================================================================================
INDENTURE
dated as of November 24, 1998
by and among
HARVARD INDUSTRIES, INC.,
as Issuer,
THE SUBSIDIARY GUARANTORS
NAMED HEREIN,
as Subsidiary Guarantors,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
=====================================
14 1/2% Senior Secured Notes Due 2003
=====================================
================================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310(a)(1) ........................................ 7.10
(a)(2) ........................................ 7.10
(a)(3) ........................................ N.A.
(a)(4) ........................................ N.A.
(b) ........................................ 7.8; 7.10
(c) ........................................ N.A.
311(a) ........................................ 7.11
(b) ........................................ 7.11
(c) ........................................ N.A.
312(a) ........................................ 2.5
(b) ........................................ 12.3
(c) ........................................ 12.3
313(a) ........................................ 7.6
(b)(1) ........................................ N.A.
(b)(2) ........................................ 7.6
(c) ........................................ 7.6
(d) ........................................ 7.6
314(a) ........................................ 4.19; 12.2
(b) ........................................ 11.2
(c)(1) ........................................ 12.4
(c)(2) ........................................ 12.4
(c)(3) ........................................ N.A.
(d) ........................................ 11.2;11.3
(e) ........................................ 12.5
315(a) ........................................ 7.1
(b) ........................................ 7.5; 12.2
(c) ........................................ 7.1
(d) ........................................ 7.1; 7.2
(e) ........................................ 6.11
316(a)(last sentence) ...................................... 12.6
(a)(1)(A) ........................................ 6.5
(a)(1)(B) ........................................ 6.4
(a)(2) ........................................ N.A.
(b) ........................................ 6.7
317(a)(1) ........................................ 6.8
(a)(2) ........................................ 6.9
(b) ........................................ 2.4
318(a) ........................................ 12.1
N.A. means not applicable.
----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE...........................1
SECTION 1.1. Definitions............................................1
SECTION 1.2. Incorporation by Reference of Trust Indenture Act.....25
SECTION 1.3. Rules of Construction.................................26
SECTION 1.4. One Class of Securities...............................26
ARTICLE II
THE SECURITIES......................................................27
SECTION 2.1. Terms, Form and Dating................................27
SECTION 2.2. Execution and Authentication..........................30
SECTION 2.3. Registrar and Paying Agent............................31
SECTION 2.4. Paying Agent To Hold Money in Trust...................31
SECTION 2.5. Securityholder Lists..................................32
SECTION 2.6. Transfer and Exchange.................................32
SECTION 2.7. Replacement Securities................................45
SECTION 2.8. Outstanding Securities................................45
SECTION 2.9. Temporary Securities..................................46
SECTION 2.10. Cancellation.........................................46
SECTION 2.11. Defaulted Principal and Interest.....................46
SECTION 2.12. CUSIP Numbers........................................47
ARTICLE III
REDEMPTION..........................................................47
SECTION 3.1. Notices to Trustee....................................47
SECTION 3.2. Selection of Securities To Be Redeemed................47
SECTION 3.3. Notice of Redemption..................................48
SECTION 3.4. Effect of Notice of Redemption........................49
SECTION 3.5. Deposit of Redemption Price...........................49
SECTION 3.6. Securities Redeemed in Part...........................49
SECTION 3.7. Optional Redemption...................................49
SECTION 3.8. Offer to Purchase by Application of Excess Proceeds...51
SECTION 3.9. Special PIK Redemptions...............................53
- i -
Page
----
ARTICLE IV
COVENANTS............................................................54
SECTION 4.1. Payment of Securities..................................54
SECTION 4.2. Restricted Payments....................................54
SECTION 4.3. Incurrence of Indebtedness and Issuance of
Preferred Stock.................................56
SECTION 4.4. Maintenance of Consolidated Leverage Ratio.............58
SECTION 4.5. Maintenance of Consolidated Interest Coverage Ratio....59
SECTION 4.6. Liens..................................................60
SECTION 4.7. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.........................60
SECTION 4.8. Transactions with Affiliates...........................60
SECTION 4.9. Sale and Leaseback Transactions........................61
SECTION 4.10. Impairment of Security Interests......................61
SECTION 4.11. Additional Subsidiary Guarantors......................62
SECTION 4.12. Offer to Purchase Upon Asset Sale.....................62
SECTION 4.13. Offer to Repurchase upon Change of Control............63
SECTION 4.14. Business Activities...................................64
SECTION 4.15. Payments for Consent..................................64
SECTION 4.16. Reports...............................................65
SECTION 4.17. Further Surveys and Title Insurance...................65
SECTION 4.18. Corporate Existence...................................65
SECTION 4.19. Accounts Receivable Aging Certificate.................66
SECTION 4.20. Compliance Certificate................................66
SECTION 4.21. Maintenance of Office or Agency.......................66
SECTION 4.22. Taxes.................................................66
SECTION 4.23. Stay, Extension and Usury Laws........................66
SECTION 4.24. Maintenance of Properties and Insurance...............67
SECTION 4.25. Further Instruments and Acts..........................67
ARTICLE V
SUCCESSOR COMPANY....................................................67
SECTION 5.1. Merger, Consolidation, or Sale of Assets...............67
ARTICLE VI
DEFAULTS AND REMEDIES................................................68
SECTION 6.1. Events of Default......................................68
SECTION 6.2. Acceleration...........................................71
SECTION 6.3. Other Remedies.........................................71
SECTION 6.4. Waiver of Past Defaults................................71
- ii -
Page
----
SECTION 6.5. Control by Majority....................................72
SECTION 6.6. Limitation on Suits....................................72
SECTION 6.7. Rights of Securityholders To Receive Payment...........72
SECTION 6.8. Collection Suit by Trustee.............................73
SECTION 6.9. Trustee May File Proofs of Claim.......................73
SECTION 6.10. Priorities............................................73
SECTION 6.11. Undertaking for Costs.................................73
SECTION 6.12. Waiver of Stay or Extension Laws......................74
SECTION 6.13. Company Report........................................74
ARTICLE VII
TRUSTEE..............................................................74
SECTION 7.1. Duties of Trustee......................................74
SECTION 7.2. Rights of Trustee......................................76
SECTION 7.3. Individual Rights of Trustee...........................77
SECTION 7.4. Trustee's Disclaimer...................................77
SECTION 7.5. Notice of Defaults.....................................77
SECTION 7.6. Reports by Trustee to Securityholders..................77
SECTION 7.7. Compensation and Indemnity.............................77
SECTION 7.8. Replacement of Trustee.................................78
SECTION 7.9. Successor Trustee by Merger............................79
SECTION 7.10. Eligibility; Disqualification.........................79
SECTION 7.11. Preferential Collection of Claims Against Company.....80
ARTICLE VIII
DISCHARGE OF INDENTURE...............................................80
SECTION 8.1. Discharge of Liability on Securities...................80
ARTICLE IX
AMENDMENTS...........................................................80
SECTION 9.1. Without Consent of Securityholders.....................80
SECTION 9.2. With Consent of Securityholders........................81
SECTION 9.3. Compliance with Trust Indenture Act....................83
SECTION 9.4. Revocation and Effect of Consents and Waivers..........83
SECTION 9.5. Notation on or Exchange of Securities..................83
SECTION 9.6. Trustee To Sign Amendments.............................84
- iii -
Page
----
ARTICLE X
GUARANTEES...........................................................84
SECTION 10.1. Guarantees............................................84
SECTION 10.2. Limitation on Liability...............................86
SECTION 10.3. Successors and Assigns................................86
SECTION 10.4. No Waiver.............................................86
SECTION 10.5. Right of Contribution.................................86
SECTION 10.6. No Subrogation........................................86
SECTION 10.7. Additional Subsidiary Guarantors......................87
SECTION 10.8. Modification..........................................87
SECTION 10.9. Release of Subsidiary Guarantor.......................87
SECTION 10.10. Merger, Consolidation and Sale of Assets of a
Subsidiary Guarantor............................87
ARTICLE XI
COLLATERAL AND SECURITY DOCUMENTS....................................88
SECTION 11.1. Security Documents; Agreements........................88
SECTION 11.2. Opinions..............................................89
SECTION 11.3. Release and Substitution of Collateral; Amendment
of Security Documents...........................89
SECTION 11.5. Reserved..............................................94
SECTION 11.6. Authorization of Actions to be Taken by the
Trustee Under the Security Documents............94
SECTION 11.7. Authorization of Receipt of Funds by the
Trustee Under the Security Documents............95
SECTION 11.8. Release Upon Termination of the Company's
Obligations.....................................95
SECTION 11.9. Security Agreement Collateral.........................95
SECTION 11.10. Effect of Termination of Lender Obligations..........95
SECTION 11.11. Authorization of Trustee Entering Into
Intercreditor Agreement.........................96
SECTION 11.12. Authorization of Receipt of Funds by the
Trustee Under the Security Documents............96
ARTICLE XII
MISCELLANEOUS........................................................96
SECTION 12.1. Trust Indenture Act Controls..........................96
SECTION 12.2. Notices...............................................96
SECTION 12.3. Communication by Securityholders with
other Securityholders...........................97
SECTION 12.4. Certificate and Opinion as to Conditions Precedent....97
SECTION 12.5. Statements Required in Certificate or Opinion.........97
- iv -
Page
----
SECTION 12.6. When Securities Disregarded...........................98
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar..........98
SECTION 12.8. Reserved..............................................98
SECTION 12.9. Governing Law and Submission to Jurisdiction..........98
SECTION 12.10. No Recourse Against Others...........................98
SECTION 12.11. Successors...........................................98
SECTION 12.12. Multiple Originals...................................98
SECTION 12.13. Qualification of Indenture...........................98
SECTION 12.14. Table of Contents; Headings..........................99
Exhibit A - Form of Initial Security
Exhibit B - Form of New Security
Exhibit C - Form of Collateral Agreement
Exhibit D - Form of Second Priority Mortgage
Exhibit E - Form of Guarantor Supplement
Exhibit F - Form of Certificate of Transfer
Exhibit G - Form of Certificate of Exchange
- v -
This INDENTURE, dated as of November 24, 1998, is entered by and among
HARVARD INDUSTRIES, INC., a Delaware corporation (the "Company"),
XXXXXXX-XXXXXX, INC., a Delaware corporation, HARVARD TRANSPORTATION
CORPORATION, a Michigan corporation, XXXXXXX-XXXXXX GREENEVILLE, INC., a
Delaware corporation, POTTSTOWN PRECISION CASTING, INC., a Delaware corporation,
XXXXXXX-XXXXXX TECHNOLOGIES, INC., a Delaware corporation, XXXXXXX-XXXXXX
TOLEDO, INC., a Delaware corporation, XXXXXX AUTOMOTIVE, INC., a Michigan
corporation, XXXXX-ALBION CORPORATION, a Michigan corporation, and THE
XXXXXXXX-XXXXXX CORPORATION, a New Hampshire corporation (collectively, the
"Subsidiary Guarantors") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Securityholders of the Company's 14 1/2%
Senior Secured Notes Due 2003 (the "Initial Securities") and, if and when issued
in exchange for Initial Securities as provided in the Registration Rights
Agreement, the Company's Series B 14 1/2% Senior Secured Notes Due 2003 (the
"New Securities"and, together with the Initial Securities, the "Securities"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
"Administrative Agent" means the Administrative Agent under the Senior
Credit Facility.
"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; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Affiliate Transaction" has the meaning assigned to it in Section 4.8.
2
"Amended and Restated Purchase Agreement" means the Amended and Restated
Purchase Agreement, dated November 23, 1998, among the Company, the Subsidiary
Guarantors and Xxxxxx Brothers Inc., as Initial Purchaser.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary and Cedel that apply to such transfer and exchange.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) by the Company or any Restricted Subsidiary other than in the
ordinary course of business (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by Section 4.13 and
Section 5.1 and not by Section 4.12), and (ii) the issue or sale by the Company
or any of its Restricted Subsidiaries of Equity Interests of any the Company's
Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a 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, the following shall not be considered
"Asset Sales": (i) a transfer of assets by the Company to a Subsidiary Guarantor
or by a Restricted Subsidiary of the Company to the Company or to a Subsidiary
Guarantor; (ii) an issuance or sale of Equity Interests by a Restricted
Subsidiary of the Company to the Company or a Subsidiary Guarantor; (iii) a
Restricted Payment that is permitted by Section 4.2; (iv) the sale or transfer
of the Designated Facilities; and (v) the sale by the Company of the Capital
Stock of an Unrestricted Subsidiary.
"Asset Sale Offer" has the meaning assigned to it in Section 4.12.
"Asset Sale Offer Trigger Date" has the meaning assigned to it in Section
4.12.
"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, 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).
"Authenticating Agent" has the meaning assigned to it in Section 2.2.
"Authentication and Delivery Order" has the meaning assigned to it in
Section 2.2.
"Bankruptcy Code" means, the Bankruptcy Reform Act of 1978, as amended and
codified as 11 U.S.C. Section 101 et seq.
3
"Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board of Directors.
"Business Day" means a day other than a Legal Holiday.
"Calculation Date" has the meaning assigned to it in the definition of
"Fixed Charge Coverage Ratio" in this Section 1.1.
"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, participation, 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) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and eurodollar
time deposits with maturities of not more than one year from the date of
acquisition, bankers' acceptances with maturities of not more than one year from
the date of acquisition and overnight bank deposits, in each case with any
domestic commercial bank having capital and surplus in excess of $500 million
and a Xxxxxxxx Bank Watch Rating of "B" or better, (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (ii) and (iii) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above and (v)
commercial paper having the highest rating obtainable from Xxxxx'x Investors
Service, Inc. or one of the two highest ratings from Standard & Poor's Ratings
Service Group, a division of the XxXxxx-Xxxx Companies, with maturities of not
more than 270 days from the date of acquisition.
"Cash Flow Participation Interest" has the meaning assigned to it in
Section 2.1.
"Cedel" means Cedel Bank, S.A.
"Change of Control" means the occurrence of any of the following: (i) the
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 Restricted Subsidiaries,
taken as a whole to any "person" (as such term is used in Section
4
13(d)(3) of the Exchange Act; (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company; (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as defined above) becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the total of the Voting
Stock of the Company (measured by voting power rather than number of shares);
(iv) the first day on which a majority of the members of the Board of Directors
of the Company are not Continuing Directors; or (v) the Company consolidates
with, or merges with or into, any Person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
Person, or any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the outstanding Voting
Stock of the Company is converted into or exchanged for cash, securities or
other property, other than any such transaction where the Voting Stock of the
Company outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Stock) of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately after giving
effect to such issuance).
"Change of Control Offer" has the meaning assigned to it in Section
4.13(a).
"Change of Control Payment" has the meaning assigned to it in Section
4.13(a).
"Change of Control Payment Date" has the meaning assigned to it in Section
4.13(a).
"CIBC Facility" means that certain $2.0 million revolving credit facility
dated June 4, 1997, by and between Trim Trends Canada and Canadian Imperial Bank
of Commerce, providing for up to $2.0 million of revolving credit borrowings, as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property of the Company and the Subsidiary
Guarantors, now owned or hereafter acquired, upon which a Lien is purported to
be created by any Security Document.
"Collateral Agent" means Norwest Bank, acting in its capacity as agent with
respect to the Collateral for the secured creditors under the Security
Documents, including, without limitation, the Securityholders and the Lenders
under the Senior Credit Facility, or any successor thereto.
"Collateral Agreement" means the Collateral Agreement, dated as of November
24, 1998, made by the Company and the Subsidiary Guarantors in favor of the
Trustee as secured
5
party thereunder, as the same may be amended, supplemented or otherwise modified
from time to time.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities.
"Comparable Treasury Price" means, with respect to any redemption date for
the Securities, (i) the average of four Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary or non-recurring loss plus any net loss realized in
connection with an Asset Sale (to the extent such losses were deducted in
computing such Consolidated Net Income), plus (ii) provision for taxes based on
income or profits of such Person and its Restricted Subsidiaries for such
period, to the extent that such provision for taxes was included in computing
such Consolidated Net Income, plus (iii) consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation, Cash Flow
Participation Interest expense, amortization of debt issuance costs and original
issue discount, non-cash interest payments (such as the PIK Securities), the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments, if any, pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income, plus (iv) depreciation and amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation and
amortization were deducted in computing such Consolidated Net Income, minus (v)
non-cash items increasing such Consolidated Net Income for such period (other
than items that were accrued in the ordinary course of business), in each case,
on a consolidated basis and determined in accordance with GAAP. Notwithstanding
the foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Restricted
Subsidiary of the Company shall be added to Consolidated Net Income to compute
Consolidated Cash Flow of the Company only to the extent (and in same
proportion) that the Net Income of such Restricted Subsidiary was included in
calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
6
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Interest Coverage Ratio" means, for any period, the ratio of
(i) Consolidated Cash Flow for such period to (ii) Consolidated Interest Expense
for such period.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, Cash Flow Participation Interest
expense, amortization of debt issuance costs and original issue discount,
non-cash interest payments (such as the PIK Securities), the interest component
of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and other fees
and charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations), (ii) the
consolidated interest of such Person and its Restricted Subsidiaries that was
capitalized during such period (including but not limited to, the value of PIK
Securities issued during such period, if applicable) and (iii) any interest
expense on Indebtedness of another Person that is Guaranteed by such Person or
one of its Restricted Subsidiaries or secured by a Lien on assets of such Person
or one of its Restricted Subsidiaries (whether or not such Guarantee or Lien is
called upon).
"Consolidated Leverage Ratio" means the ratio of (i) the aggregate
outstanding amount of Indebtedness of each of the Company and its Restricted
Subsidiaries as of the date of calculation on a consolidated basis in accordance
with GAAP plus the aggregate liquidation preference of all outstanding
Disqualified Stock of the Company and preferred stock of the Company's
Restricted Subsidiaries (except preferred stock issued to the Company or a
Wholly Owned Subsidiary) on such date to (ii) the aggregate Consolidated Cash
Flow of the Company; provided that, for the purposes of determining the ratio
described above for (i) the fiscal quarter ending on December 31, 1998,
Consolidated Cash Flow shall be deemed equal to Consolidated Cash Flow for such
fiscal quarter multiplied by four, (ii) for the six month period ending on March
31, 1999, Consolidated Cash Flow shall be deemed equal to Consolidated Cash Flow
for such period multiplied by two and (iii) for the nine month period ending on
June 30, 1999, Consolidated Cash Flow shall be deemed equal to Consolidated Cash
Flow for such period multiplied by 1.33.
For purposes of this definition, (i) the amount of Indebtedness which is
issued at a discount shall be deemed to be the accreted value of such
Indebtedness at the end of the quarter, whether or not such amount is the amount
then reflected on a balance sheet prepared in accordance with GAAP, and (ii) the
aggregate outstanding principal amount of Indebtedness of the Company and its
Subsidiaries and the aggregate liquidation preference of all outstanding
preferred stock of the Company's Subsidiaries for which such calculation is made
shall be determined on a pro forma basis as if the Indebtedness and preferred
stock giving rise to the need to perform such calculation had been incurred and
issued and the proceeds therefrom had been applied, and all other transactions
in respect of which such Indebtedness is being incurred or preferred stock is
being issued had occurred, on the first day of the quarter. In addition to the
7
foregoing, for purposes of this definition, Consolidated Cash Flow shall be
calculated on a pro forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and its Subsidiaries and the issuance of the
preferred stock of such Subsidiaries (and the application of the proceeds
therefrom) giving rise to the need to make such calculation and any incurrence
(and the application of the proceeds therefrom) or repayment of other
Indebtedness, at any time subsequent to the beginning of the quarter and on or
prior to the date of determination, as if such incurrence or issuance (and the
application of the proceeds thereof), or the repayment, as the case may be,
occurred on the first day of the quarter (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average balance of such Indebtedness at the end
of each month during such period) and (ii) any acquisition (including, without
limitation, any acquisition giving rise to the need to make such calculation as
a result of such Person or one of its Subsidiaries (including any Person that
becomes a Subsidiary as a result of such acquisition) incurring, assuming or
otherwise becoming liable for Indebtedness or such Person's Subsidiaries issuing
preferred stock) at any time on or subsequent to the first day of the quarter
and on or prior to the date of determination, as if such acquisition (including
the incurrence, assumption or liability for any such Indebtedness and the
issuance of such preferred stock and also including any Consolidated Cash Flow
associated with such acquisition) occurred on the first day of the quarter,
giving pro forma effect to any cost reductions which the Company anticipates if
the Company deliver to the Trustee an Officers' Certificate executed by the
chief financial or accounting officer of the Company certifying to and
describing and quantifying with reasonable specificity the cost reductions,
non-recurring expenses and non-recurring costs expected to be attained within
the first year after such acquisition. Furthermore, in calculating Consolidated
Interest Expense for purposes of the calculation of Consolidated Cash Flow, (a)
interest on Indebtedness determined on a fluctuating basis as of the date of
determination (including Indebtedness actually incurred on the date of the
transaction giving rise to the need to calculate the Consolidated Leverage
Ratio) and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
(for such period, on a consolidated basis, determined in accordance with GAAP);
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
that is a Guarantor, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
8
shall be excluded, and (iv) the cumulative effect of a change in accounting
principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the Issue Date in the book value of any asset
owned by such Person or a consolidated Restricted Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Restricted Subsidiaries and in
Persons that are not Restricted Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Continuing Directors" means, as of the date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the Issue Date 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.
"Corporate Trust Office" shall mean the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at the date of the execution of this Indenture is located at Sixth
and Marquette, Minneapolis, Minnesota 55479-0069, Attention: Corporate Trust
Services or at any other time at time such other address as the Trustee may
designate from time to time by notice to the Securityholders.
"Coupon Interest" has the meaning assigned to it in Section 2.1(a)(3).
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
"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.
"Defaulted Interest" has the meaning assigned to it in Section 2.11.
"Definitive Security" means a certificated Security registered in the name
of the Holder thereof and issued in accordance with Section 2.6 hereof, in the
form of Exhibit A or B hereto except that such Security shall not bear the
Global Security Legend and shall not have the "Schedule of Increases or
Decreases in Global Security" attached thereto.
9
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.3 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Facilities" means the assets (real and personal property) as of
the Issue Date relating to the Toledo, Tiffin and Xxxxxx businesses.
"DIP Credit Facilities" means the collective reference to the Company's
$175.0 million senior secured debtor-in-possession credit facility and the
Company's $25.0 million junior secured debtor-in-possession credit facility,
which are being refinanced by the transactions contemplated by the Senior Credit
Facility and the Securities offered under this Indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Securities mature, except to the extent that such Capital Stock is
solely redeemable with, or solely exchangeable for, any Capital Stock of such
Person that is not Disqualified Stock.
"Domestic Subsidiary" means any Subsidiary of the Company organized under
the laws of the United States of America, any state, territory, possession or
the District of Columbia. As of the Issue Date, the Domestic Subsidiaries are
Xxxxxxx-Xxxxxx, Inc., Harvard Transportation Corporation, Xxxxxxx-Xxxxxx
Greeneville, Inc., Pottstown Precision Casting, Inc., Xxxxxxx-Xxxxxx
Technologies, Inc., Xxxxxxx-Xxxxxx Toledo, Inc., Xxxxxx Automotive, Inc.,
Xxxxx-Albion Corporation and The Xxxxxxxx-Xxxxxx Corporation.
"DTC" means The Depository Trust Company.
"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).
"Event of Default" has the meaning assigned to it in Section 6.1.
"Excess Proceeds" has the meaning assigned to it in Section 4.12.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
10
"Excluded Foreign Subsidiary" means, any Foreign Subsidiary in respect of
which either (i) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (ii) the guaranteeing by such Subsidiary of the Obligations,
would, in the good faith judgment of the Company, result in adverse tax
consequences to the Company or violate applicable law in any material respect.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit borrowings under any
Credit Facility) or issues preferred stock subsequent to the commencement of the
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 or redemption 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. In addition, for purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions, during the
four-quarter reference period or subsequent to such reference period and on or
prior to the Calculation Date shall be deemed to have occurred on the first day
of the four-quarter reference period and Consolidated Cash Flow for such
reference period shall be calculated without giving effect to clause (iii) of
the proviso set forth in the definition of Consolidated Net Income, (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of (i) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, Cash Flow Participation Interest expense, amortization of
debt issuance costs and original issue discount, non-cash interest payments
(such as the PIK Securities), the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations), (ii) the consolidated interest of
such Person and its Restricted Subsidiaries that was capitalized during such
period (including but not limited to, the value of PIK Securities issued during
such period, if applicable), (iii) any interest expense on Indebtedness of
another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)
and (iv) the product of (a) all dividend payments, whether or not in cash, on
any
11
series of preferred stock of such Person or any of its Restricted Subsidiaries,
other than dividend payments on Equity Interests payable solely in Equity
Interests of the Company (other than Disqualified Stock), 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.
"Foreign Subsidiary" means any Subsidiary of the Company (a) that is not a
Domestic Subsidiary or (b) whose primary asset is the Capital Stock of one or
more Foreign Subsidiaries.
"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, the statements and pronouncements of
the Financial Accounting Standards Board and such other statements by such other
entities as have been approved by a significant segment of the accounting
profession, which are applicable at the Issue Date.
"Global Security" means, individually and collectively, each of the
Restricted Global Securities and the Unrestricted Global Securities, in the form
of Exhibits A and B hereto, respectively, issued in accordance with Section 2.1,
2.6(b)(iv), 2.6(d)(ii) or 2.6(f) hereof.
"Global Security Legend" means the legend set forth in Section 2.6(g)(ii),
which is required to be placed on all Global Securities issued under this
Indenture.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"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 limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness, including the Guarantee of
this Indenture and the Securities by each of the Subsidiary Guarantors pursuant
to this Indenture and in the form of Guarantee endorsed on the forms of Security
attached as Exhibits A and B to this Indenture and any additional Guarantee of
this Indenture and the Securities to be executed by any Restricted Subsidiary of
the Company.
"Hedging Obligations" means, with respect to any Person, the net payment
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements, interest rate collar agreements and agreements providing
for protection against fluctuations in commodity prices and (ii) other
agreements or arrangements in the ordinary course of business which are designed
to protect such Person against fluctuations in commodity prices, interest rates
or currency exchange rates.
12
"Holder" or "Noteholder" or "Securityholder" means the Person in whose name
a Security is registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, (a) 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 banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, 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) (b) to the extent not otherwise
included, the Guarantee by such Person of any Indebtedness of any other Person,
whether or not it appears on the balance sheet of such Person; provided that the
amount of such Indebtedness shall be the lesser of the amount of Indebtedness
that is the subject of such Guarantee and the maximum liability of such Person
on such Guarantee and (c) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by or is
otherwise the legal liability of such Person, provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness. The amount
of any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest or that allows for the payment of interest in kind, and (ii) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Security through a Participant.
"Initial Security" has the meaning assigned to it in the preamble to this
Indenture.
"Intercreditor Agreement" means the intercreditor agreement dated as of the
Issue Date by and among the Trustee, the Administrative Agent, the Collateral
Agent and the Company that shall set forth the relative rights of the Lenders
under the Senior Credit Facilities and the Securityholders in respect of shared
collateral and the security interests granted pursuant to the Loan Security
Documents and the Security Documents.
"Interest Payment Dates" means each of the semi-annual interest payment
dates on March 1 and September 1 of each year, commencing March 1, 1999.
13
"Interest" has the meaning assigned to it in Section 2.1(a)(3).
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other Obligations),
advances of assets or capital contributions (excluding commission, travel and
entertainment, moving, and similar advances to officers and employees made in
the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Company or any of its Restricted
Subsidiaries sells or otherwise disposes of any Equity Interests of any direct
or indirect Restricted Subsidiary of the Company such that, after giving effect
to any such sale or disposition, such Person is no longer a direct or indirect
Restricted Subsidiary of the Company, the Company or such Restricted Subsidiary,
as the case may be, 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 Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.2 hereof.
"Issue Date" means the date on which the Initial Securities are originally
issued.
"Xxxxxxxx-Xxxxxx" means The Xxxxxxxx-Xxxxxx Corporation, a New Hampshire
corporation, and a Subsidiary of the Company.
"LCPI" means Xxxxxx Commercial Paper Inc.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Lender" means each of the institutions a party to and acting as lenders
under the Senior Credit Facility.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Issuer and sent to all Holders of Securities for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
14
"Liquidated Damages" has the meaning set forth in the Registration Rights
Agreement.
"LLC Agreement" means the Limited Liability Company Agreement dated
November 27, 1995 by and between Xxxxxxxxxx X.X. and Xxxxxxxx-Xxxxxx.
"Loan" means, any loan made by any lender pursuant to the Senior Credit
Facility.
"Loan Collateral Agent" means, the Collateral Agent under the Loan
Collateral Agreement.
"Loan Collateral Agreement" means, the Collateral Agreement to be executed
and delivered by the Company and each Loan Guarantor, in favor of the
Administrative Agent as the same may be amended, supplemented or otherwise
modified from time to time.
"Loan Documents" means the Senior Credit Facility, the Loan Security
Documents, certain applications made by Lenders regarding letters of credit to
be issued under the Senior Credit Facility, the Loan Notes and the Intercreditor
Agreement.
"Loan Guarantor" means each Subsidiary of the Company other than Excluded
Foreign Subsidiaries.
"Loan Notes" means the collective reference to any promissory note
evidencing Loans.
"Loan Security Documents" means, collectively, the Loan Collateral
Agreement, the Mortgages and all other security hereafter delivered to the Loan
Collateral Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of the Company or the Subsidiary Guarantors under
any Loan Document.
"Make-Whole Premium" has the meaning assigned to it in Section 3.7(a).
"Maturity Date" means September 1, 2003.
"Minimum Cash Flow Participation Interest Amount" has the meaning assigned
to it in Section 2.1(a)(3).
"Mortgage" means each of the mortgages and deeds of trust made by the
Company or any Subsidiary Guarantor in favor of, or for the benefit of, the
Collateral Agent for the benefit of the Securityholders, substantially in the
form of Exhibit D hereto (with such changes thereto as shall be advisable under
the law of the jurisdiction in which such mortgage or deed of trust is to be
recorded), as the same may be amended, supplemented or otherwise modified from
time to time.
15
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (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
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary gain (but not loss),
together with any related provision for taxes on such extraordinary gain (but
not loss).
"Net Proceeds" means the aggregate cash proceeds or Cash Equivalents
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 (A) all costs relating to such Asset Sale (including, without limitation,
legal, accounting, investment banking and brokers fees, and sales and
underwriting 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), (B)
amounts required to be applied to repayment of Indebtedness (other than
Indebtedness under the Senior Credit Facility) secured by a Lien on the asset or
assets that were the subject of such Asset Sale and (C) and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"New Security" has the meaning assigned to it in the preamble of this
Indenture.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) 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 (other than
the Securities being offered hereby) 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 payable prior to its stated maturity; and
(iii) 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.
"Norwest Bank" means Norwest Bank Minnesota, National Association, a
national banking association.
"Obligations" has the meaning assigned to it in Section 10.1.
"Offer Amount" has the meaning ascribed in Section 3.8.
"Offer Period" has the meaning ascribed in Section 3.8.
16
"Offering Memorandum" means the Offering Memorandum dated November 22, 1998
relating to the Initial Securities; provided that after the issuance of New
Securities, all references herein to "Offering Memorandum" shall be deemed
references to the prospectus contained in the registration statement relating to
the New Securities.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, any Vice-President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller or the Secretary of such Person.
"Officers' Certificate" means a certificate signed on behalf of any Person
by either the principal executive officer or the principal financial officer,
and by the treasurer or the principal accounting officer of such Person that
meets the requirements of Section 12.5 hereof.
"144A Global Security" means a global security in the form of Exhibit A
hereto bearing the Global Security Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Securities sold in reliance on Rule 144A.
"Operative Documents" mean this Indenture, the Securities, the Guarantees,
the Collateral Agreement and other Security Documents, the Registration Rights
Agreement and the Intercreditor Agreement.
"Opinion of Counsel" means an executed written opinion complying with
Section 12.5 herein from Xxxxxxx Xxxx & Xxxxxxxxx or any other legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Participant" means, with respect to the Depositary or Cedel, a Person who
has an account with the Depositary or Cedel, respectively (and, with respect to
The Depository Trust Company, shall include Cedel).
"Paying Agent" has the meaning assigned to it in Section 2.3.
"Payment Default" has the meaning assigned to it in Section 6.1(6).
"Permitted Business" means the lines of business that the Company and its
Restricted Subsidiaries currently conduct on the date hereof or that the Company
and its Restricted Subsidiaries contemplate conducting as set forth in the
Disclosure Statement For Debtors' First Amended and Modified Consolidated Plan
under Chapter 11 of the Bankruptcy Code dated August 19, 1998, filed with the
United States Bankruptcy Court for the District of Delaware in connection with
the Plan of Reorganization and incorporated by reference and attached to the
Offering Memorandum, and businesses reasonably related thereto.
17
"Permitted Debt" has the meaning assigned to it in Section 4.3.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary of the Company; (b) any Investment in Cash Equivalents;
(c) any Investment by the Company or any Restricted Subsidiary of the Company in
a Person engaged in a Permitted Business, if as a result of such Investment (i)
such Person becomes a Subsidiary Guarantor or (ii) 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 Subsidiary
Guarantor; (d) any Restricted Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.12; (e) any acquisition of assets solely in exchange
for the issuance of Equity Interests (other than Disqualified Stock) of the
Company; (f) Investments arising in connection with Hedging Obligations that are
incurred in the ordinary course of business, for the purpose of fixing or
hedging currency, commodity or interest rate risk (including with respect to any
floating rate Indebtedness that is permitted by the terms of this Indenture to
be outstanding) in connection with the conduct of the business of the Company
and its Restricted Subsidiaries which are Subsidiary Guarantors; (g) any
Investment existing on the Issue Date and any Investment that replaces,
refinances or refunds an Investment, provided that the new Investment is in an
amount that does not exceed the amount replaced, refinanced or refunded and is
made in the same Person as the Investment replaced, refinanced or refunded; (h)
Investments in Permitted Joint Ventures that have an aggregate fair market
value, taken together with all other Investments made pursuant to this clause
(h) that are at that time outstanding, not to exceed $7.5 million at the time of
such Investment (with the fair market value of each Investment being measured at
the time made and without giving effect to subsequent changes in value),
provided that (I) no more than $3.0 million of the aggregate amount of
Investments (with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value) permitted by
this clause (h) may be made in the form of additional investments in the
Permitted Joint Ventures and (II) no more than $4.5 million of the aggregate
amount of Investments (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value) permitted by this clause (h) may be made in the form of loans or advances
made to or on behalf of Xxxxxxxxxx/Xxxxxxxx-Xxxxxx LLC, pursuant to Section 6.6
of the LLC Agreement for the sole purpose of funding the working capital needs,
capital expenditures and other general corporate or partnership needs of
Xxxxxxxxxx/Xxxxxxxx-Xxxxxx LLC in furtherance of its stated business purpose
pursuant to Article 2 of the LLC Agreement, provided that the terms and
conditions of such loans or advances require their repayment to the Company or
Xxxxxxxx-Xxxxxx or that the Company or Xxxxxxxx-Xxxxxx are repaid their share of
such expenditures pursuant to the LLC Agreement; and (i) other Investments by
the Company or any of its Restricted Subsidiaries in any Person engaged in one
or more Permitted Businesses, other than those provided for in clause (h), above
having an aggregate fair market value (measured as of the date made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (i) that are at the time
outstanding, not to exceed $2.5 million.
"Permitted Joint Venture" means (i) KS-Xxxxxxx-Xxxxxx GmbH, a German joint
venture formed by Xxxxxxx-Xxxxxx, Inc. and KS Aluminum Technologie AG, and (ii)
18
Xxxxxxxxxx/Xxxxxxxx-Xxxxxx LLC, a Delaware limited liability company formed by
Xxxxxxxx-Xxxxxx and Xxxxxxxxxx X.X.
"Permitted Liens" means (i) Liens securing the Senior Credit Facility and
the Securities as permitted under this Indenture; (ii) Liens on the assets of
the Company or any of the Subsidiary Guarantors to secure Hedging Obligations
with respect to Indebtedness under any Credit Facility permitted by this
Indenture to be incurred; (iii) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of 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; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition and only
extend to the property so acquired; (v) Liens existing on the Issue Date,
provided that any Liens in existence on the Issue Date that are Liens of
pre-petition claims, arising from the filing of a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code of the Company and certain of its
Subsidiaries, or Liens to secure the DIP Credit Facilities, which Liens will not
for any reason have been extinguished and released by the Issue Date, shall not
be a "Permitted Lien" within the meaning of this definition; (vi) Liens to
secure any Permitted Refinancing Indebtedness incurred to refinance any
Indebtedness secured by any Lien referred to in the foregoing clauses (i)
through (v), as the case may be, at the time the original Lien became a
Permitted Lien; (vii) Liens in favor of the Company or any Restricted Subsidiary
that is a Subsidiary Guarantor; (viii) Liens incurred in the ordinary course of
business (including those incurred in connection with trade credit in the
ordinary course of business) of the Company or any Restricted Subsidiary of the
Company with respect to obligations that do not exceed $5.0 million in the
aggregate at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business which shall be a
"Permitted Lien" within the meaning of this definition) and (b) do not in the
aggregate materially detract from the value of the property or materially impair
the use thereof in the operation of business by the Company or such Restricted
Subsidiary; (ix) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds, deposits to secure the performance of
bids, trade contracts, government contracts, leases, letters of credit or
licenses or other obligations of a like nature incurred in the ordinary course
of business (including, without limitation, landlord Liens on leased
properties); (x) 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 prosecuted, provided
that any reserve or other appropriate provision as shall be required to conform
with GAAP shall have been made therefor; (xi) Liens to secure Indebtedness
(including Capital Lease Obligations and purchase money obligations) permitted
by clauses (iii) or (iv) of the second paragraph of Section 4.3 covering only
the assets acquired with such Indebtedness; (xii) carriers', warehousemen's,
mechanics', landlords' materialmen's, repairmen's or other like Liens arising in
the ordinary course of business in respect of obligations not overdue for a
period in excess of 60 days or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently prosecuted; provided
that any reserve or other appropriate provision as shall be required to conform
with GAAP shall have been made
19
therefor; (xiii) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred, or leases or subleases
granted to others, in the ordinary course of business, which do not in any case
materially detract from the value of the property subject thereto or do not
interfere with or adversely affect in any material respect the ordinary conduct
of the business of the Company and its Restricted Subsidiaries taken as a whole;
(xiv) Liens in favor of customs and revenue authorities to secure payment of
customs duties in connection with the importation of goods in the ordinary
course of business and other similar Liens arising in the ordinary course of
business; (xv) leases or subleases granted to third Persons not interfering with
the ordinary course of business of the Company or any of its Restricted
Subsidiaries; (xvi) Liens (other than any Lien imposed by ERISA or any rule or
regulation promulgated thereunder) incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, and other types of social security; (xvii) other deposits made in the
ordinary course of business to secure liability (including letters of credit) to
insurance carriers in connection with insurance policies that the Senior Credit
Facility and this Indenture require the Company and its Subsidiaries to carry;
(xviii) any interest or title of a lessor or sublessor under any operating
lease; (xix) any attachment or judgment Lien not constituting an Event of
Default under clause (vii) of the first paragraph of Section 6.1; (xx) Liens
securing the CIBC Facility as permitted under this Indenture; and (xxi) Liens to
secure Indebtedness permitted by clause (ix) of the second paragraph of Section
4.3.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount of (or accreted value, if applicable), plus
premium, accrued and unpaid Interest on, any Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the final maturity
date of, and has a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Securities, 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 Securities on terms at least as
favorable to the Securityholders as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or a Restricted Subsidiary who is the obligor on 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.
"PIK Grid" has the meaning assigned to it in Section 2.1.
