EXHIBIT 4.1
PENTACON, INC.,
as Issuer
THE GUARANTORS named herein,
as Guarantors
and
STATE STREET BANK AND TRUST COMPANY,
as Trustee
---------------------
INDENTURE
Dated as of March 30, 1999
--------------------
$100,000,000
12 1/4% Senior Subordinated Notes due 2009, Series A
12 1/4% Senior Subordinated Notes due 2009, Series B
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
ss.310(a)(1)....................................... 6.09
(a)(2)........................................ 6.09
(a)(3)........................................ Not Applicable
(a)(4)........................................ Not Applicable
(b)........................................... 6.08, 6.10
ss. 311(a)......................................... 6.13
(b)........................................... 6.13
(c)........................................... Not Applicable
ss.312(a).......................................... 3.06, 7.01
(b)........................................... 7.02
(c)........................................... 7.02
ss.313(a).......................................... 7.03
(b)........................................... 7.03
(c)........................................... 7.03
(d)........................................... 7.03
ss.314(a).......................................... 10.10
(a)(4)........................................ 10.13
(b)........................................... Not Applicable
(c)(1)........................................ 1.04, 4.04, 12.05
(c)(2)........................................ 1.04, 4.04, 12.05
(c)(3)........................................ Not Applicable
(d)........................................... Not Applicable
(e)........................................... 1.04
ss.315(a).......................................... 6.01(a)
(b)........................................... 6.02
(c)........................................... 6.01(b)
(d)........................................... 6.01(c)
(e)........................................... 5.14
ss.316(a) (last sentence) ......................... 3.14
(a)(1)(A)..................................... 5.12
(a)(1)(B)..................................... 5.13
(a)(2)........................................ Not Applicable
(b)........................................... 5.08
(c)........................................... 9.07
ss.317(a)(1)....................................... 5.03
(a)(2)........................................ 5.04
(b)........................................... 10.03
ss.318(a).......................................... 1.08
--------------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed a part
of the Indenture.
TABLE OF CONTENTS
PAGE
PARTIES......................................................................1
RECITALS.....................................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions....................................................1
Section 1.02. Other Definitions.............................................20
Section 1.03. Rules of Construction.........................................21
Section 1.04. Form of Documents Delivered to Trustee........................21
Section 1.05. Acts of Holders...............................................22
Section 1.06. Notices, etc., to the Trustee, the Company and the Guarantors.22
Section 1.07. Notice to Holders; Waiver.....................................23
Section 1.08. Conflict with Trust Indenture Act.............................23
Section 1.09. Effect of Headings and Table of Contents......................24
Section 1.10. Successors and Assigns........................................24
Section 1.11. Separability Clause...........................................24
Section 1.12. Benefits of Indenture.........................................24
Section 1.13. GOVERNING LAW.................................................24
Section 1.14. No Recourse Against Others....................................24
Section 1.15. Independence of Covenants.....................................24
Section 1.16. Exhibits......................................................25
Section 1.17. Counterparts..................................................25
Section 1.18. Duplicate Originals...........................................25
ARTICLE TWO
NOTE AND GUARANTEE FORMS
Section 2.01. Form and Dating...............................................25
ARTICLE THREE
THE NOTES
Section 3.01. Title and Terms...............................................26
Section 3.02. Optional Redemption...........................................27
Section 3.03. Registrar and Paying Agent....................................27
Section 3.04. Execution and Authentication..................................28
Section 3.05. Temporary Notes...............................................29
Section 3.06. Transfer and Exchange.........................................29
Section 3.07. Mutilated, Destroyed, Lost and Stolen Notes...................30
Section 3.08. Payment of Interest; Interest Rights Preserved................31
i
Section 3.09. Persons Deemed Owners.........................................32
Section 3.10. Cancellation..................................................32
Section 3.11. Legal Holidays................................................33
Section 3.12. CUSIP and CINS Numbers........................................33
Section 3.13. Paying Agent To Hold Money in Trust...........................33
Section 3.14. Treasury Notes................................................33
