Person, shall
mean 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.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback) other than (A) in the ordinary course of business or (B) sales of
accounts receivables to the Accounts Receivables Subsidiary in accordance with
Section 4.16 hereof (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole will be governed by Section 4.09 hereof and/or
Section 5.01 hereof and not by the provisions of Section 4.10 hereof); and
(ii) the issue by any Restricted Subsidiary of the Company of any Equity
Interests of such Restricted Subsidiary and the sale by the Company or any of
its Restricted Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of clauses (i) and (ii), whether in a single
transaction or series of related transactions (a) that have a fair market
value in excess of $1.0 million or (b) for net proceeds in excess of $1.0
million. Notwithstanding the foregoing: (1) a transfer of assets by the
Company to a Restricted Subsidiary or by a Restricted Subsidiary to the
Company or to another Restricted Subsidiary, (2) an issuance of Equity
Interests by a Restricted Subsidiary to the Company or to another Restricted
Subsidiary, (3) a Restricted Payment that is permitted by Section 4.11 hereof,
(4) the sale and leaseback of any assets within 90 days of the acquisition of
such assets, (5) foreclosures on assets and (6) a disposition of Cash
Equivalents in the ordinary course of business will not be deemed to be Asset
Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction,
3
determined in accordance with GAAP) 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).
"Bankruptcy Law" means Title 11, U.S. Code or any similar foreign,
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or
any duly authorized committee of such board of directors.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"Business" shall have the meaning assigned to such term in Article
11, Rule 11-01(d) of Regulation S-X, promulgated pursuant to the Securities
Act, as such regulation is in effect on the date of this Indenture.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means, (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) 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.
"Cash Equivalents" means (i) Government Securities, (ii) any
certificate of deposit maturing not more than 365 days after the date of
acquisition issued by, or time deposit of, an Eligible Institution or any
lender under the New Credit Facility, (iii) commercial paper maturing not more
than 365 days after the date of acquisition of an issuer (other than an
Affiliate of the Company) with a rating, at the time as of which any
investment therein is made, of "A-3" (or higher) according to S&P or "P-2" (or
higher) according to Xxxxx'x or carrying an equivalent rating by a nationally
recognized rating agency if both of the two named rating agencies cease
publishing ratings of investments, (iv) any bankers
4
acceptances or money market deposit accounts issued by an Eligible Institution
and (v) any fund investing exclusively in investments of the types described
in clauses (i) through (iv) above.
"Change of Control" means the occurrence of any of the following: (i)
any sale, lease, 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 assets of the Company and its Subsidiaries taken
as a whole to any "person" (as defined in Section 13(d) of the Exchange Act)
or "group" (as defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
other than the Principals and their Related Parties; (ii) the adoption of a
plan for the liquidation or dissolution of the Company; (iii) the Company
consolidates with, or merges with or into, another "person" (as defined above)
or "group" (as defined above) in a transaction or series of related
transactions in which the Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any transaction
where (A) the outstanding Voting Stock of the Company is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee corporation and (B) either (1) the "beneficial owners" (as defined
in Rule 13d-3 under the Exchange Act) of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly through one
or more Subsidiaries, not less than a majority of the total Voting Stock of
the surviving or transferee corporation immediately after such transaction or
(2) if, immediately prior to such transaction the Company is a direct or
indirect Subsidiary of any other Person (such other Person, the "Parent
Holding Company"), then the "beneficial owners" (as defined above) of the
Voting Stock of such Holding Company immediately prior to such transaction
own, directly or indirectly through one or more Subsidiaries, not less than a
majority of the Voting Stock of the surviving or transferee corporation
immediately after such transaction; (iv) the consummation of any transaction
or series of related transactions (including, without limitation, by way of
merger or consolidation) the result of which is that any "person" (as defined
above) or "group" (as defined above) other than the Principals and their
Related Parties becomes the "beneficial owner" (as defined above) of more than
50% of the voting power of the Voting Stock of the Company or any Parent
Holding Company of the Company or (v) the first day on which a majority of the
members of the Board of Directors of the Company or any Parent Holding Company
of the Company are not Continuing Directors.
"Closing Date" means the closing date of the sale and original
issuance of the Notes under this Indenture.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value .01
per share.
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"Company" means the Issuer, as obligor under the Notes, until the
Merger, whereupon the term shall refer to Holdings, unless and until a
successor replaces Holdings in accordance with Article 5 hereof, and
thereafter includes such successor.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period, plus, to the extent deducted in computing
Consolidated Net Income, (i) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, (ii) Fixed
Charges of such Person for such period, (iii) depreciation and amortization
(including amortization of goodwill and other intangibles) and all other
non-cash charges (excluding any such non-cash charge to the extent that it
represents (x) an accrual of or reserve for cash charges in any future period,
(y) amortization of a prepaid cash expense that was paid in a prior period or
(z) amortization attributable to rotable inventory which has been capitalized
in accordance with GAAP) of such Person and its Restricted Subsidiaries for
such period, (iv) any net loss realized in connection with any Asset Sale and
any extraordinary or non-recurring loss, in each case, on a consolidated basis
determined in accordance with GAAP and (v) expenses and charges of the Company
or DecisionOne Corp. related to the Merger which are paid, taken or otherwise
accounted for within 90 days of the consummation of the Merger.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, the Fixed Charges of, and the depreciation and amortization and
other non-cash charges of, a Restricted Subsidiary of a Person shall be added
to Consolidated Net Income to compute Consolidated Cash Flow only to the
extent (and in the same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of such
Person.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of: (a) the interest expense of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined
in accordance with GAAP (including amortization of original issue discount,
non-cash interest payments, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments, if any,
pursuant to Hedging Obligations; provided, however, that in no event shall any
amortization of deferred financing costs be included in Consolidated Interest
Expense) and (b) consolidated capitalized interest of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person
6
and its Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP; provided, however, that (i) the Net Income
or 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 distributions paid to the referent Person or a
Restricted Subsidiary thereof in cash, (ii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to, the
date of such acquisition shall be excluded and (iii) the cumulative effect of
a change in accounting principles,shall be excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or any Parent Holding Company
of the Company who (i) was a member of such Board of Directors immediately
after consummation of the Merger, including the Offering and the application
of the net proceeds thereof, or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election or any successor Continuing Directors appointed by such Continuing
Directors (or their successors).
"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.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"DecisionOne Corp." means DecisionOne Corporation, a Delaware
corporation, or its successors.
"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.
"Designated Preferred Stock" means preferred stock of the Company
(other than Disqualified Stock) that is issued for cash (other than to a
Restricted Subsidiary) and is so designated as Designated Preferred Stock,
pursuant to an Officers' Certificate executed by the principal executive
officer and the principal financial officer of the Company, on the issuance
date thereof, the cash proceeds of which are excluded from the calculation set
forth in clause (c) of Section 4.11 hereof.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, is exchangeable for Indebtedness (except to the
extent exchangeable at
7
the option of such Person subject to the terms of any debt instrument to which
such Person is a party), or is redeemable at the option of the Holder thereof,
in whole or in part, on or prior to _________, 2008; provided, however, that
if such Capital Stock is issued to any plan for the benefit of employees of
the Company or its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by the Company in order to satisfy applicable
statutory or regulatory obligations.
"Eligible Institution" means a commercial banking institution that
has combined capital and surplus not less than $100.0 million or its
equivalent in foreign currency, whose short-term debt is rated "A-3" or higher
according to S&P or "P-2" or higher according to Xxxxx'x or carrying an
equivalent rating by a nationally recognized rating agency if both of the two
named rating agencies cease publishing ratings of investments.
"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).
"Equity Offering" means any (i) issuance of common stock or preferred
stock by the Company (other than Disqualified Stock) that is registered
pursuant to the Securities Act, other than issuances registered on Form S-8
under the Securities Act and issuances registered on Form S-4 under the
Securities Act, and (ii) any private issuance of common stock or preferred
stock by the Company (other than Disqualified Stock), excluding, in the case
of clauses (i) and (ii) above, issuances of common stock pursuant to employee
benefit plans of the Company or its Restricted Subsidiaries or otherwise as
compensation to employees of the Company or its Restricted Subsidiaries.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the New Credit
Facility) or the Senior Subordinated Notes in existence on the date of this
Indenture until such amounts are repaid.
"Fixed Charge Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person
and its Restricted Subsidiaries for such period. In the event that the Company
or any of its Restricted Subsidiaries incurs, assumes, guarantees, redeems or
repays any Indebtedness (other than revolving credit borrowings) or issues or
redeems preferred stock subsequent to the commencement of the
8
period for which the Fixed Charge Coverage Ratio is being calculated but 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, redemption or repayment of Indebtedness, or such
issuance or redemption of preferred stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period. For purposes of
making the computation referred to above, (i) the Consolidated Cash Flow of
the Company shall include (a) the Consolidated Cash Flow of the Company and
its Restricted Subsidiaries for the latest four-quarter period for which
consolidated internal financial statements of the Company are available as
derived from such financial statements plus or minus (b) with respect to any
Business or Qualified Contracts that have been acquired by the Company or any
of its Restricted Subsidiaries, including through mergers or consolidations,
after the first day of the applicable four-quarter period and prior to the
Calculation Date, the result of (1) the Consolidated Cash Flow of such
Business or Qualified Contracts for the most recent three-month period prior
to such acquisition for which internal financial statements in respect of such
acquired Business or Qualified Contracts are available times four multiplied
by (2) a fraction the numerator of which is 365 minus the number of days
during the relevant four-quarter period for which the results of operations of
such Business or Qualified Contracts were included in clause (a) of this
sentence and the denominator of which is 365, (ii) the acquisition of any
Business or Qualified Contracts that has been made by the Company or any of
its Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions after the first day of the
applicable four-quarter period and on or prior to the Calculation Date shall
give pro forma effect to financing transactions (including the incurrence of
Acquired Debt) in connection with the acquisition of such Business or
Qualified Contracts, as if such acquisition had occurred at the beginning of
the applicable reference period, and (iii) the Consolidated Cash Flow and
expenses attributable to discontinued operations as determined in accordance
with GAAP, and operations, Businesses and Qualified Contracts disposed of
prior to the Calculation Date shall be excluded. For purposes of the foregoing
clause (i), the Consolidated Cash Flow attributable to any Business or
Qualified Contracts acquired by the Company or any Restricted Subsidiary of
the Company shall be calculated utilizing the actual revenues attributable to
such Business or Qualified Contracts for the applicable period and the
expenses that would have been attributable to such Business or Qualified
Contracts had the Company acquired such Business or Qualified Contracts at the
beginning of the applicable period, as determined in good faith by the
Company, taking into account the Company's historical expenses in connection
with the provision of similar services for similar equipment under similar
contracts. If since the beginning of the applicable four-quarter period any
Person (that subsequently
9
becomes a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made or
engaged in any Investment, disposition of operations, Businesses or Qualified
Contracts, or merger or consolidation, or shall have discontinued any
operations or acquired any Business or Qualified Contracts that would have
required adjustment pursuant to this definition had such Person been a
Restricted Subsidiary at the time of such Investment, disposition, merger,
consolidation, discontinued operation or acquisition, then "Consolidated Cash
Flow" shall be calculated giving pro forma effect thereto for such period as
if such Investment, acquisition, disposition, merger, consolidation or
discontinued operation had occurred at the beginning of the applicable
four-quarter period.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the Consolidated Interest Expense of such
Person for such period and (ii) any interest expense on Indebtedness of
another Person that is guaranteed by the referent 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) and (iii) the product of (a) all cash dividend payments of the
Company or any Restricted Subsidiary of the Company on any series of preferred
stock of the Company or such Restricted Subsidiary times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect on the
date of this Indenture; provided, however, that all reports and other
financial information provided by the Company to the Holders, the Trustee
and/or the Commission shall be prepared in accordance with GAAP, as in effect
on the date of such report or other financial information.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.
"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, without
10
limitation, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates or foreign exchange rates.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means DecisionOne Holdings Corp., a Delaware corporation,
the corporate parent of DecisionOne Corp.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing
Capital Lease Obligations or the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable, or representing any Hedging Obligations, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person), the maximum fixed repurchase price of
Disqualified Stock issued by such Person and the liquidation preference of
preferred stock issued by such Person, in each case, if held by any Person
other than the Company or a Wholly Owned Restricted Subsidiary of the Company,
and, to the extent not otherwise included, the guarantee by such Person of any
indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Sale" means (i) the first transaction after the commencement
of any accounts receivable financing arrangement in which accounts receivable
are sold by the Company and/or its Restricted Subsidiaries to an Accounts
Receivable Subsidiary and (ii) the first transaction following any amendment
to any such arrangement pursuant to which the class of eligible receivables to
be purchased pursuant to such arrangement is expanded in which such expanded
class of accounts receivable are sold by the Company and/or its Restricted
Subsidiaries to an Accounts Receivable Subsidiary.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates)
11
in the forms of direct or indirect loans (including guarantees), 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, and all other items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided that
an acquisition of assets, Equity Interests or other securities by the Company
for consideration consisting of common equity securities of the Company shall
not be deemed to be an Investment. 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 Equity Interests of
such Subsidiary not sold or disposed of in an amount determined as provided in
the final paragraph of Section 4.11 hereof.