20
"PIK Securities" has the meaning assigned to it in Section 2.1.
"Prime Treasury Dealer" has the meaning assigned to it in the definition of
"Reference Treasury Dealer" in this Section 1.1.
"Private Placement Legend" means the legend set forth in Section 2.6(g)(i)
hereof to be placed on all Securities issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"Purchase Date" has the meaning assigned to it in Section 3.8.
"Receivables Aging Certificate" has the meaning assigned to it in Section
4.19.
"Released Interests" has the meaning assigned to it in Section 11.4.
"Reference Treasury Dealer" means Xxxxxx Brothers Inc. and three other
primary U.S. Government securities dealers in New York City (each, a "Primary
Treasury Dealer") appointed by the Trustee in consultation with the Company;
provided, however, that if any of the foregoing shall cease to be a Primary
Treasury Dealer, the Company shall substitute therefor another Primary Treasury
Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such redemption date.
"Registrar" has the meaning assigned to it in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of November 23, 1998 among the Company, the Subsidiary Guarantors and
Xxxxxx Brothers Inc. whereby the Company will agree to file with the SEC the
Exchange Offer Registration Statement on the appropriate form under the
Securities Act with respect to the New Securities.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Security" means a Regulation S Temporary Global
Security or Regulation S Permanent Global Security, as appropriate.
"Regulation S Permanent Global Security" means a permanent global Security
in the form of Exhibit A hereto bearing the Global Security Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Security upon
expiration of the Restricted Period.
21
"Regulation S Temporary Global Security" means a temporary global Security
in the form of Exhibit A hereto bearing the Regulation S Temporary Global
Security Legend and deposited with or on behalf of and registered in the name of
the Depositary or its nominee, issued in a denomination equal to the outstanding
principal amount of the Securities initially sold in reliance on Rule 903 of
Regulation S.
"Regulation S Temporary Global Security Legend" means the legend set forth
in Section 2.6(g)(iii) to be placed on all Regulation S Temporary Global
Securities.
"Released Interests" has the meaning assigned to it in Section 11.4(a).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payments" has the meaning assigned to it in Section 4.2.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Definitive Security" means a Definitive Security bearing the
Private Placement Legend.
"Restricted Global Security" means a Global Security bearing the Private
Placement Legend.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary; provided that, on the Issue Date,
all Subsidiaries of the Company shall be Restricted Subsidiaries of the Company.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"SEC" means the U.S. Securities and Exchange Commission, or any successor
agency.
"Securities" means the Initial Securities and the New Securities issued or
to be issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
22
"Security Documents" means, collectively, the Collateral Agreement, the
Mortgages and all other security documents hereafter delivered to the Collateral
Agent granting a Lien on any property of any Person to secure the obligations
and liabilities of the Company and the Subsidiary Guarantors any other
instruments, agreements or documents entered into or delivered in connection
with any of the foregoing, as such agreement, instruments or documents may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof.
"Semi-Annual Accrual Period" has the meaning assigned to it in Section 2.1.
"Senior Credit Facility" means that certain $115.0 million Credit Facility,
dated as of the Issue Date, by and among the Company, the Subsidiary Guarantors
and the several Lenders from time to time parties thereto, Xxxxxx Brothers Inc.,
as Arranger, Xxxxxx Commercial Paper Inc., as Syndication Agent, General
Electric Capital Corporation, as Administrative Agent and as Collateral Agent,
providing for up to $50.0 million of term loan borrowings and $65.0 million of
revolving credit borrowings and in each case, including any related notes,
guarantees, collateral documents, instruments, letters of credit and agreements
executed in connection therewith, and in each case as amended, modified,
renewed, refunded, replaced or refinanced from time to time.
"Senior Debt" means any Indebtedness that is not subordinated in right of
payment to the Securities or any other Indebtedness. Notwithstanding anything to
the contrary in the foregoing, Senior Debt will not include (w) any liability
for federal, state, local or other taxes owed or owing by the Company, (x) any
Indebtedness of the Company to any of its Subsidiaries or other Affiliates, (y)
any trade payables or (z) any Indebtedness that is incurred in violation of this
Indenture.
"Shelf Registration Statement" has the meaning assigned to it in the
Registration Rights Agreement.
"Special PIK Redemption" has the meaning assigned to it in Section 3.9.
"Special PIK Redemption Date" has the meaning assigned to it in Section
3.9.
"Stub Period" has the meaning assigned to it in Section 2.1.
"Subject Property" has the meaning assigned to it in Section 11.3.
"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 shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or an entity described in clause (i) and
related to such Person or (b) the only general partners of which are such Person
or of one or more entities described in clause (i) and
23
related to such Person (or any combination thereof). Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" herein refer to a
Subsidiary or Subsidiaries of the Company.
"Subsidiary Guarantor" means each of the Domestic Restricted Subsidiaries
that will fully and unconditionally guarantee, jointly and severally, on a
senior basis to each Securityholder the Company's payment obligations under this
Indenture and the Securities.
"Survey" means maps or plats of an as-built survey of the sites of the
properties subject to Mortgages certified to the Collateral Agent and the Title
Insurance Company in a manner reasonably satisfactory to them, dated a date
satisfactory to the Initial Purchaser and the Title Insurance Company by an
independent professional licensed land surveyor reasonably satisfactory to the
Initial Purchaser and the Title Insurance Company, which maps or plats and the
surveys on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the buildings, structures and
other improvements and the established building setback lines; (B) the lines of
streets abutting the sites and width thereof; (C) all visible and/or recorded
access and other easements appurtenant to the sites; (D) all roadways, paths,
driveways, encroachments and overhanging projections and similar encumbrances
affecting the site, whether recorded or apparent from a physical inspection of
the sites; (E) any encroachments on any adjoining property by the building
structures and improvements on the sites; (F) if the site is described as being
on a filed map, a legend relating the survey to said map; and (G) the flood zone
designations, if any, in which the mortgaged properties are located.
"TIA" means the Trust Indenture Act of 1939 15 U.S.C. Section 77aaa-77bbbb,
as in effect on the date of this Indenture; provided, however, that, in the
event the Trust Indenture Act of 1939 is amended after such date, "TIA" means,
to the extent required by any such amendments, the Trust Indenture Act of 1939
as so amended.
"Title Insurance Company" means the title insurance company that will issue
a mortgagee's title insurance policy (or policies) or marked up unconditional
binder for such insurance that shall (A) be in an amount satisfactory to the
Initial Purchaser prior to the Issue Date; (B) insure that the Mortgage insured
thereby creates a valid second lien on such mortgaged property (C) name the
Collateral Agent, for the benefit of the Initial Purchaser and the
Securityholders, as the insured thereunder; (D) be in the form of ACTA Loan
Policy - 1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies); (E)
contain such endorsements and affirmative coverage as the Initial Purchaser may
reasonably request and (F) be satisfactory to the Initial Purchaser (including
any such title companies acting as co-insurers or reinsurers, at the option of
the Initial Purchaser).
"Treasury Rate" means, with respect to any redemption date for the
Securities, (i) the yield, under the heading which represents the average for
the immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any
24
successor publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities", for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the
Maturity Date, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month) or (ii) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
"Trim Trends Canada" means Trim Trends Canada Limited, a company organized
under the laws of Canada, and a Subsidiary of the Company.
"Trust Officer" means any officer within the Corporate Trust Office
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary, Treasurer or Assistant Treasurer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge and
familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means such successor.
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
"Unrestricted Global Security" means a permanent global Security in the
form of Exhibit B attached hereto that bears the Global Security Legend and that
has the "Schedule of Increases or Decreases in Global Security" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Securities that do not bear the
Private Placement Legend.
"Unrestricted Definitive Security" means one or more Definitive Securities
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary 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: (a) has no Indebtedness other than
Non-Recourse Debt, (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that
25
might be obtained at the time from Persons who are not Affiliates of the
Company, (c) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results, and (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries; provided that, notwithstanding the above, the
Company and its Restricted Subsidiaries may make payments to, provide credit or
credit support for or make investments in Unrestricted Subsidiaries to the
extent that such payments or investments are in compliance with the covenant
entitled "Restricted Payments."
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the Company's option.
"Valuation Date" has the meaning assigned to it in Section 11.4(a)(i)(B).
"Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required 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, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" means a Restricted Subsidiary, 100% of the
outstanding Capital Stock and other Equity Interests of which is directly or
indirectly owned by the Company.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
26
"obligor" on the Indenture securities means the Company and the Subsidiary
Guarantors.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by the TIA reference to another statute or defined by the SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.3. Rules of Construction. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the Company dated such date prepared in
accordance with GAAP;
(8) the principal amount of any preferred stock shall be (i) the
maximum liquidation preference of such preferred stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
preferred stock, whichever is greater; and
(9) all references to the date the Securities were originally issued
shall refer to the date the Initial Securities were originally issued.
SECTION 1.4. One Class of Securities. The Initial Securities, the New
Securities and the PIK Securities, if any, shall vote and consent together on
all matters as one class and none of the Initial Securities, the New Securities
or the PIK Securities shall have the right to vote or consent as a separate
class on any matter.
27
ARTICLE II
THE SECURITIES
SECTION 2.1. Terms, Form and Dating. (a) Terms. (1) Initial Offering. The
Initial Securities are being offered and sold by the Company pursuant to the
Amended and Restated Purchase Agreement.
(2) Principal Amount and Maturity. The Initial Securities are being issued
in aggregate principal amount of $25,000,000 and will mature on September 1,
2003. The aggregate principal amount of Securities outstanding at any time may
not exceed $25,000,000, except with respect to PIK Securities issued pursuant to
paragraph (a)(4) of this Section 2.1.
(3) Interest. Interest on the Securities will accrue at a rate equal to the
sum of (1) 14 1/2% per annum on the principal amount of Securities outstanding
(calculated on the basis of a 360- day year comprised of twelve 30-day months)
("Coupon Interest") plus (2) Cash Flow Participation Interest (as defined below
and, together with Coupon Interest, "Interest"). "Cash Flow Participation
Interest," for any relevant period, equals the product of (1) Consolidated Cash
Flow for the six month period ending, for interest payments due March 1 of each
year, on December 31 and, for interest payments due on September 1 of each year,
on June 30 (each, a "Semi-Annual Accrual Period") prior to the next succeeding
Interest Payment Date multiplied by (2) the applicable percentage set forth for
the period ending on the Interest Payment Date indicated below:
Interest Payment Date Percentage
--------------------- ----------
March 1, 1999................................... 2.00%
September 1, 1999............................... 2.00%
March 1, 2000................................... 2.50%
September 1, 2000............................... 2.50%
March 1, 2001................................... 3.50%
September 1, 2001............................... 3.50%
March 1, 2002................................... 4.50%
September 1, 2002............................... 4.50%
March 1, 2003................................... 4.50%
September 1, 2003............................... 4.50%
If, however, the calculation of Cash Flow Participation Interest, based on
the appropriate percentages set forth above, results in an amount that is
less than $1.0 million for any two consecutive Semi-Annual Accrual Periods
taken as a whole, then Cash Flow Participation Interest will be for such
two corresponding Interest Payment Dates taken as a whole, $1.0 million
(the "Minimum Cash Flow Participation Interest Amount").
No later than 15 days prior to an Interest Payment Date or any other
date on which Cash Flow Participation Interest is payable pursuant to a
redemption of the Securities or an offer to purchase pursuant to Section
4.13 hereof, the Company shall
28
deliver to the Trustee an Officers' Certificate stating the amount of the
Cash Flow Participation Interest payable on such upcoming Interest Payment
Date or other payment date and calculations showing how such amount was
determined.
Notwithstanding the foregoing, in the event that the period for which
Interest accrues and is due (including for the period from the Issue Date
to the first Interest Payment Date of March 1, 1999) is less than 180 days
(such a period, a "Stub Period"), then the Interest due for such Stub
Period (which may be a Semi-Annual Accrual Period) will be pro rated to
reflect the actual number of days that the Securities were outstanding for
such Stub Period (calculated on the basis of a 360 day year comprised of
twelve 30-day months), provided that the portion of Interest attributable
to Cash Flow Participation Interest (or the Minimum Cash Flow Participation
Interest Amount, if applicable) due at the end of such Stub Period (or, as
the case may be, on September 1, 1999 with respect to the period covered by
the Stub Period ending on March 1, 1999 plus the Semi-Annual Accrual Period
ending on September 1, 1999, taken together) shall similarly be pro rated
to reflect the actual number of days that the Securities were outstanding
for such Stub Period (or, with respect to the period ending on September 1,
1999, the actual number of days that the Securities were outstanding for
the period covered by such Stub Period plus the succeeding Semi-Annual
Accrual Period, taken together) (calculated on the basis of a 360 day year
comprised of twelve 30-day months). Interest on overdue principal and on
overdue installments of Interest will accrue at the rate of Interest borne
by the Securities.
Interest will be payable semi-annually in arrears on March 1 and
September 1 commencing on March 1, 1999 to Holders of record on the
immediately preceding February 15 and August 15. Interest on the Securities
will accrue from the most recent date to which Interest has been paid or,
if no Interest has been paid, from the Issue Date.
(4) PIK Securities. Notwithstanding the foregoing, (i) if the
Company's Fixed Charge Coverage Ratio is less than 2.50 to 1 for any
Semi-Annual Accrual Period, then the Company may elect to pay Cash Flow
Participation Interest on the next succeeding Interest Payment Date for
such Semi-Annual Accrual Period by the issuance of additional Securities
equal to the amount of such interest that would otherwise be due but is not
paid in cash (the "PIK Securities") determined pursuant to clause (a)(3) of
this Section 2.1. The issuance of such PIK Securities shall constitute
satisfaction in full of such obligation to pay such Cash Flow Participation
Interest.
If the Company elects, pursuant to this Section 2.1(a)(4), to issue
PIK Securities, then the Company shall deliver a notice, signed by an
Officer, to the Trustee and the Paying Agent (which notice shall be
received not less than 5 nor more than 45 days prior to the record date
preceding the Interest Payment Date on which such PIK Securities will be
issued) which shall state whether the Company elects to satisfy the
obligation to pay Cash Flow Participation Interest, in full or in part, by
the issuance of PIK Securities, in which case such notice shall include a
written order to the Trustee to
29
record on the register on the outstanding Security, or Securities, as the
case may be, (the register on an outstanding Security, a "PIK Grid"), (i)
the date of the issuance of such PIK Securities, (ii) the aggregate
principal amount of such PIK Securities that were issued on such date and
(iii) the total amount of PIK Securities outstanding after taking into
account any Special PIK Redemption pursuant to Section 3.9. In the event
that there have been no Special PIK Redemptions, then the total amount of
PIK Securities shall be the sum of all prior issuances thereof.
In no event shall the election of the Company to pay Cash Flow
Participation Interest in cash or to satisfy the obligation to pay Cash
Flow Participation Interest by issuing PIK Securities on any Interest
Payment Date preclude the Company from making a different election with
respect to all or any portion of Cash Flow Participation Interest to be
paid on the Securities on any subsequent Interest Payment Date. If (i) the
Company elects to satisfy the obligation to pay Cash Flow Participation
Interest on the Securities in part in cash and in part by the issuance of
PIK Securities on any Interest Payment Date and (ii) more than one Security
is outstanding, then the proportion of cash to be paid and PIK Securities
to be issued on such Interest Payment Date in respect of these outstanding
Securities shall be the same for each such Security.
Within 2 business days after any issuance of PIK Securities, the Trustee
shall give notice of such issuance to the Depositary and all
Securityholders registered with the Registrar.
(b) Form and Dating. The Initial Securities and the Trustee's certificate
of authentication shall be substantially as set forth in the form of Exhibit A
hereto. The Securities may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Security shall be dated the date of its
authentication. The Securities shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Securities shall constitute, and
are hereby expressly made, a part of this Indenture, and the Issuers, the
Subsidiary Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
However, to the extent any provision of any Security conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(c) Global Securities. Initial Securities shall be offered and sold to QIBs
in reliance on Rule 144A as provided in the Amended and Restated Purchase
Agreement and shall be issued initially in the form of one or more permanent
global Securities in definitive, fully registered form without interest coupons
and with the Global Security Legend and Private Placement Legend, as set forth
in Exhibit A (including the "Schedule of Increases or Decreases in Global
Security" attached thereto), which shall be deposited on behalf of the
purchasers of the Initial Securities represented thereby with the Trustee as
custodian for the Depositary (or with such other custodian as the Depositary may
direct), and registered in the name of the Depositary
30
or a nominee of the Depositary, duly executed by the Company and authenticated
by the Trustee as hereinafter provided.
Each Global Security shall represent such of the outstanding Securities as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Securities from time to time endorsed
thereon and that the aggregate principal amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Security to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Securities represented thereby shall be made by
the Trustee or by the Depositary at the direction of the Trustee as required by
Section 2.6(h) hereof.
(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to a Global
Security deposited with or on behalf of the Depositary. The Company shall
execute and the Trustee shall, in accordance with this Section 2.1(d),
authenticate and deliver initially one or more Global Securities that (a) shall
be registered in the name of the Depositary for such Global Security or Global
Securities or the nominee of such Depositary and (b) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instructions or held
by the Trustee as custodian for the Depositary.
Participants in the Depositary shall have no rights under the Indenture
with respect to any Global Security held on their behalf by the Depositary or by
the Trustee as the custodian of the Depositary or under such Global Security,
and the Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
SECTION 2.2. Execution and Authentication. Two Officers of the Company
shall sign Securities for the Company by manual or facsimile signature. The
Company seal, if any, shall be reproduced on the Securities and may be in
facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time a Security is authenticated, the Security shall nevertheless be
valid.
A Security shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company (an "Authentication and Delivery Order"), authenticate
Securities for original issue up to the aggregate principal amount of
$25,000,000. The aggregate principal amount of
31
Securities outstanding at any time may not exceed such amount except as provided
in Section 2.1(a)(2) hereof.
The Trustee may (at the expense of the Company) appoint an authenticating
agent acceptable to the Issuers to authenticate the Global Security. An
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with Securityholders or an affiliate of the Company and has the
same protections under Article 7 herein.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). Initially, the Registrar and the
Paying Agent shall be, in each case, the Trustee. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Registrar may
require a Securityholder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
for a period beginning 15 days before a selection of Securities to be redeemed
and ending on the date of such selection or (ii) any Securities for a period
beginning 15 days before an Interest Payment Date and ending on such Interest
Payment Date. The Company may have one or more Company-registrars and one or
more additional paying agents. The term "Paying Agent" includes any such
additional paying agent.
In the event the Company shall retain any Person not a party to this
Indenture as an agent hereunder, the Company shall enter into an appropriate
agency agreement with any Registrar, Paying Agent or Company-registrar not a
party to this Indenture, which shall incorporate the terms of the TIA. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of each such
agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section 7.7. The Company or any of its domestically incorporated
wholly owned Subsidiaries may act as Paying Agent.
The Company initially appoints DTC to act as Depositary with respect to the
Global Notes.
The registered Holder of a Security may be treated as the owner of it for
all purposes.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at least 11:00 a.m.
(New York City time) on the date on which any principal or Interest (including
any Liquidated Damages) on any Security is due and payable, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal or Interest
(including any Liquidated Damages) when due.
32
The Company will instruct the Paying Agent to pay Interest (except Defaulted
Interest) and Liquidated Damages, if any, to the Persons who are registered
Securityholders at the close of business on the February 15 or August 15 next
preceding the Interest Payment Date. The Company will instruct the Paying Agent
to pay principal and premium and Interest and Liquidated Damages, if any, in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that such Paying Agent shall hold
in trust for the benefit of Securityholders or the Trustee all money held by
such Paying Agent for the payment of principal of or Interest (including any
Liquidated Damages) on the Securities and shall promptly notify the Trustee in
writing of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent (other than the Trustee) to pay all money held by it to
the Trustee and to account for any funds disbursed by such Paying Agent. Upon
complying with this Section, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money delivered to the
Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect
to the Company, the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Securityholders. If the Trustee is not the Registrar, the
Company shall cause the Registrar to furnish to the Trustee, in writing at least
five Business Days before each Interest Payment Date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Global Securities. A Global Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Securities will be exchanged by the Company for Definitive Securities if (i) the
Company delivers to the Trustee written notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no longer a
clearing agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Securities (in whole but not in part)
should be exchanged for Definitive Securities and delivers a written notice to
such effect to the Trustee. Upon the occurrence of either of the preceding
events in (i) or (ii) above, Definitive Securities shall be issued in such names
as the Depositary shall instruct the Trustee in writing. Global Securities also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.7
and 2.9 hereof. Every Security authenticated and delivered in exchange for, or
in lieu of, a Global Security or any portion thereof, pursuant to this Section
2.6 or Section 2.7 or 2.9 hereof, shall be authenticated and delivered in the
form of, and shall be, a Global Security. A Global Security
33
may not be exchanged for another Security other than as provided in this Section
2.6(a), however, beneficial interests in a Global Security may be transferred
and exchanged as provided in Section 2.6(b),(c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Securities.
The transfer and exchange of beneficial interests in the Global Securities shall
be effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Securities shall be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Transfers
of beneficial interests in the Global Securities also shall require compliance
with either subparagraph (i) or (ii) below, as applicable, as well as one or
more of the other Beneficial Interests described in the following subparagraphs,
as applicable.
(i) Transfer of Beneficial Interests in the Same Global Security.
Interests in any Restricted Global Security may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Security in accordance with the transfer restrictions set
forth in the Private Placement Legend. Beneficial interests in any
Unrestricted Global Security may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in such Unrestricted
Global Security. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.6(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Securities. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.6(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar either
(A) (1) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing
the Depositary to credit or cause to be credited a beneficial interest in
another Global Security in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause
to be issued a Definitive Security in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Security shall be registered to effect the
transfer or exchange referred to in (1) above. Upon consummation of an
Exchange Offer by the Company and the Parent in accordance with Section
2.6(f) hereof, the requirements of this Section 2.6(b)(ii) shall be deemed
to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Securities. Upon satisfaction
of all of the requirements for transfer or exchange of beneficial interests
in Global Securities contained in this Indenture and the Securities or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Security or Securities pursuant to
Section 2.6(h) hereof.
34
(iii) Transfer of Beneficial Interests to Another Restricted Global
Security. A beneficial interest in any Restricted Global Security may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Security if the transfer
complies with the requirements of Section 2.6(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Security, then the transferor
must deliver a certificate in the form of Exhibit F hereto, including
the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Security, then the
transferor must deliver a certificate in the form of Exhibit F hereto,
including the certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Security for Beneficial Interests in an Unrestricted Global
Security. A beneficial interest in any Restricted Global Security may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Security or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Security if the exchange or transfer complies with the requirements of
Section 2.6(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
New Securities or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Security proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Security, a certificate from such holder in the form of Exhibit G
hereto, including the certifications in item (1)(a) thereof; or
35
(2) if the holder of such beneficial interest in a
Restricted Global Security proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Security, a
certificate from such holder in the form of Exhibit F hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the Securities Act and that
the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Security has not yet been
issued, the Company shall issue and, upon receipt of an Authentication and
Delivery Order in accordance with Section 2.2 hereof, the Trustee shall
authenticate one or more Unrestricted Global Securities in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Security cannot be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, a beneficial interest in a Restricted Global Security.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Securities.
(i) Beneficial Interests in Restricted Global Securities to Restricted
Definitive Securities. If any holder of a beneficial interest in a
Restricted Global Security proposes to exchange such beneficial interest
for a Restricted Definitive Security or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Restricted
Definitive Security, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Security proposes to exchange such beneficial interest for a
Restricted Definitive Security, a certificate from such holder in the
form of Exhibit G hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit F hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit F hereto, including the certifications in item (2)
thereof;
36
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to
the effect set forth in Exhibit F hereto, including the certifications
in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to the
Company or any of their Subsidiaries, a certificate to the effect set
forth in Exhibit F hereto, including the certifications in item (3)(b)
thereof; or
(F) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit F hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Security to be reduced accordingly pursuant to Section 2.6(h)
hereof, and the Company shall execute and the Trustee shall upon receipt of
an Authentication and Delivery Order authenticate and deliver to the Person
designated in the instructions a Definitive Security in the appropriate
principal amount. Any Definitive Security issued in exchange for a
beneficial interest in a Restricted Global Security pursuant to this
Section 2.6(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
(at the expense of the Company) deliver such Definitive Securities to the
Persons in whose names such Securities are so registered. Any Definitive
Security issued in exchange for a beneficial interest in a Restricted
Global Security pursuant to this Section 2.6(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer
contained therein.
(ii) Beneficial Interests in Restricted Global Securities to
Unrestricted Definitive Securities. A holder of a beneficial interest in a
Restricted Global Security may exchange such beneficial interest for an
Unrestricted Definitive Security or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Security only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
New Securities or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
37
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Security proposes to exchange such beneficial
interest for a Definitive Security that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit G hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Security proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Security that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit F
hereto, including the certifications in item (4) thereof,
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global Securities to
Unrestricted Definitive Securities. If any holder of a beneficial interest
in an Unrestricted Global Security proposes to exchange such beneficial
interest for a Definitive Security or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Definitive
Security, then, upon satisfaction of the conditions set forth in Section
2.6(b)(ii) hereof, the Trustee shall cause the aggregate principal amount
of the applicable Global Security to be reduced accordingly pursuant to
Section 2.6(h) hereof, and the Company shall execute and the Trustee shall
upon receipt of an Authentication and Delivery Order authenticate and (at
the expense of the Company) deliver to the Person designated in the
instructions a Definitive Security in the appropriate principal amount. Any
Definitive Security issued in exchange for a beneficial interest pursuant
to this Section 2.6(c)(iii) shall be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant. The Trustee
shall (at the expense of the Company) deliver such Definitive Securities to
the Persons in whose names such Securities are so registered. Any
Definitive Security issued in exchange for a beneficial interest pursuant
to this Section 2.6(c)(iii) shall not bear the Private Placement Legend.
38
(d) Transfer and Exchange of Definitive Securities for Beneficial
Interests.
(i) Restricted Definitive Securities to Beneficial Interests in
Restricted Global Securities. If any Holder of a Restricted Definitive
Security proposes to exchange such Security for a beneficial interest in a
Restricted Global Security or to transfer such Restricted Definitive
Security to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Security, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Security proposes
to exchange such Security for a beneficial interest in a Restricted
Global Security, a certificate from such Holder in the form of Exhibit
G hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Security is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit F hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Security is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to the
effect set forth in Exhibit F hereto, including the certifications in
item (2) thereof;
(D) if such Restricted Definitive Security is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit F hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Security is being transferred
to the Company or any of their Subsidiaries, a certificate to the
effect set forth in Exhibit F hereto, including the certifications in
item (3)(b) thereof; or
(F) if such Restricted Definitive Security is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit F hereto,
including the certifications in item (3)(c) thereof, the Trustee shall
cancel the Restricted Definitive Security, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Security, in the case of
clause (B) above, the 144A Global Security, and in the case of clause
(C) above, the Regulation S Global Security.
(ii) Restricted Definitive Securities to Beneficial Interests in
Unrestricted Global Securities. A Holder of a Restricted Definitive
Security may exchange such Security for a beneficial interest in an
Unrestricted Global Security or transfer such Restricted
39
Definitive Security to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Security only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the New Securities or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Securities proposes to
exchange such Securities for a beneficial interest in the
Unrestricted Global Security, a certificate from such Holder in
the form of Exhibit G hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive Securities proposes to
transfer such Securities to a Person who shall take delivery
thereof in the form of a beneficial interest in the Unrestricted
Global Security, a certificate from such Holder in the form of
Exhibit F hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.6(d)(ii), the Trustee shall cancel the Definitive
Securities and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Security.
(iii) Unrestricted Definitive Securities to Beneficial Interests in
Unrestricted Global Securities. A Holder of an Unrestricted Definitive
Security may exchange such Security for a beneficial interest in an
Unrestricted Global Security or transfer such
40
Definitive Securities to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Security at any time. Upon
receipt of a written request for such an exchange or transfer, the Trustee
shall cancel the applicable Unrestricted Definitive Security and increase
or cause to be increased the aggregate principal amount of one of the
Unrestricted Global Securities.
If any such exchange or transfer from a Definitive Security to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Security has not yet been issued, the
Company shall issue and, upon receipt of an Authentication and Delivery Order in
accordance with Section 2.2 hereof, the Trustee shall authenticate one or more
Unrestricted Global Securities in an aggregate principal amount equal to the
principal amount of Definitive Securities so transferred.
(e) Transfer and Exchange of Definitive Securities for Definitive
Securities.
Upon request by a Holder of Definitive Securities and such Holder's
compliance with the provisions of this Section 2.6(e), the Registrar shall
register the transfer or exchange of Definitive Securities. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Securities duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his attorney, duly authorized in
writing. In addition, the requesting Holder shall provide any additional
certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 2.6(e).
(i) Restricted Definitive Securities to Restricted Definitive
Securities. Any Restricted Definitive Security may be transferred to and
registered in the name of Persons who take delivery thereof in the form of
a Restricted Definitive Security if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit F hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit F hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit F hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Restricted Definitive Securities to Unrestricted Definitive
Securities. Any Restricted Definitive Security may be exchanged by the
Holder thereof for an
41
Unrestricted Definitive Security or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Security
if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the New Securities or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Securities
proposes to exchange such Securities for an Unrestricted
Definitive Security, a certificate from such Holder in the form
of Exhibit G hereto, including the certifications in item (I)(d)
thereof; or
(2) if the Holder of such Restricted Definitive Securities
proposes to transfer such Securities to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive
Security, a certificate from such Holder in the form of Exhibit F
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.
(iii) Unrestricted Definitive Securities to Unrestricted Definitive
Securities. A Holder of Unrestricted Definitive Securities may transfer
such Securities to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Security. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted Definitive
Securities pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance
with the Registration Rights Agreement, the Company shall issue and, upon
receipt of an
42
Authentication and Delivery Order in accordance with Section 2.2, the Trustee
shall authenticate (i) one or more Unrestricted Global Securities in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Securities tendered for acceptance by Persons
that certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the New
Securities and (z) they are not affiliates (as defined in Rule 144) of the
Company, and accepted for exchange in the Exchange Offer and (ii) Definitive
Securities in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Securities accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Securities, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Securities to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and (at the expense of the Company) deliver to the Persons
designated by the Holders of Definitive Securities so accepted Definitive
Securities in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Securities and Definitive Securities issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend. (A) Except as permitted by subparagraph
(B) below, each Global Security and each Definitive Security (and all
Securities issued in exchange therefor or substitution thereof) shall bear
the legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 OR 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO
43
THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Security or
Definitive Security issued pursuant to subparagraphs (b)(iv), (c)(ii),
(c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section
2.6 (and all Securities issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Security Legend. Each Global Security shall bear a legend
in substantially the following form:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(iii) Regulation S Temporary Global Security Legend. The Regulation S
Temporary Global Security shall bear a legend in substantially the
following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
SECURITIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL
44
SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(h) Cancellation and/or Adjustment of Global Securities. At such time as
all beneficial interests in a particular Global Security have been exchanged for
Definitive Securities or a particular Global Security has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Security
shall be returned to or retained and cancelled by the Trustee in accordance with
Section 2.10 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Security or for Definitive Securities, the principal amount of Securities
represented by such Global Security shall be reduced accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Security, such other Global Security shall be increased accordingly and an
endorsement shall be made on such Global Security by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges. (i) To
permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate Global Securities and Definitive
Securities upon receipt of an Authentication and Delivery Order in
accordance with Section 2.2 hereof or upon receipt of a written request of
the Registrar.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Security or to a Holder of a Definitive Security for
any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.9, 3.6, 3.8, 4.12, 4.13 and 9.5 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Security selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
(iv) All Global Securities and Definitive Securities issued upon any
registration of transfer or exchange of Global Securities or Definitive
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Global Securities or Definitive Securities surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Securities during a period beginning at the
opening of business 15 days before the day of any selection of Securities
for redemption under Section 3.2 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to
45
exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part or (C)
to register the transfer of or to exchange a Security between a record date
and the next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Security, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of and
interest on such Securities and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(vii) The Trustee shall authenticate Global Securities and Definitive
Securities in accordance with the provisions of Section 2.2 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.6 to
effect a registration of transfer or exchange may be submitted by
facsimile.
SECTION 2.7. Replacement Securities. If any mutilated Security is
surrendered to the Trustee or the Company and the Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Security, the Company
shall issue and the Trustee, upon receipt of an Authentication and Delivery
Order, shall authenticate a replacement Security if the Trustee's requirements
are met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Securityholder that is sufficient in the judgment of the Trustee
and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Security is
replaced. The Company and the Trustee may charge for their expenses in replacing
a Security.
SECTION 2.8. Outstanding Securities. The Securities outstanding at any time
are all the Securities authenticated by the Trustee except for those cancelled
by it, those delivered to it for cancellation, those reductions in the interest
in a Global Security effected by the Trustee in accordance with the provisions
hereof, and those described in this Section as not outstanding. Except as set
forth in Section 2.9 hereof, a Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security; however,
Securities held by the Company or a Subsidiary of the Company shall not be
deemed to be outstanding for purposes of Section 3.7 hereof.
If a Security is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the principal amount of any Security is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
46
If the Paying Agent (other than an Issuer, a Subsidiary or an Affiliate of
any thereof) holds, on a redemption date or maturity date, money sufficient to
pay the principal amount of those Securities payable on that date, then on and
after that date such Securities shall be deemed to be no longer outstanding and
shall cease to accrue interest.
SECTION 2.9. Temporary Securities. Until definitive Securities are ready
for delivery, the Company may execute and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities. After
the preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Securityholder. Upon surrender
for cancellation of any one or more temporary Securities, the Company shall
execute, and the Trustee shall authenticate and deliver in exchange therefor,
one or more definitive Securities representing an equal principal amount of
Securities. Until so exchanged, the Securityholder of temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as a
Securityholder of definitive Securities.
SECTION 2.10. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee for cancellation any Securities surrendered to them for
registration of transfer or exchange or payment. The Trustee and no one else
shall cancel and destroy all Securities surrendered for registration of transfer
or exchange, payment or cancellation in accordance with its customary practices
and procedures in effect from time to time. The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.
SECTION 2.11. Defaulted Principal and Interest. If the Company defaults in
a payment of principal or Interest (including Liquidated Damages) on the
Securities, the Company shall pay interest on any such defaulted payments at the
rate borne by the Securities (such an amount, "Defaulted Interest") and, if the
Company defaults in the payment of any Defaulted Interest on any Interest
Payment Date or any other date on which such payments shall be due, then the
Company shall pay Defaulted Interest on these amounts. The Company may pay the
Defaulted Interest to the Persons who are Securityholders on a subsequent
special record date. The Company shall fix or cause to be fixed (or upon the
Company's failure to do so the Trustee shall fix) any such special record date
and payment date to the reasonable satisfaction of the Trustee which specified
record date shall not be less than 10 days prior to the payment date for such
Defaulted Interest and the Company shall promptly mail or cause to be mailed to
each Securityholder a notice that states the special record date, the payment
date and the amount of Defaulted Interest to be paid. The Company shall notify
the Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed
47
payment, such money when so deposited to be held in trust for the
benefit of the Person entitled to such Defaulted Interest as provided in this
Section 2.11.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Securityholders,
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
SECTION 2.13. Treasury Securities. In determining whether the Holders of
the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or any Subsidiary Guarantor,
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any Subsidiary Guarantor
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that the Trustee knows are so
owned shall be so disregarded.
ARTICLE III
REDEMPTION
SECTION 3.1. Notices to Trustee. If the Company elects to redeem Securities
pursuant to Section 3.7 hereof, it shall notify the Trustee in writing of the
redemption date and the principal amount of Securities to be redeemed.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein.
SECTION 3.2. Selection of Securities To Be Redeemed. If fewer than all the
Securities then outstanding are to be redeemed, the Trustee shall select the
Securities to be redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities are listed, or, if
the Securities are not so listed, by lot, pro rata or by such other method as
the Trustee shall deem fair and appropriate; provided that no Securities of
$1,000 or less shall be redeemed in part. The Trustee shall make the selection
from outstanding Securities not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions
48
of Securities called for redemption. Upon request of the Company, the Trustee
shall notify the Company of the Securities or portions of Securities to be
redeemed.
SECTION 3.3. Notice of Redemption. At least 30 days but not more than 60
days before a date for redemption of Securities, the Trustee at the expense of
the Company shall mail a notice of redemption by first-class mail to each
Securityholder at its registered address to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price if such price is calculable at the time such
notice is sent or, if not, the formula for calculating such price;
(3) the name and address of the Paying Agent;
(4) that the Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price plus, to the extent not
included therein, accrued and unpaid Interest, Liquidated Damages, if any,
and Defaulted Interest, if any;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on those Securities (or portion
thereof) called for redemption shall cease to accrue on and after the
redemption date;
(7) whether the Securities are to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, on
which the Securities are listed, or, if the Securities are not so listed,
by lot, pro rata or by such other method as the Trustee shall deem fair and
appropriate; provided that no Securities of $1,000 or less shall be
redeemed in part.
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
The Trustee shall give the notice of redemption in the Company's name and
at the Company's expense. In such event, the Company shall compute and provide
the Trustee with the information required by this Section 3.3.
49
SECTION 3.4. Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities called for redemption shall become due and payable on the
redemption date and at the redemption price stated or calculable as set forth in
the notice. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price stated in the notice, plus accrued and unpaid Interest and
Liquidated Damages, if any, and Defaulted Interest, if any, to the redemption
date; provided that the Company shall have deposited the redemption price and
accrued interest, if any, with the Paying Agent or the Trustee on or before
11:00 a.m. (New York City time) on the date of redemption; provided, further,
that if the redemption date falls on an Interest Payment Date, any accrued and
unpaid Interest, Liquidated Damages, if any, and Defaulted Interest, if any,
shall be payable to the Securityholder of the redeemed Securities registered on
the relevant record date. Failure to give notice or any defect in the notice to
any Securityholder shall not affect the validity of the notice to any other
Securityholder.
SECTION 3.5. Deposit of Redemption Price. By at least 11:00 a.m. (New York
City time) on the date on which amounts owing to Securityholders pursuant to
either Section 3.7(a) hereof, Section 3.7(b) hereof, Section 3.8 hereof or
Section 3.9 hereof are due and payable, the Company shall deposit with the
Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay such amounts plus, to the
extent not included therein, accrued and unpaid Interest Liquidated Damages, if
any, and Defaulted Interest, if any, on all Securities to be redeemed on that
date other than Securities or portions of Securities called for redemption which
are owned by the Company or an affiliate and have been delivered by the Company
or such Subsidiary to the Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such redemption price, Interest and Defaulted
Interest on the Securities to be redeemed will cease to accrue on and after the
applicable redemption date, whether or not such Securities are presented for
payment.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a Security that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Securityholder (at the Company's expense) a new Security
equal in a principal amount to the unredeemed portion of the Security
surrendered.
SECTION 3.7. Optional Redemption.
(a) Optional Redemption Prior to September 1, 2001. Prior to September 1,
2001, the Securities will be redeemable, in whole or in part, at the option of
the Company, upon not less than 30 and no more than 60 days' prior notice, on
any March 1, June 1, September 1 or December 1 of any year at a redemption price
equal to 100% of the principal amount thereof plus the Make-Whole Premium, plus,
to the extent not included in the Make-Whole Premium, accrued and unpaid
Interest and Liquidated Damages, if any, to the date of redemption. For purposes
of the foregoing: (i) "Make-Whole Premium" means, with respect to a Security, an
amount equal to the present value of the remaining Coupon Interest (exclusive of
any portion thereof accruing with respect to the period prior to the redemption
date) and premium payments due on such Security as if such Security were
redeemed on September 1, 2001 pursuant to the
50
next succeeding paragraph, discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at a discount
rate equal to the Treasury Rate plus 100 basis points; and (ii) if the Company
redeems any Security on June 1 or December 1 of any year, then Cash Flow
Participation Interest shall be calculated by multiplying (A) Consolidated Cash
Flow, with respect to any redemption on June 1, for the quarterly period ended
on the preceding March 31 and, with respect to any redemption on December 1, for
the quarterly period ended on the preceding September 30 by (B) the applicable
percentage, as stated in Section 2.1(a)(3), corresponding to the date next
succeeding that June 1 or December 1, as the case may be.