Section 3.15. Deposits of Monies............................................34
Section 3.16. Book-Entry Provisions for Global Notes........................34
Section 3.17. Special Transfer Provisions...................................35
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. Company's Option To Effect Defeasance or Covenant Defeasance..38
Section 4.02. Defeasance and Discharge......................................38
Section 4.03. Covenant Defeasance...........................................38
Section 4.04. Conditions to Defeasance or Covenant Defeasance...............39
Section 4.05. Deposited Money and U.S. Government Obligations To Be Held in
Trust; Other Miscellaneous Provisions.........................41
Section 4.06. Reinstatement.................................................42
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.............................................42
Section 5.02. Acceleration of Maturity; Rescission and Annulment............44
Section 5.03. Collection of Indebtedness and Suits..........................45
Section 5.04. Trustee May File Proofs of Claims.............................46
Section 5.05. Trustee May Enforce Claims Without Possession of Notes........47
Section 5.06. Application of Money Collected................................47
Section 5.07. Limitation on Suits...........................................47
Section 5.08. Unconditional Right of Holders To Receive Principal, Premium
and Interest..................................................48
Section 5.09. Restoration of Rights and Remedies............................48
Section 5.10. Rights and Remedies Cumulative................................48
Section 5.11. Delay or Omission Not Waiver..................................49
Section 5.12. Control by Majority...........................................49
Section 5.13. Waiver of Past Defaults.......................................49
Section 5.14. Undertaking for Costs.........................................49
Section 5.15. Waiver of Stay, Extension or Usury Laws.......................50
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities...........................50
Section 6.02. Notice of Defaults............................................51
ii
Section 6.03. Certain Rights of Trustee.....................................51
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of Notes or
Application of Proceeds Thereof...............................52
Section 6.05. Trustee and Agents May Hold Notes; Collections; Etc...........53
Section 6.06. Money Held in Trust...........................................53
Section 6.07. Compensation and Indemnification of Trustee and Its Prior
Claim.........................................................53
Section 6.08. Conflicting Interests.........................................54
Section 6.09. Corporate Trustee Required; Eligibility.......................54
Section 6.10. Resignation and Removal; Appointment of Successor Trustee.....54
Section 6.11. Acceptance of Appointment by Successor........................55
Section 6.12. Merger, Conversion, Amalgamation, Consolidation or Succession
to Business...................................................56
Section 6.13. Preferential Collection of Claims Against Company and
Guarantors....................................................57
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish Trustee Names
and Addresses of Holders......................................57
Section 7.02. Communications of Holders.....................................57
Section 7.03. Reports by Trustee............................................58
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. Company May Consolidate, etc., Only on Certain Terms..........58
Section 8.02. Successor Substituted.........................................59
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. Supplemental Indentures, Agreements and Waivers Without
Consent of Holders............................................60
Section 9.02. Supplemental Indentures, Agreements and Waivers with Consent
of Holders....................................................61
Section 9.03. Execution of Supplemental Indentures, Agreements and Waivers..62
Section 9.04. Effect of Supplemental Indentures.............................63
Section 9.05. Conformity with Trust Indenture Act...........................63
Section 9.06. Reference in Notes to Supplemental Indentures.................63
Section 9.07. Record Date...................................................63
Section 9.08. Revocation and Effect of Consents.............................63
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest...................64
Section 10.02. Maintenance of Office or Agency..............................64
iii
Section 10.03. Money for Note Payments To Be Held in Trust..................64
Section 10.04. Corporate Existence..........................................66
Section 10.05. Payment of Taxes and Other Claims............................66
Section 10.06. Maintenance of Properties....................................66
Section 10.07. Insurance....................................................67
Section 10.08. Books and Records............................................67
Section 10.09. Guarantees...................................................67
Section 10.10. Provision of Financial Statements............................67