"Investors' Agreement" means the investors' agreement, dated as of
___________, 1997, among DLJ Merchant Banking Partners II, L.P. and affiliated
funds, a limited number of institutional investors and certain members of
management of the Company, as amended from time to time.
"Legal Holiday" means a Saturday, 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.
"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).
"Management Loans" means one or more loans by the Company or Holdings
to officers and/or directors of the Company and any of its Restricted
Subsidiaries to finance the purchase by such officers and directors of common
stock of Holdings; provided, however, that the aggregate principal amount of
all such Management Loans outstanding at any time shall not exceed $10.0
million.
"Merger" means the merger of the Issuer with and into Holdings, with
Holdings continuing as the surviving corporation.
"Moody's" means Xxxxx'x Investor Services, Inc.
12
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP, excluding, however, (i)
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
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) or (b) the extinguishment of any Indebtedness of such Person or
any of its Restricted Subsidiaries, and (ii) any extraordinary or nonrecurring
gain (but not loss), together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss), and (iii) with respect to
the Company, the after-tax amount of any interest income with respect to the
Intercompany Note.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, 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, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied
to the repayment of Indebtedness (other than Indebtedness of the Company or
any Restricted Subsidiary referred to in clause (a) of the second paragraph of
Section 4.10 hereof secured by a Lien on the asset or assets that are 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.
"New Credit Facility" means that certain credit agreement, dated as
of ___________, 1997, by and among DecisionOne Corp., Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation, as arranger, DLJ Capital Funding, Inc., as
syndication agent, and the lenders party thereto, including any related notes,
guarantees, collateral documents, instruments and agreement executed in
connection therewith, and in each case as amended, modified, renewed,
refunded, replaced refinanced from time to time, including any agreement
extending the maturity of or refinancing or refunding all or any portion of
the Indebtedness thereunder or increasing the amount that may be borrowed
under such agreement or any successor agreement, whether or not among the same
parties.
"Non-Recourse Debt" means Indebtedness (i) no default with respect
to, which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or
13
payable prior to its stated maturity; and (ii) as to which the lenders have
been notified in writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries; provided,
however, that in no event shall Indebtedness of any Unrestricted Subsidiary
fail to be Non-Recourse Debt solely as a result of any default provisions
contained in a guarantee thereof by the Company or any of its Restricted
Subsidiaries if the Company or such Restricted Subsidiary was otherwise
permitted to incur such guarantee pursuant to this Indenture.
"Notes" means the Company's __% Senior Discount Debentures due 2008
issued in compliance with this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering and sale of units (the "Units")
consisting of the Notes and warrants to purchase shares of common stock of the
Company pursuant to a prospectus, dated as of _____________, 1997, contained
or incorporated in the Registration Statement.
"Offerings" means the Offering and the concurrent offering of the __%
Senior Subordinated Notes due 2207 by DecisionOne Corp. pursuant to a
prospectus dated as of ______, 1997, contained or incorporated in a
Registration Statement on Form S-1 (No. 333-28539) filed with the Commission
on June 3, 1997 and all exhibits, schedules and amendments thereto.
"Officer" means the Chairman of the Board, the President, any Vice
President or the Secretary of the Company.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company that meets the requirements set
forth in Section 1.05 hereof.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee. Each such
opinion shall include the statements provided for in TIA Section 314(e) to the
extent applicable.
"Pari Passu Indebtedness" means Indebtedness of the Company that
ranks pari passu in right of payment to the Notes.
"Permitted Business" means the equipment maintenance or support
services business or any business reasonably ancillary or related thereto.
14
"Permitted Investments" means (i) Investments in the Company or in a
Restricted Subsidiary of the Company, (ii) Investments in cash or Cash
Equivalents, (iii) Investments by the Company or any Restricted Subsidiary of
the Company in a Person if, as a result of such Investment, (a) such person
becomes a Restricted Subsidiary of the Company or (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company, (iv) Investments in accounts and notes
receivable acquired in the ordinary course of business, (v) any non-cash
consideration received in connection with an Asset Sale that complies with
Section 4.10 hereof, (vi) loans and advances to officers, directors and
employees for business-related travel expenses, moving expenses and other
similar expenses, in each case, incurred in the ordinary course of business,
(vii) any guarantees permitted to be made pursuant to Section 4.12 hereof,
(viii) Investments in any Accounts Receivable Subsidiary made in connection
with the formation of any Accounts Receivable Subsidiary or received in
consideration of sales of accounts receivable, in each case, in accordance
with Section 4.16 hereof, (ix) the Intercompany Note and (x) the Management
Loans.
"Permitted Liens" means (i) Liens on assets of DecisionOne Corp. and
its Subsidiaries; (ii) Liens in favor of the Company; (iii) Liens created by
Restricted Subsidiaries of the Company to secure Indebtedness of such
Restricted Subsidiaries to the Company or to other Wholly Owned Restricted
Subsidiaries of the Company; (iv) the pledge of the capital stock of
DecisionOne Corp. to secure the New Credit Facility; (v) Liens 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; (vi) 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 shall be required in
conformity with GAAP shall have been made therefor; (vii) carriers',
warehousemen's, mechanics', landlords', materialmen's, repairmen's or other
similar Liens arising in the ordinary course of business that are not
delinquent or remain payable without penalty; (viii) easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business that, in the aggregate, are not substantial in amount, and that do
not in any case materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the businesses of the
Company; (ix) Liens arising by operation of law in connection with judgments
to the extent, for an amount and for a period not resulting in an Event of
Default with respect thereto; (x) any customary retention of title by the
lessor under a Capital Lease Obligation incurred in compliance with Section
4.12 hereof; (xi) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
15
subdivision thereof, to secure partial, progress, advance or other payments;
(xii) Liens (other than any Lien imposed by the Employee Retirement Income
Security Act of 1974) consisting of pledges or deposits required in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other social security legislation; (xiii) Liens
arising solely by virtue of any statutory or common law provision relating to
banker's liens, rights of set-off or similar rights and remedies, in each case
as to deposit accounts or other funds maintained with a creditor depository
institution; provided that (A) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board, and (B) such deposit account is not intended by the Company to
provide collateral to the depository institution; (xiv) Liens on property of a
Person existing at the time such Person is merged into or consolidated with
the Company; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company;
and (xv) Liens on property existing at the time of acquisition thereof by the
Company, provided that such Liens were in existence prior to the contemplation
of such acquisition.
"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; provided that: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accredit value, if applicable), plus accrued interest
on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses and premiums incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a
final maturity date at least as late as 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; (iii) 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 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; and (iv) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is Pari Passu Indebtedness, such Permitted
Refinancing Indebtedness has a final maturity date on or later than the final
maturity date of, and is subordinated or pari passu in right of payment to,
the Notes on terms at least as
16
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Principals" means DLJ Merchant Banking, Inc., DLJ Offshore Partners
II C.V., DLJ Diversified Partners, L.P. DLJMB Funding II, Inc., UK Investment
Plan 1997 Partners and DLJ ESC LLC and each of their respective Affiliates.
"Qualified Contract" means any contract for the provision of computer
maintenance and/or technology support services with respect to which the
Company and its Restricted Subsidiaries have not received notice that the
counterparty to such contract intends to terminate such contract prior to the
expiration of its term or not to renew such contract at the end of its term.
"Qualified Proceeds" means any of the following or any combination of
the following: (i) cash, (ii) Cash Equivalents, (iii) assets that are used or
useful in a Permitted Business and (iv) the Capital Stock of any Person
engaged in a Permitted Business if, in connection with the receipt by the
Company or any Restricted Subsidiary of the Company of such Capital Stock, (a)
such Person becomes a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company or (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 any Restricted Subsidiary of
the Company.
"Receivables Fees" means distributions or payments made directly or
by means of discounts with respect to any participation interests issued or
sold in connection with, and other fees paid to a Person that is not a
Restricted Subsidiary in connection with, any receivables financing permitted
pursuant to Section 4.16 hereof.
"Registration Statement" means the Registration Statement (No.
333-28539) on Form S-1 relating to the Units filed with the Commission on June
3, 1997 and all exhibits, schedules and amendments thereto.
"Related Party" means, with respect to the Principals, (i) any
controlling stockholder or partner of any Principal on the date of this
Indenture, or (ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding
(directly or through one or more Subsidiaries) a 51% or more controlling
interest of which consist
17
of the Principals and/or such other Persons referred to in the immediately
preceding clauses (i) or (ii).
"Responsible Officer," when used with respect to the Trustee, means
any officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"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 of this Indenture.
"Specified Agreements" means the Investors' Agreement and the Tax
Sharing Agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of Voting Stock is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination
thereof); provided, however, that the Accounts Receivable Subsidiary and its
Subsidiaries shall not be deemed Subsidiaries of the Company or any of its
other Subsidiaries.
"Tax Sharing Agreement" means the tax sharing agreement, dated as of
______________, 1997, among the Company, DecisionOne Corp., and the
DecisionOne Corp's Subsidiaries on the date of this Indenture, as amended from
time to time.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
18
"Trustee" means the party named as such above unless and until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means such successor.
"Unrestricted Subsidiary" means any Subsidiary (other than
DecisionOne Corp.) that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent
that such Subsidiary: (i) has no Indebtedness other than Non-Recourse Debt;
(ii) 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 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;
(iii) 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 (iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries. Any such designation by the Board of Directors
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 Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.11 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as a
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 4.12 hereof, the Company shall be in
default of such covenant). 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 (i) such Indebtedness is permitted under Section 4.12 hereof
and (ii) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock
of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
19
"Warrant Agreement" means the Warrant Agreement, dated as of the date
of this Indenture, between the Company and State Street Bank and Trust
Company, as warrant agent.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the
then outstanding principal amount of such Indebtedness into (ii) the total of
the product 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 thereof by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all 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 Restricted Subsidiaries
of such Person or by such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
"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.
Term Defined in
Section
"Act".................................................. 1.07
"Affiliate Transaction"................................ 4.13
"Asset Sale Offer"..................................... 3.10
"Change of Control Offer".............................. 4.09
"Change of Control Payment"............................ 4.09
"Change of Control Payment Date"....................... 4.09
"Covenant Defeasance".................................. 8.03
"DTC".................................................. 2.01
"Electronic Message"................................... 2.02
"Event of Default"..................................... 6.01
"Excess Proceeds"...................................... 4.10
"Financier"............................................ 4.16
"incur"................................................ 4.12
"Legal Defeasance"..................................... 8.02
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"Offer Amount"......................................... 3.10
"Offer Period"......................................... 3.10
"Paying Agent"......................................... 2.03
"Payment Default"...................................... 6.01
"Permitted Debt"....................................... 4.12
"Purchase Date......................................... 3.10
"Promissory Note"...................................... 4.19
"Registrar"............................................ 2.03
"Restricted Payments".................................. 4.11
"Separation Date"...................................... 2.02
"Units"................................................ 1.01
"Warrant Endorsement".................................. 2.02
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:
"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;
"obligor" on the Notes means the Company and any successor obligors
upon the Notes.
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;
21
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the Commission from
time to time.
SECTION 1.05. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion (other than the certificates required by
Section 4.05(a) hereof) with respect to compliance with a condition or
covenant provided for in this Indenture shall comply with the provisions of
TIA 314(e) and shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, 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 complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.06. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
22
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect
to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.07. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to TIA Section 315) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner that the Trustee
deems sufficient.
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(c) The ownership of Notes shall be proved by a register kept by the
Registrar.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of such Holders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other Act, but the Company shall have no obligation to do so. Notwithstanding
TIA Section 316(c), any such record date shall be the record date specified in
or pursuant to such Board Resolution, which shall be a date not more than 30
days prior to the first solicitation of Holders generally in connection
therewith and no later than the date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Notes then outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the
Notes then outstanding shall be computed as of such record date; provided that
no such request, demand, authorization, direction, notice, consent, waiver or
other Act by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not
later than six months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, suffered or omitted to be done by the Trustee, any Paying Agent
or the Company in reliance thereon, whether or not notation of such action is
made upon such Note.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Notes may have
notations, legends or endorsements approved as to form by the Company and
required by law, stock exchange rule, agreements to which the Company is
subject, or usage. Each Note
24
shall be dated the date of its authentication. The Notes shall be issuable in
registered form, without coupons, and only in denominations of $1,000 and
integral multiples thereof.
Notes issued in global form shall be substantially as set forth in
Exhibit A hereto (including the text referred to in footnotes 1 and 2
thereto). Notes issued in definitive form shall be substantially as set forth
in Exhibit A hereto (but without the text referred to in footnotes 1 and 2
thereto). Each Note in global form shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Notes from time to time endorsed
thereon and that the aggregate amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Note in global form to reflect
the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Depositary in
accordance with instructions given by the Holder thereof as required by
Section 2.06. The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Notes in global form.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer of the Company shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal shall be reproduced on the
Notes and may be in facsimile form.