(b) Optional Redemption On or After September 1, 2001. On or after
September 1, 2001, the Securities are redeemable, in whole or in part, upon not
less than 30 nor more than 60 days' prior notice, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid Interest and Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on
September 1 of the years indicated below:
Redemption Price as a
Year Percentage of Principal Amount
---- ------------------------------
2001..................... 107.250%
2002..................... 103.625%
For purposes of the foregoing, if the Company redeems any Security (i) on March
1 or September 1 of any year, then Cash Flow Participation Interest shall be
calculated as set forth in Section 2.1(a)(3); (ii) on June 1 or December 1 of
any year, then Cash Flow Participation Interest shall be calculated by
multiplying (A) Consolidated Cash Flow, with respect to any redemption on June
1, for the quarterly period ended on the preceding March 31 and, with respect to
any redemption on December 1, for the quarterly period ended on the preceding
September 30 by (B) the applicable percentage, as stated in Section 2.1(a)(3),
corresponding to the date next succeeding that June 1 or December 1, as the case
may be; and (iii) on any date other than March 1, June 1, September 1 or
December 1 of any year, then Cash Flow Participation Interest shall be
calculated as follows: (w) for any redemption occurring between March 1 and June
1 (exclusive of March 1 and June 1), the Cash Flow Participation Interest for
the period from March 1 to the redemption date shall be calculated by
multiplying the Cash Flow Participation Interest actually paid on the Interest
Payment Date which occurred on the immediately preceding March 1 by a fraction
the numerator of which shall be the number of days from March 1 to and including
the redemption date and the denominator of which shall be 180; (x) for any
redemption occurring between June 1 and September 1 (exclusive of June 1 and
September 1), Cash Flow Participation Interest shall be the sum of (I) the Cash
Flow Participation Interest for the period from March 1 to June 1 which shall be
calculated as described in clause (w) of this paragraph and (II) the Cash Flow
Participation Interest for the period from June 1 to the redemption date which
shall be calculated by multiplying the Cash Flow Participation Interest to be
paid for the period from March 1 through June 1 by a fraction the numerator of
which shall be the number of days between June 1 and the redemption date and the
denominator of which shall be 90; (y) for any redemption
51
occurring between September 1 and December 1 (exclusive of September 1 and
December 1), the Cash Flow Participation Interest for the period from September
1 to the redemption date shall be calculated by multiplying the Cash Flow
Participation Interest actually paid on the Interest Payment Date which occurred
on the immediately preceding September 1 by a fraction the numerator of which
shall be the number of days from such September 1 to and including the
redemption date and the denominator of which shall be 180; and (z) for any
redemption occurring between December 1 and March 1 (exclusive of December 1 and
March 1), Cash Flow Participation Interest shall be the sum of (I) the Cash Flow
Participation Interest for the period from September 1 to December 1 which shall
be calculated as described in clause (y) of this paragraph and (II) the Cash
Flow Participation Interest for the period from December 1 to the redemption
date which shall be calculated by multiplying the Cash Flow Participation
Interest to be paid for the period from September 1 through December 1 by a
fraction the numerator of which shall be the number of days from December 1 to
the redemption date and the denominator of which shall be 90.
(c) Any redemption pursuant to this Section 3.7 shall be made pursuant to
the provisions of Section 3.1 through Section 3.6 hereof.
SECTION 3.8. Offer to Purchase by Application of Excess Proceeds. In the
event that, pursuant to Section 4.12 hereof, the Company shall be required to
commence 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 of Securities required to be
purchased pursuant to Section 4.12 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Securities tendered in response to the
Asset Sale Offer. Payment for any Securities so purchased shall be made in the
same manner as Interest payments are made pursuant to Section 2.1(a)(3).
If the Purchase Date is on or after a record date and on or before the
related Interest Payment Date, any accrued and unpaid Interest and Liquidated
Damages, if any, shall be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest shall be payable to Securityholders who tender Securities 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 to each of the Securityholders,
with a copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Securityholders to tender Securities pursuant
to the Asset Sale Offer. The Asset Sale Offer shall be made to all
Securityholders. 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
3.8 and Section 4.12 hereof and the length of time the Asset Sale Offer
shall remain open;
52
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Security not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrete or accrue interest after the Purchase Date;
(e) that Securityholders electing to have a Security purchased
pursuant to an Asset Sale Offer may only elect to have all of such Security
purchased and may not elect to have only a portion of such Security
purchased;
(f) that Securityholders electing to have a Security purchased
pursuant to any Asset Sale Offer shall be required to surrender the
Security, with the form entitled "Option of Securityholder to Elect
Purchase" on the reverse of the Security completed, or transfer by
book-entry transfer, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(g) that Securityholders shall be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Securityholder, the principal amount of the Security the Securityholder
delivered for purchase and a statement that such Securityholder is
withdrawing his election to have such Security purchased;
(h) that, if the aggregate principal amount of Securities surrendered
by Securityholders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as
may be deemed appropriate by the Company so that only Securities in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(i) that Securityholders whose Securities were purchased only in part
shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Securities or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Securities
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Securities or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.8. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering
Securityholder an amount equal to the purchase
53
price of the Securities tendered by such Securityholder and accepted by the
Company for purchase, and the Company shall promptly issue a new Security, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Security to such Securityholder, in a principal amount equal
to any unpurchased portion of the Security surrendered. Any Security not so
accepted shall be promptly mailed or delivered by the Company to the
Securityholder thereof. The Company shall publicly announce the results of the
Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.8, any purchase
pursuant to this Section 3.8 shall be made pursuant to the provisions of
Sections 3.1 through 3.6 hereof.
SECTION 3.9. Special PIK Redemptions. (a) If the Company elects to pay Cash
Flow Participation Interest for a Semi-Annual Accrual Period by the issuance of
PIK Securities pursuant to Section 2.1(a)(4) hereof, then the Company shall be
required to redeem such PIK Securities on the Interest Payment Date falling
immediately after the next succeeding Semi-Annual Accrual Period (such date, the
"Special PIK Redemption Date") at a redemption price equal to 100% of the
principal amount thereof plus accrued and unpaid Interest and Liquidated
Damages, if any, on such PIK Securities, to the Special PIK Redemption Date
(such redemption, the "Special PIK Redemption") if, but only if, (A) the
Company's Fixed Charge Coverage Ratio for the four full fiscal quarters
immediately preceding such Special PIK Redemption Date would have been at least
2.50 to 1 determined on a pro forma basis after giving effect to such Special
PIK Redemption as if such Special PIK Redemption had occurred at the beginning
of the applicable four-quarter reference period and (B) such Special PIK
Redemption is permitted by the Senior Credit Facility.
(b) In the event of a Special PIK Redemption, the Company shall deliver a
notice, signed by an Officer, to the Trustee and the Paying Agent (which notice
shall be received not less than 5 nor more than 45 days prior to the record date
preceding the Interest Payment Date which shall also be such Special PIK
Redemption Date) which shall include a written order to the Trustee to record on
the PIK Grid for the Security or, if more than one Security is outstanding at
that time, for each Security, (i) the date of the Special PIK Redemption, (ii)
the aggregate principal amount of PIK Securities to be redeemed on the Special
PIK Redemption Date and (iii) the total amount of PIK Securities outstanding
after taking into account this and any prior Special PIK Redemption.
Within 2 business days of any Special PIK Redemption, the Trustee shall
give notice of such Special PIK Redemption to the Depositary and all
Securityholders registered with the Registrar as of the record date preceeding
the Interest Payment Date that is such Special PIK Redemption Date.
SECTION 3.10. Mandatory Redemption. The Company shall not be required to
make mandatory redemptions or sinking fund payments with regard to the
Securities, except as, and to the extent, set forth in Sections 3.8 and 3.9
hereof.
54
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities. The Company shall promptly pay the
principal, Interest and Liquidated Damages, if any, on the Securities on the
dates and in the manner provided in the Securities and in this Indenture.
Principal and Interest (including Liquidated Damages) shall be considered paid
on the date due if on or before 11:00 a.m. (New York City time) on such date the
Trustee or the Paying Agent (or, if the Company or a Subsidiary is the Paying
Agent, the segregated account or separate trust fund maintained by the Company
or such Subsidiary pursuant to Section 2.4) holds in accordance with this
Indenture money sufficient to pay all principal and Interest (including
Liquidated Damages) then due and the Trustee or the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, the Company or such Subsidiary), as
the case may be, is not prohibited from paying such money to the Securityholders
on that date pursuant to the terms of this Indenture.
The Company shall pay Interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay Interest on overdue installments of
Interest at the same rate to the extent lawful as provided in Section 2.11.
Notwithstanding anything to the contrary contained in this Indenture, the
Company or the Paying Agent may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States of
America or other domestic or foreign taxing authorities from principal or
Interest payments hereunder.
SECTION 4.2. Restricted Payments. The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or
pay any dividend or make any other payment or distribution on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company) or to the direct or indirect holders of the Company's or
any of its Restricted Subsidiaries' Equity Interests in their capacity as such
(other than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company and other than dividends and distributions
payable to the Company or any Restricted Subsidiary); (ii) purchase, redeem or
otherwise acquire or retire for value (including without limitation, in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company or any direct or indirect parent of the Company or
other Affiliate of the Company (other than a Subsidiary of the Company); (iii)
make any payment on or with respect to, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Securities; 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, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
55
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.3 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company or any of its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted by
clauses (ii), (iii) or (iv) of the next succeeding paragraph), is less than the
sum of (i) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first fiscal quarter
immediately following the Issue Date to the end of the Company's most recently
ended fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net Income for
such period is a deficit, less 100% of such deficit), plus (ii) 100% of the
aggregate net cash proceeds received by the Company as a contribution to its
common equity capital or from the issue or sale since the Issue Date of Equity
Interests of the Company (other than Disqualified Stock), or of Disqualified
Stock or debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Restricted Subsidiary of the Company and
other than Disqualified Stock or convertible debt securities that have been
converted into Disqualified Stock), plus (iii) to the extent not already
included in Consolidated Net Income of the Company for such period without
duplication, if any Restricted Investment that was made by the Company or any of
its Restricted Subsidiaries after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash, or if any Unrestricted Subsidiary which is
designated as an Unrestricted Subsidiary subsequent to the Issue Date is sold
for cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment or Unrestricted
Subsidiary (less the cost of disposition, if any) and (B) the initial amount of
such Restricted Investment or designated amount of such Unrestricted Subsidiary.
So long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the foregoing provisions shall not prohibit: (i) the
payment of any dividend within 60 days after the date of declaration thereof, if
at said date of declaration such payment would have complied with the provisions
of this Indenture; (ii) the redemption, repurchase, retirement, defeasance or
other acquisition of any Indebtedness which is subordinated to the Securities or
Equity Interests of the Company in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, other Equity Interests of the Company (other than any
Disqualified Stock); provided that the amount of any such net cash proceeds that
are utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (c) (ii) of the preceding
paragraph; (iii) the defeasance, redemption, repurchase or other acquisition of
Indebtedness which is subordinated to the Securities with the net cash proceeds
from an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of
any dividend or distribution by a Restricted Subsidiary of the Company to the
holders of its common Equity Interests so long as the Company or another
Restricted Subsidiary receives at least its pro rata share of such dividend or
56
distribution in accordance with its Equity Interests; (v) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
of the Company that are held by any member of the Company's (or any of its
Restricted Subsidiaries) management pursuant to any management equity
subscription agreement or stock option agreement, provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $500,000 in any twelve-month period; and (vi)
distributions required under the Plan of Reorganization but only in the manner
and to the extent contemplated thereby.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary of the Company, pursuant to the Restricted Payment. The fair market
value of any non-cash Restricted Payment shall be determined by the Board of
Directors of the Company whose resolution with respect thereto shall be
delivered to the Trustee, such determination to be based upon an opinion or
appraisal issued by an investment banking firm of national standing or by an
appraisal firm of national standing, if such fair market value exceeds or
reasonably may exceed $1.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.2 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
SECTION 4.3. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and the
Company shall not issue any Disqualified Stock and shall not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) and
issue shares of Disqualified Stock and any Restricted Subsidiary may incur
Acquired Debt if (i) the Company's Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2.75 to 1, determined on a pro forma basis, as
if the additional Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such four-quarter period
and (ii) the Company is in compliance with Section 4.4 hereof.
The provisions of the first paragraph of this covenant shall not apply to
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt") so long as no Default has occurred and is continuing or would
be caused thereby:
(i) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness under the Senior Credit Facility and letters of credit (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted Subsidiaries
thereunder); provided that the sum of the aggregate principal amount of all
Indebtedness of the Company and its Restricted
57
Subsidiaries outstanding under the Senior Credit Facility after giving
effect to such incurrence, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (i) does not exceed an amount equal to $125.0
million less, without duplication, (X) the aggregate amount of all
repayments, optional or mandatory, of the principal of any Indebtedness
under the term loan portion of the Senior Credit Facility that have been
made by the Company and its Restricted Subsidiaries since the Issue Date,
(Y) the aggregate amount of PIK Securities issued and outstanding pursuant
to this Indenture to a maximum amount equal to the Minimum Cash Flow
Participation Amount, and (Z) the aggregate amount of Asset Sale proceeds
applied by the Company and its Restricted Subsidiaries to permanently
reduce the availability of revolving credit Indebtedness under the Senior
Credit Facility pursuant to Section 4.12; it being understood that the
total committed facilities with respect to any refinancing of the Senior
Credit Facility may exceed the actual aggregate principal amount of
Indebtedness outstanding at the time of such refinancing so long as the
total of such commitments does not exceed the limitations set forth in this
clause (i);
(ii) the incurrence by the Company of Indebtedness represented by the
Securities and the PIK Securities issued pursuant to this Indenture and the
incurrence by the Subsidiary Guarantors of the Guarantees;
(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, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace Indebtedness incurred pursuant to this
clause (iii), not to exceed $5.0 million at any time outstanding;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness;
(v) the incurrence by the Company of Indebtedness owing to and held by
any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary which
is a Subsidiary Guarantor owing to and held by the Company or another
Restricted Subsidiary which is a Subsidiary Guarantor; provided, however,
that (a) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in cash
of all Obligations with respect to the Securities and this Indenture, (b)
if a Restricted Subsidiary of the Company is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of such Restricted Subsidiary's Guarantee and
(c)(1) any subsequent event or issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a Person other than the
Company or a Restricted Subsidiary of the Company and (2) any sale or other
transfer of any such Indebtedness to a Person that is not either the
Company or a Subsidiary Guarantor shall
58
be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be, that was
not permitted by this clause (v);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the normal course
of business and consistent with past business practices for the purpose of
fixing or hedging currency, commodity or interest rate risk (including with
respect to any floating rate Indebtedness that is permitted by the terms of
this Indenture to be outstanding in connection with the conduct of their
respective businesses and not for speculative purposes);
(vii) the guarantee by the Company or any of the Subsidiary Guarantors
of Indebtedness of the Company or a Restricted Subsidiary of the Company
that was permitted to be incurred by another provision of this Section 4.3;
(viii) the incurrence by Trim Trends Canada of Indebtedness under the
CIBC Facility, provided that the aggregate principal amount of all
Indebtedness of Trim Trends Canada outstanding under the CIBC Facility,
after giving effect to such incurrence, including all permitted Refinancing
Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (viii), does not exceed an
amount equal to $2.0 million; and
(ix) the incurrence by the Company of additional Indebtedness in an
aggregate principal amount at any time outstanding, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace any other
Indebtedness incurred pursuant to this clause (ix), not to exceed $2.5
million.
For purposes of determining compliance with this Section 4.3, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (ix) above as of
the date of incurrence thereof or is entitled to be incurred pursuant to the
first paragraph of this covenant as of the date of incurrence thereof, the
Company shall, in its sole discretion, classify such item of Indebtedness as of
the date of incurrence thereof in any manner that complies with this covenant
and such item of Indebtedness shall be treated as having been incurred pursuant
to only one of such clauses or pursuant to the first paragraph hereof. Accrual
of interest, accrual of dividends, the accretion of accreted value and the
payment of interest in the form of additional Indebtedness will not be deemed to
be an incurrence of Indebtedness for purposes of this covenant.
SECTION 4.4. Maintenance of Consolidated Leverage Ratio. So long as the
Securities are outstanding, the Company, will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly permit the Consolidated
Leverage Ratio as of the last day of any period of four consecutive fiscal
quarters of the Company ending with any fiscal quarter set forth below to exceed
the ratio set forth below opposite such fiscal quarter:
59
Fiscal Quarter Consolidated Leverage
-------------- ---------------------
December 31, 1998............................... 4.50
March 31, 1999.................................. 4.50
June 30, 1999................................... 4.50
September 30, 1999.............................. 4.50
December 31, 1999............................... 4.00
March 31, 2000.................................. 4.00
June 30, 2000................................... 4.00
September 30, 2000 and thereafter until
the Maturity Date............................... 3.50
SECTION 4.5. Maintenance of Consolidated Interest Coverage Ratio. So long
as the Securities are outstanding, the Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Company ending with any fiscal quarter set forth below to be
less than the ratio set forth below opposite such fiscal quarter:
Consolidated Coverage
Fiscal Quarter Interest Ratio
-------------- --------------
December 31, 1998............................... 2.00
March 31, 1999.................................. 2.00
June 30, 1999................................... 2.00
September 30, 1999.............................. 2.00
December 31, 1999............................... 2.25
March 31, 2000.................................. 2.25
June 30, 2000................................... 2.25
September 30, 2000.............................. 2.25
December 31, 2000 and thereafter until
the Maturity Date............................... 2.75
60
SECTION 4.6. Liens. The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien of any kind securing Indebtedness,
Attributable Debt, or trade payables (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Securities are secured on an equal and ratable
basis with the obligations so secured until such time as such obligations are no
longer secured by a Lien.
SECTION 4.7. Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Company will not, and will 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 of the Company to (i)(X) 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 (Y) 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 Senior
Credit Facility as in effect as of the Issue Date, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Senior
Credit Facility as in effect on the Issue Date, (b) this Indenture and the
Securities, (c) applicable law, (d) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in contemplation of such
acquisition), 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, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (e) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business, (f) capital leases, mortgage
financings or purchase money obligations for property acquired in the ordinary
course of business that impose encumbrances or restrictions on the property so
acquired, (g) Indebtedness of Subsidiary Guarantors, provided that such
Indebtedness was permitted to be incurred pursuant to this Indenture, or (h)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced.
SECTION 4.8. Transactions with Affiliates. The Company will not, and will
not permit any of its Restricted Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate of any such Person (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms that
are no less
61
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (ii) the Company delivers to
the Trustee (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $1.0
million, a resolution of its Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause (i)
above and that such Affiliate Transaction has been approved by a majority of the
disinterested members of its Board of Directors and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $2.5 million, an opinion as to the fairness
to the Securityholders of such Affiliate Transaction from a financial point of
view issued by an investment banking firm of national standing or an appraisal
firm of national standing; provided that none of the following shall be deemed
to be Affiliate Transactions: (1) any employment agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of business
of the Company or such Restricted Subsidiary, as the case may be, (2)
transactions between or among the Company and/or its Subsidiary Guarantors on
terms that are no less favorable to the Company and/or such Subsidiary Guarantor
than those that would have been obtained in a comparable transaction by the
Company and/or such Subsidiary Guarantor with an unrelated Person, (3) any sale
or other issuance of Equity Interests (other than Disqualified Stock) of the
Company or of Equity Interests of any Restricted Subsidiary to the Company or
any other Restricted Subsidiary, (4) Restricted Payments that are permitted by,
and Investments that are not prohibited by, Section 4.2 hereof, (5) fees and
compensation paid to members of the Board of Directors of the Company and of its
Restricted Subsidiaries in their capacity as such, to the extent such fees and
compensation are reasonable and customary, (6) advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business; and (7) fees and compensation paid to, and
indemnity provided on behalf of, officers, directors or employees of the Company
or any of its Restricted Subsidiaries, as determined by the Board of Directors
of the Company or of any such Restricted Subsidiary, to the extent such fees and
compensation are reasonable and customary, shall not be deemed to be Affiliate
Transactions.
SECTION 4.9. Sale and Leaseback Transactions. The Company will not, and
will not permit any of its Restricted Subsidiaries to, enter into any sale and
leaseback transaction; provided that the Company may enter into a sale and
leaseback transaction if (i) the Company could have incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to (A) the Fixed Charge Coverage Ratio test set forth in
the first paragraph of Section 4.3 hereof and (B) the covenant described above
under Section 4.4 hereof, (ii) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the fair market value (as determined
in good faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee) of the property that is the subject of
such sale and leaseback transaction and (iii) the transfer of assets in such
sale and leaseback transaction is permitted by, and the Company applies the
proceeds of such transaction in compliance with, the second paragraph of Section
4.12 hereof.
SECTION 4.10. Impairment of Security Interests. Subject to the
Intercreditor Agreement, neither the Company nor any of its Subsidiaries will
take or omit to take any action
62
that would adversely affect or impair the security interests granted to the
Collateral Agent, in favor of the Trustee and Securityholders, with respect to
the Collateral. Neither the Company nor any of its Subsidiaries shall grant to
any Person, or permit any Person to retain (other than the Collateral Agent) any
interest whatsoever in the Collateral, other than the security interest of the
Senior Credit Facility and Permitted Liens as permitted under Section 4.6
hereof. Neither the Company nor any of its Subsidiaries will enter into any
agreement that requires the proceeds from any sale of Collateral to be applied
to repay, redeem, defease or otherwise acquire or retire Indebtedness of any
Person, other than as permitted by this Indenture (under Section 4.6 hereof),
the Securities, the Intercreditor Agreement and the Collateral Agreement.
SECTION 4.11. Additional Subsidiary Guarantors. If the Company or any of
its Restricted Subsidiaries shall acquire or create another Restricted
Subsidiary after the Issue Date, then such newly acquired or created Restricted
Subsidiary will (i) execute a supplemental indenture in form and substance
satisfactory to the Trustee providing that such Restricted Subsidiary will
become a Subsidiary Guarantor under this Indenture and the Collateral Agreement,
(ii) will issue a Guarantee or endorse the Securities on the same terms and
conditions as the Guarantees that will be issued by each Subsidiary Guarantor
pursuant to this Indenture and the Collateral Agreement and (iii) deliver an
Opinion of Counsel to the effect, inter alia, that such supplemental indenture
has been duly authorized and executed by such Restricted Subsidiary.
SECTION 4.12. Offer to Purchase Upon Asset Sale. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless (i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee) of the assets issued or sold
or otherwise disposed of and (ii) at least 85% of the consideration therefor
received by the Company or such Restricted Subsidiary, as the case may be, is in
the form of cash or Cash Equivalents; provided that the amount of (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Securities or any guarantee thereof) 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
securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are immediately converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received) shall be deemed to be cash for purposes of this provision.
Notwithstanding the above, (i) the Company shall not be permitted to make any
Asset Sale of Xxxxxxxx-Xxxxxx and (ii) the Company shall comply with the
applicable requirements of Section 314(d) of the TIA regarding, and as a
condition to, the release of Collateral.
Within 180 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to repay
Indebtedness under the Senior Credit Facility (and, in the case of borrowings
under the revolving credit portion of the Senior Credit Facility, to
correspondingly permanently reduce the commitments with respect thereto),
63
(b) to the acquisition of a controlling interest in another business, provided
that (i) on a pro forma basis after giving effect to such acquisition, the
Company's Consolidated Leverage Ratio as of the last day of the period of four
consecutive fiscal quarters preceding such acquisition is no higher than it
would have been without giving pro forma effect to such acquisition and (ii)
such other business engages in a Permitted Business or (c) the making of a
capital expenditure or the acquisition of other tangible long-term assets, in
each case, in Permitted Businesses. Any Net Proceeds from Asset Sales that are
not applied or invested as provided in the first sentence of this paragraph will
be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $2.0 million, the Company will be required to make an offer to
all Securityholders (an "Asset Sale Offer") to purchase the maximum principal
amount of Securities 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 thereof
plus accrued and unpaid Interest and Liquidated Damages thereon, if any, to the
date of purchase, in accordance with Section 3.8 hereof (the first date the
aggregate of all such Net Proceeds is equal to $2.0 million or more shall be
deemed an "Asset Sale Offer Trigger Date"). To the extent that the aggregate
amount of Securities 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 of Securities surrendered
by Securityholders thereof exceeds the amount of Excess Proceeds, the Trustee
shall select the Securities to be purchased on a pro rata basis. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
Each Asset Sale Offer will be mailed to the record Securityholders as shown
on the register of Securityholders within 25 days following the Asset Sale Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. Upon receiving notice of the Asset Sale Offer,
Securityholders may elect to tender their Securities in whole or in part in
integral multiples of $1,000 in exchange for cash.
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 Securities pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached their
obligations under the Asset Sale provisions of this Indenture by virtue thereof.
SECTION 4.13. Offer to Repurchase upon Change of Control. (a) Upon the
occurrence of a Change of Control, each Securityholder 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 Securityholder's Securities pursuant to the
offer described in this Section 4.13 (the "Change of Control Offer") at an offer
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid Interest and Liquidated Damages thereon, if any, to the date
of purchase (the "Change of Control Payment"). The calculation of the portion of
unpaid Interest represented by Cash Flow Participation Interest shall be made in
the same manner as set forth in Section 3.7 hereof. Within 10 days following any
Change of Control, the Company shall mail a notice to the Trustee describing the
transaction or transactions that constitute the Change of Control and
64
offering to repurchase Securities on the date specified in such notice, which
date shall be no earlier than 30 days and no later than 60 days from the date
such notice is mailed (the "Change of Control Payment Date"), pursuant to the
procedures required by this Indenture and described in such notice. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Securities
as a result of a Change of Control.
(b) On a Change of Control Payment Date, the Company shall, to the extent
lawful, (i) accept for payment all Securities 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
Securities or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate stating the aggregate principal amount of Securities or portions
thereof being purchased by the Company. The Paying Agent shall promptly mail to
each Securityholder so tendered the Change of Control Payment for such
Securities, and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Securityholder a new Security equal in
principal amount to any unpurchased portion of the Securities surrendered, if
any; provided that each such new Security shall 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.
The Change of Control provisions described above will be applicable whether
or not other provisions of this Indenture are applicable.
(c) Notwithstanding anything to the contrary in this Section 4.13, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control (i) if a third party makes the Change of Control Offer in a manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.13 and Section 3.8 hereof and purchases all Securities validly
tendered and not withdrawn under such Change of Control Offer or (ii) the
Company exercises its option to purchase all the Securities upon a Change of
Control as described in Section 3.7 hereof.
SECTION 4.14. Business Activities. The Company will not, and the Company
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
engage in any line of business other than a Permitted Business, except to such
extent as would not be material to the Company and its Restricted Subsidiaries
taken as a whole.
SECTION 4.15. Payments for Consent. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly, pay or
cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Securityholder for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Indenture or the
Securities unless such consideration is offered to be paid or is paid to all
Securityholders that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.
65
SECTION 4.16. Reports. Whether or not the Company is required by the rules
and regulations of the SEC, so long as any Securities are outstanding, the
Company will furnish to each of the Securityholders (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the SEC on Forms 10-Q and 10-K if the Company were required to file such
financial information, 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 any consolidated
Restricted Subsidiaries and, with respect to the annual information only,
reports thereon by the Company's independent public accountants (which shall be
firm(s) of established national reputation) and (ii) all information that would
be required to be filed with the SEC on Form 8- K if the Company were required
to file such reports. All such information and reports shall be filed with the
SEC on or prior to the dates on which such filings would have been required to
be made had the Company been subject to the rules and regulations of the SEC. In
addition, whether or not required by the rules and regulations of the SEC, the
Company shall file a copy of all such information and reports with the SEC for
public availability within the time periods specified in the SEC's rules and
regulations (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.
For so long as any Securities remain outstanding, the Company and the
Subsidiary Guarantors shall furnish to the Securityholders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.17. Further Surveys and Title Insurance. To the extent that, on
the Issue Date, the Company shall not have delivered Surveys of the properties
subject to the Mortgages to the Collateral Agent and the Title Insurance
Company, then the Company shall use commercially reasonable efforts to do so
within 45 days of the Issue Date and shall use commercially reasonable efforts
to have the Title Insurance Company, within 10 days thereafter, omit
corresponding survey exceptions on the relevant title insurance policies issued
and issue those endorsements to such title insurance policies (such as survey
and access) that cannot be issued without such surveys.
SECTION 4.18. Corporate Existence. Subject to Article 5 hereof, the Company
shall do, or cause to be done, all things necessary to preserve and keep in full
force and effect (i) its corporate existence, and the corporate existence of
each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Subsidiary, respectively, and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate existence of any of its Subsidiaries, if the Board
of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Securityholders.
66
SECTION 4.19. Accounts Receivable Aging Certificate. The Company shall
deliver to the Trustee within thirty days after each of March 31, June 30,
September 30 and December 31 of each fiscal year a certificate dated the last
day covered by such quarterly period, signed by the Controller, Treasurer or
Chief Financial Officer of the Company and listing the number and dollar amount
of accounts receivable aged from invoice date as follows: 1 to 30 days, 31 to 60
days, 61 to 90 days and 91 days or more, accompanied by such supporting detail
and documentation as shall be requested by the Trustee in its reasonable
discretion (each such certificate, a "Receivables Aging Certificate"). Each
Receivables Aging Certificate shall also show the percentage of total accounts
receivable which are 91 days or more past due from the date of invoice;
provided, that if such percentage is greater than or equal to 10%, the Trustee
shall notify all Securityholders in writing of such fact and provide to each
Securityholder a copy of such Receivables Aging Certificate.
SECTION 4.20. Compliance Certificate. The Company shall deliver to the
Trustee within 90 days after the end of each fiscal quarter of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company whether or not the signers
know of any Default or Event of Default that occurred during such period. If
they do, the certificate shall describe the Default or Event of Default, its
status and what action the Company is taking or proposes to take with respect
thereto. The Company and each of the Subsidiary Guarantors also shall, to the
extent required, comply with TIA Section 314(a)(4).
SECTION 4.21. Maintenance of Office or Agency. The Company shall maintain
the office or agency required under Section 2.3. The Company shall give prior
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 12.2.
SECTION 4.22. Taxes. The Company shall pay, and shall cause each of their
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Securityholders.
SECTION 4.23. Stay, Extension and Usury Laws. Each of the Company and the
Subsidiary Guarantors covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company and each Subsidiary Guarantor
(to the extent that they may lawfully do so) hereby expressly waive all benefit
or advantage of any such law, and covenant that they 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 had been enacted.
67
SECTION 4.24. Maintenance of Properties and Insurance. Subject to Article
V, the Company shall cause all material properties owned by or leased to it or
any Restricted Subsidiary and used or useful in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in normal
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, provided, however, that
nothing in this Section 4.24 shall prevent the Company or any Restricted
Subsidiary from discontinuing the use, operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Board of Directors of the Company or the Restricted
Subsidiary concerned, or of an Officer (or other agent employed by the Company
or of any Restricted Subsidiary) of the Company or such Restricted Subsidiary
having managerial responsibility for any such property, desirable in the conduct
of the business of the Company or any Restricted Subsidiary as, in the judgment
of the Company, may be necessary.
SECTION 4.25. Further Instruments and Acts. Upon reasonable request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.1. Merger, Consolidation, or Sale of Assets. The Company will
not, directly or indirectly, consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, 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, 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 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, conveyance or other disposition shall have been made
assumes all the obligations of the Company under the Securities and this
Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee;
(iii) immediately before and after such transaction no Default or
Event of Default shall have occurred; and
68
(iv) except in the case of a merger of the Company with or into a
Subsidiary Guarantor, the Company or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition shall have been made
(A) will have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, immediately after such
transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of Section 4.3 hereof. The Company may not, directly or
indirectly, lease all or substantially all of its properties or assets, in
one or more related transactions, to any other Person.
Upon any consolidation or merger, or any sale or lease of the assets of the
Company as, or substantially as, an entirety in accordance with this Section
5.1, the entity formed by such consolidation or into which the Company shall
have been merged or to which such sale or lease shall have been made shall
succeed to and be substituted for the Company with the same effect as if it had
been named in this Indenture as a party hereto and thereafter from time to time
such successor entity may exercise each and every right and power of the Company
under this Indenture in the name of the Company or in its own name; and any act
or proceeding by any provision of this Indenture required or permitted to be
done by the Board of Directors or any Officer of the Company may be done with
like force and effect by the like board or officer of any entity that shall at
the time be the successor of the Company hereunder. In the event of the sale by
the Company of its assets as, or substantially as, an entirety upon the terms
and conditions of this Section 5.1, the Company shall be released from all its
liabilities and obligations under this Indenture and the Securities, but the
predecessor Company in the case of a lease of all its assets or substantially
all its assets will not be released from the obligation to pay the principal and
premium of and Interest and Liquidated Damages, if any, on the Securities.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of Interest or Liquidated
Damages, if any, on any Security when the same becomes due and payable, and
such default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of or
premium, if any, on any Security when the same becomes due and payable at
its Maturity Date, upon declaration or otherwise;
69
(3) the Company fails to comply with Article V or the Company or a
Restricted Subsidiary fails to comply with Section 4.2 hereof or Section
4.3 hereof, and such default continues for a period of 30 days;
(4) the Company or any of its Restricted Subsidiaries fails to comply
with Section 4.12 hereof or Section 4.13 hereof;
(5) the Company or any of its Restricted Subsidiaries, as the case may
be, fails to comply with any of its agreements in the Securities, the
related Guarantees, this Indenture, the Collateral Agreement or the other
Security Documents (other than those referred to in clauses (1), (2), (3)
or (4) of this Section 6.1) and such failure continues for 60 days after
the notice specified below;
(6) the Company or any of its Restricted Subsidiaries 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
(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 Issue Date, which default (i) is caused by a
failure to pay principal of or premium, if any, or Interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (ii)
results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates without duplication $1.0 million or more;
(7) the Company or any of its Restricted Subsidiaries fails to pay
final judgments aggregating in excess of $1.0 million (excluding amounts
covered by insurance), which judgments are not paid, discharged, stayed,
vacated or bonded pending appeal by a reputable financial intermediary with
an investment grade rating for a period of 60 days from the entry thereof;
(8) the Company or a Restricted Subsidiary of the Company pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
70
(D) makes a general assignment for the benefit of its creditors;
(E) generally are not paying their debts as they become due;
or takes any comparable action under any foreign laws relating to
insolvency;
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted
Subsidiary of the Company in an involuntary case;
(B) appoints a Custodian of the Company or any Restricted
Subsidiary or for any assets that constitute a substantial part of the
assets of the Company or that constitute all or substantially all of
the assets of a Restricted Subsidiary; or
(C) orders the winding up or liquidation of the Company or any
Restricted Subsidiary of the Company;
(or any similar relief is granted under any foreign laws) and the order,
decree or relief remains unstayed and in effect for 60 days;
(10) except as permitted under this Indenture and the Collateral
Agreement, any Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force
and effect for 30 days after notice or any Subsidiary Guarantor, or any
Person acting on behalf of any Subsidiary Guarantor, shall deny or
disaffirm its obligations under its Guarantee; or
(11) except as permitted by the Collateral Agreement, the other
Security Documents, this Indenture or any amendments hereto or thereto, any
of the Collateral Agreement or the other Security Documents ceases to be in
full force and effect or ceases to be effective, in all material respects,
to create the Lien on the Collateral in favor of the Securityholders for 30
days after notice.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) of this Section 6.1 and any event which
with the giving of notice or the lapse of time would become an Event of Default
under clause (3), (5), (9), (10) and (11) of this Section 6.1 and what action
the Company is taking or proposes to take with respect thereto.
71
SECTION 6.2. Acceleration. If an Event of Default occurs and is continuing,
the Trustee by notice to the Company, or the Securityholders of at least 25% in
aggregate principal amount of the outstanding Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
Interest and Liquidated Damages, if any, on all the Securities to be due and
payable. Upon such a declaration, such principal and Interest and Liquidated
Damages, if any, shall be due and payable immediately. If an Event of Default
specified in Section 6.1(8) or (9) with respect to the Company or a Restricted
Subsidiary occurs and is continuing, the principal of and accrued Interest and
Liquidated Damages, if any, on all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. The Securityholders of a majority in
aggregate principal amount of the outstanding Securities by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or Interest and
Liquidated Damages, if any, that has become due solely because of acceleration
and the Trustee has been paid all amounts due to it pursuant to Section 7.7. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are, to the extent
permitted by law, cumulative.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment or the premium that the Company would have had
to pay if the Company then had elected to redeem the Securities pursuant to
Section 3.7 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon the acceleration of the
Securities. If an Event of Default occurs prior to September 1, 2001 by reason
of any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding the prohibition on redemption of the
Securities prior to September 1, 2001, then the premium specified in this
Indenture with respect to the next succeeding call date shall also become
immediately due and payable to the extent permitted by law upon the acceleration
of the Securities.
SECTION 6.4. Waiver of Past Defaults. Securityholders of not less than a
majority in aggregate principal amount of the then outstanding Securities by
notice to the Trustee may on behalf of the Securityholders of all of the
Securities waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal and premium of and Interest and Liquidated Damages, if any, on the
72
Securities (including in connection with an offer to purchase pursuant to this
Indenture), provided, however, that the Securityholders of a majority in
aggregate principal amount of the then outstanding Securities may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.5. Control by Majority. Upon provision of reasonable indemnity to
the Trustee satisfactory to the Trustee, Securityholders of a majority in
principal amount of the then outstanding Securities 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 Securityholders or that may involve the Trustee in personal liability.
However, the Trustee, which shall be entitled to receive and may conclusively
rely on Opinions of Counsel, may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.1, that the Trustee
determines is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee to personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(i) the Securityholder gives to the Trustee previous written notice
stating that an Event of Default is continuing;
(ii) the Securityholders of at least 25% in aggregate principal amount
of the Securities then outstanding make a written request to the Trustee to
pursue the remedy;
(iii) such Securityholder or Securityholders offer to the Trustee
security or indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(v) the Securityholders of a majority in aggregate principal amount of
the Securities then outstanding do not give the Trustee a direction
inconsistent with the written request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Securityholders To Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Securityholder to
receive payment of
73
principal and premium of and Interest and Liquidated Damages, if any, on the
Securities held by such Securityholder, on or after the respective due dates
expressed in the Securities, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Securityholder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default specified
in Section 6.1(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
and the Subsidiary Guarantors for the whole amount then due and owing (together
with interest on any unpaid interest to the extent lawful) and the amounts
provided for in Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Securityholders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Securityholder to make payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal, Make-Whole Premium, if any, Interest and
Liquidated Damages, if any, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and Interest and Liquidated Damages, if any, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant in the
74
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a Securityholder
pursuant to Section 6.7 or a suit by Securityholders of more than 10% in
aggregate principal amount of the outstanding Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the extent
it may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 6.13. Company Report. The Company shall deliver to the Trustee
annually a statement regarding compliance with this Indenture, and the Company
shall, upon becoming aware of any Default or Event of Default or Proceeding by a
Government Authority, to deliver to the Trustee a statement specifying such
Default or Event of Default or such Proceeding.
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee. If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
75
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company.
(f) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 7.1 and to the provisions of the TIA.
(h) The Trustee shall not be bound to make any investigation into facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine books, records and premises of the Company,
personally or by agent or attorney.