Section 10.11. Change of Control............................................68
Section 10.12. Limitation on Indebtedness...................................70
Section 10.13. Statement by Officers as to Default..........................72
Section 10.14. Limitation on Restricted Payments............................72
Section 10.15. Limitation on Transactions with Affiliates...................76
Section 10.16. Limitation on Sale of Assets.................................77
Section 10.17. Limitation on Liens..........................................79
Section 10.18. Limitation on Incurrence of Senior Subordinated
Indebtedness.................................................80
Section 10.19. Limitation on Sale of Capital Stock of Restricted
Subsidiaries.................................................81
Section 10.20. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries............................81
Section 10.21. Limitations on Unrestricted Subsidiaries.....................82
Section 10.22. Compliance Certificates and Opinions.........................83
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. Satisfaction and Discharge of Indenture......................84
Section 11.02. Application of Trust Money...................................85
ARTICLE TWELVE
GUARANTEE OF NOTES
Section 12.01. Unconditional Guarantee......................................85
Section 12.02. Subordination of Guarantees..................................86
Section 12.03. Execution and Delivery of Guarantee..........................86
Section 12.04. Additional Guarantors........................................87
Section 12.05. Release of a Guarantor.......................................87
Section 12.06. Waiver of Subrogation........................................87
Section 12.07. Reliance on Judicial Order or Certificate of Liquidating
Agent Regarding Dissolution, etc. of Guarantors..............88
Section 12.08. Article Twelve Applicable to Paying Agents...................88
Section 12.09. No Suspension of Remedies....................................88
Section 12.10. Limitation of Subsidiary Guarantor's Liability...............89
Section 12.11. Contribution from Other Guarantors...........................89
Section 12.12. Obligations Reinstated.......................................89
iv
Section 12.13. No Obligation To Take Action Against the Company.............89
Section 12.14. Dealing with the Company and Others..........................90
ARTICLE THIRTEEN
REDEMPTIONS AND OFFERS TO PURCHASE
Section 13.01. Notice to Trustee............................................90
Section 13.02. Selection of Notes to Be Redeemed or Purchased..............91
Section 13.03. Notice of Redemption........................................91
Section 13.04. Effect of Notice of Redemption..............................92
Section 13.05. Deposit of Redemption Price.................................92
Section 13.06. Notes Redeemed in Part......................................92
Section 13.07. Optional Redemption.........................................93
Section 13.08. Procedures Relating to Mandatory Offers.....................93
ARTICLE FOURTEEN
SUBORDINATION
Section 14.01. Agreement to Subordinate.....................................94
Section 14.02. Liquidation; Dissolution; Bankruptcy.........................94
Section 14.03. Default on Designated Senior Indebtedness....................96
Section 14.04. Acceleration of Notes........................................97
Section 14.05. When Distributions Must Be Paid Over.........................97
Section 14.06. Notice.......................................................97
Section 14.07. Subrogation..................................................98
Section 14.08. Relative Rights..............................................98
Section 14.09. The Company and Holders May Not Impair Subordination.........99
Section 14.10. Distribution or Notice to Representative.....................99
Section 14.11. Rights of Trustee and Paying Agent..........................100
Section 14.12. Authorization to Effect Subordination.......................100
Section 14.13. Payment.....................................................100
v
Exhibit A-1 - Form of Series A Note
Exhibit A-2 - Form of Series B Note
Exhibit B - Form of Legend for Book-Entry Securities
Exhibit C - Form of Certificate To Be Delivered in Connection with Transfers
Pursuant to Regulation S
Exhibit D - Form of Guarantee
Exhibit E - Registration Rights Agreement
---------------
Note: This Table of Contents shall not, for any purpose, be deemed a part of
the Indenture.
vi
INDENTURE, dated as of March 30, 1999, among PENTACON, INC., a
Delaware corporation (the "Company"), as issuer, the GUARANTORS NAMED HEREIN, as
guarantors (the "Guarantors"), and STATE STREET BANK AND TRUST COMPANY, as
trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation of an issue of (i) 12
1/4% Senior Subordinated Notes due 2009, Series A (the "Initial Notes") and (ii)
12 1/4% Senior Subordinated Notes due 2009, Series B (the "Exchange Notes") to
be issued in exchange for the Initial Notes pursuant to the Registration Rights
Agreement (as defined herein). The Initial Notes, the Exchange Notes and the
Private Exchange Notes (as defined herein), if any, are collectively referred to
as the "Notes" and are treated as a single class of securities under this
Indenture. To provide therefor, the Company has duly authorized the execution
and delivery of this Indenture.