If an Officer of the Company whose signature is on a Note no longer
holds that office at the time the 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 of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially
as set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by an
Officer of the Company, authenticate Notes for original issue up to an
aggregate principal amount at maturity of Notes stated in the Notes. The
aggregate principal amount at maturity of Notes outstanding at any time shall
not exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such
25
agent. An authenticating agent has the same rights as an Agent to deal with
the Company or an Affiliate of the Company.
All Notes issued prior to the separation described below shall have
printed or overprinted thereon the following (the "Warrant Endorsement"):
THE NOTES EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE
SEPARATELY FROM THE WARRANTS ATTACHED HERETO ORIGINALLY SOLD AS A
UNIT WITH THE NOTES UNTIL THE EARLIEST TO OCCUR OF (I)
______________, 1997 (II) SUCH EARLIER DATE AS THE UNDERWRITER MAY
DETERMINE AND (III) THE OCCURRENCE OF A CHANGE OF CONTROL, (THE
"SEPARATION DATE"). PRIOR TO SUCH DATE, THE NOTES EVIDENCED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN INTEGRAL MULTIPLES OF $1,000
PRINCIPAL AMOUNT OF NOTES AND ONLY WITH THE SIMULTANEOUS TRANSFER TO
THE TRANSFEREE OF _____ WARRANTS FOR EACH $1,000 PRINCIPAL AMOUNT SO
TRANSFERRED.
Under the terms of the warrant agreement relating to the Warrants
(the "Warrant Agreement"), the holder of this security may at any
time on or after the Separation Date, at its option, by notice to the
Trustee elect to separate or separately transfer the Notes and the
Warrants represented hereby, in whole or in part, for a definitive
Warrant Certificate or Warrant Certificates or a beneficial interest
in a Global Warrant (as defined in the Warrant Agreement) evidencing
the underlying Warrants and for a Note or Notes or a beneficial
interest in a global Note of a like aggregate principal amount at
maturity of authorized denominations and not containing a Warrant
Endorsement in accordance with the Indenture (such surrender and
exchange being referred to herein as a "Separation" and the related
Warrants being referred to as "Separated"); provided that no delay or
failure on the part of the Trustee or the Warrant Agent to exchange
this security and Note or Notes shall affect the Separation of the
Notes and the Warrants represented hereby or their separate
transferability. Until such separation, the holder of this security
is, for each $1,000 principal amount of Notes, also the record owner
of __ Warrants expiring ________, 2007, each to purchase ____ shares
of common stock of the Company, par value $.01 per share (the "Common
Stock," subject to adjustment as provided in the Warrant Agreement.
The Company has deposited with the Trustee, as custodian for the
Holder of the Notes bearing this Warrant Endorsement, a certificate
or certificates for such Warrants to purchase an aggregate of _______
shares of Common Stock (subject to adjustment as provided in the
Warrant Agreement). Prior to the separation of the Notes and the
Warrants as described above, record ownership of such Warrants is
transferable only by the transfer of this Note on the Note register
maintained by the Company pursuant to the Indenture. After such
separation, ownership of a Warrant is transferable only by the
26
transfer of the certificate representing such Warrant in accordance
with the provisions of the Warrant Agreement.
By accepting a security bearing this Warrant Endorsement, each holder
of this security shall be bound by all of the terms and provision of
the Warrant Agreement (a copy of which is available on request to the
Company or the Warrant Agent).
Election to Exercise. On or after _________, 1997, the Warrants may
be exercised by obtaining from the Trustee, as custodian for holders
of securities bearing this Warrant Endorsement, the required forms of
election to exercise, declaration from and instructions for payment
of the Exercise Price (as such term is defined in the Warrant
Agreement). Upon receiving the required forms and payment of such
Exercise Price, the Trustee as custodian for the Holder of the
security bearing this Warrant Endorsement, shall exercise such
Warrants in accordance with the provisions of the Warrant Agreement.
Election of Exchange. The holder hereof may elect to separate its
Notes and Warrants and to exchange this security (representing
ownership of __________ Warrants evidenced by Warrant Certificates
deposited with the Trustee) for a new Note in the principal amount
hereof and a Warrant Certificate in the amount of said
_______________ Warrants either by (i) completing and signing in the
space below or (ii) delivery of a computer-generated message
transmitted by DTC to the Trustee (an "Electronic Message").
Dated:
Name of Holder of this security:________________________
Address:_________________________
_________________________
Signature:_______________________
Note: The above signature must correspond with the name as
written upon the face of this security in every
particular,without alteration or enlargement whatever and if
the certificate representing any principal amount at
maturity of this security or the associated Warrants is to
be registered in a name other than that in which this
security is registered.
By delivery of this security or upon receipt of an Electronic
Message, the holder hereof hereby irrevocably instructs the Trustee
(A) to issue in the name of such registered holder a new Note (CUSIP
________________) not containing the above Warrant Endorsement in the
principal amount equal to the principal amount hereof and (B) to
deliver this security to the Warrant Agent pursuant to the provisions
of the Warrant Agreement with instructions to issue in the name of,
or
27
release to, such holder a Warrant Certificate (CUSIP _______________)
representing the number of Warrants equal to the number of Warrants
represented by this security or with respect to which an Electronic
Message has been received and, if applicable, to issue a new Warrant
Certificate to replace the Warrant Certificate held on deposit by the
Trustee as custodian representing the number of Warrants equal to the
difference between (x) the number of Warrants represented by the
Warrant Certificate so held on deposit and (y) the number of Warrants
represented by this security or with respect to which an Electronic
Message has been received."
Until any Note and the Warrant with which it is initially issued are
separated or separately transferred pursuant to the terms of the Warrant
Endorsement, the Trustee shall hold such Warrant as custodian on behalf of the
holder of such Note bearing such legends.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "Registrar") and (ii) an office or agency where Notes may be
presented for payment ("Paying Agent") within the City of and the 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 respective addresses set forth in the
register of Holders; provided that all payments with respect to Notes
represented by one or more permanent global Notes will be paid by wire
transfer of immediately available funds to the account of the Depository Trust
Company or any successor thereto. 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 "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent, Registrar or co-Registrar without prior notice to any Holder. The
Company shall notify the Trustee and the Trustee shall notify the Holders of
the name and address of any Agent not a party to this Indenture. The Company
may act as Paying Agent, Registrar or co-Registrar. The Company shall enter
into an appropriate agency agreement with any Agent not a party to this
Indenture, which shall be subject to any obligations imposed by the provisions
of the TIA. The agreement shall implement the provisions of this Indenture
that relate to such Agent. The Company shall notify the Trustee of the name
and address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such, and shall be entitled to appropriate compensation in accordance with
Section 7.07 hereof.
28
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the 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
the Holders or the Trustee all money held by the Paying Agent for the payment
of principal of, premium, if any, and 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 and to account for any funds disbursed. 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) shall have no further liability for the money delivered to the
Trustee. If the Company 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.
SECTION 2.05. LISTS OF HOLDERS OF THE NOTES.
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
Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven (7)
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 Holders,
including the aggregate principal amount at maturity of the Notes held by each
thereof, and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar with a request to register
the transfer or to exchange them for an equal principal amount of Notes of
other denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met; provided, however,
that any Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar and the Trustee duly executed
by the Holder thereof or by his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall issue and the
Trustee shall authenticate Notes at the Registrar's request, subject to such
rules as the Trustee may reasonably require.
29
Neither the Company nor the Registrar shall be required to (i) issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day fifteen (15) days before the day of any
selection of Notes for redemption or purchase under Section 3.01 hereof and
ending at the close of business on the day of selection, (ii) register the
transfer of or exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part or
(iii) register the transfer or exchange of a Note between a record date and
the next succeeding interest payment date.
No service charge shall be made to any Holder for any registration of
transfer or exchange (except as otherwise expressly permitted herein), 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 such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.10, 3.06 or 9.05 hereof, which shall be paid by the Company).
Prior to due presentment to the Trustee for registration of the
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, premium, if
any, and interest on such Note and for all other purposes whatsoever, whether
or not such Note is overdue, and none of the Trustee, any Agent nor the
Company shall be affected by notice to the contrary.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction,
loss or theft of any Note and the ownership thereof, the Company shall issue
and the Trustee, upon the written order of the Company signed by an Officer of
the Company, shall authenticate a replacement Note if the Trustee's
requirements for replacements of Notes are met. If required by the Trustee or
the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the reasonable judgment of the Trustee and the Company to
protect the Company, the Trustee, each Agent and each authenticating agent
from any loss which any of them may suffer if a Note is replaced. The Company
and the Trustee may charge 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 ratably
with all other Notes duly issued hereof.
30
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding. 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 bona fide 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. Subject to Section 2.09 hereof, a Note does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Note.
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 any Affiliate of the Company shall be considered as though not
outstanding, except that for purposes of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only Notes
which a Responsible Officer of the Trustee knows to be so owned shall be so
considered. Notwithstanding the foregoing, Notes that are to be acquired by
the Company or an Affiliate of the Company pursuant to an exchange offer,
tender offer or other agreement shall not be deemed to be owned by such entity
until legal title to such Notes passes to such entity.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company and the Trustee consider appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee, upon
receipt of the written order of the Company signed by an Officer of the
Company, shall authenticate definitive Notes in exchange for temporary Notes.
Until such exchange, temporary Notes shall be entitled to the same rights,
benefits and privileges as definitive Notes.
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 shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation. Subject to Section 2.07
hereof, the Company may not issue new Notes to replace Notes that it has
31
redeemed or paid or that have been delivered to the Trustee for cancellation.
All cancelled Notes held by the Trustee shall be destroyed and certification
of their destruction delivered to the Company, unless by a written order,
signed by an Officer of the Company, the Company shall direct that cancelled
Notes be returned to it.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, the
Company 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, which date shall be at the
earliest practicable date but in all events at least five (5) Business Days
prior to the payment date, in each case at the rate provided in the Notes and
in Section 4.01 hereof. The Company shall fix or cause to be fixed each such
special record date and payment date, and shall, promptly thereafter, notify
the Trustee of any such date. At least fifteen (15) days before the special
record date, the Company (or the Trustee, in the name of and at the expense of
the Company) shall mail to Holders, at their addresses as they appear on the
register of Notes maintained by the Registrar, a notice that states the
special record date, the related payment date and the amount of such interest
to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders
entitled to vote or consent to any action by vote or consent authorized or
permitted under this Indenture shall be determined as provided for in TIA ss.
316(c).
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number and, if it
does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company
will promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.15. COMPUTATION OF INTEREST.
Interest on the Notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
ARTICLE 3
REDEMPTION AND PREPAYMENT
32
SECTION 3.01. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section
3.08 shall be evidenced by a Board Resolution. In case of any redemption at
the election of the Company, the Company shall, at least 45 but not more than
60 days prior to the redemption date fixed by it (unless a shorter notice
period shall be satisfactory to the Trustee for its convenience), notify the
Trustee pursuant to an Officers' Certificate of (i) such redemption date, (ii)
the principal amount of Notes to be redeemed and (iii) the clause of this
Indenture pursuant to which the redemption shall occur.
SECTION 3.02. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time,
selection of Notes for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any,
on which the Notes are listed or, if the Notes are not so listed, on a pro
rata basis, by lot or by such other method as the Trustee deems fair and
appropriate, provided that no Notes with a principal amount of $1,000 or less
shall be redeemed in part.
The Trustee shall promptly notify the Company and the Registrar in
writing of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of
the principal amount of such Note which has been or is to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.10 hereof, notice of
redemption shall be mailed by first class mail, postage prepaid, at least 30
but not more than 60 days before the redemption date to each Holder of Notes
to be redeemed at its registered address. If any Note is to be redeemed in
part only, the notice of redemption that relates to such Note shall state the
portion of the principal amount thereof to be redeemed.
All notices of redemption shall state:
(a) the redemption date;
(b) the redemption price;
33
(c) if less than all Notes then outstanding are to be
redeemed, the identification (and, in the case of a
Note to be redeemed in part, the principal amount)
of the particular Notes to be redeemed;
(d) that on the redemption date the redemption price
will become due and payable upon each such Note or
portion thereof, and that (unless the Company shall
default in payment of the redemption price)
interest thereon shall cease to accrue on or after
said date;
(e) the places or places where such Notes are to be
surrendered for payment of the redemption price;
(f) that Notes called for redemption must be
surrendered to the Paying Agent to
collect the redemption price;
(g) the CUSIP number, if any, relating to such Notes,
and
(h) in the case of a Note to be redeemed in part, the
principal amount of such Note to be redeemed and
that after the redemption date upon surrender of
such Note, a new Note or Notes in the aggregate
principal amount at maturity equal to the
unredeemed portion thereof will be issued.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at its request, by the Trustee in
the name and at the expense of the Company.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Sections 3.03,
3.10 or 4.09 hereof, Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any redemption date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 4.03 hereof)
an amount of money in same day funds (or New York Clearing House funds if such
deposit is made prior to the applicable redemption date) sufficient to pay the
redemption price of, and accrued interest on, all the Notes or portions
thereof which are to be redeemed on that date.