(i) Any request or direction of the Company mentioned in this Indenture
shall be sufficiently evidenced by a written request or order of the Company and
any resolution of the Board of Directors may be sufficiently evidenced by a copy
of the resolution certified by the Secretary or 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.
(j) The Trustee shall not be responsible for the recording, rerecording,
filing of UCC Statements or UCC Continuation Statements.
76
(k) The permissive right of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its gross negligence or willful misconduct.
(l) With respect to Collateral upon an Event of Default, the Trustee shall
use its best efforts to appoint an agent or agents for collecting, preserving,
disposing, liquidating and otherwise servicing Collateral, but the Trustee shall
not have any responsibility or liability for an agent's action or inaction, as
long as the Trustee has used reasonable care in the selection of the agent. If
within a reasonable time after an Event of Default, the Trustee is unable to
obtain the appointment of an agent or agents, the Trustee shall given notice to
the Securityholders and shall have no further duty with respect to the
Collateral for which an agent is not appointed, except duties, if any, arising
pursuant to a direction given in accordance with Section 7.2(f).
SECTION 7.2. Rights of Trustee. The Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it shall be entitled
to and may require an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents, attorneys, custodians or nominees
and shall not be responsible for the misconduct or negligence or supervision of
any agent, attorney, custodian or nominee appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) The Trustee may consult with counsel of its selection, and the advice
or opinion of counsel with respect to matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Securityholders pursuant to this Indenture, unless such Securityholders
shall have offered to the Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
(g) The Trustee shall not be charged with knowledge of any Default or Event
of Default with respect to the Securities unless either (1) a Trust Officer
shall have actual knowledge of such Default or Event of Default or (2) written
notice of such Default or Event of
77
Default shall have been given to the Trustee by the Company or any other obligor
on the Securities or by any Securityholder.
(h) If the Trustee is acting as Paying Agent or Registrar hereunder, the
rights and protections of the Trustee under this Article VII shall also apply to
the Trustee as Paying Agent or Registrar.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its respective Affiliates with the same
rights it would have if it were not Trustee. Any Paying Agent or Registrar may
do the same with like rights. However, the Trustee must comply with Sections
7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture or
the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company or any Subsidiary Guarantor in this Indenture or in any document
issued in connection with the sale of the Securities or in the Securities other
than the Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or an Event of Default occurs
and is continuing and if it is actually known to a Trust Officer of the Trustee,
the Trustee shall mail to each Securityholder notice of the Default within 30
days after it is known to a Trust Officer or written notice of it is received by
the Trustee. Except in the case of a Default in payment of principal of or
Interest on any Security, the Trustee may withhold the notice if and so long as
a committee of its Trust Officers in good faith determines that withholding the
notice is not opposed to the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Securityholders. As promptly as
practicable after each April 15 beginning with April 15, 1999, and in any event
prior to July 15 in each year, the Trustee shall mail to each Securityholder a
brief report dated as of such April 15 that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b). The Trustee shall
promptly deliver to the Company a copy of any report it delivers to
Securityholders pursuant to this Section 7.6.
A copy of each report at the time of its mailing to Securityholders shall
be filed by the Trustee with the SEC and each stock exchange (if any) on which
the Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation for its services as the Company and
the Trustee shall from time to time agree in writing. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses, disbursements and advances, incurred or
78
made by it, including costs of collection, in addition to such compensation for
its services, except any such expense, disbursement or advance as may arise from
its negligence, wilful misconduct or bad faith, unless the Trustee shall have
complied with the applicable standard of care required by the TIA. Such expenses
shall include the reasonable compensation and reasonable expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts. The
Trustee shall provide the Company reasonable notice of any expenditure not in
the ordinary course of business; provided that prior approval by the Company of
any such expenditure shall not be a requirement for the making of such
expenditure nor for reimbursement by the Company thereof. The Company shall
indemnify each of the Trustee and any predecessor Trustees and their officers,
directors, employees and agents against any and all loss, damage, claim,
liability or expense (including reasonable attorneys' fees and expenses)
including taxes (other than taxes applicable to the Trustee's compensation
hereunder) incurred by it in connection with the acceptance or administration of
this trust and the performance of its duties hereunder. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. At the sole discretion of the Trustee, the Company shall
defend the claim and the Trustee may have separate counsel, and the Company will
pay the reasonable fees and expenses of such counsel. The Company need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own wilful misconduct, negligence
or bad faith, unless the Trustee shall have complied with the applicable
standard of care required by the TIA.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and Interest on particular Securities.
The Company's payment obligations pursuant to this Section 7.7 shall
survive the resignation or removal of the Trustee and discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(7) or (8) with respect to the Company, the expenses are
intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any time
with 30 days notice to the Company. The Securityholders of a majority in
principal amount of the Securities then outstanding, may remove the Trustee with
30 days written notice to the Trustee and the Company and may appoint a
successor Trustee. The Company shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
79
(iv) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Securityholders
of a majority in principal amount of the Securities and such Securityholders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the
Securityholders of 10% in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee, provided that such corporation shall be eligible under
this Article VII and TIA Section 310(a).
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture, provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and
80
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with Section TIA 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.1. Discharge of Liability on Securities. When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.7) for cancellation or (ii) all outstanding
Securities have become due and payable, whether at maturity or as a result of
the mailing of a notice of redemption pursuant to Article III hereof or the
Securities will become due and payable at their Maturity Date within 91 days, or
the Securities are to be called for redemption within 91 days under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company, and, in each case of
this clause (ii), the Company irrevocably deposits or causes to be deposited
with the Trustee funds sufficient to pay at its Maturity Date or upon redemption
all outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.7 or
delivered to the Trustee for cancellation), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
cease to be of further effect and all the Subsidiary Guarantees shall be
discharged and released and all rights of the Trustee or the Securityholders
under any of the Security Documents shall terminate. The Trustee shall
acknowledge satisfaction and discharge of this Indenture and the discharge and
release of the Subsidiary Guarantees and the termination of such rights under
the Security Documents on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel stating that all conditions precedent
provided for herein relating to satisfaction and discharge of this Indenture
have been complied with.
ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Securityholders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Securityholder:
81
(i) to cure any ambiguity, omission, defect or inconsistency, whether
wholly within this Indenture or as compared to any of the Security
Documents;
(ii) to comply with Article V;
(iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are as described in Section 163(f)(2)(B) of the Code;
iv) to make such other changes or provisions that would provide any
additional rights or benefits to Securityholders or that do not adversely
affect the rights of Securityholders under this Indenture, the Securities,
the Guarantees, the Collateral Agreement or the other Security Documents,
including to add additional Subsidiary Guarantors hereunder, to add
additional security for the Securities, to add to the covenants of the
Company for the benefit of the Securityholders or to surrender any right or
power herein conferred upon the Company;
(v) to comply with, or allow for compliance with, any requirements of
the SEC in connection with qualifying this Indenture under the TIA or
giving effect to the security arrangements contemplated hereby; to give
effect to the provisions of the Security Documents and this Indenture,
including with regard to the release of all or a portion of the Collateral
in accordance with such provisions;
(vi) to give effect to the release of any Subsidiary Guarantor in
accordance with the terms of this Indenture; and
(vii) to evidence the acceptance of the appointment of any successor
Trustee.
After an amendment under this Section 9.1 becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section 9.1.
SECTION 9.2. With Consent of Securityholders. Except as provided in
Sections 9.2(b) and 9.2(c) hereof, the Company, the Subsidiary Guarantors and
the Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Securityholders of at least a majority in principal
amount of the Securities then outstanding voting as a single class (including
consents obtained in connection with a tender offer or exchange for Securities).
82
(b) Notwithstanding Section 9.2(a) hereof, without the consent of each
Securityholder affected, an amendment or waiver to this Indenture may not (with
respect to any Securities held by a non-consenting Securityholder):
(i) reduce the principal amount of Securities whose Securityholders
must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Security or alter the provisions with respect to the redemption of the
Securities (other than provisions relating to Section 3.8, 4.12 and 4.13
hereof;
(iii) reduce the rate of, amounts due under or change the time for
payment of Interest on any Security;
(iv) waive a Default or Event of Default in the payment of principal
or premium, if any, of or Interest and Liquidated Damages, if any, on the
Securities (except a rescission of acceleration of the Securities by the
Securityholders of at least a majority in aggregate principal amount of the
Securities and a waiver of the payment default that resulted from such
acceleration);
(v) make any Security payable in money other than that stated in this
Indenture and the Securities;
(vi) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Securityholders to receive
payments of principal or premium, if any, of or Interest and Liquidated
Damages, if any, on the Securities;
(vii) waive a redemption payment with respect to any Securities (other
than a payment required by one of the covenants described above under
Sections 4.12 and 4.13 hereof;
(viii) make any changes that would affect the ranking of the
Securities and the Guarantees, except in accordance with the terms of this
Indenture and the Collateral Agreement;
(ix) release any Subsidiary Guarantor from its obligations under the
Guarantees, the Collateral Agreement and this Indenture, except in
accordance with the terms of the Collateral Agreement and this Indenture;
(x) amend or modify any provisions of this Indenture, the Collateral
Agreement and other Security Documents, the Securities and the Guarantees
relating to the Collateral in any manner adverse to Securityholders; or
(xi) make any change in this Section 9.2(b).
83
(c) Notwithstanding Sections 9.2(a) and 9.2(b) hereof, without the consent
of the Securityholders holding at least two-thirds in principal amount of the
Securities then outstanding, an amendment or waiver may not make any changes to
Section 4.3 hereof, Section 4.2 hereof, Section 4.6 and Section 4.13 hereof if
such amendment or waiver would adversely affect the rights of Securityholders.
It shall not be necessary for the consent of the Securityholders under this
Section 9.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
The Company shall deliver to the Trustee annually a statement regarding
compliance with this Indenture, and the Company shall, upon becoming aware of
any Default or Event of Default by a Governmental Authority, to deliver to the
Trustee a statement specifying such Default or Event of Default or such
Proceeding.
After an amendment under this Section 9.2 becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section 9.2.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to this
Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A consent to an
amendment or a waiver by a Securityholder shall bind the Securityholder and
every subsequent Securityholder of that Security or portion of the Security that
evidences the same debt as the consenting Securityholder's Security, even if
notation of the consent or waiver is not made on the Security. After an
amendment or waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Securityholders
after such record date. No such consent shall be valid or effective for more
than 120 days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment changes
the terms of a Security, the Trustee may require the Securityholder to deliver
it to the Trustee. The Trustee may place an appropriate notation on the Security
regarding the changed terms and return it to the Securityholder. Alternatively,
if the Company so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment.
84
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity satisfactory to it and to
receive, and shall be fully protected in relying upon, in addition to the
documents required by Section 12.4, an Officers' Certificate and an Opinion of
Counsel stating that such amendment complies with the provisions of this Article
IX.
ARTICLE X
GUARANTEES
SECTION 10.1. Guarantees. The Subsidiary Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantee to each Securityholder and
to the Trustee and its successors and assigns (a) the full and punctual payment
of principal, Make-Whole Premium, Interest, Liquidated Damages, if any, and
Defaulted Interest, if any, with respect to the Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture (including obligations to the
Trustee) and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). The Subsidiary Guarantors further agree that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from the Subsidiary Guarantors, and that the Subsidiary
Guarantors will remain bound under this Article X notwithstanding any extension
or renewal of any Obligation.
The Subsidiary Guarantors waive presentation to, demand of, payment from
and protest to the Company of any of the Obligations and also waive notice of
protest for nonpayment. The Subsidiary Guarantors waive notice of any default
under the Securities or the Obligations. The obligations of the Subsidiary
Guarantors under this Section 10.1 shall not be affected by (a) the failure of
any Securityholder or the Trustee to assert any claim or demand or to enforce
any right or remedy against the Company or any other Person under this
Indenture, the Securities or any other agreement or otherwise; (b) any extension
or renewal of any Obligation; (c) any rescission, waiver, amendment,
modification or supplement of any of the terms or provisions of this Indenture
(other than this Article X), the Securities or any other agreement, unless such
rescission, waiver, amendment, modification or supplement expressly affects the
obligations of any Subsidiary Guarantor under this Section 10.1; (d) the release
of any security held by any Securityholder or the Trustee for the Obligations or
any of them; (e) the failure of any Securityholder or Trustee to exercise any
right or remedy against any other guarantor of the Obligations; or (f) any
change in the ownership of the Company.
The Subsidiary Guarantors further agree that their Guarantees herein
constitute a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waive any right to require that any resort be had
by any Securityholder or the Trustee to any security held for payment of the
Obligations.
85
Except as set forth in this Indenture, the obligations of the Subsidiary
Guarantors hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense, setoff, counterclaim, recoupment or termination whatsoever or by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, except as set forth
in this Indenture, the obligations of the Subsidiary Guarantors herein shall not
be discharged or impaired or otherwise affected by the failure of any
Securityholder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Subsidiary Guarantors or would
otherwise operate as a discharge of the Subsidiary Guarantors as a matter of law
or equity.
The Subsidiary Guarantors further agree that their Guarantees herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Securityholder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise, unless such Guarantee has been
released in accordance with Section 10.9.
In furtherance of the foregoing and not in limitation of any other right
which any Securityholder or the Trustee has or may have at law or in equity
against the Subsidiary Guarantors by virtue hereof, upon the failure of the
Company to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Obligation, the Subsidiary Guarantors hereby promise to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Securityholders or the Trustee an amount equal to the sum
of (i) the unpaid principal amount of such Obligations, (ii) accrued and unpaid
Interest on such Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Obligations of the Company to the Securityholders and
the Trustee.
The Subsidiary Guarantors agree that, as between the Subsidiary Guarantors,
on the one hand, and the Securityholders and the Trustee, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in Article VI for the purposes of the Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article VI, such Obligations
(whether or not due and payable) shall forthwith become due and payable by the
Subsidiary Guarantors for the purposes of this Section.
The Subsidiary Guarantors also agree to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Securityholder in enforcing any rights under this Section.
86
SECTION 10.2. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the obligations of each Subsidiary
Guarantor are limited to the maximum amount as will result in the Obligations of
such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
SECTION 10.3. Successors and Assigns. This Article X shall inure to the
benefit of the successors and assigns of the Trustee and the Securityholders
and, in the event of any transfer or assignment of rights by any Securityholder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.4. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Securityholders in exercising any right, power or
privilege under this Article X shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Securityholders herein expressly specified are cumulative and not exclusive
of any other rights, remedies or benefits which either may have under this
Article X at law, in equity, by statute or otherwise.
SECTION 10.5. Right of Contribution. Each Subsidiary Guarantor hereby
agrees that to the extent that a Subsidiary Guarantor shall have paid more than
its proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder who has not paid its proportionate share of such
payment. Each Subsidiary Guarantor's right of contribution shall be subject to
the terms and conditions of Section 10.6. The provisions of this Section shall
in no respect limit the obligations and liabilities of any Subsidiary Guarantor
to the Trustee and the Securityholders and each Subsidiary Guarantor shall
remain liable to the Trustee and the Securityholders for the full amount
guaranteed by such Subsidiary Guarantor hereunder.
SECTION 10.6. No Subrogation. Notwithstanding any payment or payments made
by any of the Subsidiary Guarantors hereunder, no Subsidiary Guarantor shall be
entitled to be subrogated to any of the rights of the Trustee or any
Securityholder against the Company or any other Subsidiary Guarantor or any
collateral security or guarantee or right of offset held by the Trustee or any
Securityholder for the payment of the Obligations, nor shall any Subsidiary
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Company or any other Subsidiary Guarantor in respect of payments made by such
Subsidiary Guarantor hereunder, until all amounts owing to the Trustee and the
Securityholders by the Company on account of the Obligations are paid in full.
If any amount shall be paid to any Subsidiary Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Subsidiary Guarantor in trust
for the Trustee and the Securityholders, segregated from other funds of such
Subsidiary Guarantor, and shall, forthwith upon receipt by such Subsidiary
Guarantor, be turned over to the Trustee in the exact form received by such
Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the Trustee,
if required), to be applied against the Obligations.
87
SECTION 10.7. Additional Subsidiary Guarantors. Until such time as all
Guarantees by the Subsidiary Guarantors under this Indenture shall have been
released in accordance with Section 10.9, the Company shall cause each
Subsidiary that becomes a Borrower (as defined in the Senior Credit Facility)
under the Senior Credit Facility (other than a Foreign Subsidiary) to execute
and deliver a supplement to this Indenture providing that such Subsidiary will
be a Subsidiary Guarantor hereunder. Each such supplement shall be substantially
in the form of Exhibit E attached hereto. Subsidiaries that are Subsidiary
Guarantors on the date any such supplement is executed by an additional
Subsidiary shall not be required to become parties to such supplement and hereby
agree to the execution and delivery by any additional Subsidiary of any such
supplement.
SECTION 10.8. Modification. No modification, amendment or waiver of any
provision of this Article X, nor the consent to any departure by the Subsidiary
Guarantors therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given; it
being understood that the release of the Guarantees of Subsidiary Guarantors
pursuant to Section 10.9 shall not be an amendment or waiver of any provision of
this Article X and shall not require any action on the part of the Trustee. No
notice to or demand on the Subsidiary Guarantors in any case shall entitle the
Subsidiary Guarantors to any other or further notice or demand in the same,
similar or other circumstances.
SECTION 10.9. Release of Subsidiary Guarantor. Upon the sale or other
disposition of all of the assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the Capital
Stock of such Subsidiary Guarantor, in each case in accordance with the terms of
Section 10.10, such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise of all the
Capital Stock of such Subsidiary Guarantor) shall be automatically released from
all its obligations under this Indenture and the Subsidiary Guarantee without
any action on the part of the Trustee or the Securityholders. The Trustee shall
receive written notice of the release of any Subsidiary Guarantor if such
release is effected other than under Section 10.10.
SECTION 10.10. Merger, Consolidation and Sale of Assets of a Subsidiary
Guarantor. No Subsidiary Guarantor may directly or indirectly, consolidate or
merge with or into (whether or not the Subsidiary Guarantor is the surviving
corporation), or sell, assign, transfer, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, another Person unless:
(i) the Person formed by or surviving any such consolidation or merger
(if other than the Subsidiary Guarantor) or the Person to which such sale,
assignment, transfer, conveyance or other disposition shall have been made
assumes all the obligations of the Subsidiary Guarantor under the
Securities and this Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and
88
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, sale, lease, or merger complies with the foregoing clause
(ii).
Upon a sale or other disposition of all, or substantially all, of the
assets of any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor, then such Subsidiary Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or otherwise, of all
of the Capital Stock of such Subsidiary Guarantor) or the corporation acquiring
the property (in the event of a sale or other disposition of all of the assets
of such Subsidiary Guarantor) will be released and relieved of any liabilities
and obligations under its Guarantee; provided that the Net Proceeds of such sale
or other disposition are applied in accordance with Section 4.12 hereof and the
Intercreditor Agreement.
Notwithstanding the foregoing, each Subsidiary Guarantor may consolidate
with or merge into or sell its assets to the Company or another Subsidiary
Guarantor.
ARTICLE XI
COLLATERAL AND SECURITY DOCUMENTS
SECTION 11.1. Security Documents; Agreements. The due and punctual payment
of the principal and premium, if any, of and Interest, Liquidated Damages, if
any, and Defaulted Interest, if any, on the Securities when and as the same
shall be due and payable, whether on an Interest Payment Date, at maturity, by
acceleration, repurchase, redemption or otherwise, (to the extent permitted by
law), and the performance of all other obligations under this Indenture,
including, without limitation, the obligations of the Company set forth in
Section 7.7 hereof, shall be secured as provided in the Collateral Agreement and
the other Security Documents.
The Trustee, the Company and the Subsidiary Guarantors hereby consent and
agree that, with respect to that portion of the Collateral in which the security
interest is being perfected by possession, the Administrative Agent shall hold
the Collateral for the benefit of the Trustee in accordance with the terms of
the Intercreditor Agreement, for the purpose of perfecting the Trustee's
security interest therein. The Trustee hereby consents and agrees that, upon
acquiring knowledge that upon the occurrence of the Substitution Event (as
defined in the Intercreditor Agreement), the Trustee shall promptly make a
request to the Administrative Agent for a written acknowledgment of the payment
in full in cash of the Lender Obligations (as defined in the Intercreditor
Agreement) and the termination of any commitments by the Lenders to extend
credit under the Senior Credit Facility, pursuant to Section 8 of the
Intercreditor Agreement.
Each Securityholder, by accepting the Securities, consents and agrees to
the terms of the Security Documents and the Intercreditor Agreement (including,
without limitation, the
89
provisions providing for foreclosure and release of Collateral) as the same may
be in effect or may be amended from time to time in accordance with their terms
and authorizes and directs the Trustee, with respect to each of the Security
Documents and the Intercreditor Agreement, to perform its obligations and
exercise its rights thereunder in accordance therewith.
The Trustee and each Securityholder, by accepting the Securities,
acknowledge that (i) as more fully set forth in the Security Documents, the
Collateral as now or hereafter constituted shall be held for the equal and
ratable benefit of all of the Securityholders under the Security Documents, and
(ii) as more fully set forth in the Intercreditor Agreement, the rights and
interests of the Administrative Agent and the Lenders under the Senior Credit
Facility are prior to the rights and interests of the Securityholders in the
Collateral and (iii) that the Lien of this Indenture and the Security Documents
in respect of the Trustee and the Securityholders is subject to and qualified
and limited in all respects by the Security Documents and the Intercreditor
Agreement and actions that may be taken thereunder.
As among the Securityholders, the Collateral as now or hereafter
constituted shall be held for the equal and ratable benefit of the
Securityholders without preference, priority or distinction of any thereof over
any other by reason of difference in time of issuance, sale or otherwise, as
security for the Securities.
SECTION 11.2. Opinions. Promptly after the execution and delivery of this
Indenture, the Company shall deliver the opinion(s) required by Section
314(b)(1) of the TIA. Subsequent to the execution and delivery of this
Indenture, to the extent required by the TIA, the Company shall furnish to the
Trustee within three months after each anniversary of the Issue Date, an Opinion
of Counsel, dated as of such date, stating either that (i) in the opinion of
such counsel, all action has been taken with respect to any filing, re-filing,
recording or re-recording with respect to the Collateral as is necessary to
maintain the Lien on the Collateral in favor of the Securityholders or (ii) in
the opinion of such counsel, that no such action is necessary to maintain such
Lien.
SECTION 11.3. Release and Substitution of Collateral; Amendment of Security
Documents. (a) The parties hereto hereby agree and acknowledge that the
Collateral may be released by the Trustee at any time in accordance with the
provisions of the Collateral Agreement and the Loan Collateral Agreement and, in
any such case, the Collateral so released shall automatically be released as
Collateral for the Securities without any action on the part of the Trustee or
the Securityholders. For purposes of the TIA, the release of any Collateral from
the terms of the Security Documents will not be deemed to impair the security
under this Indenture in contravention of the provisions hereof or affect the
Lien of the Security Documents if and to the extent the Collateral is released
pursuant to the Security Documents or upon the termination of the Senior Credit
Facility. To the extent applicable, the Company shall cause TIA Section 314(d)
relating to the release of property or securities from the Lien of the Security
Documents and relating to the substitution therefor of any property or
securities to be subjected to the Lien of the Security Documents to be complied
with.
90
(b) Notwithstanding the foregoing, the Company and each Restricted
Subsidiary, as the case may be, so long as the following is permitted by the
Security Documents, may
(i) sell, lease or otherwise dispose of in the ordinary course of
business free from the Liens of the Security Documents, any machinery,
equipment, furniture, apparatus, tools or implements, materials or supplies
or other similar property ("Subject Property") which, in their reasonable
opinion, may have become obsolete or unfair for use in the conduct of its
businesses or the operation of the Collateral upon replacing the same with,
or substituting for the same, new Subject Property constituting Collateral
not necessarily of the same character but being of a least equal value as
the Subject Property so disposed of as long as such new Subject Property
becomes subject to the Liens of the Security Documents;
(ii) abandon, sell, assign, transfer, license or otherwise dispose of
in the ordinary course of business any personal property the use of which
is no longer necessary or desirable in the proper conduct of the business
of the Company and is not material to the conduct of the business of the
Company and its Subsidiaries taken as a whole;
(iii) grant in the ordinary course of business, rights-of-way and
easements over or in respect of any of the Company's or such Subsidiary's
real property, provided that such grant will not, in the reasonable opinion
of the Company's Board of Directors, impair the usefulness of such property
in the conduct of the Company's business;
(iv) sell, transfer or otherwise dispose of inventory in the ordinary
course of business;
(v) sell, collect, liquidate, factor or otherwise dispose of accounts
receivable in the ordinary course of business;
(vi) make cash payments (including for the scheduled repayment of
Indebtedness) from cash that is at any time part of the Collateral in the
ordinary course of business that are not otherwise prohibited by this
Indenture and the Security Documents; and
(vii) release any Collateral in accordance with the terms of the
Senior Credit Facility and the Security Documents or as otherwise permitted
by the Administrative Agent under the Senior Credit Facility, pursuant to
the Intercreditor Agreement;
in each case, without the delivery of any opinions or certificates upon any such
release; provided that the Company shall deliver to the Trustee, within 15 days
after each of the six-month periods ended March 1 and September 1 in each year
an Officers' Certificate to the effect that all releases of Collateral pursuant
to this Section 11.3(b) by the Company or any Subsidiary, as the case may be,
during the preceding six-month period were in the ordinary course of the
Company's or such Subsidiary's business and that all proceeds therefrom were
used by the Company or such Subsidiary as permitted herein.
91
(c) The fair value of Collateral released from the Liens of the Security
Documents pursuant to Section 11.3(b) or (d) hereof shall not be considered in
determining whether the aggregate fair value of Collateral released from the
Liens of the Security Documents in any calendar year exceeds the 10% threshold
specified in Section 314(d)(l) of the TIA; provided that the Company's right to
rely on this sentence at any time is conditioned upon the Company having
furnished to the Trustee the certificates described in Section 11.3(b) hereof
that were required to be furnished to the Trustee at or prior to such time. It
is expressly understood that Section 11.3(b) and this Section 11.3(c) relate
only to the Company's obligations under the TIA and shall not restrict or
otherwise affect the Company's and its Subsidiaries' rights or abilities to
release Collateral pursuant to the terms of the Senior Credit Facility, the
Intercreditor Agreement and the Security Documents or as otherwise permitted by
the Lenders under the Senior Credit Facility.
(d) Notwithstanding Sections 4.12, 11.1 and 11.3, (i) Collateral may be
released from the Lien of the Security Documents to the extent that the sale,
transfer or disposition of the item of Collateral in question would not
constitute an Asset Sale provided that the Company complies with Section 11.4(b)
prior to the release of such Lien; and (ii) the Designated Facilities may be
released from the Lien of the Security Documents.
(e) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor (as defined in the Collateral Agreement) in a
transaction permitted by this Indenture, then the Collateral Agent, at the
request and sole expense of such Grantor, shall execute and deliver to such
Grantor all releases or other documents reasonably necessary or desirable for
the release of the Liens created hereby on such Collateral.
SECTION 11.4. Procedures Regarding Release of Collateral.
(a) Procedures Regarding Release of Collateral Pursuant to an Asset Sale.
In connection with an Asset Sale and upon compliance by the Company with the
conditions set forth under clauses (i) through (iv) of this Section 11.4(a) as
well as the conditions set forth under the Loan Security Documents, the
Intercreditor Agreement and the applicable provisions of the Trust Indenture Act
set forth in Section 11.4(c) in respect of any release of items of Collateral,
the Collateral Agent shall release items of Collateral (the "Released
Interests") from the Lien of the Security Documents and, pursuant to the
Collateral Agreement, shall reconvey the Released Interests to the Company and
its Subsidiaries, as applicable.
(i) Written Notice. The Company shall deliver to the Trustee a written
statement executed by a duly authorized officer of the Company requesting
the release of Released Interests that provides the following:
(A) a description of the proposed Released Interests in
sufficient detail to identify them;
(B) a specification of the purchase price received for such
Released Interests on a date within 30 days of such notice (the
"Valuation Date");
92
(C) a statement that the purchase price received is at least
equal to the fair market value of the Released Interests;
(D) a statement that the release of such Released Interests would
not be expected to interfere with the Collateral Agent's ability to
realize the value of the remaining Collateral and will not impair the
maintenance and operation of the remaining Collateral; and
(E) a certification that such Asset Sale complies with the terms
and conditions of the Loan Security Documents and the Security
Documents with respect thereto.
(ii) Officers' Certificate. The Company shall deliver to the Trustee
an Officer's Certificate that certifies as to the following:
(A) that the Asset Sale covers only the Released Interests;
(B) pursuant to the first paragraph of Section 4.12 hereof, that
the Company or the Restricted Subsidiary, as the case may be, shall
receive consideration at the time that the Asset Sale is consummated
at least equal to the fair market value of the assets issued or sold
or otherwise disposed of, attaching a resolution or unanimous written
consent of the Board of Directors of the Company to that effect;
(C) that all Net Proceeds from the sale of the Released Interests
will be or are being applied at the same time as the delivery of the
Officers' Certificate to the Collateral Agent pursuant to the second
paragraph of Section 4.12 hereof, according to the provisions of the
Loan Security Documents, the Security Documents and the Intercreditor
Agreement;
(D) there is no Default or Event of Default in effect or
continuing on the date of the Officers' Certificate, the Valuation
Date or the date of such Asset Sale; and
(E) the release of the items of Collateral will not result in a
Default or Event of Default under this Indenture, the Security
Documents, the Senior Credit Facility or the Loan Security Documents.
(iii) Excess Proceeds. Excess Proceeds, if any, that are required to
be delivered to the Collateral Agent pursuant to this Indenture and the
Intercreditor Agreement and to the Administrative Agent pursuant to the
Senior Credit Facility and the Intercreditor Agreement shall have been so
delivered or are being delivered at the same time as the delivery of the
Officers' Certificate referred to in clause (ii) above.
93
(iv) Opinion of Counsel. The Company shall deliver to the Collateral
Agent an Opinion of Counsel to the effect that the conditions to the
release of the Released Interests have been met.
(b) Procedures Regarding Release of Collateral That Does Not Constitute an
Asset Sale. In connection with the sale or disposition of an asset that shall
not constitute an Asset Sale and upon compliance by the Company with the
conditions set forth under clauses (i) through (iv) of this Section 11.4(b), as
applicable, as well as the conditions set forth under the Loan Security
Documents, the Intercreditor Agreement and the applicable provisions of the
Trust Indenture Act set forth in Section 11.4(c) in respect of any release of
items of Collateral, the Collateral Agent will release the Released Interests
from the Lien of the Security Documents and, pursuant to the Collateral
Agreement, shall reconvey the Released Interests to the Company and its
Subsidiaries, as applicable; provided that notwithstanding the above, the
Company shall not be required to follow the procedures set forth in this Section
11.4(b) with regard to the sale of Designated Facilities.
(i) Written Notice. The Company shall deliver to the Trustee a written
statement executed by a duly authorized Officer of the Company requesting
the release of Released Interests that provides the following:
(A) a description of the proposed Released Interests in
sufficient detail to identify them;
(B) a specification of the purchase price received for such
Released Interests the Valuation Date;
(C) a statement that the purchase price received is at least
equal to the fair market value of the Released Interests;
(D) a statement that the release of such Released Interests would
not be expected to interfere with the Collateral Agent's ability to
realize the value of the remaining Collateral and will not impair the
maintenance and operation of the remaining Collateral; and
(E) a certification that such sale of an asset, which does not
constitute an Asset Sale, complies with the terms and conditions of
the Loan Security Documents and the Security Documents with respect
thereto.
(ii) Officers' Certificate. The Company shall deliver to the Trustee
an Officer's Certificate that certifies as to the following:
(A) that such sale of an asset, which does not constitute an
Asset Sale, covers only the Released Interests;
94
(B) that all Net Proceeds from the sale of the Released Interests
will be or are being applied at the same time as the delivery of the
Officers' Certificate to the Collateral Agent pursuant to the
provisions of the Loan Security Documents, the Security Documents and
the Intercreditor Agreement.
(C) there is no Default or Event of Default in effect or
continuing on the date of the Officers' Certificate, the Valuation
Date or the date of such asset sale; and
(D) the release of the items of Collateral will not result in a
Default or Event of Default under this Indenture, the Security
Documents, the Senior Credit Facility or the Loan Security Documents.
(iii) Excess Proceeds. Excess Proceeds, if any, that are required to
be delivered to the Collateral Agent pursuant to this Indenture and the
Intercreditor Agreement and to the Administrative Agent pursuant to the
Senior Credit Facility and the Intercreditor Agreement shall have been so
delivered or are being delivered at the same time as the delivery of the
Officers' Certificate referred to in clause (ii) above.
(iv) Opinion of Counsel. The Company shall deliver to the Collateral
Agent an Opinion of Counsel to the effect that the conditions to the
release of the Released Interests have been met.
(c) Compliance with the TIA. Subject to Section 11.3(b), the Company shall
furnish to the Trustee prior to each proposed release of Collateral all
documents required by TIA Section 314(d), if any. The Trustee may, to the extent
permitted by Sections 7.1 and 7.2 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained in
such documents. Any certificate or opinion required by TIA Section 314(d), if
applicable, may be made by an Officer of the Company except in cases where TIA
Section 314(d) requires that such certificate or opinion be made by an
independent engineer, appraiser or other expert within the meaning of TIA
Section 314(d).
SECTION 11.5. Reserved.
SECTION 11.6. Authorization of Actions to be Taken by the Trustee Under the
Security Documents. The Trustee shall act upon the written direction of the
Securityholders with regard to all voting, consent and other rights granted to
the Securityholders under the Security Documents. Subject to the provisions of
the Security Documents, the Trustee may, in its sole discretion and without the
consent of the Securityholders, on behalf of the Securityholders, take all
actions it deems necessary or appropriate in order to (a) enforce any of its
rights or any of the rights of the Securityholders under the Security Documents
and (b) receive any and all amounts payable from the Collateral in respect of
the obligations of the Company and the Subsidiary Guarantors hereunder. Subject
to the provisions of the Security Documents and the Intercreditor Agreement, the
Trustee shall have the power to institute and to maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the Collateral
by any acts
95
that may be unlawful or in violation of the Security Documents or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interest and the interests of the Securityholders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Securityholders or the Trustee).
SECTION 11.7. Authorization of Receipt of Funds by the Trustee Under the
Security Documents. The Trustee is authorized to receive any funds for the
benefit of the Securityholders distributed under the Security Documents and to
make further distributions of such funds to the Securityholders according to the
provisions of this Indenture and the Security Documents.
SECTION 11.8. Release Upon Termination of the Company's Obligations. (a) If
(i) the Company delivers an Officer's Certificate and an Opinion of Counsel
certifying that all of its obligations under this Indenture have been satisfied
and discharged by complying with the provisions of Article VIII hereof, (ii) all
outstanding Securities issued under this Indenture shall be surrendered to the
Trustee for cancellation or (iii) upon the release of the Collateral in
accordance with the terms of the Security Documents, the Trustee shall deliver
to the Collateral Agent a notice stating that the Trustee, for itself and on
behalf of the Securityholders, disclaims and has given up any and all rights it
has in or to the Collateral, and any rights it has under the Security Documents,
then, upon and after the receipt by the Collateral Agent of such notice, the
Collateral Agent shall no longer be deemed to hold the Lien in the Collateral on
behalf of the Trustee for the benefit of the Securityholders.
(b) Any release of Collateral made in compliance with this Section 11.8
shall not be deemed to impair the Lien under the Security Documents or the
Collateral thereunder in contravention of the provisions of this Indenture or
the Security Documents.
SECTION 11.9. Security Agreement Collateral. Notwithstanding anything to
the contrary contained in this Indenture, the Senior Credit Facility or the
Security Documents, to the extent that the representations, warranties and
covenants contained in this Indenture, in the Senior Credit Facility or in the
Security Documents with respect to Collateral are at any time incorrect (in the
case of representations or warranties) or are not complied with (in the case of
covenants), then in each case so long as the aggregate fair market value of all
Collateral under the Security Documents with respect to which such
representations or warranties are incorrect, or covenants are not complied with,
does not exceed $10,000,000 the existence of such circumstances shall be deemed
not to be a violation of this Indenture or constitute a Default under Article
VI.
SECTION 11.10. Effect of Termination of Lender Obligations. If the rights
of the Senior Secured Parties (as defined in the Intercreditor Agreement) in
respect of the Collateral shall have been terminated, then, pursuant to Section
8 of the Intercreditor Agreement, the rights
96
and interests of the Securityholders shall no longer be junior to the rights and
interests of the Lenders under the Senior Credit Facility.
SECTION 11.11. Authorization of Trustee Entering Into Intercreditor
Agreement. The Trustee is authorized to enter into the Intercreditor Agreement
on behalf of the Securityholders to provide for, among other things, (a) the
allocation of rights between the Administrative Agent and the Trustee with
respect to the Collateral, (b) enforcement provisions and remedies with respect
thereto and (c) the release of the Collateral.
SECTION 11.12. Authorization of Receipt of Funds by the Trustee Under the
Security Documents. The Trustee is authorized to enter into the Intercreditor
Agreement on behalf of the Securityholders, to receive any funds for the benefit
of the Securityholders distributed under the Collateral Documents, and to make
further distributions of such funds to the Securityholders according to the
provisions of this Indenture and the Intercreditor Agreement. The Trustee is
further authorized to enter into such amendments to the Security Documents as
are required to create security interests in additional Collateral or to release
Collateral from the Lien created by the Security Documents as provided by the
terms of the Security Documents and this Indenture or the disposition of such
Collateral as is permitted by this Indenture.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control.
SECTION 12.2. Notices. Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail addressed as follows:
if to the Company or the Subsidiary Guarantors:
Harvard Industries, Inc.
0 Xxxxxx Xxx, Xxxxx 000
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Secretary
if to the Trustee:
Norwest Bank Minnesota, National Association
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Department
Facsimile: 000-000-0000
97
The Company, the Subsidiary Guarantors, or the Trustee by notice to the
others may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be mailed to
the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 12.3. Communication by Securityholders with other Securityholders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 12.4. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 12.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(i) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
98
(iv) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 12.6. When Securities Disregarded. In determining whether the
Securityholders of the required principal amount of Securities have concurred in
any direction, waiver or consent, Securities owned by the Company or an
affiliate or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company shall be disregarded
and deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which a Trust Officer of the Trustee actually knows
are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 12.7. Rules by Trustee, Paying Agent and Registrar. The Trustee may
make reasonable rules for action by or a meeting of Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 12.8. Reserved.
SECTION 12.9. Governing Law and Submission to Jurisdiction. THIS INDENTURE
AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
SECTION 12.10. No Recourse Against Others. A director, officer, employee or
stockholder, as such, of the Company or the Subsidiary Guarantors shall not have
any liability for any obligations of the Company or the Subsidiary Guarantors
under the Securities or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 12.11. Successors. All agreements of the Company and the Subsidiary
Guarantors in this Indenture and the Securities shall bind their respective
successors in accordance with the terms hereof. All agreements of the Trustee in
this Indenture shall bind its successors.
SECTION 12.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 12.13. Qualification of Indenture. The Company shall qualify this
Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including reasonable attorneys' fees for the Company, the Trustee and the
Securityholders) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of this Indenture and the
99
Securities and printing this Indenture and the Securities. The Trustee shall be
entitled to receive from the Company any such Officers' Certificates, Opinions
of Counsel or other documentation as it may reasonably request in connection
with any such qualification of this Indenture under the TIA. Notwithstanding
anything else herein, any obligations imposed on the parties hereto by the TIA
(except for the opinion(s) contemplated in Section 11.2 hereof) shall not be
effective until such time as this Indenture becomes qualified under the TIA.
SECTION 12.14. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
[The rest of this page has been left blank intentionally;
the signature page follows.]
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
HARVARD INDUSTRIES, INC.