The Guarantors have duly authorized their senior subordinated
guarantees of the Notes and to provide therefor, the Guarantors have duly
authorized the execution and delivery of this Indenture and their Guarantees (as
defined herein) under the terms set forth herein.
All things necessary have been done to make the Notes and the
Guarantees, when executed by the Company and the Guarantors, respectively, and
authenticated and delivered hereunder and duly issued by the Company and the
Guarantors, respectively, the valid obligations of the Company and the
Guarantors and to make this Indenture a valid agreement of each of the Company,
the Guarantors and the Trustee in accordance with the terms hereof.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders (as hereinafter defined) of the
Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (i) assumed
in connection with an Asset Acquisition from such Person or (ii) existing at the
time such Person becomes a Restricted Subsidiary of any other Person (other than
any Indebtedness incurred in connection with, or in contemplation of, such Asset
Acquisition or such Person becoming such a Restricted Subsidiary). Acquired
Indebtedness shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Restricted Subsidiary, as the case may be.
"AFFILIATE" means with respect to any specified Person: (i) any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person; or (ii) any other Person
that owns, directly or indirectly, 10% or more of such specified Person's
Capital Stock. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"ASSET ACQUISITION" means (i) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person will
become a Restricted Subsidiary or will be merged or consolidated with or into
the Company or any Restricted Subsidiary or (ii) the acquisition by the Company
or any Restricted Subsidiary of the assets of any Person which constitute
substantially all of the assets of such Person, or any division or line of
business of such Person, or which is otherwise outside of the ordinary course of
business.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease
or other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, for purposes of
this definition, a "transfer"), directly or indirectly, in one or a series of
related transactions, of: (i) any Capital Stock of any Restricted Subsidiary;
(ii) all or substantially all of the properties and assets of any division or
line of business of the Company or any Restricted Subsidiary; or (iii) any other
properties or assets of the Company or any Restricted Subsidiary other than in
the ordinary course of business. For the purposes of this definition, the term
"Asset Sale" shall not include any transfer of properties and assets (a) that is
governed by the provisions of Section 8.01; (b) that is by the Company to any
Restricted Subsidiary, or by any Subsidiary to the Company or any Restricted
Subsidiary in accordance with the terms of this Indenture, (c) that is of
obsolete, damaged or used equipment or inventory in the ordinary course of
business, (d) that constitutes a sale, lease or other disposition of inventory,
accounts receivable or other assets in the ordinary course of business including
for purposes of financing, (e) that constitutes a Capitalized Lease Obligation,
(f) having a fair market value that does not exceed $500,000 or (g) that is made
the subject of an Investment consummated in compliance with Section 10.14 of
this Indenture.
"AVERAGE LIFE TO STATED MATURITY" means, with respect to any
Indebtedness, as at any date of determination, the quotient obtained by dividing
(i) the sum of the products of (a) the number of years from such date to the
date or dates of each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Indebtedness multiplied by
(b) the amount of each such principal payment by (ii) the sum of all such
principal payments.
"BANKRUPTCY LAW" means Xxxxx 00, Xxxxxx Xxxxxx Code or any similar
federal or state law relating to bankruptcy, insolvency, receivership,
winding-up, liquidation, reorganization
2
or relief of debtors or the law of any other jurisdiction relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"BANKRUPTCY ORDER" means any court order made in a proceeding
pursuant to or within the meaning of any Bankruptcy Law, containing an
adjudication of bankruptcy or insolvency, or providing for liquidation,
receivership, winding-up, dissolution, "concordate" or reorganization, or
appointing a Custodian of a debtor or of all or any substantial part of a
debtor's property, or providing for the staying, arrangement, adjustment or
composition of indebtedness or other relief of a debtor.
"BOARD OF DIRECTORS" means the board of directors of the Company or
any Guarantor, as the case may be, or any duly authorized committee of such
board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Guarantor, as the case
may be, to have been duly adopted by its respective Board of Directors and to be
in full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
The State of New York, The State of Connecticut or The Commonwealth of
Massachusetts are authorized or obligated by law, regulation or executive order
to close.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents (however
designated) of such Person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrants, options or rights
exchangeable or exercisable for or convertible into such capital stock, whether
now outstanding or issued after the date of this Indenture.