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SECTION 3.06. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the redemption date, become due and payable at the
redemption price therein specified and from and after such date (unless the
Company shall default in the payment of the redemption price and accrued
interest) such Notes shall cease to bear interest. Upon surrender of any such
Note for redemption in accordance with said notice, such Note shall be paid by
the Company at the redemption price together with accrued interest to the
redemption date.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof (and premium, if any, thereon)
shall, until paid, bear interest from the redemption date at the rate borne by
such Note.
SECTION 3.07. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be surrendered at
the office or agency of the Company maintained for such purpose pursuant to
Section 4.02 hereof (with, if the Company, the Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company, the Registrar or the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and a new Note
in principal amount equal to the unpurchased or unredeemed portion will be
issued in the name of the Holder thereof upon cancellation of the original
Note. On and after the purchase or redemption date, unless the Company
defaults in payment of the purchase or redemption price, interest shall cease
to accrue on Notes or portions thereof purchased or called for redemption.
SECTION 3.08. OPTIONAL REDEMPTION.
(a) Except as described in this Section 3.08, the Notes will not be
redeemable at the Company's option prior to _____________, 2002. Thereafter,
the Notes will be subject to redemption at the option of the Company, in whole
or in part, upon not less than 30 nor more than 60 days' written notice, at
the redemption prices (expressed as percentages of principal amount) set forth
below, together with accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on
_____________ of each of the years indicated below:
YEAR Percentage of
Principal
Xxxxxx
35
2002.............................................................. [ ]%
2003.............................................................. [ ]%
2004.............................................................. [ ]%
2005 and thereafter............................................... 100.000%
In addition, prior to _________, 2000, the Company may, at its
option, on any one or more occasions, redeem up to 35% of the original
aggregate principal amount at maturity of Notes at a redemption price equal to
____% of the Accreted Value thereof, with the net cash proceeds of one or more
Equity Offerings; provided that at least 65% of the original aggregate
principal amount at maturity of Notes remains outstanding immediately after
the occurrence of each such redemption; and provided, further, that any such
redemption shall occur within 90 days of the date of the closing of each such
Equity Offering.
(b) Any redemption pursuant to this Section 3.08 shall be made
pursuant to the provisions of Sections 3.01 through 3.07 hereof.
SECTION 3.09. MANDATORY REDEMPTION.
Except as set forth under Sections 4.09 and 4.10 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments
with respect to the Notes.
SECTION 3.10. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be 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 remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later
than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount at maturity
of Notes required to be purchased pursuant to Section 4.10 hereof (the "Offer
Amount") or, if less than the Offer Amount has been tendered, all Notes
tendered in response to the Asset Sale Offer.
If the Purchase Date is on or after an interest payment 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 registered at the
close of business on such record
36
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 notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.10 and Section 4.10 hereof and the length of time
the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrete after the Purchase Date;
(e) 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 not later than the third Business
Day preceding the end of the Offer Period;
(f) 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 third Business Day
preceding the end 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 Xxxxxx is
withdrawing his election to have such Note purchased;
(g) that, if the aggregate principal amount at maturity of Notes
surrendered by Holders exceeds the Offer Amount, the Company
shall select the Notes to be purchased on a pro rata basis
(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
37
(h) 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 12:00 p.m. (New York City time) on each Purchase Date,
the Company shall, irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to a
principal amount of Notes equal to the Offer Amount, together with accrued and
unpaid interest thereon to the Purchase Date, to be held for payment in
accordance with the terms of this Section 3.10. On the Purchase Date, the
Company shall, to the extent lawful, (i) 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, (ii) deliver or cause the Paying Agent
or depositary, as the case may be, to deliver to the Trustee Notes so accepted
and (iii) deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.10. The Company, the depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not
later than three Business 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, plus any
accrued and unpaid interest, thereon to the Purchase Date, and the Company
shall promptly issue a new Note, and the Trustee, upon written request from
the Company shall authenticate and mail or deliver such new Note to such
Holder, equal in principal amount 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 send a notice to each
Holder stating the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.10, any
purchase pursuant to this Section 3.10 shall be made pursuant to the
provisions of Sections 3.01 through 3.07 hereof.
38
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
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 will maintain, in The City of New York, an office or
agency where Notes may be presented or surrendered for payment, where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
any change in the location of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes, and may from time to
time rescind such designation; provided, however, that no such designation or
recession shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or recession and any change in the location of any such office or agency.
39
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.
SECTION 4.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of, premium, if any, or
interest on any of the Notes, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, on or before each due date of the principal of, premium, if
any, or interest on any Notes, deposit with a Paying Agent a sum in same day
funds (or New York Clearing House funds if such deposit is made prior to the
date on which such deposit is required to be made) sufficient to pay the
principal, premium, if any, or interest so becoming due (or at the option of
the Company, payment of interest may be mailed by check to the Holders of the
Notes at their respective addresses set forth in the register of Holders of
Notes; provided that all payments with respect to Notes represented by one or
more permanent global Notes will be paid by wire transfer of immediately
available funds to the account of the Depository Trust Company or any
successor thereto) such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Notes in trust for the
benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided;
(b) give the Trustee notice of any default by the Company (or
any other obligor upon the Notes) in the making of any
payment of principal, premium, if any, or interest;
(c) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent; and
40
(d) acknowledge, accept and agree to comply in all respects with
the provisions of this Indenture relating to the duties,
rights and obligations of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
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 at the request of the Company or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, 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, shall at the
expense of the Company cause notice to be promptly sent to each Holder 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 any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 4.04. REPORTS.
Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company will furnish to
the Holders of Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms
10-Q and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of operations
of the Company and its Restricted Subsidiaries and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) 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. In addition whether or not required by the rules and regulations of
the Commission, the Company will file a copy of all such information and
reports with the Commission for public availability (unless the Commission
will not accept such a filing) and make such
41
information available to securities analysts and prospective investors upon
request.
SECTION 4.05. STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year ending after the date of this Indenture, an
Officers' Certificate stating whether, to such Officers' knowledge, the
Company is in compliance with all covenants and conditions to be complied with
by it under this Indenture (including with respect to any Restricted Payments
made during such year, the basis upon which the calculations required by
Section 4.07 hereof were computed, which calculations may be based on the
Company's latest financial statements), and further stating, as to each
Officer signing such certificate, that to the best of his or her knowledge
each entity is not in default in the performance or observance of any terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have 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 or premium, 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. For purposes of this Section 4.05, such compliance shall be
determined without regard to any period of grace or requirement of notice
under this Indenture.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the annual reports
delivered pursuant to Section 4.04(a) hereof 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 Four or Article Five 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) The Company shall, within five Business Days, upon becoming aware
of any Default or Event of Default or any default under any document,
instrument or agreement representing Indebtedness of the Company or any
Restricted Subsidiary, deliver to the Trustee an Officers' Certificate
specifying such Default or Event of Default.
42
SECTION 4.06. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments
and governmental charges levied or imposed upon it or any Subsidiary or upon
the income, profits or property of the Company or any of its Subsidiaries and
(b) all material lawful claims for labor, materials and supplies, which, if
unpaid, might by law become a lien upon the property of the Company or any of
its Subsidiaries that could produce a material adverse effect on the
consolidated financial condition of the Company; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and in respect of which appropriate reserves (in the good faith
judgment of management of the Company) are being maintained in accordance with
GAAP.
SECTION 4.07. STAY, EXTENSION, 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 whatever
enacted, now or at any time hereafter in force, that may affect that covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby 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 4.08. CORPORATE EXISTENCE.
Subject to Article Five hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and that of each Subsidiary of the Company and the
corporate rights (charter and statutory), corporate licenses and corporate
franchises of the Company and its Subsidiaries, except where a failure to do
so, singly or in the aggregate, is not likely to have a materially adverse
effect upon the business, assets, financial conditions or results of
operations of the Company and the Subsidiaries taken as a whole determined on
a consolidated basis in accordance with GAAP; provided that prior to the
occurrence and continuance of an Event of Default, the Company shall not be
required to preserve any such existence (except of the Company), right,
license or franchise if the Board of Directors of the Company shall determine
and deliver to the Trustee an Officers' Certificate to the effect that the
preservation thereof is no longer desirable in the conduct of the business
of the Company or such Subsidiary and that the loss
43
thereof is not disadvantageous in any material respect to the Holders.
SECTION 4.09. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, 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 thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the aggregate principal amount at
maturity thereof plus accrued and unpaid interest thereon to the date of
purchase (or, in the case of repurchases of Notes prior to ____, 2002, at a
purchase price equal to 101% of the Accreted Value thereof as of the date of
repurchase) (the "Change of Control Payment").
(b) Within 65 days following any Change of Control, the Company shall
mail a notice to each Holder of Notes issued under this Indenture, with a copy
to the Trustee, with the following statements and/or information:
(1) a Change of Control Offer is being made pursuant to
this Section 4.09 and that all Notes properly
tendered pursuant to such Change of Control Offer
will be accepted for payment;
(2) the purchase price and the purchase date, which
will be no earlier than 30 days nor later than 60
days from the date such notice is mailed, except as
may be otherwise required by applicable law (the
"Change of Control Payment Date");
(3) any Note not properly tendered will remain
outstanding and continue to accrue interest;
(4) unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for
payment pursuant to the Change of Control Offer
will cease to accrue interest on the Change of
Control Payment Date;
(5) Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be
required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed, to the Paying
Agent and at the address specified in the notice
prior to the close of business on the third
Business Day preceding the Change of Control
Payment Date;
44
(6) Holders will be entitled to withdraw their tendered
Notes and their election to require the Company to
purchase such Notes, provided that the paying agent
receives, not later than the close of business on
the third Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of
the Holder, the principal amount of Notes tendered
for purchase, and a statement that such Xxxxxx is
withdrawing his tendered Notes and his election to
have such Notes purchased; and
(7) that Holders whose Notes are being purchased only
in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral
multiple thereof.
(c) Prior to complying with the provisions of this Section 4.09, but
in any event within 30 days following a Change of Control, the Company shall
either repay all outstanding Senior Debt, or offer to repay in full all
outstanding Senior Debt and repay the Senior Debt with respect to which such
offer has been accepted, or obtain the requisite consents, if any, under all
outstanding Senior Debt to permit the repurchase of the Notes required by this
Section 4.09.
(d) 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 such laws or regulations are applicable in connection
with the repurchase of the Notes pursuant to a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations described in this Indenture by virtue thereof.
(e) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount at maturity of Notes or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail
to each Holder of Notes so tendered the Change of Control Payment for such
Notes, and the Trustee 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
45
portion of the Notes surrendered, if any; provided that each such new Note
will be in a principal amount of $1,000 or an integral multiple thereof. 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.
(f) The Change of Control provisions described in this Section 4.09
will be applicable whether or not any other provisions of this Indenture are
applicable.
SECTION 4.10. ASSET SALES.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time
of such Asset Sale at least equal to the fair market value (evidenced by a
Board of Resolution set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise
disposed of and (ii) at least 75% of the consideration therefor received by
the Company or such Restricted Subsidiary is in the form of (I) cash or Cash
Equivalents or (II) property or assets that are used or useful in a Permitted
Business, or Capital Stock of any Person primarily engaged in a Permitted
Business if, as a result of the acquisition by the Company or any Restricted
Subsidiary thereof, such Person becomes a Restricted Subsidiary; provided that
the amount of (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet or in the notes thereto), of
the Company or any Restricted Subsidiary (other than contingent liabilities
and liabilities of the Company that are by their terms subordinated to the
Notes) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (y) any notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are converted by the Company or such Restricted Subsidiary into cash or
Cash Equivalents (to the extent of the cash or Cash Equivalents received)
within 180 days following the closing of such Asset Sale, will be deemed to be
cash for purposes of this provision; provided further, that the 75% limitation
referred to above shall not apply to any sale, transfer or other disposition
of assets in which the cash portion of the consideration received therefor,
determined in accordance with the foregoing proviso, is equal to or greater
than what the after-tax net proceeds would have been had such transaction
complied with the aforementioned 75% limitation.
Within 395 days after the Company's or any Restricted Subsidiary's
receipt of any Net Proceeds from an Asset Sale, the Company or such Restricted
Subsidiary shall apply such Net Proceeds (a) to permanently reduce
Indebtedness of a Restricted Subsidiary of the Company (and to correspondingly
reduce commitments with
46
respect thereto) or (b) to repay Pari Passu Indebtedness (provided that if the
Company shall so repay Pari Passu Indebtedness, it will equally and ratably
reduce Indebtedness under the Notes if the Notes are then redeemable or, if
the Notes may not be then redeemed, the Company shall make an offer pursuant
to Section 3.10 hereof to purchase at 100% of the principal amount thereof at
maturity (or, in the case of repurchases of Notes prior to ______, 2002 at a
purchase price equal to 100% of the Accreted Value thereof as of the date of
repurchase) the amount of Notes that would otherwise be redeemed or (c) to an
investment in property, capital expenditures or assets that are used or useful
in a Permitted Business, or Capital Stock of any Person primarily engaged in a
Permitted Business if, as a result of the acquisition by the Company or any
Restricted Subsidiary thereof, such Person becomes a Restricted Subsidiary.