By: /s/ D. Xxxxx Xxxxxx
---------------------------------
Name: D. Xxxxx Xxxxxx
Title: Vice President, Law and Secretary
XXXXXXX-XXXXXX, INC.
HARVARD TRANSPORTATION CORPORATION
XXXXXXX-XXXXXX GREENEVILLE, INC.
POTTSTOWN PRECISION CASTING, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
THE XXXXXXXX-XXXXXX CORPORATION
On behalf of each of the above
Subsidiary Guarantors
By: /s/ D. Xxxxx Xxxxxx
---------------------------------
Name: D. Xxxxx Xxxxxx
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
EXHIBIT A
FORM OF INITIAL SECURITY
[GLOBAL SECURITIES LEGEND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") 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 IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[PRIVATE PLACEMENT LEGEND]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISION OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 UNDER THE
2
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
[REGULATION S TEMPORARY GLOBAL SECURITY LEGEND]
[Include if Security is a Regulation S Temporary Global Security]
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
SECURITIES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE
HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SECURITY
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
3
HARVARD INDUSTRIES, INC.
14 1/2% Senior Secured Note Due 2003
No. __________
Principal Amount: $25,000,000 CUSIP NO. _______
HARVARD INDUSTRIES, INC., a Delaware corporation, promises to pay to CEDE &
COMPANY, or registered assigns, the principal sum of TWENTY FIVE MILLION DOLLARS
on September 1, 2003.
Interest Payment Dates: March 1 and September 1.
Record Dates: February 15 and August 15.
Additional provisions of this Security are set forth on the following pages
of this Security.
HARVARD INDUSTRIES, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Dated: November __, 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:
----------------------------------
Name:
Title:
Dated: November __, 1998
14 1/2% Senior Secured Note Due 2003
1. Principal.
The Senior Secured Notes (the "Securities") are limited to $25.0 million
aggregate principal amount, subject to Section 2.1(a)(2) of the Indenture.
2. Interest.
HARVARD INDUSTRIES, INC., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay Interest (as defined below) on the
principal amount of this Security. Interest on the Securities will accrue at a
rate equal to the sum of (1) 14 1/2% per annum on the principal amount of
Securities outstanding (calculated on the basis of a 360-day year comprised of
twelve 30-day months) ("Coupon Interest") plus (2) Cash Flow Participation
Interest (as defined below and, together with Coupon Interest, "Interest").
"Cash Flow Participation Interest," for any relevant period, equals the product
of (1) Consolidated Cash Flow for the six month period ending, for interest
payments due March 1 of each year, on December 31 and, for interest payments due
on September 1 of each year, on June 30 (each, a "Semi-Annual Accrual Period")
prior to the next succeeding Interest Payment Date multiplied by (2) the
applicable percentage set forth for the period ending on the Interest Payment
Date indicated below:
Interest Payment Date Percentage
--------------------- ----------
March 1, 1999.............................. 2.00%
September 1, 1999.......................... 2.00%
March 1, 2000.............................. 2.50%
September 1, 2000.......................... 2.50%
March 1, 2001.............................. 3.50%
September 1, 2001.......................... 3.50%
March 1, 2002.............................. 4.50%
September 1, 2002.......................... 4.50%
March 1, 2003.............................. 4.50%
September 1, 2003.......................... 4.50%
If, however, the calculation of Cash Flow Participation Interest, based on the
appropriate percentages set forth above, results in an amount that is less than
$1.0 million for any two consecutive Semi-Annual Accrual Periods taken as a
whole, then Cash Flow Participation Interest will be for such two corresponding
Interest Payment Dates taken as a whole, $1.0 million (the "Minimum Cash Flow
Participation Interest Amount").
No later than 15 days prior to an Interest Payment Date or any other date
on which Cash Flow Participation Interest is payable pursuant to a redemption of
the Securities or an offer to purchase pursuant to Section 4.13 of the
Indenture, the Company shall deliver to the Trustee an Officers' Certificate
stating the amount of the Cash Flow Participation Interest payable on
2
such upcoming Interest Payment Date or other payment date and calculations
showing how such amount was determined.
Notwithstanding the above, (i) if the Company's Fixed Charge Coverage Ratio
is less than 2.50 to 1 for any Semi-Annual Accrual Period, then the Company may
elect to pay Cash Flow Participation Interest on the next succeeding Interest
Payment Date with respect to such Semi-Annual Accrual Period by the issuance of
additional Securities equal to the amount of such interest would otherwise be
due but is not paid in cash (the "PIK Securities"), determined pursuant to
Section 2.1(a)(3) of the Indenture. In the event that the period for which
Interest accrues and is due (including for the period from the Issue Date to the
first interest payment date of March 1, 1999) is less than 180 days (such a
period, a "Stub Period"), then the Interest due for such Stub Period (which may
be a Semi-Annual Accrual Period) will be pro rated to reflect the actual number
of days that the Securities were outstanding for such Stub Period (calculated on
the basis of a 360 day year comprised of twelve 30-day months), provided that
the portion of Interest attributable to Cash Flow Participation Interest (or the
Minimum Cash Flow Participation Interest Amount, if applicable) due at the end
of such Stub Period (or, as the case may be on September 1, 1999 with respect to
the period covered by the Stub Period ending on March 1, 1999 plus the
Semi-Annual Accrual Period ending on September 1, 1999, taken together) shall
similarly be pro rated to reflect the actual number of days that the Securities
were outstanding for such Stub Period (or, with respect to the period ending on
September 1, 1999, the actual number of days that the Securities were
outstanding for the period covered by such Stub Period plus the succeeding
Semi-Annual Accrual Period, taken together) (calculated on the basis of a 360
day year comprised of twelve 30-day months). Interest on overdue principal and
installments of Interest will accrue at the rate of Interest borne by the
Securities.
Such interest is payable in addition to any other interest payable from
time to time with respect to this Security. The Trustee will not be deemed to
have notice of a Registration Default (as defined in the Registration Rights
Agreement) until it shall have received actual notice of such Registration
Default.
If the Company elects, pursuant to Section 2.1(a)(4) of the Indenture, to
issue PIK Securities, then the Company shall deliver a notice, signed by an
Officer, to the Trustee and the Paying Agent (which notice shall be received not
less than 5 nor more than 45 days prior to the record date preceding the
Interest Payment Date on which such PIK Securities will be issued) which shall
state whether the Company elects to satisfy the obligation to pay Cash Flow
Participation Interest, in full or in part, by the issuance of PIK Securities,
in which case such notice shall include a written order to the Trustee to record
on the PIK Grid of this Security (i) the date of the issuance of such PIK
Securities, (ii) the aggregate principal amount of such PIK Securities that were
issued on such date and (iii) the total amount of PIK Securities outstanding
after taking into account any Special PIK Redemption pursuant to Section 3.9 of
the Indenture. In the event that there have been no Special PIK Redemptions,
then the total amount of PIK Securities shall be the sum of all prior issuances
thereof.
In no event shall the election of the Company to pay Cash Flow
Participation Interest in cash or to satisfy the obligation to pay Cash Flow
Participation Interest by issuing PIK
3
Securities on any Interest Payment Date preclude the Company from making a
different election with respect to all or any portion of Cash Flow Participation
Interest to be paid on this Security, or any other Security, on any subsequent
Interest Payment Date. If (i) the Company elects to satisfy the obligation to
pay Cash Flow Participation Interest on this Security, or any other Security, in
part in cash and in part by the issuance of PIK Securities on any Interest
Payment Date and (ii) more than one Security is outstanding, then the proportion
of cash to be paid and PIK Securities to be issued on such Interest Payment Date
in respect of these outstanding Securities shall be the same for each such
Security.
Within 2 business days after any issuance of PIK Securities, the Trustee
shall give notice of such issuance to the Depositary and all Securityholders
registered with the Registrar.
3. Method of Payment.
By at least 11:00 a.m. (New York City time) on the date on which any
principal and premium of or Interest and Liquidated Damages, if any, on this
Security is due and payable, the Company shall irrevocably deposit with the
Trustee or the Paying Agent money sufficient to pay such amounts. The Company
will instruct the Paying Agent to pay Interest (except Defaulted Interest) and
Liquidated Damages, if any, to the Persons who are registered Securityholders at
the close of business on the February 15 or August 15 next preceding the
Interest Payment Date. Securityholders must surrender Securities to a Paying
Agent to collect principal payments. The Company will instruct the Paying Agent
to pay principal and premium and Interest and Liquidated Damages, if any, in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
4. Trustee and Paying Agent and Registrar.
Initially, NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association (the "Trustee"), will act as Trustee as well as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
Company-registrar without notice to any Securityholder. The Company or any of
its Domestic Subsidiaries may act as Paying Agent.
5. Indenture.
The Company issued this Security under an Indenture dated as of November
24, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), by and among the Company, the
Subsidiary Guarantors and the Trustee. Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture for a statement of those terms.
The Securities are the senior obligations of the Company, rank pari passu
in right of payment with all current and future Senior Debt of the Company,
including the Senior Credit Facility, and rank senior in right of payment to all
existing and future subordinated obligations of
4
the Company. The Security is one of the Initial Securities referred to in the
Indenture. The Securities include the Initial Securities and any New Securities
issued in exchange for the Initial Securities pursuant to the Indenture and the
Registration Rights Agreement. The Initial Securities and the New Securities are
treated as a single class of securities under the Indenture. Principal and
premium of and Interest and Liquidated Damages, if any, on the Securities will
be payable at the office or agency maintained by the Company for such purpose
pursuant to Section 2.3 of the Indenture. Initially, such office will be the
office of the Trustee maintained for such purpose. The Securities will be issued
in denominations of $1,000 and integral multiples thereof.
The Indenture imposes certain restrictive covenants on the Company and its
Restricted Subsidiaries as set forth in Article IV of the Indenture.
To guarantee the due and punctual payment of the principal and Interest, if
any, on the Securities and all other amounts payable by the Company under the
Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by redemption, by acceleration or otherwise, according to
the terms of the Securities and the Indenture, the Subsidiary Guarantors, as
primary obligors and not merely as surety, have unconditionally and irrevocably
guaranteed, on a joint and several basis, such obligations on a senior basis
pursuant to the terms of Article X of the Indenture.
The Securities are secured to the extent set forth in the Collateral
Agreement and Article XI of the Indenture.
6. Optional Redemption.
Pursuant to Section 3.7(a) of the Indenture, prior to September 1, 2001,
the Securities will be redeemable, in whole or in part, at the option of the
Company, upon not less than 30 and no more than 60 days' prior notice, on any
March 1, June 1, September 1 or December 1 of any year at a redemption price
equal to 100% of the principal amount thereof plus the Make-Whole Premium, plus,
to the extent not included in the Make-Whole Premium, accrued and unpaid
Interest and Liquidated Damages, if any, to the date of redemption. For purposes
of the foregoing: (i) "Make-Whole Premium" means, with respect to a Security, an
amount equal to the present value of the remaining Coupon Interest (exclusive of
any portion thereof accruing with respect to the period prior to the redemption
date) and premium payments due on such Security as if such Security were
redeemed on September 1, 2001 pursuant to the next succeeding paragraph,
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at a discount rate equal to the
Treasury Rate plus 100 basis points; and (ii) if the Company redeems any
Security on June 1 or December 1 of any year, then Cash Flow Participation
Interest shall be calculated by multiplying (A) Consolidated Cash Flow, with
respect to any redemption on June 1, for the quarterly period ended on the
preceding March 31 and, with respect to any redemption on December 1, for the
quarterly period ended on the preceding September 30 by (B) the applicable
percentage (stated under paragraph 2 above and Section 2.1(a)(3) of the
Indenture) corresponding to the date next succeeding that June 1 or December 1,
as the case may be.
5
Pursuant to Section 3.7(b) of the Indenture, on or after September 1, 2001,
the Securities are redeemable, in whole or in part, upon not less than 30 nor
more than 60 days' prior notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
Interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on September 1 of the
years indicated below:
Redemption Price as a
Year Percentage of Principal Amount
---- ------------------------------
2001.......................... 107.250%
2002.......................... 103.625%
For purposes of the foregoing, if the Company redeems any Security (i) on March
1 or September 1 of any year, then Cash Flow Participation Interest shall be
calculated as set forth under paragraph 2 above and Section 2.1(a)(3) of the
Indenture; (ii) on June 1 or December 1 of any year, then Cash Flow
Participation Interest shall be calculated by multiplying (A) Consolidated Cash
Flow, with respect to any redemption on June 1, for the quarterly period ended
on the preceding March 31 and, with respect to any redemption on December 1, for
the quarterly period ended on the preceding September 30 by (B) the applicable
percentage (stated under paragraph 2 above and Section 2.1(a)(3) of the
Indenture) corresponding to the date next succeeding that June 1 or December 1,
as the case may be; and (iii) on any date other than March 1, June 1, September
1 or December 1 of any year, then Cash Flow Participation Interest shall be
calculated as described under paragraph 2 above and Section 2.1(a)(3) of the
Indenture with respect to such calculation for Stub Periods and more
particularly as follows: (w) for any redemption occurring between March 1 and
June 1 (exclusive of the dates March 1 and June 1), the Cash Flow Participation
Interest for the period from March 1 to the redemption date shall be calculated
by multiplying the Cash Flow Participation Interest actually paid on the
Interest Payment Date which occurred on the immediately preceding March 1 by a
fraction the numerator of which shall be the number of days from March 1 to the
redemption date and the denominator of which shall be 180; (x) for any
redemption occurring between June 1 and September 1 (exclusive of the dates June
1 and September 1) (I) the Cash Flow Participation Interest for the period from
March 1 to June 1 which shall be calculated as described in clause (ii) above
and (II) the Cash Flow Participation Interest for the period from June 1 to the
redemption date which shall be calculated by multiplying the Cash Flow
Participation Interest to be paid for the period from March 1 through June 1 by
a fraction the numerator of which shall be the number of days between June 1 and
the redemption date and the denominator of which shall be 90; (y) for any
redemption occurring between September 1 and December 1 (exclusive of the dates
September 1 and December 1), the Cash Flow Participation Interest for the period
from September 1 to the redemption date shall be calculated by multiplying the
Cash Flow Participation Interest actually paid on the Interest Payment Date
which occurred on the immediately preceding September 1 by a fraction the
numerator of which shall be the number of days from such September 1 to the
redemption date and the denominator of which shall be 180; (z) for any
redemption occurring between December 1 and March 1 (exclusive of the dates
December 1 and March 1) (I) the Cash Flow Participation Interest for the period
from September 1 to December 1 which shall be
6
calculated as described in clause (ii) above and (II) the Cash Flow
Participation Interest for the period from December 1 to the redemption date
which shall be calculated by multiplying the Cash Flow Participation Interest to
be paid for the period from September 1 through December 1 by a fraction the
numerator of which shall be the number of days from December 1 to the redemption
date and the denominator of which shall be 90.
7. Mandatory Redemption.
Except pursuant to Sections 3.8 and 3.9 of the Indenture, the Company is
not required to make mandatory redemption or sinking fund payments with respect
to the Securities.
Pursuant to Section 3.9 of the Indenure, if the Company elects to pay Cash
Flow Participation Interest for a Semi-Annual Accrual Period by the issuance of
PIK Securities pursuant to Section 2.1(a)(4) of the Indenture, then the Company
shall be required to redeem such PIK Securities on the Interest Payment Date
falling immediately after the next succeeding Semi-Annual Accrual Period (such
date, the "Special PIK Redemption Date") at a redemption price equal to 100% of
the principal amount thereof plus accrued and unpaid Interest and Liquidated
Damages, if any, on such PIK Securities, to the Special PIK Redemption Date
(such redemption, the "Special PIK Redemption") if, but only if, (i) the
Company's Fixed Charge Coverage Ratio for the four full fiscal quarters
immediately preceding such Special PIK Redemption Date would have been at least
2.50 to 1 determined on a pro forma basis after giving effect to such Special
PIK Redemption as if such Special PIK Redemption had occurred at the beginning
of the applicable four-quarter reference period and (ii) such Special PIK
Redemption is permitted by the Senior Credit Facility.
In the event of a Special PIK Redemption, the Company shall deliver a
notice, signed by an Officer, to the Trustee and the Paying Agent (which notice
shall be received not less than 5 nor more than 45 days prior to the record date
preceding the Interest Payment Date which shall also be such Special PIK
Redemption Date) which shall include a written order to the Trustee to record on
the PIK Grid of this Security or, if more than one Security is outstanding at
that time, for each Security, (i) the date of the Special PIK Redemption, (ii)
the aggregate principal amount of PIK Securities to be redeemed on the Special
PIK Redemption Date and (iii) the total amount of PIK Securities outstanding
after taking into account this and any prior Special PIK Redemption.
Within 2 business days of any Special PIK Redemption, the Trustee shall
give notice of such Special PIK Redemption to the Depositary and all
Securityholders registered with the Registrar as of the record date preceeding
the Interest Payment Date that is such Special PIK Redemption Date.
8. Notice of Redemption.
Pursuant to Section 3.3 of the Indenture, notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption date by
first class mail to each Securityholder to be redeemed at his registered
address. Securities in denominations of principal
7
amount larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued and
unpaid Interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
For other provisions regarding the redemption provisions of this Security,
see Sections 3.1 through 3.6 of the Indenture.
9. Registration Rights.
The Company is party to a Registration Rights Agreement, dated as of
November 23, 1998, by and among the Company, the Subsidiary Guarantors, and
Xxxxxx Brothers Inc. pursuant to which it is obligated to pay Liquidated Damages
upon the occurrence of certain Registration Defaults.
10. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in denominations of
principal amount of $1,000 and whole multiples of $1,000. A Securityholder may
register, transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Securityholder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange (i) any Securities selected for redemption (except,
in the case of a Security to be redeemed in part, the portion of the Security
not to be redeemed) for a period beginning 15 days before a selection of
Securities to be redeemed and ending on the date of such selection or (ii) any
Securities for a period beginning 15 days before an Interest Payment Date and
ending on such Interest Payment Date.
11. Persons Deemed Owners.
The registered holder of this Security may be treated as the owner of it
for all purposes.
12. Unclaimed Money.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or Interest that remains unclaimed for two
years after the Maturity Date or full redemption of the Securities, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
8
13. Amendment and Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
and the Securities may be amended with the written consent of the
Securityholders of at least two-thirds in principal amount of the outstanding
Securities with respect to Sections 4.2, 4.3, 4.6 and 4.13 of the Indenture and
of at least a majority in principal amount of the outstanding Securities with
respect to certain other Sections of the Indenture and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Securityholders of a majority in principal amount of the outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company, the Subsidiary Guarantors and the Trustee may
amend the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency whether wholly within the Indenture or as compared to any of the
Operative Documents, or to make such other provisions in regard to matters or
questions arising under the Indenture as the Board of Directors of the Company
may deem necessary or desirable and which shall not materially and adversely
affect the rights of the Securityholders, or to comply with Article 5 of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add additional guarantees with respect
to the Securities or to add additional security for the Securities, or to add
additional covenants of or surrender rights and powers conferred on the Company,
or to comply, or allow compliance with, any requirement of the SEC in connection
with qualifying the Indenture under the Act or giving effect to the security
arrangements contemplated by the Indenture, or to make any change that does not
adversely affect the rights of any Securityholder in any material respect or to
give effect to the provisions of the Security Documents and the Indenture,
including with regard to the release of all or a portion of the Collateral in
accordance with such provisions and to give effect to the release of any
Subsidiary Guarantee in accordance with the terms of the Indenture.
14. Defaults and Remedies.
Pursuant to Section 6.1 of the Indenture, An "Event of Default" occurs if:
the Company defaults in any payment of Interest or Liquidated Damages, if any,
on any Security when the same becomes due and payable, and such default
continues for a period of 30 days; the Company defaults in the payment of the
principal or Make-Whole Premium of any Security when the same becomes due and
payable at its Maturity Date, upon declaration or otherwise; the Company fails
to comply with Article V or the Company or a Restricted Subsidiary fails to
comply with Section 4.2 of the Indenture or Section 4.3 of the Indenture; the
Company or any of its Restricted Subsidiaries fails to comply with Section 4.12
of the Indenture or Section 4.13 of the Indenture; the Company or a Subsidiary
Guarantor, as the case may be, fails to comply with any of its agreements in the
Securities, the related Guarantees, the Indenture, the Collateral Agreement or
the other Security Documents (other than those referred to in clauses (i), (ii),
(iii) or (iv) above) and such failure continues for 60 days after the notice
specified below; the Company or any of its Restricted Subsidiaries 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 (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 Issue Date, which default (x) is caused by a failure to
9
pay principal or premium, if any, or Interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of such
default (a "Payment Default") or (y) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates without duplication $1.0 million or
more; the Company or any of its Restricted Subsidiaries fails to pay final
judgments aggregating in excess of $1.0 million (excluding amounts covered by
insurance), which judgments are not paid, discharged, stayed, vacated or bonded
pending appeal by a reputable financial intermediary with an investment grade
rating for a period of 60 days from the entry thereof; the Company or a
Restricted Subsidiary of the Company pursuant to or within the meaning of any
Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an
order for relief against it in an involuntary case in which it is the debtor;
(C) consents to the appointment of a Custodian of it or for any substantial part
of its property; or (D) makes a general assignment for the benefit of its
creditors; (E) generally are not paying their debts as they become due; or takes
any comparable action under any foreign laws relating to insolvency; a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Restricted Subsidiary of the
Company in an involuntary case; (B) appoints a Custodian of the Company or any
Restricted Subsidiary or for any assets that constitute a substantial part of
the assets of the Company or that constitute all or substantially all of the
assets of a Restricted Subsidiary; or (C) orders the winding up or liquidation
of the Company or any Restricted Subsidiary of the Company; (or any similar
relief is granted under any foreign laws) and the order, decree or relief
remains unstayed and in effect for 60 days; except as permitted under the
Indenture and the Collateral Agreement, any Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect for 30 days after notice or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, shall
deny or disaffirm its obligations under its Guarantee; or except as permitted by
the Collateral Agreement, the other Security Documents, the Indenture or any
amendments hereto or thereto, any of the Collateral Agreement or the other
Security Documents ceases to be in full force and effect or ceases to be
effective, in all material respects, to create the Lien on the Collateral in
favor of the Securityholders for 30 days after notice.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) of Section 6.1 of the Indenture and any
event which with the giving of notice or the lapse of time would become an Event
of Default under clause (3), (5), (9), (10) and (11) of Section 6.1 of the
Indenture and what action the Company is taking or proposes to take with respect
thereto.
10
If an Event of Default occurs and is continuing, the Trustee or the
Securityholders of at least 25% in aggregate principal amount of the Securities
may declare all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Securityholders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default or Event of Default (except a Default or Event of Default in payment of
principal or Interest) if it determines that withholding notice is not opposed
to their interest.
15. Trustee Dealings with the Company.
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company or
the Subsidiary Guarantors shall not have any liability for any obligations of
the Company or the Subsidiary Guarantors under the Securities or the Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.
17. Authentication
Pursuant to Section 2.2 of the Indenture, this Security shall not be valid
until an authorized signatory of the Trustee (or an authenticating agent acting
on its behalf) manually signs the certificate of authentication on the first
page of this Security.
18. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
11
19. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Governing Law.
This Security shall be governed by, and construed in accordance with, the
laws of the State of New York but without giving effect to applicable principles
of conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
21. Copies of Indenture and Certain Other Documents.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security as well as copies of the Collateral Agreement, the
Intercreditor Agreement and the Registration Rights Agreement. Requests may be
made to: Harvard Industries, Inc., 0 Xxxxxx Xxx, Xxxxx 000, Xxxxxxx, Xxx Xxxxxx
00000, attention: Chief Financial Officer.
22. Submission to Jurisdiction.
The Indenture and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
12
PIK Grid
Pursuant to Sections 2.1(a)(4) and 3.9 of the Indenture, the Trustee is
required to complete the following register upon the issuance and redemption of
PIK Securities.
--------------------------------------------------------------------------------
Total Amount
Date Amount Issued Amount Redeemed Outstanding(1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
----------
(1) The amount listed under this column reflects the net of (i) the total
amount issued and (ii) the total amount redeemed on the date corresponding
to these issuances and redemptions.
GUARANTEES
Each of the Subsidiary Guarantors hereby unconditionally guarantees jointly
and severally, on a senior basis the due and punctual payment of the principal
and premium of and Interest and Liquidated Damages, if any, on the Securities,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of Interest on the overdue principal and premium of and Interest and Liquidated
Damages, if any, on the Securities, and the due and punctual performance of all
other obligations of the Company to the Securityholders or the Trustee, all in
accordance with the terms set forth in Article X of the Indenture.
The Guarantees, including the payment of principal and premium of and
Interest and Liquidated Damages, if any, on the Securities, will be senior
obligations of such Subsidiary Guarantors and rank pari passu in right of
payment with all existing and future senior obligations of the Subsidiary
Guarantors and rank senior to all existing and future subordinated obligations
of such Subsidiary Guarantors. The Guarantees will be secured to the extent set
forth under Article XI of the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Securities upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The terms of the Guarantees evidenced hereby are qualified in their
entirety and remain subject to the terms of Article X of the Indenture, as such
Article may be amended, modified or changed from the date hereof, including but
not limited to the addition of additional Subsidiary Guarantors and the release
of existing Subsidiary Guarantors from their obligations under the Indenture.
This Guarantee shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of law.
[The signature page follows.]
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this instrument to
be duly executed and its corporate seal to be hereunto affixed and attested.
XXXXXXX-XXXXXX, INC.
HARVARD TRANSPORTATION
CORPORATION
XXXXXXX-XXXXXX GREENEVILLE, INC.
POTTSTOWN PRECISION CASTING, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
THE XXXXXXXX-XXXXXX CORPORATION
On behalf of each of the above
Subsidiary Guarantors
By:
--------------------------------
Name:
Title:
2
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint ______________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: ____________________ Your Signature: _____________________
Signature Guarantee: ______________________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the first page of this Security.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being transferred:
CHECK ONE BOX BELOW:
(1)[ ] to the Company; or
(2)[ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3)[ ] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4)[ ] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
(5)[ ] pursuant to another available exemption from registration provided
by Rule 144 under the Securities act of 1933.
3
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
checked, the Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other information as the
Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the exemption
provided by Rule 144 under such Act.
------------------------------
Signature
Signature Guarantee:
------------------------- ------------------------------
Signature
(Signature must be guaranteed
by a participant in a
recognized Signature Guarantee
Medallion Program or other
signature guarantor program
reasonably acceptable to the
Trustee)
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: ________________
----------------------------------------------
NOTICE: To be executed by an executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Amount of decrease in Amount of increase in
Date of Principal Amount of this Principal Amount of this
Exchange Global Security Global Security
-------- ------------------------ ------------------------
Principal Amount of this Signature of authorized officer
Global Security following of Trustee or Securities
such decrease or increase Custodian
------------------------- -------------------------------
EXHIBIT B
FORM OF NEW SECURITY
[GLOBAL SECURITIES LEGEND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("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 IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
2
HARVARD INDUSTRIES, INC.
14 1/2% Senior Secured Note Due 2003
No. __________
Principal Amount: $25,000,000 CUSIP NO. _______
HARVARD INDUSTRIES, INC., a Delaware corporation, promises to pay to CEDE &
COMPANY, or registered assigns, the principal sum of TWENTY FIVE MILLION DOLLARS
on September 1, 2003.
Interest Payment Dates: March 1 and September 1.
Record Dates: February 15 and August 15.
Additional provisions of this Security are set forth on the following pages
of this Security.
HARVARD INDUSTRIES, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Dated: November __, 1998
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the Indenture.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:
----------------------------------
Name:
Title:
Dated: November __, 1998
3
14 1/2% Senior Secured Security Due 2003
1. Principal.
The Senior Secured Notes (the "Securities") are limited to $25.0 million
aggregate principal amount, subject to Section 2.1(a)(2) of the Indenture.
2. Interest.
HARVARD INDUSTRIES, INC., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay Interest (as defined below) on the
principal amount of this Security. Interest on the Securities will accrue at a
rate equal to the sum of (1) 14 1/2% per annum on the principal amount of
Securities outstanding (calculated on the basis of a 360-day year comprised of
twelve 30-day months) ("Coupon Interest") plus (2) Cash Flow Participation
Interest (as defined below and, together with Coupon Interest, "Interest").
"Cash Flow Participation Interest," for any relevant period, equals the product
of (1) Consolidated Cash Flow for the six month period ending, for interest
payments due March 1 of each year, on December 31 and, for interest payments due
on September 1 of each year, on June 30 (each, a "Semi-Annual Accrual Period")
prior to the next succeeding Interest Payment Date multiplied by (2) the
applicable percentage set forth for the period ending on the Interest Payment
Date indicated below:
Interest Payment Date Percentage
--------------------- ----------
March 1, 1999.................................. 2.00%
September 1, 1999.............................. 2.00%
March 1, 2000.................................. 2.50%
September 1, 2000.............................. 2.50%
March 1, 2001.................................. 3.50%
September 1, 2001.............................. 3.50%
March 1, 2002.................................. 4.50%
September 1, 2002.............................. 4.50%
March 1, 2003.................................. 4.50%
September 1, 2003.............................. 4.50%
If, however, the calculation of Cash Flow Participation Interest, based on the
appropriate percentages set forth above, results in an amount that is less than
$1.0 million for any two consecutive Semi-Annual Accrual Periods taken as a
whole, then Cash Flow Participation Interest will be for such two corresponding
Interest Payment Dates taken as a whole, $1.0 million (the "Minimum Cash Flow
Participation Interest Amount").
No later than 15 days prior to an Interest Payment Date or any other date
on which Cash Flow Participation Interest is payable pursuant to a redemption of
the Securities or an offer to purchase pursuant to Section 4.13 of the
Indenture, the Company shall deliver to the Trustee
2
an Officers' Certificate stating the amount of the Cash Flow Participation
Interest payable on such upcoming Interest Payment Date or other payment date
and calculations showing how such amount was determined.
Notwithstanding the above, (i) if the Company's Fixed Charge Coverage Ratio
is less than 2.50 to 1 for any Semi-Annual Accrual Period, then the Company may
elect to pay Cash Flow Participation Interest on the next succeeding Interest
Payment Date for such Semi-Annual Accrual Period by the issuance of additional
Securities equal to the amount of such interest would otherwise be due but is
not paid in cash (the "PIK Securities"), determined pursuant to Section
2.1(a)(3) of the Indenture. In the event that the period for which Interest
accrues and is due (including for the period from the Issue Date to the first
interest payment date of March 1, 1999) is less than 180 days (such a period, a
"Stub Period"), then the Interest due for such Stub Period (which may be a
Semi-Annual Accrual Period) will be pro rated to reflect the actual number of
days that the Securities were outstanding for such Stub Period (calculated on
the basis of a 360 day year comprised of twelve 30- day months), provided that
the portion of Interest attributable to Cash Flow Participation Interest (or the
Minimum Cash Flow Participation Interest Amount, if applicable) due at the end
of such Stub Period (or, as the case may be on September 1, 1999 with respect to
the period covered by the Stub Period ending on March 1, 1999 plus the
Semi-Annual Accrual Period ending on September 1, 1999, taken together) shall
similarly be pro rated to reflect the actual number of days that the Securities
were outstanding for such Stub Period (or, with respect to the period ending on
September 1, 1999, the actual number of days that the Securities were
outstanding for the period covered by such Stub Period plus the succeeding
Semi-Annual Accrual Period, taken together) (calculated on the basis of a 360
day year comprised of twelve 30-day months). Interest on overdue principal and
installments of Interest will accrue at the rate of Interest borne by the
Securities.
Such interest is payable in addition to any other interest payable from
time to time with respect to this Security. The Trustee will not be deemed to
have notice of a Registration Default until it shall have received actual notice
of such Registration Default.
If the Company elects, pursuant to Section 2.1(a)(4) of the Indenture, to
issue PIK Securities, then the Company shall deliver a notice, signed by an
Officer, to the Trustee and the Paying Agent (which notice shall be received not
less than 5 nor more than 45 days prior to the record date preceding the
Interest Payment Date on which such PIK Securities will be issued) which shall
state whether the Company elects to satisfy the obligation to pay Cash Flow
Participation Interest, in full or in part, by the issuance of PIK Securities,
in which case such notice shall include a written order to the Trustee to record
on the register on the PIK Grid of this Security (i) the date of the issuance of
such PIK Securities, (ii) the aggregate principal amount of such PIK Securities
that were issued on such date and (iii) the total amount of PIK Securities
outstanding after taking into account any Special PIK Redemption pursuant to
Section 3.9 of the Indenture. In the event that there have been no Special PIK
Redemptions, then the total amount of PIK Securities shall be the sum of all
prior issuances thereof.
In no event shall the election of the Company to pay Cash Flow
Participation Interest in cash or to satisfy the obligation to pay Cash Flow
Participation Interest by issuing PIK
3
Securities on any Interest Payment Date preclude the Company from making a
different election with respect to all or any portion of Cash Flow Participation
Interest to be paid on this Security, or any other Security, on any subsequent
Interest Payment Date. If (i) the Company elects to satisfy the obligation to
pay Cash Flow Participation Interest on this Security, or any other Security, in
part in cash and in part by the issuance of PIK Securities on any Interest
Payment Date and (ii) more than one Security is outstanding, then the proportion
of cash to be paid and PIK Securities to be issued on such Interest Payment Date
in respect of these outstanding Securities shall be the same for each such
Security.
Within 2 business days after any issuance of PIK Securities, the Trustee
shall give notice of such issuance to the Depositary and all Securityholders
registered with the Registrar.
3. Method of Payment.
By at least 11:00 a.m. (New York City time) on the date on which any
principal and premium of or Interest and Liquidated Damages, if any, on any
Security is due and payable, the Company shall irrevocably deposit with the
Trustee or the Paying Agent money sufficient to pay such amounts. The Company
will instruct the Paying Agent to pay Interest (except Defaulted Interest) and
Liquidated Damages, if any, to the Persons who are registered Securityholders at
the close of business on the February 15 or August 15 next preceding the
Interest Payment Date. Securityholders must surrender Securities to a Paying
Agent to collect principal payments. The Company will instruct the Paying Agent
to pay principal and premium and Interest and Liquidated Damages, if any, in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
4. Trustee and Paying Agent and Registrar.
Initially, NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association (the "Trustee"), will act as Trustee as well as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
Company-registrar without notice to any Securityholder. The Company or any of
its Domestic Subsidiaries may act as Paying Agent.
5. Indenture.
The Company issued this Security under an Indenture dated as of November
24, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), by and among the Company, the
Subsidiary Guarantors and the Trustee. Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture for a statement of those terms.
The Securities are the senior obligations of the Company, rank pari passu
in right of payment with all current and future Senior Debt of the Company,
including the Senior Credit Facility, and rank senior in right of payment to all
existing and future subordinated obligations of
4
the Company. The Security is one of the New Securities referred to in the
Indenture. The Securities include the Initial Securities and any New Securities
issued in exchange for the Initial Securities pursuant to the Indenture and the
Registration Rights Agreement. The Initial Securities and the New Securities are
treated as a single class of securities under the Indenture. Principal and
premium of and Interest and Liquidated Damages, if any, on the Securities will
be payable at the office or agency maintained by the Company for such purpose
pursuant to Section 2.3 of the Indenture. Initially, such office will be the
office of the Trustee maintained for such purpose. The Securities will be issued
in denominations of $1,000 and integral multiples thereof.
The Indenture imposes certain restrictive covenants on the Company and its
Restricted Subsidiaries as set forth in Article IV thereof.
To guarantee the due and punctual payment of the principal and Interest, if
any, on the Securities and all other amounts payable by the Company under the
Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture, the Subsidiary Guarantors, as primary obligors and
not merely as surety, have unconditionally and irrevocably guaranteed, on a
joint and several basis, such obligations on a senior basis pursuant to the
terms of Article X of the Indenture.
The Securities are secured to the extent set forth in the Collateral
Agreement and Article XI of the Indenture.
6. Optional Redemption.
Pursuant to Section 3.7(a) of the Indenture, prior to September 1, 2001,
the Securities will be redeemable, in whole or in part, at the option of the
Company, upon not less than 30 and no more than 60 days' prior notice, on any
March 1, June 1, September 1 or December 1 of any year at a redemption price
equal to 100% of the principal amount thereof plus the Make-Whole Premium, plus,
to the extent not included in the Make-Whole Premium, accrued and unpaid
Interest and Liquidated Damages, if any, to the date of redemption. For purposes
of the foregoing: (i) "Make-Whole Premium" means, with respect to a Security, an
amount equal to the present value of the remaining Coupon Interest (exclusive of
any portion thereof accruing with respect to the period prior to the redemption
date) and premium payments due on such Security as if such Security were
redeemed on September 1, 2001 pursuant to the next succeeding paragraph,
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at a discount rate equal to the
Treasury Rate plus 100 basis points; and (ii) if the Company redeems any
Security on June 1 or December 1 of any year, then Cash Flow Participation
Interest shall be calculated by multiplying (A) Consolidated Cash Flow, with
respect to any redemption on June 1, for the quarterly period ended on the
preceding March 31 and, with respect to any redemption on December 1, for the
quarterly period ended on the preceding September 30 by (B) the applicable
percentage (stated under paragraph 2 above and Section 2.1(a)(3) of the
Indenture) corresponding to the date next succeeding that June 1 or December 1,
as the case may be.
5
Pursuant to Section 3.7(b) of the Indenture, on or after September 1, 2001,
the Securities are redeemable, in whole or in part, upon not less than 30 nor
more than 60 days' prior notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
Interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on September 1 of the
years indicated below:
Redemption Price as a
Year Percentage of Principal Amount
---- ------------------------------
2001............................. 107.250%
2002............................. 103.625%
For purposes of the foregoing, if the Company redeems any Security (i) on March
1 or September 1 of any year, then Cash Flow Participation Interest shall be
calculated as set forth under paragraph 2 above and Section 2.1(a)(3) of the
Indenture; (ii) on June 1 or December 1 of any year, then Cash Flow
Participation Interest shall be calculated by multiplying (A) Consolidated Cash
Flow, with respect to any redemption on June 1, for the quarterly period ended
on the preceding March 31 and, with respect to any redemption on December 1, for
the quarterly period ended on the preceding September 30 by (B) the applicable
percentage (stated under paragraph 2 above and Section 2.1(a)(3) of the
Indenture) corresponding to the date next succeeding that June 1 or December 1,
as the case may be; and (iii) on any date other than March 1, June 1, September
1 or December 1 of any year, then Cash Flow Participation Interest shall be
calculated as described under paragraph 2 above and Section 2.1(a)(3) of the
Indenture with respect to such calculation for Stub Periods and more
particularly as follows: (w) for any redemption occurring between March 1 and
June 1 (exclusive of the dates March 1 and June 1), the Cash Flow Participation
Interest for the period from March 1 to the redemption date shall be calculated
by multiplying the Cash Flow Participation Interest actually paid on the
Interest Payment Date which occurred on the immediately preceding March 1 by a
fraction the numerator of which shall be the number of days from March 1 to the
redemption date and the denominator of which shall be 180; (x) for any
redemption occurring between June 1 and September 1 (exclusive of the dates June
1 and September 1) (I) the Cash Flow Participation Interest for the period from
March 1 to June 1 which shall be calculated as described in clause (ii) above
and (II) the Cash Flow Participation Interest for the period from June 1 to the
redemption date which shall be calculated by multiplying the Cash Flow
Participation Interest to be paid for the period from March 1 through June 1 by
a fraction the numerator of which shall be the number of days between June 1 and
the redemption date and the denominator of which shall be 90; (y) for any
redemption occurring between September 1 and December 1 (exclusive of the dates
September 1 and December 1), the Cash Flow Participation Interest for the period
from September 1 to the redemption date shall be calculated by multiplying the
Cash Flow Participation Interest actually paid on the Interest Payment Date
which occurred on the immediately preceding September 1 by a fraction the
numerator of which shall be the number of days from such September 1 to the
redemption date and the denominator of which shall be 180; (z) for any
redemption occurring between December 1 and March 1 (exclusive of the dates
December 1 and March 1) (I) the Cash Flow Participation Interest for the period
from September 1 to December 1 which shall be
6
calculated as described in clause (ii) above and (II) the Cash Flow
Participation Interest for the period from December 1 to the redemption date
which shall be calculated by multiplying the Cash Flow Participation Interest to
be paid for the period from September 1 through December 1 by a fraction the
numerator of which shall be the number of days from December 1 to the redemption
date and the denominator of which shall be 90.