"CAPITALIZED LEASE OBLIGATION" means any obligation to pay rent or
other amounts under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required to be classified
and accounted for as a capital lease obligation under GAAP, and, for the purpose
of this Indenture, the amount of such obligation at any date shall be the
capitalized amount thereof at such date, determined in accordance with GAAP
consistently applied.
"CASH EQUIVALENTS" means, at any time, (i) any evidence of
Indebtedness with a maturity of not more than one year issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) demand or time deposits,
certificates of deposit or acceptances with a maturity of not more than one year
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$250.0 million; (iii) commercial paper with a maturity of not more than one year
issued by a corporation that is not an Affiliate of the Company organized under
the laws of any state of the United States or the District of Columbia
3
and rated at least A-1 by Standard & Poor's Corporation or at least P-1 by
Xxxxx'x Investors Service, Inc.; and (iv) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (i) and (ii) above entered into with any financial institution meeting
the qualifications specified in clause (ii) above.
"CEDEL" means Cedel Bank, SOCIETE ANONYME.
"CHANGE OF CONTROL" means the occurrence of any of the following
events (whether or not approved by the Board of Directors of the Company): (i)
any "person" or "group" (as such terms are used in Section 13(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of 50% or more of the total voting power of the then
outstanding Voting Stock of the Company; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the board of directors of the Company (together with any new directors whose
election to such board or whose nomination for election by the stockholders of
the Company was approved by a vote of 66 2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved), cease for any
reason to constitute a majority of such board of directors then in office; (iii)
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 corporation consolidates
with or merges into or with the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is changed into
or exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the Company is not changed or
exchanged at all (except to the extent necessary solely to reflect a change in
the jurisdiction of incorporation of the Company) or where (A) the outstanding
Voting Stock of the Company is changed into or exchanged for (x) Voting Stock of
the surviving corporation which is not Redeemable Capital Stock or (y) cash,
securities and other property (other than Capital Stock of the surviving
corporation) in an amount which could be paid by the Company as a Restricted
Payment as described in Section 10.14 (and such amount shall be treated as a
Restricted Payment subject to the provisions of Section 10.14), (B) no "person"
or "group" owns immediately after such transaction, directly or indirectly, 50%
or more of the total outstanding Voting Stock of the surviving corporation and
(C) the holders of the Voting Stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than a majority of the total
voting power of the then outstanding Voting Stock of the surviving or transferee
corporation immediately after such transaction; or (iv) any order, judgment or
decree shall be entered against the Company decreeing the dissolution or split
up of the Company and such order shall remain undischarged or unstayed for a
period in excess of sixty days.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, or if at any time after the execution of this
Indenture such Commission is not existing and performing the applicable duties
now assigned to it, then the body or bodies performing such duties at such time.
4
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or
order signed in the name of the Company by any one of its Chief Executive
Officer, its President or a Vice President, and by its Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer or its chief financial
officer, and delivered to the Trustee.