Any Net Proceeds from Asset Sales that are not applied or invested as provided
in the preceding sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0
million, the Company shall be required to make an Asset Sale Offer to purchase
the maximum principal amount of Notes that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount at maturity thereof plus accrued and unpaid interest thereon to the
date of purchase (or, in the case of repurchases of Notes prior to ________,
2002 at a purchase price equal to 100% of the Accreted Value thereof as of the
date of repurchase), in accordance with the procedures set forth in Section
3.10 hereof. To the extent that the aggregate principal amount at maturity or
Accreted Value (as applicable) of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes. If the aggregate principal
amount at maturity of or Accreted Value (as applicable) of Notes surrendered
by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis. Upon completion of such
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
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 such laws and regulations are applicable in connection with the
repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Indenture relating to such Asset Sale Offer, the Company
will comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations described in this Indenture by
virtue thereof.
SECTION 4.11. LIMITATION ON RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or
47
pay any dividend or make any other payment or distribution on account of any
Equity Interests of the Company or any of its Restricted Subsidiaries (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or dividends or distributions payable to
the Company or any Wholly Owned Restricted Subsidiary); (ii) purchase, redeem
or otherwise acquire or retire for value any Equity Interests of the Company,
any of its Restricted Subsidiaries or any other Affiliate of the Company
(other than any such Equity Interests owned by the Company or any Restricted
Subsidiary of the Company); (iii) make any principal payment on, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness of
the Company that is subordinated in right of payment to the Notes, except in
accordance with the scheduled mandatory redemption or repayment provisions set
forth in the original documentation governing such Indebtedness (but not
pursuant to any mandatory offer to repurchase upon the occurrence of any
event); or (iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof, and
(b) immediately after giving effect to such transaction on a pro
forma basis, the Company would have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in the first paragraph of Section 4.12 hereof, and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the date of this Indenture (excluding Restricted Payments permitted by clauses
(i) (to the extent that the declaration of any dividend referred to therein
reduces amounts available for Restricted Payments pursuant to this clause
(c)), (ii), (iii), (v), (vi), (viii), (ix), (x), (xiii), (xiv) and (xvi) of
the next succeeding paragraph), is less than the sum of (1) 50% of the
Adjusted Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first calendar month commencing
after the date of this Indenture 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 Adjusted Consolidated Net
Income for such period is a deficit, minus 100% of such deficit), plus (2)
100% of the Qualified Proceeds received by the Company since the date of this
Indenture from contributions to the Company's capital or the issue or sale
since the date of the this Indenture of Equity Interests of the Company or of
convertible debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests or convertible debt securities)
sold to a Subsidiary of the Company and other than
48
Designated Preferred Stock, Disqualified Stock or convertible debt securities
that have been converted into Disqualified Stock), plus (3) the amount equal
to the net reduction in Investments in Persons after the date of this
Indenture who are not Restricted Subsidiaries (other than Permitted
Investments) resulting from (x) Qualified Proceeds received as a dividend,
repayment of a loan or advance or other transfer of assets (valued at the fair
market value thereof) to the Company or any Restricted Subsidiary from such
Persons, (y) Qualified Proceeds received upon the sale or liquidation of such
Investment and (z) the redesignation of Unrestricted Subsidiaries (other than
any Unrestricted Subsidiary designated as such pursuant to clause (ix) or
(xvi) of the following paragraph) whose assets are used or useful in, or which
is engaged in one or more Permitted Businesses as Restricted Subsidiaries
(valued (proportionate to the Company's equity interest in such Subsidiary) at
the fair market value of the net assets of such Subsidiary at the time of such
redesignation) not to exceed, in the case of clauses (x), (y) and (z), the
amount of Investments previously made by the Company or any Restricted
Subsidiary in such Person, which amount was a Restricted Payment; provided
that no proceeds received by the Company from the issue or sale of any Equity
Interests of the Company will be counted in determining the amount available
for Restricted Payments under this clause (c) to the extent such proceeds were
used to redeem, repurchase, retire or acquire any Equity Interests or
Subordinated Indebtedness of the Company pursuant to clauses (ii) and (iv) of
the next succeeding paragraph.
The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the
date of declaration thereof, if at such date of declaration such
payment would have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company or Subordinated
Indebtedness of the Company in exchange for, or out of the net
proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net
cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(2)
of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other
acquisition of pari passu or subordinated Indebtedness with the net
proceeds from an incurrence of Permitted Refinancing Indebtedness;
49
(iv) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or
Holdings held by any member of the Company's or any of the Company's
Restricted Subsidiaries' management pursuant to any management equity
subscription agreement or stock option agreement; provided that (A)
the aggregate price paid for all such repurchased, redeemed, acquired
or retired Equity Interests shall not exceed (I) $5.0 million in any
calendar year (with unused amounts in any calendar year being carried
over to succeeding calendar years subject to a maximum (without
giving effect to the following clause (II)) of $10.0 million in any
calendar year) plus (II) the aggregate cash proceeds received by the
Company during such calendar year from any reissuance of Equity
Interests by the Company or DecisionOne Corp. to members of
management of the Company and its Restricted Subsidiaries and (B) no
Default or Event of Default shall have occurred and be continuing
immediately after such transaction; provided further that the
aggregate cash proceeds referred to in clause (II) above shall be
excluded from clause (c)(2) of the preceding paragraph;
(v) the payment of dividends by a Restricted Subsidiary on
any class of common stock of such Restricted Subsidiary if (A) such
dividend is paid pro rata to all holders of such class of common
stock and (B) at least 51% of such class of common stock is held by
the Company or one or more of its Restricted Subsidiaries;
(vi) the repurchase of any class of common stock of a
Restricted Subsidiary if (A) such repurchase is made pro rata with
respect to such class of common stock and (B) at least 51% of such
class of common stock is held by the Company or one or more of its
Restricted Subsidiaries;
(vii) any other Restricted Investment made in a Permitted
Business which, together with all other Restricted Investments made
pursuant to this clause (vii) since the date of this Indenture, does
not exceed $40.0 million (in each case, after giving effect to all
subsequent reductions in the amount of any Restricted Investment made
pursuant to this clause (vii), either as a result of (A) the
repayment or disposition thereof for cash or (B) as a result of the
redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary (valued proportionate to the Company's equity interest in
such Subsidiary at the time of such redesignation) at the fair market
value of the net assets of such Subsidiary at the time of such
redesignation), in the case of clause (A) and (B), not to exceed the
amount of such Restricted Investment previously made pursuant to this
clause (ix); provided that no Default or Event of Default shall have
occurred and be continuing immediately after making such Restricted
Investment;
50
(viii) the declaration and payment of dividends to holders
of any class or series of Disqualified Stock of the Company issued
after the date of this Indenture in accordance with the covenant
described in Section 4.14 hereof; provided that no Default or Event
of Default shall have occurred and be continuing immediately after
such declaration or payment;
(ix) repurchases of Equity Interests deemed to occur upon
exercise of stock options if such Equity Interests represent a
portion of the exercise price of such options;
(x) (A) payments made by the Company in respect of statutory
appraisal rights (and any settlement thereof) and (B) payments made
by the Company to fund the cash consideration payable in the Merger
(including pursuant to statutory appraisal rights and any settlement
thereof) to security holders of Holdings (including without
limitation, the Cash Merger Consideration, the Option Cash Proceeds
and the Warrant Cash Proceeds (each as defined in the Registration
Statement)) and fees and expenses of the Company and DecisionOne
Corp. in connection with the Merger;
(xi) a Restricted Payment to pay for the repurchase,
retirement or other acquisition or retirement for value of Equity
Interests of Holdings outstanding on the date of this Indenture and
which are not held by the Principals or any member of management of
Holdings or any Subsidiary of Holdings on the date of this Indenture
(including any Equity Interests issued in respect of such Equity
Interests as a result of a stock split, recapitalization, merger,
combination, consolidation or otherwise, but excluding any Equity
Interests issued pursuant to any management equity plan or stock
option plan or similar agreement), provided that the aggregate
Restricted Payments made under this clause (xi) shall not exceed
$40.0 million, provided further that prior to the first anniversary
of the consummation of the Merger, the aggregate amount of Restricted
Payments made under this clause (xi) shall not exceed $20.0 million,
provided further that notwithstanding the foregoing proviso, the
Company shall be permitted to make Restricted Payments under this
clause (xi) only if after giving effect thereto, the Company would be
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.12 hereof; provided that no Default or Event
of Default shall have occurred and be continuing immediately after
making such Restricted Payment;
(xii) the payment of dividends on the Company's common
stock, following the first public offering of the Company's or
Holdings' common stock after the date of this Indenture, of up to
6.0% per annum of the net proceeds received by the Company as common
equity from such public
51
offering, other than, in each case, with respect to public offerings
with respect to the Company's or Holdings' common stock registered on
Form S-8; provided that no Default or Event of Default shall have
occurred and be continuing immediately after any such payment of
dividends;
(xiii) the declaration and payment of dividends to holders
of any class or series of Designated Preferred Stock issued after the
date of this Indenture; provided, however, immediately after the date
of issuance of such Designated Preferred Stock, after giving effect
to such issuance on a pro forma basis, the Company would have been
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.12 hereof.
(xiv) the payment in cash in lieu of fractional shares of
Common Stock under the Warrant Agreement;
(xv) any other Restricted Payment which, together with all
other Restricted Payments made pursuant to this clause (xvi) since
the date of this Indenture, does not exceed $40.0 million (in each
case, after giving effect to all subsequent reductions in the amount
of any Restricted Investment made pursuant to this clause (xv) either
as a result of (A) the repayment or disposition thereof for cash or
(B) the redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary (valued proportionate to the Company's equity interest in
such Subsidiary at the time of such redesignation) at the fair market
value of the net assets of such Subsidiary at the time of such
redesignation), in the case of clause (A) and (B), not to exceed the
amount of such Restricted Investment previously made pursuant to this
clause (xvi); provided that no Default or Event of Default shall have
occurred and be continuing immediately after making such Restricted
Payment; and
(xvi) distributions or payments of Receivables Fees.
The Board of Directors may designate any Restricted Subsidiary (other
than DecisionOne Corp.) to be an Unrestricted Subsidiary if such designation
would not cause a Default. For purposes of making such designation, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid in cash) in the Subsidiary so designated will be deemed
to be Restricted Payments at the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of this
Section 4.11. All such outstanding Investments will be deemed to constitute
Restricted Investments in an amount equal to the greater of (i) the net book
value of such Investments at the time of such designation and (ii) the fair
market value of such Investments at the time of such designation. Such
designation will only be
52
permitted if such Restricted Investment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of (i) all Restricted Payments (other than restricted
Payments made in 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 and (ii) Qualified Proceeds (other than
cash) shall be the fair market value on the date of receipt thereof by the
Company of such Qualified Proceeds. The fair market value of any non-cash
Restricted Payment and Qualified Proceeds shall be determined by the Board of
Directors whose resolution with respect thereto shall be delivered to the
Trustee, such determination to be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if
such fair market value exceeds $20.0 million. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee and
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.11 were computed, which calculations shall be based upon the Company's
latest available financial statements.
SECTION 4.12. LIMITATION ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK.
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), (ii) that the Company will not issue any Disqualified Stock
and (iii) that the Company will not permit any of its Restricted Subsidiaries
to issue any preferred stock; provided, however, that the Company and its
Restricted Subsidiaries may incur Indebtedness (including Acquired Debt), the
Company may issue shares of Disqualified Stock and any Restricted Subsidiary
of the Company may issue Preferred Stock if the Company's Fixed Charge
Coverage Ratio for the Company's most recently ended four fiscal quarters for
which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified
Stock or Preferred Stock is issued, would have been at least 1.50 to 1.00,
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 or Preferred Stock had been issued, as the case may be,
at the beginning of such four-quarter period.