7. Mandatory Redemption.
Except pursuant to Sections 3.8 and 3.9 of the Indenture, the Company is
not required to make mandatory redemption or sinking fund payments with respect
to the Securities.
Pursuant to Section 3.9 of the Indenure, if the Company elects to pay Cash
Flow Participation Interest for a Semi-Annual Accrual Period by the issuance of
PIK Securities pursuant to Section 2.1(a)(4) of the Indenture, then the Company
shall be required to redeem such PIK Securities on the Interest Payment Date
falling immediately after the next succeeding Semi-Annual Accrual Period (such
date, the "Special PIK Redemption Date") at a redemption price equal to 100% of
the principal amount thereof plus accrued and unpaid Interest and Liquidated
Damages, if any, on such PIK Securities, to the Special PIK Redemption Date
(such redemption, the "Special PIK Redemption") if, but only if, (i) the
Company's Fixed Charge Coverage Ratio for the four full fiscal quarters
immediately preceding such Special PIK Redemption Date would have been at least
2.50 to 1 determined on a pro forma basis after giving effect to such Special
PIK Redemption as if such Special PIK Redemption had occurred at the beginning
of the applicable four-quarter reference period and (ii) such Special PIK
Redemption is permitted by the Senior Credit Facility.
In the event of a Special PIK Redemption, the Company shall deliver a
notice, signed by an Officer, to the Trustee and the Paying Agent (which notice
shall be received not less than 5 nor more than 45 days prior to the record date
preceding the Interest Payment Date which shall also be such Special PIK
Redemption Date) which shall include a written order to the Trustee to record on
the PIK Grid of this Security or, if more than one Security is outstanding at
that time, for each Security, (i) the date of the Special PIK Redemption, (ii)
the aggregate principal amount of PIK Securities to be redeemed on the Special
PIK Redemption Date and (iii) the total amount of PIK Securities outstanding
after taking into account this and any prior Special PIK Redemption.
Within 2 business days of any Special PIK Redemption, the Trustee shall
give notice of such Special PIK Redemption to the Depositary and all
Securityholders registered with the Registrar as of the record date preceeding
the Interest Payment Date that is such Special PIK Redemption Date.
8. Notice of Redemption.
Pursuant to Section 3.3 of the Indenture, notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption date by
first class mail to each Securityholder to be redeemed at his registered
address. Securities in denominations of principal
7
amount larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000. If money sufficient to pay the redemption price of and accrued and
unpaid Interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
For other provisions regarding the redemption provisions of this Security,
see Sections 3.1 through 3.6 of the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in denominations of
principal amount of $1,000 and whole multiples of $1,000. A Securityholder may
register, transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Securityholder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange (i) any Securities selected for redemption (except,
in the case of a Security to be redeemed in part, the portion of the Security
not to be redeemed) for a period beginning 15 days before a selection of
Securities to be redeemed and ending on the date of such selection or (ii) any
Securities for a period beginning 15 days before an Interest Payment Date and
ending on such Interest Payment Date.
10. Persons Deemed Owners.
The registered holder of this Security may be treated as the owner of it
for all purposes.
11. Unclaimed Money.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or Interest that remains unclaimed for two
years after the Maturity Date or full redemption of the Securities, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
12. Amendment and Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
and the Securities may be amended with the written consent of the
Securityholders of at least two-thirds in principal amount of the outstanding
Securities with respect to Sections 4.2, 4.3, 4.6 and 4.13 of the Indenture and
of at least a majority in principal amount of the outstanding Securities with
respect to certain other Sections of the Indenture and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Securityholders of a majority in principal amount of the outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company, the Subsidiary Guarantors
8
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency whether wholly within the Indenture or as
compared to any of the Operative Documents, or to make such other provisions in
regard to matters or questions arising under the Indenture as the Board of
Directors of the Company may deem necessary or desirable and which shall not
materially and adversely affect the rights of the Securityholders, or to comply
with Article 5 of the Indenture, or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add additional
guarantees with respect to the Securities or to add additional security for the
Securities, or to add additional covenants of or surrender rights and powers
conferred on the Company, or to comply, or allow compliance with, any
requirement of the SEC in connection with qualifying the Indenture under the Act
or giving effect to the security arrangements contemplated by the Indenture, or
to make any change that does not adversely affect the rights of any
Securityholder in any material respect or to give effect to the provisions of
the Security Documents and the Indenture, including with regard to the release
of all or a portion of the Collateral in accordance with such provisions and to
give effect to the release of any Subsidiary Guarantee in accordance with the
terms of the Indenture.
13. Defaults and Remedies.
Pursuant to Section 6.1 of the Indenture, An "Event of Default" occurs if:
(i) the Company defaults in any payment of Interest or Liquidated Damages, if
any, on any Security when the same becomes due and payable, and such default
continues for a period of 30 days; (ii) the Company defaults in the payment of
the principal or Make-Whole Premium of any Security when the same becomes due
and payable at its Maturity Date, upon declaration or otherwise; (iii) the
Company fails to comply with Article V or the Company or a Restricted Subsidiary
fails to comply with Section 4.2 of the Indenture or Section 4.3 of the
Indenture; (iv) the Company or any of its Restricted Subsidiaries fails to
comply with Section 4.12 of the Indenture or Section 4.13 of the Indenture; (v)
the Company or a Subsidiary Guarantor, as the case may be, fails to comply with
any of its agreements in the Securities, the related Guarantees, the Indenture,
the Collateral Agreement or the other Security Documents (other than those
referred to in clauses (i), (ii), (iii) or (iv) above) and such failure
continues for 60 days after the notice specified below; (vi) the Company or any
of its Restricted Subsidiaries 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 (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 Issue Date, which
default (x) is caused by a failure to pay principal or premium, if any, or
Interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment Default")
or (y) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates without duplication $1.0 million or more; (vii) the
Company or any of its Restricted Subsidiaries fails to pay final judgments
aggregating in excess of $1.0 million (excluding amounts covered by insurance),
which judgments are not paid, discharged, stayed, vacated or bonded pending
appeal by a reputable financial intermediary with an investment grade rating for
a period of 60 days from the entry thereof; (viii) the Company or a
9
Restricted Subsidiary of the Company pursuant to or within the meaning of any
Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an
order for relief against it in an involuntary case in which it is the debtor;
(C) consents to the appointment of a Custodian of it or for any substantial part
of its property; (D) makes a general assignment for the benefit of its
creditors; or (E) generally are not paying their debts as they become due; or
takes any comparable action under any foreign laws relating to insolvency; (ix)
a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that: (A) is for relief against the Company or any Restricted Subsidiary of
the Company in an involuntary case; (B) appoints a Custodian of the Company or
any Restricted Subsidiary or for any assets that constitute a substantial part
of the assets of the Company or that constitute all or substantially all of the
assets of a Restricted Subsidiary; or (C) orders the winding up or liquidation
of the Company or any Restricted Subsidiary of the Company; (or any similar
relief is granted under any foreign laws) and the order, decree or relief
remains unstayed and in effect for 60 days; (x) except as permitted under the
Indenture and the Collateral Agreement, any Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall cease for any reason
to be in full force and effect for 30 days after notice or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, shall
deny or disaffirm its obligations under its Guarantee; or (xi) except as
permitted by the Collateral Agreement, the other Security Documents, the
Indenture or any amendments hereto or thereto, any of the Collateral Agreement
or the other Security Documents ceases to be in full force and effect or ceases
to be effective, in all material respects, to create the Lien on the Collateral
in favor of the Securityholders for 30 days after notice.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) of Section 6.1 of the Indenture and any
event which with the giving of notice or the lapse of time would become an Event
of Default under clause (3), (5), (9), (10) and (11) of Section 6.1 of the
Indenture and what action the Company is taking or proposes to take with respect
thereto.
If an Event of Default occurs and is continuing, the Trustee or the
Securityholders of at least 25% in aggregate principal amount of the Securities
may declare all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Securityholders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default or Event of Default (except a Default or Event of Default in payment of
principal or interest) if it determines that withholding notice is not opposed
to their interest.
10
14. Trustee Dealings with the Company.
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company or
the Subsidiary Guarantors shall not have any liability for any obligations of
the Company or the Subsidiary Guarantors under the Securities or the Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication
Pursuant to Section 2.2 of the Indenture, this Security shall not be valid
until an authorized signatory of the Trustee (or an authenticating agent acting
on its behalf) manually signs the certificate of authentication on the first
page of this Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
18. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law.
This Security shall be governed by, and construed in accordance with, the
laws of the State of New York but without giving effect to applicable principles
of conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
11
20. Copies of Indenture and Certain Other Documents.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security as well as copies of the Collateral Agreement and the
Intercreditor Agreement. Requests may be made to: Harvard Industries, Inc., 0
Xxxxxx Xxx, Xxxxx 000, Xxxxxxx, Xxx Xxxxxx 00000, attention: Chief Financial
Officer.
21. Submission to Jurisdiction.
The Indenture and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
12
PIK Grid
Pursuant to Sections 2.1(a)(4) and 3.9 of the Indenture, the Trustee is
required to complete the following register upon the issuance and redemption of
PIK Securities.
--------------------------------------------------------------------------------
Total Amount
Date Amount Issued Amount Redeemed Outstanding(1)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
----------
(**) The amount listed under this column reflects the net of (i) the total
amount issued and (ii) the total amount redeemed on the date corresponding
to these issuances and redemptions.
GUARANTEES
Each of the Subsidiary Guarantors hereby unconditionally guarantees jointly
and severally, on a senior basis the due and punctual payment of the principal
and premium of and Interest and Liquidated Damages, if any, on the Securities,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of Interest on the overdue principal and premium of and Interest and Liquidated
Damages, if any, on the Securities, and the due and punctual performance of all
other obligations of the Company to the Securityholders or the Trustee, all in
accordance with the terms set forth in Article X of the Indenture.
The Guarantees, including the payment of principal and premium of and
Interest and Liquidated Damages, if any, on the Securities, will be senior
obligations of such Subsidiary Guarantors and rank pari passu in right of
payment with all existing and future senior obligations of the Subsidiary
Guarantors and rank senior to all existing and future subordinated obligations
of such Subsidiary Guarantors. The Guarantees will be secured to the extent set
forth under Article XI of the Indenture.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Securities upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
The terms of the Guarantees evidenced hereby are qualified in their
entirety and remain subject to the terms of Article X of the Indenture, as such
Article may be amended, modified or changed from the date hereof, including but
not limited to the addition of additional Subsidiary Guarantors and the release
of existing Subsidiary Guarantors from their obligations under the Indenture.
This Guarantee shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of law.
[The signature page follows.]
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this instrument to
be duly executed and its corporate seal to be hereunto affixed and attested.
XXXXXXX-XXXXXX, INC.
HARVARD TRANSPORTATION CORPORATION
XXXXXXX-XXXXXX GREENEVILLE, INC.
POTTSTOWN PRECISION CASTING, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
THE XXXXXXXX-XXXXXX CORPORATION
On behalf of each of the above
Subsidiary Guarantors
By:
-----------------------------
Name:
Title:
2
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint ______________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: ____________________ Your Signature: _____________________
Signature Guarantee: ______________________________
(Signature must be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program or other signature guarantor program reasonably
acceptable to the Trustee)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the first page of this Security.
EXHIBIT C
================================================================================
COLLATERAL AGREEMENT
made by
HARVARD INDUSTRIES, INC.,
XXXXXXX-XXXXXX, INC.
HARVARD TRANSPORTATION CORPORATION
XXXXXXX-XXXXXX GREENEVILLE, INC.
POTTSTOWN PRECISION CASTING, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
THE XXXXXXXX-XXXXXX CORPORATION
in favor of
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Collateral Agent
================================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS....................................................1
1.1 Definitions..................................................1
1.2 Other Definitional Provisions................................5
SECTION 2. GRANT OF SECURITY INTEREST.......................................6
2.1 Collateral...................................................6
2.2 Grant of Second Priority Security Interest...................6
2.3 Acknowledgment Regarding Intercreditor Agreement.............7
SECTION 3. REPRESENTATIONS AND WARRANTIES...................................7
3.1 Title; No Other Liens........................................7
3.2 Perfected Liens..............................................7
3.3 Chief Executive Office.......................................7
3.4 Inventory and Equipment......................................8
3.5 Farm Products................................................8
3.6 Pledged Securities...........................................8
3.7 Receivables..................................................8
3.8 Contracts....................................................9
3.9 Intellectual Property........................................9
SECTION 4. COVENANTS.......................................................10
4.1 Delivery of Instruments and Chattel Paper...................10
4.2 Maintenance of Insurance....................................10
4.3 Payment of Obligations......................................11
4.4 Maintenance of Perfected Security Interest;
Further Documentation...................................11
4.5 Changes in Locations, Name, etc.............................12
4.6 Notices.....................................................12
4.7 Pledged Securities..........................................12
4.8 Receivables.................................................14
4.9 Contracts...................................................14
4.10 Intellectual Property......................................14
SECTION 5. REMEDIAL PROVISIONS.............................................16
5.1 Certain Matters Relating to Receivables.....................16
5.2 Communications with Obligors; Grantors Remain Liable........17
5.3 Pledged Stock...............................................17
5.4 Proceeds to be Turned Over To Collateral Agent..............18
5.5 Application of Proceeds.....................................19
5.6 Code and Other Remedies.....................................19
5.7 Registration Rights.........................................20
5.8 Waiver; Deficiency..........................................21
i
Page
----
SECTION 6. THE COLLATERAL AGENT............................................21
6.1 Collateral Agent's Appointment as Attorney-in-Fact, etc.....21
6.2 Duty of Collateral Agent....................................23
6.3 Execution of Financing Statements...........................23
6.4 Authority of Collateral Agent...............................23
SECTION 7. MISCELLANEOUS...................................................24
7.1 Amendments in Writing.......................................24
7.2 Notices.....................................................24
7.3 No Waiver by Course of Conduct; Cumulative Remedies.........24
7.4 Enforcement Expenses; Indemnification.......................24
7.5 Successors and Assigns......................................24
7.6 Set-Off.....................................................25
7.7 Counterparts................................................25
7.8 Severability................................................25
7.9 Section Headings............................................25
7.10 Integration................................................25
7.11 GOVERNING LAW..............................................26
7.12 Submission To Jurisdiction; Waivers........................26
7.13 Acknowledgements...........................................26
7.14 Additional Grantors........................................27
7.15 Releases...................................................27
7.16 WAIVER OF JURY TRIAL.......................................27
ii
COLLATERAL AGREEMENT
COLLATERAL AGREEMENT, dated as of November 24, 1998, made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the "Grantors"), in favor of NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee under the Indenture described below (the
Trustee, as secured party hereunder, the "Collateral Agent") is entered by and
among HARVARD INDUSTRIES, INC., a Delaware corporation (the "Company"),
XXXXXXX-XXXXXX, INC., a Delaware corporation, HARVARD TRANSPORTATION,
CORPORATION, a Michigan corporation, XXXXXXX-XXXXXX GREENEVILLE, INC., a
Delaware corporation, POTTSTOWN PRECISION CASTING, INC., a Delaware corporation,
XXXXXXX-XXXXXX TECHNOLOGIES, INC., a Delaware corporation, XXXXXXX-XXXXXX TOLEDO
INC., a Delaware corporation, and XXXXXX AUTOMOTIVE, INC., a Michigan
corporation, XXXXX-ALBION CORPORATION, a Michigan corporation and THE
XXXXXXXX-XXXXXX CORPORATION, a New Hampshire corporation (collectively, the
"Subsidiary Guarantors").
W I T N E S S E T H :
WHEREAS, pursuant to the Amended and Restated Purchase Agreement (as
defined in the Indenture) and the Indenture (as defined herein), the Company
proposes to issue the Securities (as defined in the Indenture) upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Grantors are members of an affiliated group of companies;
WHEREAS, the Grantors are engaged in related businesses, and each Grantor
will derive substantial direct and indirect benefit from the issuance of the
Securities; and
WHEREAS, it is a condition to the closing of the offering of the Securities
that the Grantors shall have executed and delivered this Agreement to the
Collateral Agent;
NOW, THEREFORE, in consideration of the premises and to induce the Initial
Purchaser (as defined in the Indenture) to enter into the Amended and Restated
Purchase Agreement and to induce the prospective purchasers of the Securities to
purchase said Securities, each Grantor hereby agrees with the Collateral Agent
as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Indenture and used herein shall have the meanings given to them in the
Indenture, and the following terms which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Farm Products,
Instruments, Inventory and Investment Property.
(b) The following terms shall have the following meanings:
2
"Agreement": this Collateral Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by the Collateral
Agent as provided in Section 5.1 or 5.4.
"Contracts": the contracts and agreements listed in Schedule 7, as the same
may be amended, supplemented or otherwise modified from time to time, including,
without limitation, (i) all rights of any Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights of any
Grantor to damages arising thereunder and (iii) all rights of any Grantor to
perform and to exercise all remedies thereunder.
"Copyright Licenses": any written agreement naming any Grantor as licensor
(including, without limitation, those listed in Schedule 6) granting any right
under any Copyright, including, without limitation, the grant of rights to
manufacture, distribute, exploit and sell materials derived from any Copyright.
"Copyrights": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"DIP Credit Facilities": as defined in the Senior Credit Facility.
"General Intangibles": all "general intangibles" as such term is defined in
Section 9-106 of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, including, without limitation, with
respect to any Grantor, all contracts, agreements, instruments and indentures in
any form, and portions thereof, to which such Grantor is a party or under which
such Grantor has any right, title or interest or to which such Grantor or any
property of such Grantor is subject, as the same may from time to time be
amended, supplemented or otherwise modified, including, without limitation, (i)
all rights of such Grantor to receive moneys due and to become due to it
thereunder or in connection therewith, (ii) all rights of such Grantor to
damages arising thereunder and (iii) all rights of such Grantor to perform and
to exercise all remedies thereunder, in each case to the extent the grant by
such Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such contract, agreement, instrument or indenture is not
prohibited by such contract, agreement, instrument or indenture without the
consent of any other party thereto, would not give any other party to such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent if all necessary consents
to such grant of a security interest have been obtained from the other parties
thereto (it being
3
understood that the foregoing shall not be deemed to obligate such Grantor to
obtain such consents); provided, that the foregoing limitation shall not affect,
limit, restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other amounts due
or to become due under any such contract, agreement, instrument or indenture.
"Indenture": the Indenture dated as of November 24, 1998 by and among the
Company, the Subsidiary Guarantors named therein and the Trustee.
"Intellectual Property": the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent
Licenses, the Trademarks and the Trademark Licenses that are owned, held or used
in the business of any Grantor or any of its Subsidiaries, and all rights to xxx
at law or in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made by any
Grantor to any of its Subsidiaries (that is not a Grantor).
"Intercreditor Agreement": the Intercreditor Agreement among (i) the
Company, (ii) the Collateral Agent and (iii) the Administrative Agent, dated as
of November 24, 1998.
"Issuers": the collective reference to each issuer of a Pledged Security.
"Letter of Credit": as defined as the Senior Credit Facility.
"Loan Security Documents": the "Security Documents" as defined in the
Senior Credit Facility.
"Material Adverse Effect": as defined in the Senior Credit Facility.
"New York UCC": the Uniform Commercial Code as from time to time in effect
in the State of New York.
"Obligations": the collective reference to any amounts owing to the
Securityholders in respect of principal and premium of and Interest, Liquidated
Damage, if any, and Defaulted Interest, if any, of the Securities under the
Indenture and all other obligations and liabilities of the Company and the
Subsidiary Guarantors (including, without limitation, amounts owing to
Securityholders under the Indenture after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company or any Subsidiary Guarantor).
4
"Patent License": all agreements, whether written or oral, providing for
the grant by Grantor of any right to manufacture, use or sell any invention
covered in whole or in part by a Patent, including, without limitation, any of
the foregoing referred to in Schedule 6.
"Patents": (i) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions thereof and
all goodwill associated therewith, including, without limitation, any of the
foregoing referred to in Schedule 6, (ii) all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any of the
foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues
or extensions of the foregoing.
"Plan of Reorganization": the Grantors' First Amended and Modified
Consolidated Plan of Reorganization under Chapter 11 of the Bankruptcy Code
dated August 19, 1998 as confirmed by the Bankruptcy Court on October 15, 1998.
"Pledged Notes": all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
"Pledged Securities": the collective reference to the Pledged Notes and the
Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on Schedule 2, together
with any other shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of any Person that may be issued or
granted to, or held by, any Grantor while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section 9-306(1) of
the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Securities, collections thereon or distributions
or payments with respect thereto.
"Property": any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including,
without limitation, Capital Stock.
"Receivable": any right to payment for goods sold or leased or for services
rendered, whether or not such right is evidenced by an Instrument or Chattel
Paper and whether or not it has been earned by performance (including, without
limitation, any Account).
5
"Requirements of Laws": as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its Property or to which such Person or any of its Property is
subject.
"Securities Act": the Securities Act of 1933, as amended.
"Substitution Event": collectively, (i) the payment in full in cash of the
Lender Obligations, (ii) the termination of all commitments by the Lenders to
extend credit under the Senior Credit Facility, (iii) the termination of the
rights of the Administrative Agent under the Intercreditor Agreement and (iv)
the continuance of the Obligations hereunder.
"Trademark License": any agreement, whether written or oral, providing for
the grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in Schedule 6.
"Trademarks": (i) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service marks,
logos and other source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred to in Schedule 6,
and (ii) the right to obtain all renewals thereof.
"Unperfected Collateral": as defined in Section 3.2.
"Vehicles": all cars, trucks, trailers, construction and earth moving
equipment and other vehicles covered by a certificate of title law of any state
and all tires and other appurtenances to any of the foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or the relevant part thereof.
6
SECTION 2. GRANT OF SECURITY INTEREST
2.1 Collateral. For the purposes of this Agreement, all of the following
property now owned or at any time hereafter acquired by a Grantor or in which a
Grantor now has or at any time in the future may acquire any right, title or
interest is collectively referred to as the "Collateral":
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
(k) all Vehicles;
(l) all Investment Property;
(m) all deposit accounts and other bank accounts;
(n) all books and records pertaining to the Collateral; and
(o) to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security and guarantees given by any
Person with respect to any of the foregoing.
2.2 Grant of Second Priority Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether at stated
maturity, acceleration or otherwise) of the Obligations, each Grantor hereby
grants, assigns and transfers to the Collateral Agent for the benefit of the
Securityholders a second priority security interest in all of its Collateral,
subject to the first priority security interest in such Collateral created in
favor of
7
the Administrative Agent by the Loan Collateral Agreement, and subject to the
other Liens permitted by Section 4.6 of the Indenture.
2.3 Acknowledgment Regarding Intercreditor Agreement. Each Securityholder,
by its acceptance of the Securities, consents and agrees to the terms of the
Intercreditor Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Trustee to enter into the Indenture, the Initial Purchaser to
enter into the Amended and Restated Purchase Agreement and the prospective
purchasers of the Initial Securities to purchase the Initial Securities from the
Initial Purchaser as contemplated by the Amended and Restated Purchase Agreement
and the Indenture, each Grantor hereby represents and warrants to the Collateral
Agent on behalf of the Securityholders that:
3.1 Title; No Other Liens. Except for (a) the security interest granted to
the Administrative Agent for the benefit of the Lenders under the Senior Credit
Facility pursuant to the Loan Collateral Agreement and the other Loan Security
Documents, and the security interest granted to the Collateral Agent for the
benefit of the Securityholders pursuant to this Agreement and the other Security
Documents and (b) the other Liens permitted to exist on the Collateral by
Section 4.6 of the Indenture, such Grantor owns each item of the Collateral free
and clear of any and all Liens or claims of others. No financing statement,
other than with respect to the DIP Facilities, or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of (i) the Administrative
Agent pursuant to the Loan Collateral Agreement and the other Loan Security
Documents, (ii) the Collateral Agent pursuant to this Agreement and the other
Security Documents or except as shall be terminated on the date hereof and (iii)
the other Liens permitted to exist on the Collateral by Section 4.6 of the
Indenture..
3.2 Perfected Liens. The security interests granted pursuant to this
Agreement (a) upon completion of the filings and other actions specified on
Schedule 3 (which, in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Collateral Agent in completed and duly
executed form) will constitute valid perfected security interests in all of the
Collateral (except for Vehicles and Intellectual Property not listed on Schedule
6 (the "Unperfected Collateral")) in favor of the Collateral Agent, for the
benefit of the Securityholders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof and applicable law
against all creditors of such Grantor and (b) are prior to all other Liens on
the Collateral in existence on the date hereof except for (i) Liens granted to
the Administrative Agent for the benefit of the Lenders under the Senior Credit
Facility pursuant to the Loan Collateral Agreement and the other Loan Security
Documents, (ii) Liens permitted by Section 4.6 of the Indenture, (iii) Liens
which have priority over the Liens on the Collateral by operation of law and
(iv) Liens described on Schedule 8.
3.3 Chief Executive Office. On the date hereof, such Grantor's jurisdiction
of organization and the location of such Grantor's chief executive office or
sole place of business are specified on Schedule 4.
8
3.4 Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on Schedule
5.
3.5 Farm Products. None of the Collateral constitutes, or is the Proceeds
of, Farm Products.
3.6 Pledged Securities. (a) The shares of Pledged Stock pledged by such
Grantor held by the Administrative Agent under the Loan Collateral Agreement and
in which, pursuant to this Agreement and the Intercreditor Agreement, the
Collateral Agent has a second security interest, constitute all the issued and
outstanding shares of all classes of the Capital Stock of each domestic Issuer
owned by such Grantor.
(b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Pledged Securities pledged by it hereunder, free of any
and all Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement.
(e) Pursuant to Section 8 of the Intercreditor Agreement, the
Administrative Agent has agreed, upon (i) the payment in full of all Lender
Obligations (as defined in the Intercreditor Agreement) and the termination of
all commitments to extend credit under the Senior Credit Facility and (ii) the
request of the Trustee, to (x) provide a written acknowledgment of (i) above and
that the Senior Secured Parties (as defined in the Intercreditor Agreement) have
no further rights under the Intercreditor Agreement in respect of the Collateral
and (y) deliver to the Trustee any items of Collateral held in the possession of
the Administrative Agent, provided that there are Trustee Obligations (as
defined in the Intercreditor Agreement) then outstanding.
3.7 Receivables. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent or, after the
Substitution Event, the Collateral Agent.
(b) Substantially all of the obligors on Receivables are not Governmental
Authorities.
9
(c) The amounts represented by such Grantor to the Securityholders and the
Collateral Agent from time to time as owing to such Grantor in respect of the
Receivables will at such times be accurate.
3.8 Contracts. (a) No consent of any party (other than such Grantor) to any
Contract is required, or purports to be required, in connection with the
execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes a valid and
legally enforceable obligation of the parties thereto, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general
in nature.
(d) Neither such Grantor nor (to the best of such Grantor's knowledge) any
of the other parties to the Contracts is in default in the performance or
observance of any of the terms thereof in any manner that, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in, to and under the
Contracts are not subject to any defenses, offsets, counterclaims or claims
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(f) Such Grantor has delivered to the Collateral Agent a complete and
correct copy of each Contract, including all amendments, supplements and other
modifications thereto.
(g) No amount payable to such Grantor under or in connection with any
Contract is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Administrative Agent or, after the Substitution Event, the
Collateral Agent.
(h) None of the parties to any Contract is a Governmental Authority.
3.9 Intellectual Property. (a) Schedule 6 lists all registrations,
applications for, and all material unregistered Intellectual Property owned by
such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and, to the best
knowledge of such Grantor, does not infringe the intellectual property rights of
any other Person.
10
(c) Except as set forth in Schedule 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or such
Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
SECTION 4. COVENANTS
Each Grantor covenants and agrees with the Collateral Agent and the
Securityholders that, from and after the date of this Agreement until the
Obligations shall have been paid in full:
4.1 Delivery of Instruments and Chattel Paper. (a) If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement, subject to Section 8 of the Intercreditor Agreement.
(b) If the Substitution Event shall have occurred, if any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Collateral Agent, duly indorsed in a manner
satisfactory to the Collateral Agent, to be held as Collateral pursuant to this
Agreement.
4.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Collateral Agent
and (ii) to the extent requested by the Collateral Agent, insuring such Grantor,
the Collateral Agent, and the Securityholders against liability for personal
injury and property damage relating to such Inventory, Equipment and Vehicles,
such policies to be in such form and amounts and having such coverage as may be
reasonably satisfactory to the Collateral Agent.
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Collateral Agent of written notice
thereof, (ii) name the Collateral Agent as insured
11
party or loss payee, (iii) if reasonably requested by the Collateral Agent,
include a breach of warranty clause and (iv) be reasonably satisfactory in all
other respects to the Collateral Agent.
(c) Upon the reasonable request of the Collateral Agent, the Grantors shall
deliver to the Collateral Agent, the Securityholders and the Trustee a report of
a reputable insurance broker with respect to such insurance substantially
concurrently with the delivery by the Grantors to the Collateral Agent of their
audited financial statements for each fiscal year and such supplemental reports
with respect thereto as the Collateral Agent may from time to time reasonably
request.
(d) Notwithstanding the foregoing paragraphs (a) through (c), to the extent
the powers granted to the Collateral Agent in such paragraphs are granted to the
Administrative Agent under the Loan Collateral Agreement, the Administrative
Agent's exercise of such powers shall control.
4.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes (except as may be treated under the Plan of
Reorganization), assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as all claims
of any kind (including, without limitation, claims for labor, materials and
supplies) against or with respect to the Collateral, except that no such charge
need be paid if the amount or validity thereof is currently being contested in
good faith by appropriate proceedings, reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor and such
proceedings could not reasonably be expected to result in the sale, forfeiture
or loss of any material portion of the Collateral or any interest therein.
4.4 Maintenance of Perfected Security Interest; Further Documentation. (a)
Such Grantor shall maintain the security interest created by this Agreement as a
perfected security interest (except with respect to Unperfected Collateral, to
the extent that filing of UCC financing statements is insufficient to perfect a
security interest in such Unperfected Collateral) having at least the priorities
described in Section 2 hereof and shall defend such security interest against
the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Collateral Agent
may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
12
4.5 Changes in Locations, Name, etc. Such Grantor will not, except upon 15
days' prior written notice to the Collateral Agent and delivery to the
Collateral Agent of (a) all additional executed financing statements and other
documents reasonably requested by the Collateral Agent to maintain the validity,
perfection and priority of the security interests provided for herein and (b) if
applicable, a written supplement to Schedule 5 showing any additional location
at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a location
other than those listed on Schedule 5, except with respect to Equipment
under repair and held by bailees;
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 3.3; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Collateral Agent in
connection with this Agreement would become misleading.
4.6 Notices. Such Grantor will advise the Collateral Agent promptly, in
reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Indenture) on any of the Collateral which would adversely
affect the ability of the Collateral Agent to exercise any of its remedies
hereunder; and
(b) of the occurrence of any other event which could reasonably be expected
to have a material adverse effect on the aggregate value of the Collateral or on
the security interests created hereby (the materiality of the adverse nature of
any such occurrence or other event will not be presumed by the sending of any
such notice).
4.7 Pledged Securities. (a) Subject to Section 8 of the Intercreditor
Agreement, if, prior to the occurrence of the Substitution Event, such Grantor
shall become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock of any Issuer, whether in addition to,
in substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent, hold the same in trust for the
Administrative Agent, and deliver the same forthwith to the Administrative Agent
in the exact form received, duly indorsed by such Grantor to the Administrative
Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof and of the Intercreditor
Agreement, as additional collateral security for the Obligations. Subject to the
provisions of the Indenture, any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any Issuer shall be paid over
to the Administrative Agent to be held by it, subject to the terms of the
13
Intercreditor Agreement, as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of the
Pledged Securities or any property shall be distributed upon or with respect to
the Pledged Securities pursuant to the recapitalization or reclassification of
the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it, subject to the terms of the Intercreditor
Agreement, as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Collateral Agent, subject to Section 8 of the
Intercreditor Agreement, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.
(b) If (i) the Substitution Event shall have occurred and (ii) any Grantor
referred to in Section 4.7(a) shall become entitled to receive or shall receive
any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Grantor shall accept the same as the agent of the Collateral
Agent, hold the same in trust for the Collateral Agent, and deliver the same
forthwith to the Collateral Agent in the exact form received, duly indorsed by
such Grantor to the Collateral Agent, if required, together with an undated
stock power covering such certificate duly executed in blank by such Grantor and
with, if the Collateral Agent so requests, signature guaranteed, to be held by
the Collateral Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Subject to the provisions of the Indenture any
sums paid upon or in respect of the Pledged Securities upon the liquidation or
dissolution of any Issuer shall be paid over to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the Pledged
Securities or any property shall be distributed upon or with respect to the
Pledged Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the Collateral Agent, be delivered to the Collateral Agent to be held
by it hereunder as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of the Pledged
Securities shall be received by such Grantor, such Grantor shall, until such
money or property is paid or delivered to the Collateral Agent, hold such money
or property in trust for the Collateral Agent, pursuant to Section 8 of the
Intercreditor Agreement, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.
(c) Following the occurrence of the Substitution Event and without the
prior written consent of the Collateral Agent, the Grantor referred to in
Section 4.7(a) will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the
14
Pledged Securities or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Indenture), (iii) create, incur or permit to exist
any Lien or option in favor of, or any claim of any Person with respect to, any
of the Pledged Securities or Proceeds thereof, or any interest therein, except
for the security interests created by this Agreement or (iv) enter into any
agreement or undertaking restricting the right or ability of such Grantor or the
Collateral Agent to sell, assign or transfer any of the Pledged Securities or
Proceeds thereof.
(d) In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 4.7(a) with
respect to the Pledged Securities issued by it and (iii) the terms of Sections
5.3(c) and 5.7 shall apply to it, mutatis mutandis, with respect to all actions
that may be required of it pursuant to Section 5.3(c) or 5.7 with respect to the
Pledged Securities issued by it.
4.8 Receivables. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it that questions or calls into
doubt the validity or enforceability of more than 5% of the aggregate amount of
the then outstanding Receivables.
4.9 Contracts. (a) Such Grantor will perform and comply in all material
respects with all its obligations under the Contracts.
(b) Such Grantor will not amend, modify, terminate or waive any provision
of any Contract in any manner which could reasonably be expected to materially
adversely affect the value of such Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently each and every
material right which it may have under each Contract (other than any right of
termination).
(d) Such Grantor will deliver to the Collateral Agent a copy of each
material demand, notice or document received by it relating in any way to any
Contract that questions the validity or enforceability of such Contract.
4.10 Intellectual Property. (a) Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use, (ii) maintain as
in the past the quality of products and services offered under each material
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other
15
notices and legends required by applicable Requirements of Law, (iv) not adopt
or use any xxxx which is confusingly similar or a colorable imitation of each
material Trademark unless the Collateral Agent, for the benefit of the
Securityholders, shall obtain a perfected security interest in such xxxx
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby each
material Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any act,
or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will not (and
will not permit any licensee or sublicensee thereof to) do any act or knowingly
omit to do any act whereby any material Copyright may become invalidated or
otherwise impaired or fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any act
that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Collateral Agent immediately if it knows,
or has reason to know, that any application or registration relating to any
material Intellectual Property may become forfeited, abandoned or dedicated to
the public, or of any adverse determination or development (including, without
limitation, the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, or the validity of, any material Intellectual Property
or such Grantor's right to register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Collateral Agent within five Business Days after the last day of
the fiscal quarter in which such filing occurs. Upon request of the Collateral
Agent, such Grantor shall execute and deliver, and have recorded, any and all
agreements, instruments, documents, and papers as the Collateral Agent may
request to evidence the Collateral Agent's security interest in any Copyright,
Patent or Trademark and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps, including,
without limitation, in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
16
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and promptly notify the
Collateral Agent after it learns thereof and take all appropriate remedial
action, including, when appropriate, xxx for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any and all
damages for such infringement, misappropriation or dilution.
SECTION 5. REMEDIAL PROVISIONS
5.1 Certain Matters Relating to Receivables. (a) The Collateral Agent shall
have the right, following the occurrence of the Substitution Event, to make test
verifications of the Receivables in any manner and through any medium that it
reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Collateral Agent may require in connection
with such test verifications. At any time and from time to time, following the
occurrence of the Substitution Event, upon the Collateral Agent's request and at
the expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others satisfactory to the Collateral Agent to furnish to the
Collateral Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the Receivables; provided, however, that unless a
Default or Event Default shall have occurred and be continuing, the Collateral
Agent shall request no more than two (2) such reports during any calendar year.
(b) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor's Receivables and the Collateral Agent may, following the occurrence of
the Substitution Event, curtail or terminate said authority at any time after
the occurrence and during the continuance of an Event of Default. If required by
the Collateral Agent, following the occurrence of the Substitution Event, at any
time after the occurrence and during the continuance of an Event of Default, any
payments of Receivables, when collected by any Grantor, (i) shall be forthwith
(and, in any event, within two Business Days) deposited by such Grantor in the
exact form received, duly indorsed by such Grantor to the Collateral Agent if
required, in a Collateral Account maintained under the sole dominion and control
of the Collateral Agent, subject to withdrawal by the Collateral Agent for the
account of Securityholders only as provided in Section 5.5, and (ii) until so
turned over, shall be held by such Grantor in trust for the Collateral Agent,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(c) At the Collateral Agent's request, each Grantor shall deliver to the
Collateral Agent all original and other documents evidencing, and relating to,
the agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts in paper
and electronic format as may be directed by the Collateral Agent.
17
5.2 Communications with Obligors; Grantors Remain Liable. (a) The
Collateral Agent in its own name or in the name of others may at any time after
the occurrence and during the continuance of an Event of Default, following the
occurrence of the Substitution Event, communicate with obligors under the
Receivables and parties to the Contracts to verify with them to the Collateral
Agent's satisfaction the existence, amount and terms of any Receivables or
Contracts.
(b) Upon the request of the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, following the
occurrence of the Substitution Event, each Grantor shall notify obligors on the
Receivables and parties to the Contracts that the Receivables and the Contracts
have been assigned to the Collateral Agent for the benefit of the
Securityholders and that payments in respect thereof shall be made directly to
the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables and Contracts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Collateral Agent nor any Securityholder shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) or Contract by reason of or arising out of this Agreement or the
receipt by the Collateral Agent or any Securityholder of any payment relating
thereto, nor shall the Collateral Agent or any Securityholder be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant to
any Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
5.3 Pledged Stock. (a) Unless (i) the Substitution Event shall have
occurred, (ii) an Event of Default shall have occurred and be continuing and
(iii) the Collateral Agent shall have given notice to the relevant Grantor of
the Collateral Agent's intent to exercise its corresponding rights pursuant to
Section 5.3(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Pledged Stock and all payments made in respect of the
Pledged Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent permitted in
the Indenture Agreement, and to exercise all voting and corporate rights with
respect to the Pledged Securities; provided, however, that no vote shall be cast
or corporate right exercised or other action taken which, in the Collateral
Agent's reasonable judgment, would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Indenture
Agreement, this Agreement or any other Loan Document.