"CONSOLIDATED CASH FLOW AVAILABLE FOR FIXED CHARGES" means, for any
period, (i) the sum of, without duplication, the amounts for such period, taken
as a single accounting period, of (a) Consolidated Net Income, (b) to the extent
reducing Consolidated Net Income, Consolidated Non-cash Charges, (c) to the
extent reducing Consolidated Net Income, Consolidated Interest Expense, and (d)
to the extent reducing Consolidated Net Income, Consolidated Income Tax Expense
less (ii) other non-cash items increasing Consolidated Net Income for such
period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means the ratio of the
aggregate amount of Consolidated Cash Flow Available for Fixed Charges of the
Company for the four full fiscal quarters immediately preceding the date of the
transaction (the "Transaction Date") giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio for which consolidated financial
information of the Company is available (such four full fiscal quarter period
being referred to herein as the "Four Quarter Period") to the aggregate amount
of Consolidated Fixed Charges of the Company for such Four Quarter Period. For
purposes of this definition, "Consolidated Cash Flow Available for Fixed
Charges" and "Consolidated Fixed Charges" will be calculated, without
duplication, after giving effect on a PRO FORMA basis for the period of such
calculation to (i) the incurrence of any Indebtedness of the Company or any of
the Restricted Subsidiaries during the period commencing on the first day of the
Four Quarter Period to and including the Transaction Date (the "Reference
Period"), including, without limitation, the incurrence of the Indebtedness
giving rise to the need to make such calculation, as if such incurrence occurred
on the first day of the Reference Period, (ii) an adjustment to eliminate or
include, as applicable, the Consolidated Cash Flow Available for Fixed Charges
and Consolidated Fixed Charges of the Company directly attributable to assets
which are the subject of any Asset Sale or Asset Acquisition (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of the Company or one of the Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring Acquired Indebtedness) occurring during the
Reference Period, as if such Asset Sale or Asset Acquisition occurred on the
first day of the Reference Period and (iii) the retirement of Indebtedness
during the Reference Period which cannot thereafter be reborrowed occurring as
if retired on the first day of the Reference Period. For purposes of this
definition, whenever pro forma effect is to be given to an Asset Sale or Asset
Acquisition such pro forma calculations shall be determined in accordance with
Article 11 of Regulation S-X under the Securities Act. In calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1)
interest on Indebtedness determined on a fluctuating basis as of the
5
Transaction Date and which will continue to be so determined thereafter will be
deemed to accrue at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; (2) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date shall be deemed to have been in effect during the
Reference Period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by Interest Rate Agreements, will be deemed to accrue at the rate per
annum resulting after giving effect to the operation of such agreements. If the
Company or any Restricted Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the above definition will give effect to the
incurrence of such guaranteed Indebtedness as if the Company or any Restricted
Subsidiary had directly incurred or otherwise assumed such guaranteed
Indebtedness.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of,
without duplication, the amounts for such period of (i) Consolidated Interest
Expense and (ii) the aggregate amount of cash dividends and other distributions
paid or accrued during such period in respect of Redeemable Capital Stock.
"CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the
provision for federal, state, local and foreign income taxes payable by the
Company and the Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, without
duplication, the sum of (a) the interest expense of the Company and the
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP, including, without limitation, (i) any amortization of
debt discount attributable to such period (other than amortization of debt
issuance costs), (ii) the net cost under or otherwise associated with Interest
Rate Agreements and Currency Agreements (in each case, including any
amortization of discounts), (iii) the interest portion of any deferred payment
obligation, (iv) all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and (v) all
capitalized interest and all accrued interest, and (b) all but the principal
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by the Company and the Restricted Subsidiaries during such
period and as determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the consolidated
net income (or loss) of the Company and the Restricted Subsidiaries for such
period on a consolidated basis as determined in accordance with GAAP, adjusted,
to the extent included in calculating such net income (or loss), by excluding,
without duplication, (i) all extraordinary gains or losses (net of all fees and
expenses relating thereto), (ii) the portion of net income (or loss) of the
Company and the Restricted Subsidiaries on a consolidated basis allocable to
minority interests of Persons in Restricted Subsidiaries or of the Company and
the Restricted Subsidiaries in unconsolidated Persons, except (in the case of
unconsolidated Persons) to the extent that cash dividends or distributions are
actually received by the Company or a Restricted Subsidiary, (iii) income of the
6
Company and the Restricted Subsidiaries derived from or in respect of
Investments in Unrestricted Subsidiaries, except to the extent that cash
dividends or distributions are actually received by the Company or a Restricted
Subsidiary, (iv) for purposes of Section 10.14 net income (or loss) of any
Person combined with the Company or any of the Restricted Subsidiaries on a
"pooling of interests" basis attributable to any period prior to the date of
combination, (v) any gain or loss realized upon the termination of any employee
pension benefit plan, (vi) gains (or losses), net of all fees and expenses
relating thereto, in respect of any Asset Sales by the Company or a Restricted
Subsidiary, (vii) the net income of any Restricted Subsidiary to the extent that
the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, and (viii) any gain, arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness of the Company or any Restricted Subsidiary.