The foregoing provisions will not apply to (collectively, "Permitted
Debt"):
53
(i) the incurrence by the Company, DecisionOne Corp. and its
Restricted Subsidiaries of Indebtedness under the New Credit
Facility; provided that the aggregate principal amount of all
Indebtedness (with letters of credit and bankers' acceptances being
deemed to have a principal amount equal to the maximum face amount
thereunder) outstanding under the New Credit Facility after giving
effect to such incurrence does not exceed an amount equal to $625.0
million;
(ii) the incurrence by (A) the Company and its Restricted
Subsidiaries of Indebtedness represented by the Notes and (B)
DecisionOne Corp. and its Restricted Subsidiaries of Indebtedness
represented by the Senior Subordinated Notes and any guarantee
thereof;
(iii) 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 construction or improvement of property
used in the business of the Company or such Restricted Subsidiary, in
aggregate principal amount not to exceed $25.0 million at any time
outstanding;
(iv) Existing Indebtedness;
(v) 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 extend, refinance, renew,
replace, defease or refund, Indebtedness that was permitted by this
Indenture;
(vi) Indebtedness of the Company to a Restricted Subsidiary;
provided that any subsequent issuance or transfer of any Capital
Stock or other event which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of
any such Indebtedness (except to the Company or another Restricted
Subsidiary) shall be deemed, in each case, to be an incurrence of
such Indebtedness;
(vii) Indebtedness of a Restricted Subsidiary to the Company
or another Restricted Subsidiary; provided that any subsequent
issuance or transfer of any Capital Stock of any Restricted
Subsidiary to whom such Indebtedness is owed or any other event which
results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or another Restricted Subsidiary) shall be
deemed, in each case, to be an incurrence of such Indebtedness;
54
(viii) the incurrence by the Company or any of its
Restricted Subsidiaries of Hedging Obligations that are incurred for
the purpose of fixing or hedging (a) interest rate risk with respect
to any floating rate Indebtedness of such Person that is permitted by
the terms of this Indenture to be outstanding or (b) exchange rate
risk with respect to agreements or Indebtedness of such Person
payable denominated in a currency other than U.S. dollars; provided
that such agreements do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in
foreign currency exchange rates or interest rates or by reason of
fees, indemnities and compensation payable thereunder;
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt, in an aggregate principal amount at
any time outstanding not to exceed $25.0 million;
(x) the incurrence by the Company or any Restricted
Subsidiary of Indebtedness (in addition to Indebtedness permitted by
any other clause of this paragraph) in an aggregate principal amount
at any time outstanding not to exceed the sum of $60.0 million;
(xi) Indebtedness arising from agreements of the Company or
a Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or
a Restricted Subsidiary, other than guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such business,
assets or a Restricted Subsidiary for the purpose of financing such
acquisition; provided, however, that (i) such Indebtedness is not
reflected on the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet
will not be deemed to be reflected on such balance sheet for purposes
of this clause (i)) and (ii) the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross
proceeds including noncash proceeds (the fair market value of such
noncash proceeds being measured at the time received and without
giving effect to any subsequent changes in value) actually received
by the Company and its Restricted Subsidiaries in connection with
such disposition;
(xii) obligations in respect of performance and surety bonds
and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business; and
55
(xiii) (A) any guarantee by a Restricted Subsidiary of the
Company of Indebtedness of the Company that is passu in right of
payment to the Debentures that was permitted to be incurred under
this Indenture and (B) any guarantee by a Restricted Subsidiary of
the Company of Indebtedness of any other Restricted Subsidiary of the
Company that was permitted to be incurred under this Indenture.
For purposes of determining compliance with this Section 4.12, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xiii) above or
is entitled to be incurred pursuant to the first paragraph of this covenant,
the Company shall, in its sole discretion, classify such item of Indebtedness
in any manner that complies with this covenant and such item of Indebtedness
will be treated as having been incurred pursuant to only one of such clauses
or pursuant to the first paragraph hereof. Accrual of interest and the
accretion of original issue discount will not be deemed to be an incurrence of
Indebtedness for purposes of this covenant.
SECTION 4.13. TRANSACTIONS WITH AFFILIATES
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 (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or such 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 (ii) if such Affiliate Transaction involves aggregate
payments in excess of $5.0 million, the Company delivers to the Trustee either
(x) a resolution of the Board of Directors of the Company set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and such Affiliate Transaction is approved by a majority of
the members of the Board of Directors of the Company or (y) an opinion as to
the fairness to the Holders of the Notes of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing; provided, however, that (a) any employment
agreement entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary, (b) transactions between or among the
Company and/or its Restricted Subsidiaries, (c) transactions between the
Company or its Restricted Subsidiaries on the one hand, and the Underwriter or
its Affiliates on the other hand, involving the provision of financial,
consulting or underwriting services by the Underwriter or its
56
Affiliates, provided that the fees payable to the Underwriter or its
Affiliates do not exceed the usual and customary fees of the Underwriter and
its Affiliates for similar services, (d) transactions in accordance with the
Specified Agreements, as amended; provided that no such amendment contains any
provisions that are materially adverse to the Holders of the Notes, (e)
payment of employee benefits, including bonuses, retirement plans and stock
options, in the ordinary course of business, consistent with past practice,
(f) the payment of reasonable and customary fees to, and indemnity provided on
behalf of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary; (g) Restricted Payments permitted by the provisions of
clauses (i), (iv), (v), (vi), (ix), (x), (xiv) and (xvi) of the second
paragraph of Section 4.11 hereof, (h) payments and transactions in connection
with the Merger and the application of the net proceeds from the Offering,
including the payment of any fees and expenses with respect thereto, (i)
transactions pursuant to the Intercompany Note and any forgiveness of
Indebtedness thereunder, (j) transactions permitted by the provisions of
Section 4.11 hereof and (k) transactions pursuant to the Management Loans, in
each case, shall not be deemed Affiliate Transactions.
SECTION 4.14. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer
to exist or become effective any encumbrance or restriction on the ability of
any Restricted Subsidiary to: (i) (a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits or (b) pay any Indebtedness owed to the Company or
any of its Restricted Subsidiaries; (ii) make loans or advances to the Company
or any of its Restricted Subsidiaries; or (iii) transfer any of its properties
or assets to the Company or any of its Restricted Subsidiaries, except for
such encumbrances or restrictions existing under or by reason of (a) the terms
of any Indebtedness permitted by this Indenture to be incurred by any
Restricted Subsidiary of the Company, (b) Existing Indebtedness, as in effect
on the date of this Indenture; (c) any agreement or other instrument of a
Person acquired by the Company or any of its Restricted Subsidiaries, as in
effect at the time of such acquisition (but not created in contemplation of
such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired; (d) customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices; (e) applicable law; (f) purchase
money obligations for property acquired in the ordinary course of business
that impose restrictions of the nature
57
described in clause (iii) above on the property so acquired; or (g) contracts
for the sale of assets, including, without limitation, customary restrictions
with respect to a Subsidiary pursuant to an agreement that has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary.
SECTION 4.15 LIMITATIONS ON LIENS
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 on any asset now owned or hereafter acquired, or any income or
profits therefrom, or assign or convey any rights to receive income therefrom,
unless all payments due under this Indenture and the Notes are secured on an
equal and ratable basis with the obligations so secured or until such time as
such obligation is no longer secured by a Lien except for (i) Liens existing
on the date of this Indenture, (ii) Liens on assets of any Restricted
Subsidiary of the Company securing indebtedness of Restricted Subsidiaries of
the Company and (iii) Permitted Liens.
SECTION 4.16 SALES OF ACCOUNTS RECEIVABLES.
The Company may, and any of its Restricted Subsidiaries may, sell at
any time and from time to time, accounts receivable to any Accounts Receivable
Subsidiary; provided that (i) the aggregate consideration received in each
such sale is at least equal to the aggregate fair market value of the
receivables sold, as determined by the Board of Directors of the Company in
good faith, (ii) no less than 80% of the consideration received in each such
sale consists of either cash or a promissory note (a "Promissory Note") which
is subordinated to no Indebtedness or obligation other than the financial
institution or other entities providing the financing to the Accounts
Receivable Subsidiary with respect to such accounts receivable (the
"Financier") and the remainder of such consideration consists of an Equity
Interest in such Accounts Receivable Subsidiary; provided further that the
Initial Sale will include all accounts receivable of the Company and/or its
Restricted Subsidiaries that are party to such arrangements that constitute
eligible receivables under such arrangements, (iii) the cash proceeds received
from the Initial Sale less reasonable and customary transaction costs will be
deemed to be Net Proceeds and will be applied in accordance with the second
paragraph of Section 4.10 hereof, and (iv) the Company and its Restricted
Subsidiaries will sell all accounts receivable that constitute eligible
receivables under such arrangements to the Accounts Receivable Subsidiary no
less frequently than on a weekly basis.
The Company (i) will not permit any Accounts Receivable Subsidiary to
sell any accounts receivable purchased from the Company or any of its
Restricted Subsidiaries to any other person
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except on an arm's-length basis and solely for consideration in the form of
cash or Cash Equivalents, (ii) will not permit the Accounts Receivable
Subsidiary to engage in any business or transaction other than the purchase,
financing and sale of accounts receivable of the Company and its Restricted
Subsidiaries and activities incidental thereto, (iii) will not permit any
Accounts Receivable Subsidiary to incur Indebtedness in an amount in excess of
97% of the book value of such Accounts Receivable Subsidiary's total assets,
as determined in accordance with GAAP, (iv) will, at least as frequently as
monthly, cause the Accounts Receivable Subsidiary to remit to the Company as
payment for additional receivables or on the Promissory Notes or as a
dividend, all available cash or Cash Equivalents not held in a collection
account pledged to a Financier, to the extent not applied to pay or maintain
reserves for reasonable operating expenses of the Accounts Receivable
Subsidiary or to satisfy reasonable minimum capital requirements based on then
current market practices of rating agencies in similar transactions involving
receivables of a similar type and quality, as determined by the Board of
Directors of the Company in good faith and (v) will not, and will not permit
any of its Subsidiaries to, sell accounts receivable to any Accounts
Receivable Subsidiary upon (1) the occurrence of an Event of Default with
respect to the Company and its Restricted Subsidiaries and (2) the occurrence
of certain events of bankruptcy or insolvency with respect to such Accounts
Receivable Subsidiary.
SECTION 4.17. NO RESTRICTIONS ON CONSUMMATION OF MERGER.
Notwithstanding any provision contained herein to the contrary, this
Indenture will not prohibit the consummation of the Merger, provided that
concurrently with the Merger, (a) Holdings, as the surviving corporation,
shall execute and deliver to the Trustee an assumption agreement substantially
in the form of EXHIBIT B hereto pursuant to which it shall assume all the
Obligations of the Issuer under the Notes and this Indenture.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving entity), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to, another Person unless (i) the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made is a corporation organized or existing under the laws of the United
States, any state thereof or
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the District of Columbia; (ii) 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, lease, conveyance or other disposition will
have been made assumes all the obligations of the Company under the Notes and
this Indenture pursuant to a supplemental indenture in form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction, no
Default or Event of Default exists; (iv) the Company or the Person formed by
or surviving any such consolidation or merger, or to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been
made will, at the time of such transaction after giving pro forma effect
thereto as if such transaction 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 the
first paragraph of Section 4.12 hereof. The foregoing clause (iv) will not
prohibit (a) a merger between the Company and a Wholly Owned Subsidiary of an
Affiliate of the Company created solely for the purpose of holding the Capital
Stock of the Company, (b) a merger between the Company and a Wholly Owned
Restricted Subsidiary or (c) a merger between the Company and an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
State of the United States so long as, in each case, the amount of
Indebtedness of the Company and its Restricted Subsidiaries is not increased
thereby.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease or conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with 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 that meets the requirements of
Section 5.01 hereof; provided, further, that solely for purposes of computing
Consolidated Net Income for purposes of clause (c) of the first paragraph of
Section 4.11 hereof, the Consolidated Net Income of any Person other than the
Company or any of its Restricted Subsidiaries shall be included only for
periods subsequent to the effective time of such consolidation or merger,
sale, assignment, transfer, lease or conveyance or other disposition of
assets.
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT AND NOTICE THEREOF.
Each of the following constitutes an "Event of Default":
(a) default for 30 days in the payment when due of interest
on the Notes;
(b) default in payment when due of principal or premium, if
any, on the Notes at maturity, upon redemption or otherwise;
(c) failure by the Company for 30 days after receipt of
notice from the Trustee or Holders of at least 30% in principal
amount of the Notes then outstanding to comply with the provisions of
Sections 3.10, 4.09, 4.10, 4.11, 4.12 or Article 5 hereof.
(d) failure by the Company for 60 days after notice from the
Trustee or the Holders of at least 30% in principal amount of the
Notes then outstanding to comply with its other agreements in this
Indenture or the Notes;
(e) 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, which default (i) is caused by a failure to pay
Indebtedness at its stated final maturity (after giving effect to any
applicable grace period provided in such Indebtedness) (a "Payment
Default") or (ii) results in the acceleration of such Indebtedness
prior to its stated final 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
$20.0 million or more;
(f) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $20.0
million (net of any amounts with respect to which a reputable and
creditworthy insurance company has acknowledged liability in
writing), which judgments are not paid, discharged or stayed within
60 days after their entry;
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(g) the Company or any of its Restricted Subsidiaries that
is a Significant Subsidiary pursuant to or within the meaning of the
Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for
relief against it in an involuntary case,
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of
its property,
(iv) makes a general assignment for the benefit
of its creditors,
(v) generally is not paying its debts as they
become due; or
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any
of its Restricted Subsidiaries that is a
Significant Subsidiary in an involuntary
case;
(ii) appoints a Custodian of the Company or any
of its Restricted Subsidiaries that is a
Significant Subsidiary or for all or
substantially all of the property of the
Company or any of its Restricted
Subsidiaries that is a Significant
Subsidiary;
(iii) orders the liquidation of the Company or
any of its Restricted Subsidiaries that is
a Significant Subsidiary; and
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 30% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default specified in clause (g) or
clause (h) of Section 6.01 hereof, all outstanding Notes will become due and
payable without further action or notice. Upon any acceleration of maturity of
the Notes, all principal of and accrued interest on (if on or after _______,
2002) or Accreted Value of (if prior to ___, 2002) the Notes shall be due and
payable immediately. Holders of
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the Notes may not enforce this Indenture or the Notes except as provided in
this 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. In the event of a declaration of acceleration
of the Notes because an Event of Default has occurred and is continuing as a
result of the acceleration of any Indebtedness described in clause (e) of
Section 6.01 hereof, the declaration of acceleration of the Notes shall be
automatically annulled if the holders of any Indebtedness described in clause
(e) of Section 6.01 hereof have rescinded the declaration of acceleration in
respect of such Indebtedness within 30 days of the date of such declaration
and if (y) the annulment of the acceleration of the Notes would not conflict
with any judgment or decree of a court of competent jurisdiction and (z) all
existing Events of Default, except nonpayment of principal or interest on the
Notes that became due solely because of the acceleration of the Notes, have
been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may upon
delivery of 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.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding, by notice to the Trustee, may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under this Indenture, except a continuing Default or Event of
Default in the payment of interest or premium on, or principal of, the Notes.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in such Holders' interest.