(b) If, following the occurrence of the Substitution Event, an Event of
Default shall occur and be continuing and the Collateral Agent shall give notice
of its intent to exercise such rights to the relevant Grantor or Grantors, (i)
the Collateral Agent shall have the right to receive any and all cash dividends,
payments or other Proceeds paid in respect of the Pledged
18
Securities and make application thereof to the Obligations in the order set
forth in Section 5.5, and (ii) any or all of the Pledged Securities shall be
registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Collateral Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any Pledged
Securities pledged by such Grantor hereunder, following the occurrence of the
Substitution Event, to (i) comply with any instruction received by it from the
Collateral Agent in writing that (x) states that an Event of Default has
occurred and is continuing and (y) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from such Grantor, and
each Grantor agrees that each Issuer shall be fully protected in so complying,
and (ii) unless otherwise expressly permitted hereby, pay any dividends or other
payments with respect to the Pledged Securities directly to the Collateral
Agent.
5.4 Proceeds to be Turned Over To Collateral Agent. (a) In addition to the
rights of the Collateral Agent specified in Section 5.1 with respect to payments
of Receivables, all Proceeds received by any Grantor consisting of cash, checks
and other near-cash items shall be held by such Grantor in trust for the
Collateral Agent to the extent of its second priority interest therein,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent, pursuant to the
Intercreditor Agreement, in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control subject to the rights of the Collateral Agent pursuant to Section 8
of the Intercreditor Agreement. All Proceeds while held by the Administrative
Agent in a Collateral Account (or by such Grantor in trust for the Collateral
Agent and the Securityholders) shall continue to be held as collateral security
for all the Obligations and shall not constitute payment thereof until applied
as provided in Section 5.5.
(b) If (i) the Substitution Event shall have occurred and (ii) an Event of
Default shall occur and be continuing and the Collateral Agent shall give notice
of its intent to exercise such rights to the relevant Grantor or Grantors, (i)
the Collateral Agent shall have the right to receive any and all cash dividends,
payments or other Proceeds paid in respect of the Pledged Securities and make
application thereof to the Obligations in the order set forth in Section 5.5,
19
and (ii) any or all of the Pledged Securities shall be registered in the name of
the Collateral Agent or its nominee, and the Collateral Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the Collateral Agent of any right, privilege or
option pertaining to such Pledged Securities, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Collateral Agent may determine), all without
liability except to account for property actually received by it, but the
Collateral Agent shall have no duty to any Grantor to exercise any such right,
privilege or option and shall not be responsible for any failure to do so or
delay in so doing.
5.5 Application of Proceeds. If (i) the Substitution Event shall have
occurred and (ii) an Event of Default shall have occurred and be continuing, at
any time at the Collateral Agent's election, the Collateral Agent may apply all
or any part of Proceeds constituting Collateral, whether or not held in any
Collateral Account in payment of the Obligations in the order specified in the
Indenture.
5.6 Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent, on behalf of the Securityholders and the
Trustee, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law, subject to the
Intercreditor Agreement. Without limiting the generality of the foregoing and
subject to the Intercreditor Agreement, the Collateral Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived) may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Collateral Agent or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. Subject to the
Intercreditor Agreement, the Collateral Agent shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Collateral
Agent's request, to assemble the Collateral and make it available to the
Collateral Agent at places which the Collateral Agent shall reasonably select,
whether at such Grantor's premises or elsewhere. The Collateral Agent shall
apply the net proceeds of any action taken by it pursuant to this Section 5.6,
after deducting all reasonable
20
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Collateral Agent or the Securityholders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Collateral Agent may elect, and only after such application and
after the payment by the Collateral Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the New
York UCC, need the Collateral Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Collateral Agent or any
Securityholder arising out of the exercise by them of any rights hereunder. If
any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition.
5.7 Registration Rights. (a) If (i) the Collateral Agent shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to Section
5.6, (ii) the Substitution Event shall have occurred and (iii) in the opinion of
the Collateral Agent it is necessary or advisable to have the Pledged Stock, or
that portion thereof to be sold, registered under the provisions of the
Securities Act, then the relevant Grantor will cause the Issuer thereof to (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Collateral Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of one year from the date of the first public
offering of the Pledged Stock, or that portion thereof to be sold, and (iii)
make all amendments thereto and/or to the related prospectus which, in the
opinion of the Collateral Agent, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Collateral Agent shall designate and
to make available to its Securityholders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
21
(c) Each Grantor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pursuant to this Section 5.7 valid and binding and
in compliance with any and all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any of the covenants contained in this
Section 5.7 will cause irreparable injury to the Collateral Agent and the
Securityholders, that the Collateral Agent and the Securityholders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 5.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Indenture.
5.8 Waiver; Deficiency. Each Grantor waives and agrees not to assert any
rights or privileges which it may acquire under Section 9-112 of the New York
UCC. Each Grantor shall remain liable for any deficiency if the proceeds of any
sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Collateral Agent or any Securityholder to collect such deficiency.
SECTION 6. THE COLLATERAL AGENT
6.1 Collateral Agent's Appointment as Attorney-in-Fact, etc. (a) Subject to
the Loan Collateral Agreement and the Intercreditor Agreement, each Grantor,
pursuant to Section 11.1 of the Indenture, hereby irrevocably constitutes and
appoints the Collateral Agent and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Collateral Agent the power and right,
on behalf of such Grantor, without notice to or assent by such Grantor to do any
or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Receivable or Contract or with respect to any other Collateral and file any
claim or take any other action or proceeding in any court of law or equity
or otherwise deemed appropriate by the Collateral Agent for the purpose of
collecting any and all such moneys due under any Receivable or Contract or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Collateral Agent may request to evidence the Collateral
Agent's security interest in such Intellectual Property and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
22
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 5.6
or 5.7, any indorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Agent or as the Collateral Agent
shall direct; (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become
due at any time in respect of or arising out of any Collateral; (3) sign
and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral; (4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Collateral Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Collateral Agent shall in its sole discretion
determine; and (8) generally, sell, transfer, pledge and make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Collateral Agent were the absolute owner thereof
for all purposes, and do, at the Collateral Agent's option and such
Grantor's expense, at any time, or from time to time, all acts and things
which the Collateral Agent deems necessary to protect, preserve or realize
upon the Collateral and the Collateral Agent's security interests therein
and to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 6.1(a) (except for the rights provided in
Section 6.1(a)(iii)) unless an Event of Default shall have occurred and be
continuing, subject to the Intercreditor Agreement.
(b) Subject to the Loan Collateral Agreement and the Intercreditor
Agreement, any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The expenses of the Collateral Agent incurred in connection with
actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the Defaulted Interest under the Indenture,
from the date of payment by the Collateral
23
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
6.2 Duty of Collateral Agent. Without limiting any of the rights of the
Collateral Agent hereunder, the Collateral Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9- 207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property in its capacity as an indenture trustee, taking into account whether an
Event of Default has occurred and it is continuing. The Collateral Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Collateral Agent
deals with similar property for its own account. Neither the Collateral Agent
nor any Securityholder nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the
Collateral Agent hereunder are solely to protect the Collateral Agent's
interests in the Collateral for the benefit of the Securityholders and shall not
impose any duty upon the Collateral Agent or any Securityholder to exercise any
such powers. The Collateral Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and neither they
nor any of their officers, directors, employees or agents shall be responsible
to any Grantor for any act or failure to act hereunder, except for their own
gross negligence or willful misconduct.
6.3 Execution of Financing Statements. Pursuant to Section 9-402 of the New
York UCC and any other applicable law, each Grantor authorizes the Collateral
Agent to file or record financing statements and other filing or recording
documents or instruments with respect to the Collateral without the signature of
such Grantor in such form and in such offices as the Collateral Agent reasonably
determines appropriate to perfect the security interests of the Collateral Agent
under this Agreement. A photographic or other reproduction of this Agreement
shall be sufficient as a financing statement or other filing or recording
document or instrument for filing or recording in any jurisdiction.
6.4 Authority of Collateral Agent. Each Grantor acknowledges that the
rights and responsibilities of the Collateral Agent under this Agreement with
respect to any action taken by the Collateral Agent or the exercise or
non-exercise by the Collateral Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the
Securityholders, be governed by the Indenture and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Collateral Agent and Grantors, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Securityholders with full and
24
valid authority so to act or refrain from acting, and no Grantor shall be under
any obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 7. MISCELLANEOUS
7.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Indenture.
7.2 Notices. All notices, requests and demands to or upon the Collateral
Agent or any Grantor hereunder shall be effected in the manner provided for in
Section 12.2 of the Indenture.
7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Collateral Agent, nor any Securityholder shall by any act (except by a written
instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Collateral Agent or any Securityholder any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Agent or any Securityholder of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Collateral Agent or such Securityholder would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
7.4 Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay
or reimburse each Securityholder and the Collateral Agent for all its costs and
expenses incurred in enforcing or preserving any rights under this Agreement and
the other Loan Documents to which such Grantor is a party, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to each Lender and of counsel to the
Collateral Agent.
(b) Each Grantor agrees to pay, and to save the Collateral Agent and the
Securityholders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) The agreements in this Section shall survive repayment of the
Obligations and all other amounts payable under the Indenture and the other
Operative Documents.
7.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and of the Collateral Agent and shall
inure to the benefit of the Collateral Agent and the Securityholders and their
successors and assigns; provided that no
25
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Collateral Agent.
7.6 Set-Off. Each Grantor hereby irrevocably authorizes the Collateral
Agent and each Securityholder at any time and from time to time while an Event
of Default shall have occurred and be continuing, without notice to such Grantor
or any other Grantor, any such notice being expressly waived by each Grantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Collateral Agent or such Securityholder to or for the credit or the
account of such Grantor (other than for the account of any Grantor acting in a
fiduciary or other special capacity), or any part thereof in such amounts as the
Collateral Agent or such Securityholder may elect, against and on account of the
obligations and liabilities of such Grantor to the Collateral Agent, such
Securityholder hereunder and claims of every nature and description of the
Collateral Agent or such Securityholder against such Grantor, in any currency,
whether arising hereunder, under the Indenture, any other Operative Document or
otherwise, as the Collateral Agent or such Securityholder may elect, whether or
not the Collateral Agent or any Securityholder has made any demand for payment
and although such obligations, liabilities and claims may be contingent or
unmatured. The Collateral Agent and each Securityholder shall notify such
Grantor promptly of any such set-off and the application made by the Collateral
Agent or such Lender of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of the Collateral Agent and each Securityholder under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent or such Securityholder may have.
7.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
7.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
7.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
7.10 Integration. This Agreement and the other Operative Documents
represent the agreement of the Grantors and the Collateral Agent with respect to
the subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Collateral Agent or any Securityholder
relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
26
7.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
7.12 Submission To Jurisdiction; Waivers. Each of the Grantors and the
Collateral Agent hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Operative Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such party
at its address referred to in Section 7.2 or, with respect to the Grantors,
at such other address of which the Collateral Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent permitted by law, any right it may
have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
7.13 Acknowledgements. Each of the Grantors and the Collateral Agent hereby
acknowledges that with respect to itself:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Operative Documents to which it is
a party;
(b) neither the Collateral Agent nor any Securityholder has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Operative Documents, and
the relationship between the Grantors, on the one hand, and the Collateral
Agent and the Securityholders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
27
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Securityholders and the Collateral Agent or among the Grantors, the
Securityholders and the Collateral Agent.
7.14 Additional Grantors. Each Restricted Subsidiary that is required to
become a party to this Agreement pursuant to Section 10.7 of the Indenture shall
become a Grantor for all purposes of this Agreement upon execution and delivery
by such Restricted Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.
7.15 Releases. (a) At such time as the Obligations shall have been paid in
full, the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Collateral Agent and each Grantor hereunder shall terminate,
all without delivery of any instrument or performance of any act by any party,
and all rights to the Collateral shall revert to the Grantors. At the request
and sole expense of any Grantor following any such termination, the Collateral
Agent shall deliver to such Grantor any Collateral held by the Collateral Agent
hereunder, and execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Indenture, then the
Collateral Agent, at the request and sole expense of such Grantor, shall execute
and deliver to such Grantor all releases or other documents reasonably necessary
or desirable for the release of the Liens created hereby on such Collateral.
7.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
28
IN WITNESS WHEREOF, each of the undersigned has caused this Collateral
Agreement to be duly executed and delivered as of the date first above written.
HARVARD INDUSTRIES, INC.
By:
-----------------------------
Name:
Title:
XXXXXXX-XXXXXX, INC.
HARVARD TRANSPORTATION CORPORATION
XXXXXXX-XXXXXX GREENEVILLE, INC.
POTTSTOWN PRECISION CASTING, INC.
XXXXXXX-XXXXXX TECHNOLOGIES, INC.
XXXXXXX-XXXXXX TOLEDO, INC.
XXXXXX AUTOMOTIVE, INC.
XXXXX-ALBION CORPORATION
THE XXXXXXXX-XXXXXX CORPORATION
On behalf of each of the above
Subsidiary Guarantors
By:
-----------------------------
Name:
Title:
Schedule 1
Intentionally Left Blank
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
Pledged Stock:
Issuer Class of Stock Stock Certificate No. No. of Shares
------ -------------- --------------------- -------------
Pledged Notes:
Issuer Payee Principal Amount
------ ----- ----------------
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock
Other Actions
[Describe other actions to be taken]
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
Harvard Industries, Inc.
Xxxxxxx-Xxxxxx, Inc.
Harvard Transportation Corporation
Xxxxxxx-Xxxxxx Greeneville, Inc.
Pottstown Precision Casting, Inc.
Xxxxxxx-Xxxxxx Technologies, Inc.
Xxxxxxx-Xxxxxx Toledo, Inc.
Xxxxxx Automotive, Inc.
Xxxxx-Albion Corporation
The Xxxxxxxx-Xxxxxx Corporation
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Location
------- --------
Harvard Industries, Inc.
Xxxxxxx-Xxxxxx, Inc.
Harvard Transportation Corporation
Xxxxxxx-Xxxxxx Greeneville, Inc.
Pottstown Precision Casting, Inc.
Xxxxxxx-Xxxxxx Technologies, Inc.
Xxxxxxx-Xxxxxx Toledo, Inc.
Xxxxxx Automotive, Inc.
Xxxxx-Albion Corporation
The Xxxxxxxx-Xxxxxx Corporation
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
Harvard Industries, Inc.
Xxxxxxx-Xxxxxx, Inc.
Harvard Transportation Corporation
Xxxxxxx-Xxxxxx Greeneville, Inc.
Pottstown Precision Casting, Inc.
Xxxxxxx-Xxxxxx Technologies, Inc.
Xxxxxxx-Xxxxxx Toledo, Inc.
Xxxxxx Automotive, Inc.
Xxxxx-Albion Corporation
The Xxxxxxxx-Xxxxxx Corporation
PATENTS AND PATENT LICENSES
Harvard Industries, Inc.
Xxxxxxx-Xxxxxx, Inc.
Harvard Transportation Corporation
Xxxxxxx-Xxxxxx Greeneville, Inc.
Pottstown Precision Casting, Inc.
Xxxxxxx-Xxxxxx Technologies, Inc.
Xxxxxxx-Xxxxxx Toledo, Inc.
Xxxxxx Automotive, Inc.
Xxxxx-Albion Corporation
The Xxxxxxxx-Xxxxxx Corporation
TRADEMARKS AND TRADEMARK LICENSES
Harvard Industries, Inc.
Xxxxxxx-Xxxxxx, Inc.
Harvard Transportation Corporation
Xxxxxxx-Xxxxxx Greeneville, Inc.
Pottstown Precision Casting, Inc.
Xxxxxxx-Xxxxxx Technologies, Inc.
Xxxxxxx-Xxxxxx Toledo, Inc.
Xxxxxx Automotive, Inc.
Xxxxx-Albion Corporation
The Xxxxxxxx-Xxxxxx Corporation
Schedule 7
CONTRACTS
Schedule 8
EXISTING PRIOR LIENS
ISSUER
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Collateral
Agreement dated as of November 24, 1998 (the "Agreement"), made by the Grantors
party thereto in favor of ________, as Collateral Agent. The undersigned agrees
for the benefit of the Collateral Agent, the Securityholders and the Trustee as
follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Collateral Agent promptly in writing of
the occurrence of any of the events described in Section 4.7(a) of the
Agreement.
3. The terms of Sections 5.3(a) and 5.7 of the Agreement shall apply to it,
mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 5.3(a) or 5.7 of the Agreement.
[NAME OF ISSUER]
By
---------------------------------------------------
Title
---------------------------------------------------
Address for Notices:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Fax:
---------------------------------------------------
Annex 1 to
Collateral Agreement
FORM OF ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT, dated as of ________________, ____, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of ___________________, as Collateral Agent for the
Securityholders, dated as of November 24, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Indenture"). All capitalized terms
not defined herein shall have the meaning ascribed to them in such Indenture.
W I T N E S S E T H :
WHEREAS, in connection with the Indenture, the Grantors (other than the
Additional Grantor) have entered into the Collateral Agreement, dated as of
November 24, 1998 (as amended, supplemented or otherwise modified from time to
time, the "Collateral Agreement") in favor of the Collateral Agent for the
benefit of the Securityholders;
WHEREAS, the Indenture requires the Additional Grantor to become a party to
the Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Collateral Agreement. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 7.14 of the Collateral
Agreement, hereby becomes a party to the Collateral Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder. The information
set forth in Annex 1-A hereto is hereby added to the information set forth in
Schedules ____________ to the Collateral Agreement. The Additional Grantor
hereby represents and warrants that each of the representations and warranties
contained in Section 3 of the Collateral Agreement is true and correct on and as
the date hereof (after giving effect to this Assumption Agreement) as if made on
and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
2
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
-----------------------------
Name:
Title:
EXHIBIT D
FORM OF SECOND PRIORITY MORTGAGE
THIS SECOND PRIORITY MORTGAGE, dated as of November , 1998 is made by
HARVARD INDUSTRIES, INC., a Delaware corporation, successor by merger to Harvard
Merger Corporation, a Delaware corporation, and Harvard Industries, Inc., a
Florida corporation ("Mortgagor"), whose address is 0 Xxxxxx Xxx, Xxxxxxx, Xxx
Xxxxxx 00000, to NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national
banking association, whose address is Sixth and Marquette, Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000, Attn: Corporate Trust Services, as Collateral Agent (the
"Second Priority Collateral Agent") under the Collateral Agreement, dated as of
the date hereof (as the same may be amended, supplemented or otherwise modified
from time to time, the "Collateral Agreement") among the Second Priority
Collateral Agent, the Second Priority Note Trustee, Mortgagor, and the other
Subsidiary Guarantors named therein (Mortgagor and the Subsidiary Guarantors,
collectively, the "Second Priority Borrowers") (in such capacity, the
"Mortgagee") for the benefit of Norwest Bank Minnesota, National Association as
trustee (with any successor in such capacity, the "Second Priority Note
Trustee") under the Indenture, dated as of the date hereof (as the same may be
amended, supplemented or otherwise modified from time to time, the "Second
Priority Indenture") among the Second Priority Borrowers, as guarantors, the
Second Priority Note Trustee, and the holders from time to time (the "Second
Priority Holders") of 14 1/2% Senior Secured Securities Due 2003 (the "Second
Priority Notes") of Mortgagor issued pursuant to the Second Priority Indenture
(in such capacity, "Mortgagee").
Unless otherwise defined herein, terms which are defined in the Collateral
Agreement and used herein are so used as so defined. References to this
"Mortgage" shall mean this instrument and any and all renewals, modifications,
amendments, supplements, extensions, consolidations, substitutions, spreaders
and replacements of this instrument.
Background
A. Mortgagor is the owner of the parcel(s) of real property described on
Schedule A attached (such real property, together with all of the buildings,
improvements, structures and fixtures now or subsequently located thereon (the
"Improvements"), being collectively referred to as the "Real Estate").
B. Mortgagor has entered into the Credit Agreement dated as of the date
hereof (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement") with Xxxxxxx-Xxxxxx, Inc., Harvard
Transportation Corporation, Xxxxxxx-Xxxxxx Greeneville, Inc., Pottstown
Precision Casting, Inc., Xxxxxxx-Xxxxxx Technologies, Inc., Xxxxxxx-Xxxxxx
Toledo, Inc., Xxxxxx Automotive Inc., Xxxxx-Albion Corporation, and The
Xxxxxxxx-Xxxxxx Corporation (collectively with the Mortgagor, "Borrowers"), the
several banks and other financial institutions or entities from time to time
parties thereto (the "Lenders"), Xxxxxx Brothers Inc., as
2
arranger, Xxxxxx Commercial Paper Inc., as syndication agent (in such capacity,
"First Priority Syndication Agent"), and General Electric Capital Corporation,
as administrative agent (in such capacity, "First Priority Administrative
Agent", and collectively with the First Priority Syndication Agent, "Agents").
Pursuant to the Credit Agreement, the Lenders have made certain Loans to, and
issued or participated in Letters of Credit issued for the account of, Borrowers
upon the terms and conditions set forth therein. Pursuant to the Credit
Agreement, Borrowers' obligations in respect of all such Loans and Letters of
Credit made or issued under the Credit Agreement are secured by first priority
security interests in favor of First Priority Administrative Agent, for the
benefit of the Agents and the Lenders, in substantially all of the assets of
Borrowers, including a first priority mortgage dated as of the date hereof made
by Mortgagor in favor of the First Priority Administrative Agent, for the
benefit of the Agents and the Lenders (as the same may be amended, supplemented
or otherwise modified from time to time, the "First Priority Mortgage"). The
First Priority Mortgage encumbers Mortgagor's interest in the Real Estate.
References in this Mortgage to the "Default Rate" shall mean the rate of
interest per annum equivalent to the Base Rate as defined in the Credit
Agreement plus two percent.
C. Mortgagor has issued the Second Priority Notes pursuant to the Second
Priority Indenture upon the terms and subject to the conditions set forth
therein. Pursuant to Section 11.1 of the Second Priority Indenture, Mortgagor,
in order to secure the Second Priority Borrowers' obligations under the Second
Priority Indenture and the Collateral Documents, is required to execute and
deliver this Second Priority Mortgage to the Mortgagee for the benefit of the
Second Priority Note Trustee and the Second Priority Holders, which is intended
to, and shall be, junior to the first priority security interest granted
pursuant to the First Priority Mortgage, the relative priority being as set
forth in the Second Priority Indenture, the Collateral Agreement, and that
certain Intercreditor Agreement dated as of the date hereof (as the same may be
amended, supplemented or otherwise modified from time to time, the
"Intercreditor Agreement") between Second Priority Note Trustee, First Priority
Administrative Agent, and Mortgagor.
D. This Mortgage secures the prompt payment and performance in full of the
obligations secured by the Second Priority Indenture in accordance with its
terms.
Granting Clauses
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Mortgagor agrees that to secure:
(a)(i) the obligations of Mortgagor to pay the principal of and interest
(including, without limitation, interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to any Second Priority Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
under the Second Priority Notes, and (ii) the obligations of Second Priority
Borrowers to pay all other amounts payable under the Second Priority Indenture
or any other Collateral Document (collectively, the "Indebtedness"); and
(b) the performance and observance of each obligation, term, covenant and
condition to be performed or observed by any Second Priority Borrower, whether
direct or
3
indirect, absolute or contingent, due or to become due, or now existing or
hereinafter incurred, which may arise under, out of, or in connection with, the
Second Priority Indenture, the Second Priority Notes, the Collateral Agreement,
this Mortgage, or any of the other Collateral Documents (collectively, the
"Obligations") (the Second Priority Indenture, the Second Priority Notes, the
Collateral Agreement and the Collateral Documents collectively being referred to
as the "Loan Documents");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES AND WARRANTS, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO
MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever of
Mortgagor, in possession or expectancy, in and to the Real Estate or any
part thereof;
(C) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, water and riparian rights, development
rights, air rights, mineral rights and all estates, rights, titles,
interests, privileges, licenses, tenements, hereditaments and appurtenances
belonging, relating or appertaining to the Real Estate, and any reversions,
remainders, rents, issues, profits and revenue thereof and all land lying
in the bed of any street, road or avenue, in front of or adjoining the Real
Estate to the center line thereof;
(D) all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal
property of every kind and nature whatsoever, and all appurtenances and
additions thereto and substitutions or replacements thereof (together with,
in each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in connection
with any operation or letting of the Real Estate, including but without
limiting the generality of the foregoing, all screens, awnings, shades,
blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air conditioning
and air-cooling apparatus, refrigerating, and incinerating equipment,
escalators, elevators, loading and unloading equipment and systems, stoves,
ranges, laundry equipment, cleaning systems (including window cleaning
apparatus), telephones, communication systems (including satellite dishes
and antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description (all of the foregoing
in this paragraph (D) being referred to as the "Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to, the
Real Estate and the
4
Equipment, subsequently acquired by or released to Mortgagor or
constructed, assembled or placed by Mortgagor on the Real Estate,
immediately upon such acquisition, release, construction, assembling or
placement, including, without limitation, any and all building materials
whether stored at the Real Estate or offsite, and, in each such case,
without any further mortgage, conveyance, assignment or other act by
Mortgagor;
(F) all right, title and interest of Mortgagor in, to and under all
leases, subleases, underlettings, concession agreements, management
agreements, licenses and other agreements relating to the use or occupancy
of the Real Estate or the Equipment or any part thereof, now existing or
subsequently entered into by Mortgagor and whether written or oral and all
guarantees of any of the foregoing (collectively, as any of the foregoing
may be amended, restated, extended, renewed or modified from time to time,
the "Leases"), and all rights of Mortgagor in respect of cash and
securities deposited thereunder and the right to receive and collect the
revenues, income, rents, issues and profits thereof, together with all
other rents, royalties, issues, profits, revenue, income and other benefits
arising from the use and enjoyment of the Mortgaged Property (as defined
below) (collectively, the "Rents") including, but not limited to, all
rights conferred by Act No. 210 of the Michigan Public Acts of 1953 as
amended by Act No. 151 of the Michigan Public Acts of 1966 (MCLA 554.231 et
seq.), and Act No. 228 of the Michigan Public Acts of 1925 as amended by
Act No. 55 of the Michigan Public Acts of 1933 (MCLA 554.211 et seq.);
(G) all trade names, trade marks, logos, copyrights, good will and
books and records relating to or used in connection with the operation of
the Real Estate or the Equipment or any part thereof; all general
intangibles related to the operation of the Improvements now existing or
hereafter arising;
(H) all unearned premiums under insurance policies now or subsequently
obtained by Mortgagor relating to the Real Estate or Equipment and
Mortgagor's interest in and to all proceeds of any such insurance policies
(including title insurance policies) including the right to collect and
receive such proceeds, subject to the provisions relating to insurance
generally set forth below; and all awards and other compensation, including
the interest payable thereon and the right to collect and receive the same,
made to the present or any subsequent owner of the Real Estate or Equipment
for the taking by eminent domain, condemnation or otherwise, of all or any
part of the Real Estate or any easement or other right therein;
(I) all right, title and interest of Mortgagor in and to (i) all
contracts from time to time executed by Mortgagor or any manager or agent
on its behalf relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Real Estate or Equipment or
any part thereof and all agreements relating to the purchase or lease of
any portion of the Real Estate or any property which is adjacent or
peripheral to the Real Estate, together with the right to exercise such
options and all leases of Equipment (collectively, the "Contracts"), (ii)
all consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to
5
construction, completion, occupancy, use or operation of the Real Estate or
any part thereof (collectively, the "Permits") and (iii) all drawings,
plans, specifications and similar or related items relating to the Real
Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the payment
of real estate taxes or special assessments against the Real Estate or for
the payment of premiums on insurance policies covering the foregoing
property or otherwise on deposit with or held by Mortgagee as provided in
this Mortgage; and
(K) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned or held
or subsequently acquired by Mortgagor and described in the foregoing clauses (A)
through (E) are collectively referred to as the "Premises", and those described
in the foregoing clauses (A) through (K) are collectively referred to as the
"Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and privileges
hereby mortgaged unto Mortgagee, its successors and assigns for the uses and
purposes set forth, until the Indebtedness is fully paid and the Obligations
fully performed.
It is the intent of Mortgagor, Mortgagee, and the Second Priority Holders
that the lien and security interest granted to Mortgagee, for the benefit of the
Second Priority Holders, pursuant to this Mortgage shall constitute a separate
and distinct lien and security interest junior to the lien and security interest
granted by Mortgagor to the First Priority Administrative Agent, for the benefit
of the Lenders, pursuant to the First Priority Mortgage.
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees with Mortgagee
as follows, provided that notwithstanding anything to the contrary in this
Mortgage, any consent or approval of Mortgagee required to be obtained under
this Mortgage, any election by Mortgagee, or any determination of any matter
required to be reasonably satisfactory to Mortgagee, shall be deemed to be given
or made, as the case may be, in accordance with any such consent, approval,
election or determination made as to such matter by the First Priority
Administrative Agent as mortgagee under the corresponding provision of the First
Priority Mortgage:
1. Warranty of Title. Mortgagor warrants good and indefeasible title to the
Premises, subject only to (i) the matters that are set forth in Schedule B of
the title insurance policy or policies being issued to Mortgagee to insure the
lien of this Mortgage; and (ii) those liens expressly permitted by the terms of
the Second Priority Indenture (the "Permitted Exceptions").
2. Payment of Indebtedness. Mortgagor shall pay the Indebtedness at the
times and places and in the manner specified in the Second Priority Notes and in
any other Loan Document and shall perform all the Obligations set forth therein.
6
3. Requirements. Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall not by act or
omission permit any building or other improvement on any premises not subject to
the lien of this Mortgage to rely on the Premises or any part thereof or any
interest therein to fulfill any Legal Requirement, and Mortgagor hereby assigns
to Mortgagee any and all rights to give consent for all or any portion of the
Premises or any interest therein to be so used. Mortgagor shall not by act or
omission impair the integrity of any of the Real Estate as a single zoning lot
separate and apart from all other premises. Mortgagor represents that each
parcel of the Real Estate constitutes a legally subdivided lot, in compliance
with all subdivision laws and similar Legal Requirements. Any act or omission by
Mortgagor which would result in a violation of any of the provisions of this
subsection shall be void.
4. Payment of Taxes and Other Impositions. Promptly when due, Mortgagor
shall pay and discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any easement
or agreement maintained for the benefit of any of the Mortgaged Property, all
general and special assessments, levies, permits, inspection and license fees,
all water and sewer rents and charges, vault taxes, and all other public charges
even if unforeseen or extraordinary, imposed upon or assessed against or which
may become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Mortgagor shall within 30 days after each due date deliver to
Mortgagee (i) original or copies of receipted bills and cancelled checks
evidencing payment of such Imposition if it is a real estate tax or other public
charge and (ii) evidence acceptable to Mortgagee showing the payment of any
other such Imposition. If by law any Imposition, at Mortgagor's option, may be
paid in installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Mortgagor may elect to pay such Imposition in such
installments and shall be responsible for the payment of such installments with
interest, if any.
7
(b) Nothing herein shall affect any right or remedy of Mortgagee under this
Mortgage or otherwise, without notice or demand to Mortgagor, to pay any
Imposition after the date such Imposition shall have become due. Any sums paid
by Mortgagee in discharge of any Impositions shall be payable on demand by
Mortgagor to Mortgagee together with interest at the Default Rate as set forth
above.
(c) Mortgagor shall have the right before any delinquency occurs to contest
or object in good faith to the amount or validity of any Imposition by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Mortgagor's covenant to pay any
such Imposition at the time and in the manner provided in this Section unless
(i) Mortgagor has given prior written notice to Mortgagee of Mortgagor's intent
so to contest or object to an Imposition, (ii) Mortgagor shall demonstrate to
Mortgagee's satisfaction that the legal proceedings shall operate conclusively
to prevent the sale of the Mortgaged Property, or any part thereof, to satisfy
such Imposition prior to final determination of such proceedings and (iii)
Mortgagor shall furnish a good and sufficient bond or surety as requested by and
reasonably satisfactory to Mortgagee in the amount of the Impositions which are
being contested plus any interest and penalty which may be imposed thereon and
which could become a lien against the Real Estate or any part of the Mortgaged
Property.
5. Insurance. (a) Mortgagor shall maintain or cause to be maintained on all
of the Premises
(i) property insurance against loss or damage by fire, lightning,
windstorm, tornado, water damage, flood, earthquake and by such other
further risks and hazards as now are or subsequently may be covered by an
"all risk" policy or a fire policy covering "special" causes of loss, and
the policy limits shall be automatically reinstated after each loss;
(ii) commercial general liability insurance under a policy including
the "broad form CGL endorsement" (or which incorporates the language of
such endorsement), covering all claims for personal injury, bodily injury
or death, or property damage occurring on, in or about the Premises in an
amount not less than $10,000,000 combined single limit with respect to
injury and property damage relating to any one occurrence plus such excess
limits as Mortgagee shall request from time to time;
(iii) insurance against rent loss, extra expense or business
interruption, in amounts satisfactory to Mortgagee, but not less than one
year's gross rent or gross income;
(iv) if any portion of the Premises are located in an area identified
as a special flood hazard area by the Federal Emergency Management Agency
or other applicable agency, flood insurance in an amount satisfactory to
Mortgagee, but in no event less than the maximum limit of coverage
available under the National Flood Insurance Act of 1968, as amended; and
8
(v) such other insurance in such amounts as Mortgagee may reasonably
request from time to time against loss or damage by any other risk commonly
insured against by persons occupying or using like properties in the
locality or localities in which the Real Estate is situated.
(b) Each insurance policy (other than flood insurance) shall (x) provide
that it shall not be canceled, non-renewed or materially amended without
30-days' prior written notice to Mortgagee, and (y) with respect to all property
insurance, provide for deductibles in an amount reasonably satisfactory to
Mortgagee and contain a "Replacement Cost Endorsement" without any deduction
made for depreciation and with no co-insurance penalty (or attaching an agreed
amount endorsement satisfactory to Mortgagee), with loss payable to Mortgagee
and First Priority Administrative Agent (in its capacity as mortgagee under the
First Priority Mortgage) (modified, if necessary, to provide that proceeds in
the amount of replacement cost may be retained by Mortgagee without the
obligation to rebuild) as its interest may appear, without contribution, under a
"standard" or "New York" mortgagee clause acceptable to Mortgagee. Liability
insurance policies shall name Mortgagee as an additional insured and contain a
waiver of subrogation against Mortgagee. Each policy shall expressly provide
that any proceeds which are payable to Mortgagee shall be paid by check payable
to the order of Mortgagee only and requiring the endorsement of Mortgagee only.
(c) Mortgagor shall deliver to Mortgagee an original of each insurance
policy required to be maintained, or a certificate of such insurance acceptable
to Mortgagee, together with a copy of the declaration page for each such policy.
Mortgagor shall (i) pay as they become due all premiums for such insurance and
(ii) not later than 15 days prior to the expiration of each policy to be
furnished pursuant to the provisions of this Section, deliver a renewed policy
or policies, or duplicate original or originals thereof, marked "premium paid,"
or accompanied by such other evidence of payment satisfactory to Mortgagee.
(d) If Mortgagor is in default of its obligations to insure or deliver any
such prepaid policy or policies, then Mortgagee, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and Mortgagor shall pay to Mortgagee on demand such premium
or premiums so paid by Mortgagee with interest from the time of payment at the
Default Rate.
(e) Mortgagor promptly shall comply with and conform to (i) all provisions
of each such insurance policy, and (ii) all requirements of the insurers
applicable to Mortgagor or to any of the Mortgaged Property or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Mortgaged Property. Mortgagor shall not use or permit the
use of the Mortgaged Property in any manner which would permit any insurer to
cancel any insurance policy or void coverage required to be maintained by this
Mortgage.
(f) If the Mortgaged Property, or any part thereof, shall be destroyed or
damaged, Mortgagor shall give immediate notice thereof to Mortgagee. All
insurance proceeds shall be paid to Mortgagee to be held by Mortgagee as
collateral to secure the payment and performance of the Indebtedness and the
Obligations. Notwithstanding the preceding sentence, provided that
9
no Event of Default shall have occurred and be continuing, Mortgagor shall have
the right to adjust such loss, and the insurance proceeds relating to such loss
shall be paid over to Mortgagor; provided that Mortgagor shall, promptly after
any such damage, repair all such damage regardless of whether any insurance
proceeds have been received or whether such proceeds, if received, are
sufficient to pay for the costs of repair.
(g) In the event of foreclosure of this Mortgage or other transfer of title
to the Mortgaged Property, all right, title and interest of Mortgagor in and to
any insurance policies then in force shall pass to the purchaser or grantee.
(h) Mortgagor may maintain insurance required under this Mortgage by means
of one or more blanket insurance policies maintained by Mortgagor; provided,
however, that (A) any such policy shall specify, or Mortgagor shall furnish to
Mortgagee a written statement from the insurer so specifying, the maximum amount
of the total insurance afforded by such blanket policy that is allocated to the
Premises and the other Mortgaged Property and any sublimits in such blanket
policy applicable to the Premises and the other Mortgaged Property, (B) each
such blanket policy shall include an endorsement providing that, in the event of
a loss resulting from an insured peril, insurance proceeds shall be allocated to
the Mortgaged Property in an amount equal to the coverages required to be
maintained by Mortgagor as provided above and (C) the protection afforded under
any such blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the Mortgaged
Property.
6. Restrictions on Liens and Encumbrances. Except for the lien of this
Mortgage and the Permitted Exceptions, Mortgagor shall not further mortgage, nor
otherwise encumber the Mortgaged Property nor create or suffer to exist any
lien, charge or encumbrance on the Mortgaged Property, or any part thereof,
whether superior or subordinate to the lien of this Mortgage and whether
recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as expressly
permitted under the Second Priority Indenture, Mortgagor shall not sell,
transfer, convey or assign all or any portion of, or any interest in, the
Mortgaged Property.
8. Maintenance; No Alteration; Inspection; Utilities. Mortgagor shall
maintain or cause to be maintained all the Improvements in good condition and
repair and shall not commit or suffer any waste of the Improvements. Mortgagor
shall repair, restore, replace or rebuild promptly any part of the Premises
which may be damaged or destroyed by any casualty whatsoever. The Improvements
shall not be demolished or materially altered, nor any material additions built,
without the prior written consent of Mortgagee. Mortgagor's failure to pay (i)
any Imposition assessed against the Premises, or any installment thereof, or
(ii) any insurance premium upon policies required to be carried by the terms of
this Mortgage, shall constitute waste (although the meaning of the term "waste"
shall not be limited to such nonpayment) as provided by Act No. 236 of the
Michigan Public Acts of 1961 (Revised Judicature Act), Section 600.2927, as and
if amended and shall entitle Mortgagee to all remedies provided for therein; and
Mortgagor agrees to and hereby does consent to the appointment of a receiver
under said statute, should Mortgagee elect to seek such relief thereunder.
10
(b) Mortgagee and any persons authorized by Mortgagee shall have the right
to enter and inspect the Premises and all work done, labor performed and
materials furnished in and about the Improvements and to inspect and make copies
of all books, contracts and records of Mortgagor relating to the Mortgaged
Property.
(c) Mortgagor shall pay or cause to be paid when due all utility charges
which are incurred for gas, electricity, water or sewer services furnished to
the Premises and all other assessments or charges of a similar nature, whether
public or private, affecting the Premises or any portion thereof, whether or not
such assessments or charges are liens thereon.
9. Condemnation/Eminent Domain. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Mortgaged Property,
or any portion thereof, Mortgagor will notify Mortgagee of the pendency of such
proceedings. Mortgagee is hereby authorized and empowered by Mortgagor to settle
or compromise any claim in connection with such condemnation and to receive all
awards and proceeds thereof to be held by Mortgagee as collateral to secure the
payment and performance of the Indebtedness and the Obligations. Notwithstanding
the preceding sentence, provided no Event of Default shall have occurred and be
continuing, Mortgagor shall, at its expense, diligently prosecute any proceeding
relating to such condemnation, settle or compromise any claims in connection
therewith and receive any awards or proceeds thereof, provided that Mortgagor
shall promptly repair and restore the Mortgaged Property to its condition prior
to such condemnation, regardless of whether any award shall have been received
or whether such award is sufficient to pay for the costs of such repair and
restoration.