"CONSOLIDATED NON-CASH CHARGES" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company and the
Restricted Subsidiaries reducing Consolidated Net Income for such period (other
than any non-cash item requiring an accrual or reserve for cash disbursements in
any future period), determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATION" means, with respect to any Person, the consolidation
of the accounts of its Restricted Subsidiaries with those of such Person, all in
accordance with GAAP; PROVIDED, HOWEVER, that "consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary with the accounts
of such Person. The term "consolidated" has a correlative meaning to the
foregoing.
"CONTROL" means, with respect to any specified Person, the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at Xxxxxxx Square, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000,
Attention: Xxxxx Xxxxxx/Corporate Trust Administration, Reference: Pentacon
1999, except for purposes of Section 3.03 and Section 10.02. For purposes of
Section 3.03 and Section 10.02, the Corporate Trust Office is located at 00
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, Attention:
Corporate Trust.
"COVENANT DEFEASANCE" has the meaning set forth in Section 4.03.
"CREDIT FACILITY" means the Amended and Restated Credit Agreement
dated as of September 3, 1998 among the Company, the lenders named therein and
NationsBank, N.A. as administrative agent, as such agreement may be amended,
modified, supplemented, extended, restated, replaced (including replacement
after the termination of such agreement), restructured,
7
increased, renewed or refinanced from time to time in one or more credit
agreements, loan agreements, instruments or similar agreements, as such may be
further amended, modified, supplemented, extended, restated, replaced (including
replacement after the termination of such agreement), restricted, increased,
renewed or refinanced from time to time, in each case in accordance with and as
permitted by this Indenture and whether or not with the same lenders or agents.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or its Restricted Subsidiaries against fluctuations in currency values.
"CUSTODIAN" means any receiver, interim receiver, receiver and
manager, receiver-manager, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law or any other law respecting secured
creditors and the enforcement of their security or any other Person with like
powers whether appointed judicially or out of court and whether pursuant to an
interim or final appointment.
"DEFAULT" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"DEFEASANCE" has the meaning set forth in Section 4.02.
"DEPOSITORY" means The Depository Trust Company, its nominees and
successors.
"DESIGNATED SENIOR INDEBTEDNESS" means (a) all Senior Indebtedness,
liquidated or contingent, outstanding under the Credit Facility and (b) any
other Senior Indebtedness of the Company which, at the time of determination, is
in an aggregate principal amount outstanding or committed for of at least $50.0
million and is specifically designated in the instrument governing such Senior
Indebtedness as "Designated Senior Indebtedness" by the Company.
"DESIGNATION" has the meaning set forth in Section 10.21.
"DESIGNATION AMOUNT" has the meaning set forth in Section 10.21.
"DISINTERESTED DIRECTOR" means, with respect to any transaction or
series of related transactions, a member of the Board of Directors of the
Company who does not have any material direct or indirect financial interest in
or with respect to such transaction or series of related transactions.
"EUROCLEAR" means Xxxxxx Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System.
"EVENT OF DEFAULT" has the meaning set forth in Section 5.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission thereunder.
8
"EXCHANGE NOTES" means the 12 1/4% Senior Subordinated Notes due
2009, Series B, to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement.
"EXCHANGE OFFER" shall have the meaning specified in the
Registration Rights Agreement.
"FAIR MARKET VALUE" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length transaction, for cash,
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy. Fair Market Value shall
be determined by the Board of Directors of the Company acting in good faith
evidenced by a Board Resolution thereof delivered to the Trustee.
"FOUR QUARTER PERIOD" has the meaning set forth in the definition
of "Consolidated Fixed Charge Coverage Ratio."
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the United States which are applicable at the
date of determination and which are consistently applied for all applicable
periods.
"GLOBAL NOTES" means one or more Notes in the form of Exhibit A-1 or
A-2 bearing the legend set forth in Exhibit B.
"GUARANTEE" means, as applied to any obligation, (i) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit. A guarantee shall include,
without limitation, any agreement to maintain or preserve any other Person's
financial condition or to cause any other Person to achieve certain levels of
operating results.