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SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount at maturity
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. The
Trustee may take any other action which it deems proper which is not
inconsistent with any such direction.
SECTION 6.06. LIMITATION ON SUITS.
No Holder of a Note will have any right to institute any proceeding
with respect to this Indenture or for any remedy hereunder, unless (i) such
Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes, (ii) the Holders of at
least 30% in aggregate principal amount at maturity of the Notes then
outstanding shall have made written request to the Trustee to institute such
proceeding and, if requested by the Trustee, provided reasonable indemnity to
the Trustee, with respect to such proceeding and (iii) the Trustee shall not
have received from the Holders of a majority in aggregate principal amount at
maturity of the Notes then outstanding a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
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 any Note, on or after the respective due dates expressed in any
Note, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent
of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) hereof
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.
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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, as administrative
expenses associated with any such proceeding 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 Six, it
shall pay out the money, subject to Article 10 hereof, 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 and, if any, and
interest, respectively;
65
Third: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture and the Notes; and
Fourth: 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.
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
his 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, provided, that
the Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
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(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:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 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 this
Indenture unless the Holders shall have 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 Officers' Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Officers'
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 hereof in good faith and in
reliance thereon.
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(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 shall 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.
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 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, apply to the Commission for permission to continue as trustee
or resign. 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 direction of the Company 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
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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.
Within 60 days after each __________ beginning with the ___________
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 ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA ss.
313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee, from time to time as may be
agreed upon between them, reasonable compensation for its acceptance of this
Indenture and services hereof. 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.
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 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
hereof, except to the extent 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 hereof. The Company shall defend the claim and the Trustee shall
cooperate
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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.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
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.
When the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in Section 6.01(g) or (h) hereof,
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.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
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.
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:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) 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;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor
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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.
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.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereof 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 (including the trust
created by this Indenture) 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 hereof 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, or is a wholly owned subsidiary of a bank
holding company that has, a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
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This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
SECTION 7.12. RIGHTS OF HOLDERS WITH RESPECT TO TIME METHOD AND PLACE
Subject to the limitations of this Article 7, a majority in principal
amount of the outstanding Notes issued hereof shall have the right to direct
the time, method and place of conducting any proceeding for exercising any
remedy available to the Trustee, subject to certain exceptions.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 8.02 or Section 8.03 hereof
be applied to all Notes then outstanding upon compliance with the conditions
set forth below in this Article Eight.
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 shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all Notes then
outstanding on the date the conditions set forth below are satisfied ("Legal
Defeasance"). For this purpose such defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by the
Notes outstanding, which shall thereafter be deemed to be "outstanding" only
for the purposes of Section 8.05 and the other Sections of this Indenture
referred to in clauses (i) and (ii) of this Section 8.02, and to have
satisfied all its 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 which
shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Notes to receive payments in
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respect of the principal of, premium, if any, and interest on such Notes when
such payments are due solely from amounts deposited with the Trustee as
provided in Section 8.04 hereof, (ii) the Company's obligations with respect
to the Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 4.02 and 4.03
hereof, (iii) the rights, powers, trusts, duties, indemnities and immunities
of the Trustee and the Company's obligations in connection therewith and (iv)
this Article 8.
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 shall be released from its
obligations under the covenants contained in Article Five and in Sections
4.04, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.16 with respect to the
outstanding Notes, if any, on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed to be not "outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any 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 financial
accounting purposes). For this purpose, such 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(c) 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, Sections 6.01(d) through 6.01(f) and Section
6.01(i) shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 8.02 or Section 8.03 hereof to the outstanding Notes:
(i) the Company shall have irrevocably deposited with the Trustee, in
trust, for the benefit of the Holders of the Notes and without retaining any
legal interest corpus of such trust, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal amount at maturity of or Accreted
Value (as
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applicable), premium, if any, and interest due on the outstanding Notes on the
stated maturity thereof or on the applicable optional redemption date, as the
case may be, and the Company must specify whether the Notes are being defeased
to maturity or to a particular redemption date;
(ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from,
or there has been published by, the United States Internal Revenue Service a
ruling or (B) since the Closing Date, there has been a change in the
applicable U.S. federal income tax law, in either case to the effect that, and
based thereon such opinion of counsel in the United States shall confirm that,
subject to customary assumptions and exclusions, the Holders of the
outstanding Notes will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such Legal Defeasance and will be subject
to U.S. 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;
(iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that, subject to customary assumptions
and exclusions, the Holders of the outstanding Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
Covenant Defeasance and will be subject to such 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;
(iv) 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)
or, insofar as Events of Default set forth in Section 6.01(g) and (h), at any
time in the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be satisfied until the
expiration of such period);
(v) 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 is a
party or by which the Company is bound;
(vi) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date of such opinion and subject to
customary assumptions and exclusions (which assumptions and exclusions shall
not relate to the operation of Section 547 of the United States Bankruptcy
Code or any analogous New York State law provision or related judicial
decisions) after the 91st day following the deposit the trust funds will not
be
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subject to the effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally, and that the Trustee
has a perfected security interest in such trust funds for the ratable benefit
of the Holders;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding any
creditors of the Company;
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States (which Opinion of
Counsel may be subject to customary assumptions and exclusions) each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance, as the case may be, have been complied with; and
(ix) the Trustee shall have received such other documents and
assurances as the Trustee shall reasonably require.
SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 4.03
hereof, all money and 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 Notes then outstanding 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 its own 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 (and 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 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 Notes then
outstanding.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time at the Company's
request any money or Government Securities held by it as provided in Section
8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered
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to the Trustee (which may be the opinion delivered under Section 8.04(i)
hereof), are in excess of the amount thereof which would then be required to
be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
The Trustee shall promptly pay to the Company, after written request
therefor, any money held at such time in excess of the amounts required to pay
any of the Company's Obligations then owing with respect to the Notes.
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, if any, on any Note and remaining unclaimed for one year
after such principal, and premium, if any, or interest, if any, have 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, as an unsecured general creditor, 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 will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or Government Securities in accordance with Section 8.02 hereof or
Section 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 hereof or Section 8.03 hereof, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 hereof or Section 8.03
hereof, as the case may be; provided, however, that if the Company makes any
payment of principal of (or 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 hereof, without the consent of any
Holder of Notes, the Company and the Trustee may amend or supplement this
Indenture or the Notes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to comply with Article 5 hereof;
(d) to provide for the assumption of the Company's obligations
to the Holders of the Notes in the case of a merger,
consolidation, sale, assignment, transfer lease or other
conveyance or other disposition of assets;
(e) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not, in
the opinion of counsel, adversely affect the legal rights
hereunder of any such Holder;
(f) to add covenants for the benefit of the Holders or to
surrender any right or power conferred upon the Company; or
(g) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under
the Trust Indenture Act.
Upon the written request of the Company accompanied by a Board
Resolution authorizing the execution of any such amended or supplemental
indenture, and upon receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel, 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, this Indenture and the
Notes issued hereunder may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Notes), and, subject to Sections 6.02, 6.04 and 6.07
hereof, any existing default or compliance with any provision of this
Indenture, the Notes may be waived with the consent of the Holders of a
majority in principal amount of the outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a Board of Resolution
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 an Officers' Certificate and an Opinion of Counsel, the Trustee
shall join with the Company in the execution of such amended or supplemental
indenture unless such amended or supplemental indenture 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.
The consent of the Holders is not necessary under this Section 9.02
to approve the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.
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 at maturity of the
Notes then outstanding may waive compliance in a particular instance by the
Company with any provision of this Indenture, the Notes. However, without the
consent of each Holder affected, an amendment or waiver may not (with respect
to any Note held by a non-consenting Holder):
(i) reduce the principal amount of the Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal amount at maturity of or change the
fixed maturity of any Note or alter the redemption
provisions with respect to the redemption of the Notes
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(other than provisions relating to Sections 4.09 and 4.10
hereof);
(iii) reduce the rate of or change the time for payment of
interest on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest on the Notes
(except a rescission of acceleration of the Notes by the
Holders of at least a majority in aggregate principal amount
at maturity of such Notes and a waiver of the payment
default that resulted from such acceleration) or in respect
of a covenant or a provision contained herein which cannot
be amended or modified without the consent of all Holders;
(v) make any Note payable in money other than that stated in
such Notes;
(vi) make any change in Section 6.04 or Section 6.07 hereof;
(vii) waive a redemption or repurchase payment with respect to any
Note (other than a payment required by Sections 3.10, 4.09
or 4.10 hereof);
(viii) modify any provision of this Indenture with respect to the
priority of the Notes in right of payment; or
(ix) make any change in the foregoing amendment and waiver
provisions of this Article 9.
Notwithstanding the foregoing, any amendment or waiver to Section
4.09 hereof will require the consent of the Holders of at least two-thirds in
aggregate principal amount at maturity of the Notes then outstanding if such
amendment would adversely affect the rights of Holders of Notes.
SECTION 9.03. COMPLIANCE WITH XXX.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an 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 Xxxxxx'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
79
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, but shall not be required to, 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 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 Nine 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 Directors approves it. In signing or refusing to sign any amended
or supplemental indenture the Trustee shall be entitled to receive and
(subject to Section 7.01 hereof) shall be fully protected in relying upon an
Officers's Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company, if any, in accordance with its terms.
ARTICLE 10
SATISFACTION AND DISCHARGE
SECTION 10.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and will cease to be of further
effect as to all Notes issued hereunder, when either
(a) all such Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which 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
80
(b) (i) all such Notes not theretofore delivered to such
Trustee for cancellation have become due and
payable by reason of the making of a notice of
redemption or otherwise or will become due and
payable within one year and the Company has
irrevocably deposited or caused to be deposited
with such Trustee as trust funds in trust an amount
of money sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation for
principal, premium, if any, and accrued interest to
the date of maturity or redemption;
(ii) no Default or Event of Default with respect to this
Indenture or the Notes shall have occurred and be
continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit
will not result in a breach or violation of, or
constitute a default under, any other instrument to
which the Company is a party or by which the
Company is bound;
(iii) the Company has paid or caused to be paid all sums
payable by it under this Indenture; and
(iv) the Company has delivered irrevocable instructions
to the Trustee under this Indenture to apply the
deposited money toward the payment of such Notes at
maturity or the redemption date, as the case may
be.
In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
SECTION 10.02 APPLICATION OF TRUST MONEY
Subject to the provisions of the last paragraph of Section 4.03
hereof, all money deposited with the Trustee pursuant to Section 11.01 hereof
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 Paying Agent) as the Trustee may
determine, to Persons entitled thereto, of the principal (and premium, if any)
and interest for whose payment such money has been deposited with the Trustee.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining,
81
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though such deposit had occurred pursuant to Section 11.01 hereof; 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 11
MISCELLANEOUS
SECTION 11.01. CONFLICT OF ANY PROVISION OF INDENTURE WITH TIA.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by TIA ss. 318(c), the imposed duties shall control.
SECTION 11.02. 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), telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
DecisionOne Holdings Corp.
00 Xxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Trustee:
State Street Bank and Trust Company
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000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporate Trust Department
Facsimile: (860) ___-____
The Company or the Trustee, by notice to the others 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 answered back, if telexed; 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 ss. 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.
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 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 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
ss. 312(c).
SECTION 11.04. 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:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the
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statements set forth in Section 1.05 hereof) stating that,
in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating
to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the
statements set forth in Section 1.05 hereof) stating that,
in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 11.05. LEGAL HOLIDAYS.
In any case where any interest payment date, any date established for
payment of defaulted interest pursuant to Section 2.12 hereof, or any maturity
date with respect to any Note shall not be a Business Day, then
(notwithstanding any other provisions of this Indenture or the Notes) payment
of interest or principal (and premium, if any) need not be made on such date
but may be made on the next succeeding Business Day with the same force and
effect as if made on the interest payment date or date established for payment
of defaulted interest pursuant to Section 2.12 hereof or the maturity date, as
applicable, and no interest shall accrue with respect to such payment for the
period from and after such interest payment date or date established for
payment of defaulted interest pursuant to Section 2.12 or maturity date , as
the case may be, to the next succeeding Business Day.
SECTION 11.06. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company shall have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of, or by reason
of such obligations or their creation. Each Holder of the 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. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the Commission that such a waiver is against public policy.
SECTION 11.07. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CHOICE OF LAW RULES THEREOF.