10. Restoration. Mortgagor shall use all insurance proceeds and all
condemnation proceeds and awards to promptly restore the Mortgaged Property to
its condition prior to such casualty or condemnation, (giving effect to the
remaining configuration of the Premises after such condemnation) and in
compliance with all Legal Requirements.
11. Leases. Mortgagor shall not (i) execute an assignment or pledge of any
Lease relating to all or any portion of the Mortgaged Property other than in
favor of Mortgagee, or (ii) except as expressly permitted under the Second
Priority Indenture, without the prior written consent of Mortgagee, execute or
permit to exist any Lease of any of the Mortgaged Property.
12. Further Assurances. To further assure Mortgagee's rights under this
Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act or execute any
additional documents (including, but not limited to, security agreements on any
personalty included or to be included in the Mortgaged Property and a separate
assignment of each Lease in recordable form) as may be required by Mortgagee to
confirm the lien of this Mortgage and all other rights or benefits conferred on
Mortgagee.
13. Mortgagee's Right to Perform. If Mortgagor fails to perform any of the
covenants or agreements of Mortgagor, Mortgagee, without waiving or releasing
Mortgagor from any obligation or default under this Mortgage, may, at any time
(but shall be under no obligation
11
to pay or perform the same, and the amount or cost thereof, with interest at the
Default Rate, shall immediately be due from Mortgagor to Mortgagee and the same
shall be secured by this Mortgage and shall be a lien on the Mortgaged Property
prior to any right, title to, interest in or claim upon the Mortgaged Property
attaching subsequent to the lien of this Mortgage. No payment or advance of
money by Mortgagee under this Section shall be deemed or construed to cure
Mortgagor's default or waive any right or remedy of Mortgagee.
14. Hazardous Material. (a) Neither Mortgagor nor, to the best knowledge of
Mortgagor, any other person has ever caused or permitted any Hazardous Material
(as defined below) to be placed, held, located or disposed of on, under or at
the Premises, or any part thereof, and the Premises have never been used
(whether by Mortgagor or, to the best knowledge of Mortgagor, by any other
person, including any tenant) as a dump site or storage (whether permanent or
temporary) site for any Hazardous Material, except in the ordinary course of
Grantor's business and in compliance with Hazardous Material Laws.
(b) Mortgagor represents that (i) to the best of Mortgagor's knowledge,
upon due inquiry, the Premises are free of all Hazardous Material, except those
used in the ordinary course of business and in compliance with Hazardous
Material Laws, and (ii) the Premises is not presently adversely affected by any
Hazardous Material or is in violation of any applicable Legal Requirement of any
Governmental Authority regulating, relating to, or imposing liability or
standards of conduct concerning Hazardous Material, the violation of which could
reasonably be expected to result in material liability.
(c) Mortgagor shall comply with any and all applicable Legal Requirements
governing the discharge and removal of Hazardous Material, shall pay immediately
when due the costs of removal of any Hazardous Material, and shall keep the
Premises free of any lien imposed pursuant to such Legal Requirements. In the
event Mortgagor fails to do so, after notice to Mortgagor and the expiration of
the earlier of (i) applicable cure periods hereunder, or (ii) the cure period
permitted under the applicable Legal Requirement, Mortgagee may declare such
failure an Event of Default or cause the Premises to be freed from the Hazardous
Material and the cost of the removal with interest at the Default Rate shall
immediately be due from Mortgagor to Mortgagee and the same shall be added to
the Indebtedness and be secured by this Mortgage. Mortgagor further agrees not
to willfully release or dispose of any Hazardous Material at the Premises,
except in the ordinary course of business, without the express approval of
Mortgagee and any such release or disposal, regardless of whether in the
ordinary course of business, shall comply with all applicable Legal Requirements
and any conditions established by Mortgagee. In addition, Mortgagor agrees not
to allow the manufacture, storage, transmission, presence or disposal of any
Hazardous Material over or upon the Premises, except in the ordinary course of
business. Mortgagee at its own expense shall have the right at any time to
conduct an environmental audit of the Premises and Mortgagor shall cooperate in
the conduct of such environmental audit. Mortgagor shall give Mortgagee and its
agents and employees access to the Premises to remove Hazardous Material.
Mortgagor agrees to defend, indemnify and hold Mortgagee free and harmless from
and against all loss, costs, damage and expense related to the Premises or
Mortgagor's business (including attorneys' fees and costs and consequential
damages) Mortgagee may sustain by reason of (i) the imposition or recording of a
lien by any
12
Governmental Authority pursuant to any Legal Requirement relating to hazardous
or toxic wastes or substances or the removal thereof ("Hazardous Material
Laws"); (ii) claims of any private parties regarding violations of Hazardous
Material Laws; (iii) costs and expenses (including, without limitation,
attorneys' fees and fees incidental to the securing of repayment of such costs
and expenses) incurred by Mortgagor or Mortgagee in connection with the removal
of any such lien or in connection with Mortgagor's or Mortgagee's compliance
with any Hazardous Material Laws; and (iv) the assertion against Mortgagee by
any party of any claim in connection with Hazardous Material.
(d) For the purposes of this Mortgage, "Hazardous Material" means and
includes any hazardous, nuclear, toxic or dangerous waste, substance or material
defined as such in (or for purposes of) the Comprehensive Environmental
Response, Compensation, and Liability Act, any so-called "Superfund" or
"Superlien" law, or any other Legal Requirement regulating, relating to, or
imposing liability or standards of conduct concerning, any hazardous, nuclear,
toxic or dangerous waste, substance or material, as now or at any time in
effect.
(e) The foregoing indemnification shall survive repayment of the Second
Priority Notes, notwithstanding the delivery of any satisfaction, release or
release deed, discharge or deed of reconveyance, or the assignment of this
Mortgage by Mortgagee.
15. Events of Default. The occurrence of an Event of Default under the
Second Priority Indenture shall constitute an Event of Default hereunder.
16. Remedies. Except as expressly provided in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
Upon the occurrence of any Event of Default, in addition to any other rights and
remedies Mortgagee may have pursuant to the Loan Documents, or as provided by
law, Mortgagee may immediately take such action, without notice or demand, as it
deems advisable to protect and enforce its rights against Mortgagor and in and
to the Mortgaged Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such
manner as Mortgagee may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all or any
part of the Mortgaged Property (as described below), (B) institute and
maintain an action on the Indebtedness, (C) sell all or part of the
Mortgaged Property (Mortgagor expressly granting to Mortgagee the power of
sale, as more fully described below), or (D) take such other action at law
or in equity for the enforcement of this Mortgage or any of the Loan
Documents as the law may allow. Mortgagee may proceed in any such action to
final judgment and execution thereon for all sums due hereunder, together
with interest thereon at the Default Rate and all costs of suit, including,
without limitation, reasonable attorneys' fees and disbursements. Interest
at the Default Rate shall be due on any judgment obtained by Mortgagee from
the date of judgment until actual payment is made of the full amount of the
judgment.
13
(ii) Mortgagee may immediately commence foreclosure proceedings
against the Mortgaged Property pursuant to applicable law. The commencement
by Mortgagee of foreclosure proceedings by advertisement or in equity shall
be deemed an exercise by Mortgagee of its option set forth above to
accelerate the due date of all sums secured hereby. Mortgagor hereby grants
power to Mortgagee, in the event of the occurrence of an Event of Default
hereunder, to grant, bargain, sell, release and convey the Mortgaged
Property at public auction or venue, and upon such sale to execute and
deliver to the purchaser(s) instruments of conveyance pursuant to the terms
hereof and to the applicable laws. Mortgagor acknowledges that the
foregoing sentence confers a power of sale upon Mortgagee, and that upon
the occurrence of an Event of Default this Mortgage may be foreclosed by
advertisement as described below and in the applicable Michigan statutes.
Mortgagor understands that upon default, Mortgagee is hereby authorized and
empowered to sell the Mortgaged Property, or cause the same to be sold and
to convey the same to the purchaser in any lawful manner, including but not
limited to that provided by Chapter 32 of the Revised Judicature Act of
Michigan, entitled "Foreclosure of Mortgage by Advertisement", which
permits Mortgagee to sell the Mortgaged Property without affording
Mortgagor a hearing, or giving it actual personal notice. The only notice
required under such Chapter 32 is to publish notice in a local newspaper
and to post a copy of the notice on the Mortgaged Property.
WAIVER: By conferring this power of sale upon Mortgagee, Mortgagor, for
itself, its successors and assigns, after an opportunity for consultation
with its legal counsel, hereby voluntarily, knowingly and intelligently
waives all rights under the Constitution and Laws of the United States and
under the Constitution and Laws of the State of Michigan, both to a hearing
on the right to exercise and the exercise of the power of sale, and to
notice except as required by the Michigan statute which provides for
Foreclosure of Mortgages by Advertisement.
(iii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the Mortgaged
Property or any other collateral as security for the Indebtedness and
Obligations enter into and upon the Mortgaged Property and each and every
part thereof and exclude Mortgagor and its agents and employees therefrom
without liability for trespass, damage or otherwise (Mortgagor hereby
agreeing to surrender possession of the Mortgaged Property to Mortgagee
upon demand at any such time) and use, operate, manage, maintain and
control the Mortgaged Property and every part thereof. Following such entry
and taking of possession, Mortgagee shall be entitled, without limitation,
(x) to lease all or any part or parts of the Mortgaged Property for such
periods of time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease and (z)
generally to execute, do and perform any other act, deed, matter or thing
concerning the Mortgaged Property as Mortgagee shall deem appropriate as
fully as Mortgagor might do. In connection with Mortgagee's right to
possession of the Mortgaged Property as specified in this paragraph,
Mortgagor acknowledges that it has been advised that there is a significant
body of case law in Michigan which purportedly
14
provides that in the absence of a showing of waste of a character
sufficient to endanger the value of the Mortgaged Property, or other
special factors, a mortgagor is entitled to remain in possession of
Mortgaged Property, and to enjoy the income, rents and profits therefrom,
during the pendency of foreclosure proceedings and until the expiration of
the redemption period, even if the mortgage documents expressly provide to
the contrary. Mortgagor further acknowledges that it has been advised that
Mortgagee recognizes the value of the security covered hereby is
inextricably intertwined with the effectiveness of the management,
maintenance and general operation of the Mortgaged Property, and that
Mortgagee would not extend the Indebtedness secured hereby unless it could
be assured that it would have the right to take possession of the Mortgaged
Property in order to manage or to control management thereof, and to enjoy
the income, rents and profits therefrom, immediately upon default by
Mortgagor hereunder, notwithstanding that foreclosure proceedings may not
have been instituted, or are pending, or the redemption period may not have
expired. Accordingly, Mortgagor hereby knowingly, intelligently and
voluntarily waives all right to possession of the Mortgaged Property from
and after the occurrence of an Event of Default hereunder, upon demand for
possession by Mortgagee, and Mortgagor agrees not to assert any objection
or defense to Mortgagee's request or petition to a court for possession.
The rights hereby conferred upon Mortgagee have been agreed upon prior to
any default by Mortgagor hereunder and the exercise by Mortgagee of any
such rights shall not be deemed to put Mortgagee in the status of a
"mortgagee in possession". Mortgagor acknowledges that this provision is
material to this transaction and that Mortgagee would not extend the
Indebtedness secured hereby but for this paragraph.
(a) The holder of this Mortgage, in any action to foreclose it, shall be
entitled to the appointment of a receiver. In case of a foreclosure sale, the
Real Estate may be sold, at Mortgagee's election, in one parcel or in more than
one parcel and if in more than one parcel the same may be divided as Mortgagee
may elect and Mortgagee is specifically empowered, (without being required to do
so, and in its sole and absolute discretion) to cause successive sales of
portions of the Mortgaged Property to be held. At the election of Mortgagee, the
Mortgaged Property may be offered first in parcels and then as a whole, the
offer producing the highest price for the entire property offered to prevail.
Mortgagor hereby waives any right to require any such sale to be made in parcels
or any right to select such parcels.
(b) In the event of any breach of any of the covenants, agreements, terms
or conditions contained in this Mortgage, Mortgagee shall be entitled to enjoin
such breach and obtain specific performance of any covenant, agreement, term or
condition and Mortgagee shall have the right to invoke any equitable right or
remedy as though other remedies were not provided for in this Mortgage.
(c) In the event of a default because of the existence of any lien upon the
Mortgaged Property, Mortgagee shall have the right (without being obligated to
do so or to continue to do so), without notice to Mortgagor, to advance on and
for the account of Mortgagor such sums as Mortgagee in its sole discretion deems
necessary to cure such default or to induce the holder of any such lien to
forbear from exercising its rights thereunder. Notwithstanding
15
anything herein to the contrary, the repayment of all such advances, with
interest thereon at the Default Rate from the date of each such advance, shall
be immediately due and payable without demand.
17. Right of Mortgagee to Credit Sale. Upon the occurrence of any sale made
under this Mortgage, whether made under the power of sale or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof. In
lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Second Priority Indenture, the
Second Priority Notes, the other Loan Documents and any documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
18. Appointment of Receiver. If an Event of Default shall have occurred and
be continuing, Mortgagee as a matter of right and without notice to Mortgagor,
unless otherwise required by applicable law, and without regard to the adequacy
or inadequacy of the Mortgaged Property or any other collateral as security for
the Indebtedness and Obligations or the interest of Mortgagor therein, shall
have the right to apply to any court having jurisdiction to appoint a receiver
or receivers or other manager of the Mortgaged Property, and Mortgagor hereby
irrevocably consents to such appointment and waives notice of any application
therefor (except as may be required by law). Any such receiver or receivers
shall have all the usual powers and duties of receivers in like or similar cases
and all the powers and duties of Mortgagee in case of entry as provided in this
Mortgage, including, without limitation and to the extent permitted by law, the
right to enter into leases of all or any part of the Mortgaged Property, and
shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated.
19. Extension, Release, etc. Without affecting the lien or charge of this
Mortgage upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of the Indebtedness, Mortgagee may,
from time to time and without notice, agree to (i) release any person liable for
the Indebtedness (ii) extend the maturity or alter any of the terms of the
Indebtedness or any guaranty thereof, (iii) grant other indulgences, (iv)
release or reconvey, or cause to be released or reconveyed at any time at
Mortgagee's option any parcel, portion or all of the Mortgaged Property, (v)
take or release any other or additional security for any obligation herein
mentioned, or (vi) make compositions or other arrangements with debtors in
relation thereto. If at any time this Mortgage shall secure less than all of the
principal amount of the Indebtedness, it is expressly agreed that any repayments
of the principal amount of the Indebtedness shall not reduce the amount of the
lien of this Mortgage until the lien amount shall equal the principal amount of
the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an execution
under any judgment upon the Mortgaged Property or upon any other property of
Mortgagor shall affect
16
the lien of this Mortgage or any liens, rights, powers or remedies of Mortgagee
hereunder, and such liens, rights, powers and remedies shall continue
unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage, Mortgagor
authorizes Mortgagee at its option to foreclose the lien of this Mortgage
subject to the rights of any tenants of the Mortgaged Property. The failure to
make any such tenants parties defendant to any such foreclosure proceeding and
to foreclose their rights will not be asserted by Mortgagor as a defense to any
proceeding instituted by Mortgagee to collect the Indebtedness or to foreclose
the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that ownership of
this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.
20. Security Agreement under Uniform Commercial Code. (a) It is the
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "Code") of the
State of Michigan. If an Event of Default shall occur under this Mortgage, then
in addition to having any other right or remedy available at law or in equity,
Mortgagee shall have the option of either (i) proceeding under the Code and
exercising such rights and remedies as may be provided to a secured party by the
Code with respect to all or any portion of the Mortgaged Property which is
personal property (including, without limitation, taking possession of and
selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Mortgaged Property in accordance with Mortgagee's rights, powers and remedies
with respect to the real property (in which event the default provisions of the
Code shall not apply). If Mortgagee shall elect to proceed under the Code, then
five days' notice of sale of the personal property shall be deemed reasonable
notice and the reasonable expenses of retaking, holding, preparing for sale,
selling and the like incurred by Mortgagee shall include, but not be limited to,
attorneys' fees and legal expenses. At Mortgagee's request, Mortgagor shall
assemble the personal property and make it available to Mortgagee at a place
designated by Mortgagee which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by law, that:
(i) all of the goods described within the definition of the word "Equipment" are
or are to become fixtures on the Real Estate; (ii) this Mortgage upon recording
or registration in the real estate records of the proper office shall constitute
a financing statement filed as a "fixture filing" within the meaning of Sections
9- 313 and 9-402 of the Code; (iii) Mortgagor is the record owner of the Real
Estate; (iv) the mailing addresses of Mortgagor and Mortgagee are as set forth
on the first page of this Mortgage; and (v) Mortgagor's federal tax
identification number is. In addition, for purposes of Article 9 of the Michigan
Uniform Commercial Code, (i) Mortgagor is the "debtor", (ii) Mortgagee is the
"secured party" and (iii) information concerning the security interest created
hereby may be obtained from Mortgagee at its address on the first page of this
Mortgage.
17
(c) Mortgagor, upon request by Mortgagee from time to time, shall execute,
acknowledge and deliver to Mortgagee one or more separate security agreements,
in form satisfactory to Mortgagee, covering all or any part of the Mortgaged
Property and will further execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, any financing statement, affidavit,
continuation statement or certificate or other document as Mortgagee may request
in order to perfect, preserve, maintain, continue or extend the security
interest under and the priority of this Mortgage and such security instrument.
Mortgagor further agrees to pay to Mortgagee on demand all costs and expenses
incurred by Mortgagee in connection with the preparation, execution, recording,
filing and re-filing of any such document and all reasonable costs and expenses
of any record searches for financing statements Mortgagee shall reasonably
require. If Mortgagor shall fail to furnish any financing or continuation
statement within 10 days after request by Mortgagee, then pursuant to the
provisions of the Code, Mortgagor hereby authorizes Mortgagee, without the
signature of Mortgagor, to execute and file any such financing and continuation
statements. The filing of any financing or continuation statements in the
records relating to personal property or chattels shall not be construed as in
any way impairing the right of Mortgagee to proceed against any personal
property encumbered by this Mortgage as real property, as set forth above.
21. Assignment of Rents. Mortgagor hereby assigns to Mortgagee the Rents as
further security for the payment of the Indebtedness and performance of the
Obligations, provided that such assignment shall be junior to the assignment of
the Rents contained in the First Priority Mortgage, and Mortgagor grants to
Mortgagee the right to enter the Mortgaged Property for the purpose of
collecting the same and to let the Mortgaged Property or any part thereof, and
to apply the Rents on account of the Indebtedness. The foregoing assignment and
grant is present and absolute and shall continue in effect until the
Indebtedness is paid in full, but Mortgagee hereby waives the right to enter the
Mortgaged Property for the purpose of collecting the Rents and Mortgagor shall
be entitled to collect, receive, use and retain the Rents until the occurrence
of an Event of Default under this Mortgage; such right of Mortgagor to collect,
receive, use and retain the Rents may be revoked by Mortgagee upon the
occurrence of any Event of Default under this Mortgage by giving not less than
five days' written notice of such revocation to Mortgagor; in the event such
notice is given, Mortgagor shall pay over to Mortgagee, or to any receiver
appointed to collect the Rents, any lease security deposits, and shall pay
monthly in advance to Mortgagee, or to any such receiver, the fair and
reasonable rental value as determined by Mortgagee for the use and occupancy of
the Mortgaged Property or of such part thereof as may be in the possession of
Mortgagor or any affiliate of Mortgagor, and upon default in any such payment
Mortgagor and any such affiliate will vacate and surrender the possession of the
Mortgaged Property to Mortgagee or to such receiver, and in default thereof may
be evicted by summary proceedings or otherwise. Mortgagor shall not accept
prepayments of installments of Rent to become due for a period of more than one
month in advance (except for security deposits and estimated payments of
percentage rent, if any). Mortgagee shall be entitled to all of the rights and
benefits conferred by Act No. 210 of the Michigan Public Acts of 1953 as it may
be amended, including by Act No. 151 of the Michigan Public Acts of 1966 (MCLA
554.231 et seq.), and Act No. 228 of the Michigan Public Acts of 1925 as it may
be amended, including by Act No. 55 of the Michigan Public Acts of 1933 (MCLA
554.211 et seq.).
18
The collection of rents by Mortgagee shall in no way waive the right of
Mortgagee to foreclose this Mortgage in the event of any default.
22. Trust Funds. All lease security deposits of the Real Estate shall be
treated as trust funds not to be commingled with any other funds of Mortgagor.
Within 10 days after request by Mortgagee, Mortgagor shall furnish Mortgagee
satisfactory evidence of compliance with this subsection, together with a
statement of all lease security deposits by lessees and copies of all Leases not
previously delivered to Mortgagee, which statement shall be certified by
Mortgagor.
23. Additional Rights. The holder of any subordinate lien on the Mortgaged
Property shall have no right to terminate any Lease whether or not such Lease is
subordinate to this Mortgage nor shall any holder of any subordinate lien join
any tenant under any Lease in any action to foreclose the lien or modify,
interfere with, disturb or terminate the rights of any tenant under any Lease.
By recordation of this Mortgage all subordinate lienholders are subject to and
notified of this provision, and any action taken by any such lienholder contrary
to this provision shall be null and void. Upon the occurrence of any Event of
Default, Mortgagee may, in its sole discretion and without regard to the
adequacy of its security under this Mortgage, apply all or any part of any
amounts on deposit with Mortgagee under this Mortgage against all or any part of
the Indebtedness. Any such application shall not be construed to cure or waive
any Default or Event of Default or invalidate any act taken by Mortgagee on
account of such Default or Event of Default.
24. Notices. All notices, requests, demands and other communications
hereunder shall be given in accordance with the provisions of Section 12.2 of
the Second Priority Indenture to Mortgagor and to Mortgagee as specified
therein.
25. No Oral Modification. This Mortgage may not be amended, supplemented or
otherwise modified except in accordance with the provisions of Article IX of the
Second Priority Indenture. Any agreement made by Mortgagor and Mortgagee after
the date of this Mortgage relating to this Mortgage shall be superior to the
rights of the holder of any intervening or subordinate lien or encumbrance.
26. Partial Invalidity. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been included.
Notwithstanding to the contrary anything contained in this Mortgage or in any
provisions of the Indebtedness or Loan Documents, the obligations of Mortgagor
and of any other obligor under the Indebtedness or Loan Documents shall be
subject to the limitation that Mortgagee shall not charge, take or receive, nor
shall Mortgagor or any other obligor be obligated to pay to Mortgagee, any
amounts constituting interest in excess of the maximum rate permitted by law to
be charged by Mortgagee.
19
27. Mortgagor's Waiver of Rights. To the fullest extent permitted by law,
Mortgagor waives the benefit of all laws now existing or that may subsequently
be enacted providing for (i) any appraisement before sale of any portion of the
Mortgaged Property, (ii) any extension of the time for the enforcement of the
collection of the Indebtedness or the creation or extension of a period of
redemption from any sale made in collecting such debt and (iii) exemption of the
Mortgaged Property from attachment, levy or sale under execution or exemption
from civil process. To the full extent Mortgagor may do so, Mortgagor agrees
that Mortgagor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Mortgage before exercising any other remedy granted
hereunder and Mortgagor, for Mortgagor and its successors and assigns, and for
any and all persons ever claiming any interest in the Mortgaged Property, to the
extent permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshaling in the event of
foreclosure of the liens hereby created.
28. Remedies Not Exclusive. Mortgagee shall be entitled to enforce payment
of the Indebtedness and performance of the Obligations and to exercise all
rights and powers under this Mortgage or under any of the other Loan Documents
or other agreement or any laws now or hereafter in force, notwithstanding some
or all of the Indebtedness and Obligations may now or hereafter be otherwise
secured, whether by mortgage, security agreement, pledge, lien, assignment or
otherwise. Neither the acceptance of this Mortgage nor its enforcement, shall
prejudice or in any manner affect Mortgagee's right to realize upon or enforce
any other security now or hereafter held by Mortgagee, it being agreed that
Mortgagee shall be entitled to enforce this Mortgage and any other security now
or hereafter held by Mortgagee in such order and manner as Mortgagee may
determine in its absolute discretion. No remedy herein conferred upon or
reserved to Mortgagee is intended to be exclusive of any other remedy herein or
by law provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. Every power or remedy given by any of the Loan
Documents to Mortgagee or to which it may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by Mortgagee. In no event shall Mortgagee, in the exercise
of the remedies provided in this Mortgage (including, without limitation, in
connection with the assignment of Rents to Mortgagee, or the appointment of a
receiver and the entry of such receiver on to all or any part of the Mortgaged
Property), be deemed a "mortgagee in possession," and Mortgagee shall not in any
way be made liable for any act, either of commission or omission, in connection
with the exercise of such remedies.
29. Multiple Security. If (a) the Premises shall consist of one or more
parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold one or more additional mortgages, liens, deeds of trust or other security
(directly or indirectly) for the Indebtedness upon other property in the State
in which the Premises are located (whether or not such property is owned by
Mortgagor or by others) or (c) both the circumstances described in clauses (a)
and (b) shall be true, then to the fullest extent permitted by law, Mortgagee
may, at its election, commence or consolidate in a
20
single foreclosure action all foreclosure proceedings against all such
collateral securing the Indebtedness (including the Mortgaged Property), which
action may be brought or consolidated in the courts of any county in which any
of such collateral is located. Mortgagor acknowledges that the right to maintain
a consolidated foreclosure action is a specific inducement to Mortgagee to
extend the Indebtedness, and Mortgagor expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure proceedings
in a single action and any objections to the laying of venue or based on the
grounds of forum non conveniens which it may now or hereafter have. Mortgagor
further agrees that if Mortgagee shall be prosecuting one or more foreclosure or
other proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Indebtedness, or if Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue foreclosure proceedings and exercise its other remedies
granted in this Mortgage against all or any part of the Mortgaged Property and
Mortgagor waives any objections to the commencement or continuation of a
foreclosure of this Mortgage or exercise of any other remedies hereunder based
on such other proceedings or judgments, and waives any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage or
such other proceedings on such basis. Neither the commencement nor continuation
of proceedings to foreclose this Mortgage nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Premises are located)
which directly or indirectly secures the Indebtedness, and Mortgagor expressly
waives any objections to the commencement of, continuation of, or entry of a
judgment in such other proceedings or exercise of any remedies in such
proceedings based upon any action or judgment connected to this Mortgage, and
Mortgagor also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any action under this Mortgage on
such basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Mortgagee may, at its election, cause the sale of all
collateral which is the subject of a single foreclosure action at either a
single sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the parties to
dispose of and administer all collateral securing the Indebtedness (directly or
indirectly) in the most economical and least time-consuming manner.
30. Successors and Assigns. All covenants of Mortgagor contained in this
Mortgage are imposed solely and exclusively for the benefit of Mortgagee and its
successors and assigns, and no other person or entity shall have standing to
require compliance with such covenants or be deemed, under any circumstances, to
be a beneficiary of such covenants, any or all of which may be freely waived in
whole or in part by Mortgagee at any time if in its sole discretion it deems
such waiver advisable. All such covenants of Mortgagor shall run with the land
and bind Mortgagor, the successors and assigns of Mortgagor (and each of them)
and all subsequent owners, encumbrancers and tenants of the Mortgaged Property,
and shall inure to the benefit of Mortgagee, its successors and assigns. The
word "Mortgagor" shall be construed as if
21
it read "Mortgagors" whenever the sense of this Mortgage so requires and if
there shall be more than one Mortgagor, the obligations of the Mortgagors shall
be joint and several.
31. No Waivers, etc. Any failure by Mortgagee to insist upon the strict
performance by Mortgagor of any of the terms and provisions of this Mortgage
shall not be deemed to be a waiver of any of the terms and provisions hereof,
and Mortgagee, notwithstanding any such failure, shall have the right thereafter
to insist upon the strict performance by Mortgagor of any and all of the terms
and provisions of this Mortgage to be performed by Mortgagor. Mortgagee may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the security held for the obligations secured by this Mortgage without,
as to the remainder of the security, in anywise impairing or affecting the lien
of this Mortgage or the priority of such lien over any subordinate lien.
32. Governing Law, etc. This Mortgage shall be governed by and construed
and interpreted in accordance with the laws of the State of Michigan, except
that Mortgagor expressly acknowledges that by its terms the Second Priority
Notes shall be governed and construed in accordance with the laws of the State
of New York, without regard to principles of conflict of law, and for purposes
of consistency, Mortgagor agrees that in any in personam proceeding related to
this Mortgage the rights of the parties to this Mortgage shall also be governed
by and construed in accordance with the laws of the State of New York governing
contracts made and to be performed in that State, without regard to principles
of conflict of law.
33. Certain Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage shall be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor or any subsequent owner or owners of the
Mortgaged Property or any part thereof or interest therein," the word
"Mortgagee" shall mean "Mortgagee or any successor agent for the Second Priority
Holders," the words "Second Priority Notes" shall mean "the Second Priority
Notes, the Second Priority Indenture or any other evidence of indebtedness
secured by this Mortgage," the word "person" shall include any individual,
corporation, partnership, trust, unincorporated association, government,
governmental authority, or other entity, and the words "Mortgaged Property"
shall include any portion of the Mortgaged Property or interest therein.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa. The captions in this
Mortgage are for convenience or reference only and in no way limit or amplify
the provisions hereof.
34. Conflict With Second Priority Indenture. In the event of any conflict
or inconsistency between the terms and provisions of this Mortgage and the terms
and provisions of the Second Priority Indenture, the terms and provisions of the
Second Priority Indenture shall govern; provided, however that in the event of
any conflict or inconsistency between the terms and provisions of the Second
Priority Indenture and the terms and provisions of the Intercreditor Agreement,
the terms and provisions of the Intercreditor Agreement shall govern.
22
35. Intercreditor Agreement. Notwithstanding anything to the contrary in
this Mortgage, the exercise of all rights and remedies by Mortgagee pursuant to
this Mortgage or otherwise in respect of the Mortgaged Property, and the
application of any proceeds of the Mortgaged Property, are subject to and shall
be governed by the terms and conditions of the Intercreditor Agreement. In the
event of any inconsistency between the provisions of this Mortgage and the
provisions of the Intercreditor Agreement, the provisions of the Intercreditor
Agreement shall control.
23
This Mortgage has been duly executed by Mortgagor on the date first above
written.
In the Presence of: HARVARD INDUSTRIES, INC.
---------------------- By: -------------------------
Print name: Name:
Title:
--------------------
Print name:
CORPORATION
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this ____ day of
November, 1998, by ______________, the [ ] President of Harvard Industries,
Inc., a Delaware corporation, on behalf of the corporation.
------------------------
Notary Public
My Commission Expires
[seal]
Schedule A
Description of the Premises
[Attach Legal Description of all parcels; include
municipal tax assessment identification numbers]
Delaware
THIS MORTGAGE CONSTITUTES A FIXTURE FILING
UNDER THE MICHIGAN UNIFORM COMMERCIAL CODE
SECOND PRIORITY MORTGAGE
from
HARVARD INDUSTRIES, INC., Mortgagor,
a Delaware corporation whose address is
0 Xxxxxx Xxx, Xxxxx 000, Xxxxxxx, Xxx Xxxxxx 00000
to
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, Mortgagee,
a national banking association whose address is
Sixth and Marquette,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
As Collateral Agent
DATED AS OF NOVEMBER 24, 1998
Prepared by, and after recording, please return to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxxx X. Xxxxx, Esq.
EXHIBIT E
FORM OF GUARANTOR SUPPLEMENT
GUARANTOR SUPPLEMENT, dated as of __________ __, among HARVARD INDUSTRIES,
INC., a Delaware corporation (the "Company"), [NEW SUBSIDIARY GUARANTOR], a
__________ corporation (the "New Subsidiary Guarantor") and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee") to the Indenture dated as of November 24, 1998 (as amended to the
date hereof, the "Indenture") among the Company, the Subsidiary Guarantors named
therein and the Trustee.
W I T N E S S E T H :
WHEREAS, Section 9.1 of the Indenture provides that the Company and the
Trustee may, among other things, amend the Indenture or the Securities without
notice to or consent of any Securityholder to add Guarantees with respect to the
Securities or to secure the Securities;
WHEREAS, Section 10.7 of the Indenture provides that until such time as all
Guarantees by the Subsidiary Guarantors under the Indenture shall have been
released in accordance with Section 10.9 of the Indenture, the Company shall
cause each Subsidiary that Guarantees the Company's obligations under the Senior
Credit Facility (other than a Foreign Subsidiary) to execute and deliver this
Guarantor Supplement pursuant to which such Subsidiary shall agree to be bound
by the provisions of Article X of the Indenture; and
WHEREAS, the New Subsidiary Guarantor shall execute and deliver to the
Trustee this Guarantor Supplement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
a. Defined Terms. Capitalized terms used and not defined herein shall have
the meaning specified in or pursuant to the Indenture.
b. Guarantee. The New Subsidiary Guarantor hereby agrees to unconditionally
assume all the obligations of a Subsidiary Guarantor under the Indenture as
described therein.
c. Trustee. The Trustee accepts the modification of the Indenture effected
by this Guarantor Supplement, but only upon the terms and conditions set forth
in the Indenture. Without limiting the generality of the foregoing, the Trustee
assumes no responsibility for the correctness of the recitals herein contained.
The Trustee makes no representation and shall have no responsibility as to the
validity and sufficiency of this Guarantor Supplement.
d. Effect on Indenture. As supplemented by this Guarantor Supplement, the
Indenture is hereby ratified and confirmed in all aspects.
2
e. Counterparts. This Guarantor Supplement may be executed in counterparts,
each of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
f. Governing Law and Submission to Jurisdiction. This Guarantor Supplement
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another Jurisdiction would be
required thereby. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Guarantor
Supplement to be duly executed as of the day and year first above written.
[NEW SUBSIDIARY GUARANTOR]
By:
----------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:
----------------------------
Name:
Title:
HARVARD INDUSTRIES, INC.
By:
----------------------------
Name:
Title:
EXHIBIT F
FORM OF CERTIFICATE OF TRANSFER
Harvard Industries, Inc.
0 Xxxxxx Xxx
Xxxxx 000
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Department
Re: 14 1/2% Senior Secured Securities due 2003
Reference is hereby made to the Indenture, dated as of November 24, 1998
(the "Indenture"), by and among Harvard Industries, Inc.(the "Company"), the
Subsidiary Guarantors named therein and Norwest Bank Minnesota, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
__________________ (the "Transferor") owns and proposes to transfer the
Security or Securities or interest in such Security or Securities specified in
Annex A hereto, in the principal amount of $____ in such Security or Securities
or interests (the "Transfer"), to ______ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial interest in the
144A Global Security or a Definitive Security Pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Security is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Security for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Security will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Security
and/or the Definitive Security and in the Indenture and the Securities Act.
2. [ ] Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Security or a Definitive Security pursuant to Regulation S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at
2
the time the buy order was originated, the Transferee was outside the United
States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (y)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the United
States, (ii) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities
Act, (iii) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Restricted Period, the
transfer is not being made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed
transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Security will be subject to the restrictions
on Transfer enumerated in the Private Placement Legend printed on the Regulation
S Global Security, and/or the Definitive Security and in the Indenture and the
Securities Act.
3. [ ] Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Security or a Definitive Security pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Securities and
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Issuers or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Security or Restricted Definitive Securities and the
requirements of the exemption claimed, which certification is supported by ( 1)
a certificate executed by the Transferee and (2) if such Transfer is in respect
of a principal amount of Securities at the time of transfer of less than
$250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act. Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Security will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the IAI Global Security and/or the Definitive Securities and in the Indenture
and the Securities Act.
3
4. [ ] Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Security or of an Unrestricted Definitive Security.
(a) [ ] Check if Transfer is Pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Security will no longer be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Global Securities, on
Restricted Definitive Securities and in the Indenture.
(b) [ ] Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Security will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Securities, on Restricted Definitive Securities and in the Indenture.
(c) [ ] Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Security will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Securities or Restricted Definitive Securities and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
----------------------------
[Insert Name of Transferor]
By:
----------------------------
Name:
Title:
Dated: ___________, ____
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Security (CUSIP _____), or
(ii) [ ] Regulation S Global Security, (CUSIP _____), or
(iii) [ ] IAI Global Security (CUSIP _____); or
(b) [ ] a Restricted Definitive Security.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Security (CUSIP _____), or
(ii) [ ] Regulation S Global Security (CUSIP _____), or
(iii) [ ] a IAI Global Security (CUSIP _____), or
(iv) [ ] Unrestricted Global Security (CUSIP _____); or
(b) [ ] a Restricted Definitive Security; or
(c) [ ] an Unrestricted Definitive Security,
in accordance with the terms of the Indenture.
EXHIBIT G
FORM OF CERTIFICATE OF EXCHANGE
Harvard Industries, Inc.
0 Xxxxxx Xxx
Xxxxx 000
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Financial Officer
Norwest Bank Minnesota, National Association
Norwest Center
Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Department
Re: 14 1/2% Senior Secured Securities due 2003
(CUSIP ____________________)
Reference is hereby made to the Indenture, dated as of November 24, 1998
(the "Indenture"), by and among Harvard Industries, Inc. (the "Company"), the
Subsidiary Guarantors named therein and Norwest Bank Minnesota, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
________________ (the "Owner") owns and proposes to exchange the Security
or Securities or interest in such Security or Securities specified herein, in
the principal amount of $______ in such Security or Securities or interests (the
"Exchange"). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Securities or Beneficial Interests in a
Restricted Global Security for Unrestricted Definitive Securities or Beneficial
Interests in an Unrestricted Global Security
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Security to beneficial interest in an Unrestricted Global Security. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Security for a beneficial interest in an Unrestricted Global Security in
an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Securities and pursuant to and in accordance with the
United States Securities Act of 1933, as amended (the "Securities Act"), (iii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest in an Unrestricted Global
Security is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(b) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Security to Unrestricted Definitive Security. In connection with the
Exchange of the Owner's
2
beneficial interest in a Restricted Global Security for an Unrestricted
Definitive Security, the Owner hereby certifies (i) the Definitive Security is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Restricted Global Securities and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Definitive Security is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) [ ] Check if Exchange is from Restricted Definitive Security to
beneficial interest in an Unrestricted Global Security. In connection with the
Owner's Exchange of a Restricted Definitive Security for a beneficial interest
in an Unrestricted Global Security, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Securities and pursuant to and
in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Security to
Unrestricted Definitive Security. In connection with the Owner's Exchange of a
Restricted Definitive Security for an Unrestricted Definitive Security, the
Owner hereby certifies (i) the Unrestricted Definitive Security is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Securities and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive Security
is being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
2. Exchange of Restricted Definitive Securities or Beneficial Interests in
Restricted Global Securities for Restricted Definitive Securities or Beneficial
Interests in Restricted Global Securities
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Security to Restricted Definitive Security. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Security for
a Restricted Definitive Security with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Security is being acquired for
the Owner's own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the Restricted
Definitive Security issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Definitive Security and in the Indenture and the Securities Act.
(b) [ ] Check if Exchange is from Restricted Definitive Security to
beneficial interest in a Restricted Global Security. In connection with the
Exchange of the Owner's Restricted Definitive Security for a beneficial interest
in the [CHECK ONE] [ ] 144A Global Security, [ ] Regulation S Global Security,
[ ] IAI Global Security with an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Global Securities
and pursuant to and in accordance with the Securities Act, and in compliance
with any applicable blue sky securities laws of any state of the United States.
Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to
3
the restrictions on transfer enumerated in the Private Placement Legend printed
on the relevant Restricted Global Security and in the Indenture and the
Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Issuers.
----------------------------
[Insert Name of Owner]
By:
----------------------------
Name:
Title:
Dated: ___________, ____