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SECTION 11.08. 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 11.09. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not. All
covenants and agreements in this Indenture by the Trustee shall bind its
respective successors and assigns, whether so expressed or not.
SECTION 11.10. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.11. 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 11.12. 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]
85
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed in New York, New York as of the day and year first above
written.
QUAKER HOLDING CO.
Dated: August ___, 1997
By:_________________________________
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
Dated: August ___, 1997
By:_________________________________
Name:
Title:
86
EXHIBIT A
(Face of Note)
[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. The Depository Trust Company shall act as the Depositary until a
successor shall be appointed by the Company. Unless this certificate is
presented by an authorized representative of The Depository Trust Company (00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"), 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.]1
[Insert Warrant Endorsement as applicable]
THE NOTES EVIDENCED BY THIS CERTIFICATE ARE NOT TRANSFERABLE SEPARATELY FROM
THE WARRANTS ATTACHED HERETO ORIGINALLY SOLD AS A UNIT WITH THE NOTES UNTIL
THE EARLIEST TO OCCUR OF (I) _________, 1997 (II) SUCH EARLIER DATE AS
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION MAY DETERMINE AND (III)
THE OCCURRENCE OF A CHANGE OF CONTROL (THE "SEPARATION DATE"). PRIOR TO SUCH
DATE, THE NOTES EVIDENCED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN
INTEGRAL MULTIPLES OF $1,000 PRINCIPAL AMOUNT OF NOTES AND ONLY WITH THE
SIMULTANEOUS TRANSFER TO THE TRANSFEREE OF __ WARRANTS FOR EACH $1,000
PRINCIPAL AMOUNT SO TRANSFERRED.
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS $_______,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $_______, THE ISSUE DATE IS AUGUST
__, 1997 AND THE YIELD TO MATURITY IS ____% PER ANNUM.
------------
1. This paragraph should be included only if the Note is issued in global form.
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_____% Senior Discount Debentures due 2008
No. $_________
Cusip No:
QUAKER HOLDING CO.
promises to pay to Cede & Co. or registered assigns, the principal sum of
$_________________ (_______________________________ Dollars) on __________,
2008.
Interest Payment Dates: __________ and ___________
Record Dates: _________ and ___________
By:______________________________
Name:
Title:
This is one of the ____% Senior
Discount Debentures due 2008
referred to in the within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: _____________________________
Authorized Signature
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(Back of Note)
QUAKER HOLDING CO.
___% Senior Discount Debentures 2008
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. Quaker Holding Co., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate of
____% per annum in the manner specified below. Interest will not accrue prior
to _____, 2002. Thereafter, the Company shall pay interest semi-annually in
arrears on ______ and ________ of each year, or if any such day is not a
Business Day, on the next ucceeding Business Day (each an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from _______, 2002.
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 equal to the per annum rate on the Notes
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 will be computed on the basis
of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of busi ess on ____________ and _____________ next preceding the
Interest Payment Date, even if such Notes are cancelled 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 will 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 all payments with respect to Notes
represented by one or more permanent global Notes will be paid by wire
transfer of immediately available funds to the account of the Depository Trust
Company or any successor thereto. Such payment shall be in such coin or
currency of the United Sates of America as at the time of payment is legal
tender for payment of public and private debts.
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3. PAYING AGENT AND REGISTRAR. Initially, State Street Bank and Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Notes may be presented for registration of transfer and exchange at the
offices of the Registrar. The Company may change any Paying Agent or Registrar
without 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
August ___, 1997 (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 xx.xx. 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. The Notes are general unsecured obligations of the Company limited to
___________ in aggregate principal amount at maturity.
5. OPTIONAL REDEMPTION. Except as set forth in the next paragraph, the Notes
will not be redeemable at the Company's option prior to ________, 2002.
Thereafter, the Notes will be subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
written notice, at the redemption prices (expressed as a percentage of
principal amount) set forth below, together with accrued and unpaid interest
thereon, to the applicable redemption date, if redeemed during the
twelve-month period beginning on __________ of each of the years indicated
below:
YEAR PERCENTAGE OF
PRINCIPAL AMOUNT
2002 ..................................... _______%
2003 ..................................... _______%
2004 and thereafter ....................... 100.000%
In addition, prior to _________, 2000, the Company may, at its
option, on any one or more occasions redeem up to 35% of the original
aggregate principal amount at maturity of Notes at a redemption price equal to
______% of the Accreted Value thereof, with the net cash proceeds of one or
more Equity Offerings; provided that at least 65% of the original aggregate
principal amount at maturity of Notes remains outstanding immediately after
the occurrence of each such redemption; and provided, further that any such
redemption shall occurs within 90 days of the date of closing of each such
Equity Offering.
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6. MANDATORY REDEMPTION. Other than as set forth in paragraph 8, the Company
shall not be required to make mandatory redemption payments with respect to
the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes may be redeemed in
part but only in whole multiples of $1,000. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.
8. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of a Change of
Control, the Company shall make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of the Notes at a price in cash equal to 101% of the aggregate principal
amount at maturity thereof plus accrued and unpaid interest, if any, to the
date of purchase (or, in the case of repurchases of Notes prior to ____,2002,
at a purchase price equal to 101% of the Accreted Value thereof as of the date
of repurchase) (the "Change of Control Payment"). Within 65 days following any
Change of Control, the Company shall mail a notice to each Holder of Notes
issued under the Indenture, with a copy to the Trustee, containing the
information set forth in Section 4.09 of the Indenture. Holders of Notes that
are subject to an offer to purchase may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the
reverse side of this Note.
(b) Within 395 days after the Company's or any Restricted
Subsidiary's receipt of any Net Proceeds from an Asset Sale, the Company or
such Restricted Subsidiary shall apply such Net Proceeds (a) to permanently
reduce Indebtedness of a Restricted Subsidiary of the Company (and to
correspondingly reduce commitments with respect thereto) or (b) to repay Pari
Passu Indebtedness (provided that if the Company shall so repay Pari Passu
Indebtedness, it will equally and ratably reduce Indebtedness under the Notes
if the Notes are then redeemable or, if the Notes may not be then redeemed,
the Company shall make an offer pursuant to Section 3.10 of the Indenture to
purchase at 100% of the principal amount thereof at maturity (or, in the case
of repurchases of Notes prior to ___, 2002, at a purchase price equal to 100%
of the Accreted Value thereof as of the date of repurchase) the amount of
Notes that would otherwise be redeemed or (c) to an investment in property,
capital expenditures or assets that are used or useful in a Permitted
Business, or Capital Stock of any Person primarily engaged in a Permitted
Business if, as a result of the acquisition by the Company or any Restricted
Subsidiary thereof, such Person becomes a Restricted Subsidiary. Any Net
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Proceeds from Asset Sales that are not applied or invested as provided in the
preceding sentence of this paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Company shall be required to make an Asset Sale Offer to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the principal
amount at maturity thereof plus accrued and unpaid interest thereon to the
date of purchase (or, in the case of repurchases of Notes prior to ______,
2002, at a purchase price equal to 100% of the Accreted Value thereof as of
the date of repurchase), in accordance with the procedures set forth in
Section 3.10 of the Indenture. To the extent that the aggregate principal
amount at maturity or Accreted Value (as applicable) of Notes amount of Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes.
If the aggregate principal amount at maturity of or Accreted Value (as
applicable) of Notes surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro
rata basis. Upon completion of such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
9. 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 to pay
any taxes and fees required by law or permitted by the Indenture. Neither the
Company nor the Registrar need exchange or register the transfer of any Note
or portion of a Note selected for redemption. Also, neither the Company nor
the Registrar need exchange or register the transfer of any Notes for a period
of 15 days before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as
its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture and the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount at maturity of the then
outstanding Notes, and, subject to the terms of the Indenture, any existing
default (other than a default in the payment of the principal of, premium, if
any, or interest on, the Notes) or compliance with any provision of the
Indenture and the Notes may be waived with the consent of the Holders of a
A-6
majority in principal amount of the then outstanding Notes. Without the
consent of any Holder, the Indenture and 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
comply with Article 5 of the Indenture, to provide for the assumption of the
Company's obligations to Holders of the Notes, 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 add covenants for the benefit of the Holders or to surrender any
right or power conferred upon the Company, to comply with the requirements of
the Commission in order to effect or maintain the qualification of the
Indenture under the TIA or to provide for the appointment of a successor
trustee in compliance with the requirements of Section 7.10 of the Indenture.
12. DEFAULTS AND REMEDIES. Each of the following constitutes an "Event of
Default": (a) default for 30 days in the payment when due of interest on the
Notes; (b) default in payment when due of principal or premium, if any, on the
Notes at maturity, upon redemption or otherwise; (c) failure by the Company
for 30 days after receipt of notice from the Trustee or Holders of at least
30% in principal amount of the Notes then outstanding to comply with the
provisions of Sections 3.10, 4.09, 4.10, 4.11, 4.12 or Article 5 of the
Indenture; (d) failure by the Company for 60 days after notice from the
Trustee or the Holders of at least 30% in principal amount of the Notes then
outstanding to comply with its other agreements in the Indenture or the Notes;
(e) 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 the Indenture, which default (i) is caused by a failure to
pay Indebtedness at its stated final maturity (after giving effect to any
applicable grace period provided in such Indebtedness) (a "Payment Default")
or (ii) results in the acceleration of such Indebtedness prior to its stated
final 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 $20.0 million or more; (f) failure
by the Company or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $20.0 million (net of any amounts with respect to
which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed
within 60 days
A-7
after their entry; and (g) certain events of bankruptcy with
respect to the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary.
If an Event of Default occurs and is continuing under the Indenture,
the Trustee or the Holders of at least 30% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default arising
under clause (f) or (g) of the preceding paragraph, all outstanding Notes will
become due and payable without further action or notice. Upon any acceleration
of maturity of the Notes, all principal of and accrued interest on (if on or
after ____,2002) or Accreted Value of (if prior to ______, 2002) the Notes
shall be due and payable immediately. Holders of Notes may not enforce the
Indenture or the Notes except as provided under 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. In the event of a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in clause (e) of Section 6.01 of
the Indenture, the declaration of acceleration of the Notes shall be
automatically annulled if the holders of any Indebtedness described in clause
(e) of Section 6.01 of the Indenture have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 days of the date of
such declaration and if (y) the annulment of the acceleration of the Notes
would not conflict with any judgment or decree of a court of competent
jurisdiction and (z) all existing Events of Default, except nonpayment of
principal or interest on the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived. The Trustee may withhold
from Holders of Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal,
premium, if any, or interest) if it determines that withholding notice is in
their interest. In addition, the Trustee shall have no obligation to
accelerate the Notes if in the best judgment of the Trustee acceleration is
not in the best interest of the Holders of such Notes.
13. 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, and may otherwise deal with the Company, as if it were not the
Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder,
as such, of the Company shall not
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have any liability for any obligations of the Company under these Notes or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting any of these Notes
waives and releases all such liability.
15. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TENANT (= 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).
17. 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 may use CUSIP numbers in
notices of redemption 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 redemption 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:
DecisionOne Holdings Corp.
00 Xxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
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(Insert assignee's soc. sec. or tax I.D. no.)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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(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.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.09 or 4.10 of the Indenture, check the box below:
[ ] Section 4.09 [ ] Section 4.10
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.09 or Section 4.10 of the Indenture, state the
amount you elect to have purchased: $_____________
Date:_____________________ Your Signature: ______________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:_______________
Signature Guarantee.
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EXHIBIT B
FORM OF ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT (this "Agreement"), dated as of August __,
1997, between DecisionOne Holdings Corp., a Delaware corporation (the
"Company"), and State Street Bank and Trust Company, as trustee under the
indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, Quaker Holding Co., a Delaware corporation ("Quaker"), has
heretofore executed and delivered to the Trustee an indenture (the
"Indenture"), dated as of the date hereof, providing for the issuance of __%
Senior Discount Debentures due 2008 (the "Notes");
WHEREAS, Quaker has been merged with and into the Company;
WHEREAS, pursuant to Section 4.17 of the Indenture, the Company is
required to execute and deliver this Agreement concurrently with such merger;
WHEREAS, pursuant to Section 9.01 of the Indenture the Trustee is
authorized to execute and deliver this Agreement; and
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company and the Trustee mutually covenant and agree for the equal and ratable
benefit of the holders of the Securities as follows:
1. ASSUMPTION. The Company hereby assumes all of the obligations of
Quaker under the Indenture and the Notes and, hereafter, shall be deemed the
"Company" for all purposes under the Indenture and the Notes.
2. NEW YORK LAW TO GOVERN. The internal law of the State of New
York, without regard to the choice of law rules thereof, shall govern and be
used to construe this Agreement.
3. COUNTERPARTS. The parties may sign any number of copies of this
Agreement. Each signed copy shall be an original, but all of them together
represent the same agreement.
4. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the date first above written.
Dated: August __, 1997 DECISIONONE HOLDINGS CORP.
By: ____________________________
Name:
Title:
Dated: August __, 1997 STATE STREET BANK AND TRUST COMPANY
as Trustee
By: ____________________________
Name:
Title:
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