"GUARANTEE" means the guarantee by any Guarantor of both the
Company's obligations under this Indenture and the Notes pursuant to a guarantee
given in accordance with this Indenture.
"GUARANTOR" means (i) each of Alatec Products, Inc., AXS Solutions,
Inc., Capitol Bolt & Supply, Inc., Maumee Industries, Inc., Sales Systems,
Limited, Texas International Aviation, Inc., Pace Products, Inc., West Coast
Aero Products Holding Corporation, Inc., ASI Aerospace Group, Inc., Xxxxxxx
Acquisition Corp., Alatec Cable Harness & Assembly Division, Inc., Alatec
Fastener and Component Group, Inc., Alatec International Sales, Inc., Alatec
Race, Inc., Trace Alatec Supply Company, Inc., TIA International, Inc., Pentacon
Aerospace Group, Inc. and Pentacon Industrial Group, Inc. and (ii) each other
Subsidiary of the Company that in the future becomes a Guarantor in accordance
with Section 10.18.
9
"HOLDER" or "NOTEHOLDER" means a Person in whose name a Note is
registered in the Note Register.
"INCUR" has the meaning set forth in Section 10.12.
"Incurrence," "incurred" and "incurring" shall have the meanings correlative
to the foregoing.
"INDEBTEDNESS" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, excluding (a) indemnities in
connection with the disposition of assets of businesses not to exceed the
purchase price for such assets, (b) customary agreements for purchase price
adjustments, hold backs or similar obligations in connection with an Asset
Acquisition and (c) any trade payables and other accrued current liabilities
incurred or arising in the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit, bankers acceptance or other similar
credit transaction and in connection with any agreement to purchase, redeem,
exchange, convert or otherwise acquire for value any Capital Stock of such
Person, or any warrants, rights or options to acquire such Capital Stock, now or
hereafter outstanding, (ii) all obligations of such Person evidenced by bonds,
notes, debentures or other similar instruments, (iii) all indebtedness created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade payables arising in
the ordinary course of business, (iv) all Capitalized Lease Obligations of such
Person, (v) all Indebtedness referred to in clauses (i) through (iv) above of
other Persons and all dividends of other Persons, the payment of which is
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or with respect to
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, (vi) all guarantees of Indebtedness by such
Person, (vii) except for purposes of Section 10.14, all Redeemable Capital Stock
issued by such Person valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued and unpaid dividends, (viii) all
obligations under Interest Rate Agreements and Currency Agreements of such
Person, and (ix) any amendment, supplement, modification, deferral, renewal,
extension, refunding or refinancing of any liability of the types referred to in
clauses (i) through (viii) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Redeemable Capital Stock, such Fair Market Value shall be
determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock.
"INDENTURE" means this instrument as originally executed (including
all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
10
"INDENTURE OBLIGATIONS" means the obligations of the Company and any
other obligor under this Indenture or under the Notes, to pay principal of,
premium, if any, and interest on the Notes when due and payable, whether at
maturity, by acceleration, call for redemption or repurchase or otherwise, and
all other amounts due or to become due under or in connection with this
Indenture, the Notes or the Guarantees and the performance of all other
obligations to the Trustee (including, but not limited to, payment of all
amounts due the Trustee under Section 6.07 hereof) and the Holders of the Notes
under this Indenture, the Notes and the Guarantees, according to the terms
thereof.
"INDEPENDENT FINANCIAL ADVISOR" means a nationally recognized
accounting, appraisal or investment banking firm (i) which does not, and whose
directors, officers and employees or Affiliates do not have, a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INITIAL NOTES" means the 12 1/4% Senior Subordinated Notes due
2009, Series A, of the Company.
"INITIAL PURCHASERS" means Bear, Xxxxxxx & Co. Inc., NationsBank
Xxxxxxxxxx Securities LLC and Xxxxxxx Xxxxxx Xxxxx Inc.
"INTEREST" means, when used with respect to any Note, the amount of
all interest accruing on such Note, including all liquidated damages payable on
the Notes pursuant to the Registration Rights Agreement and all interest
accruing subsequent to the occurrence of any events specified in Sections
5.01(h), (i) and (j) or which would have accrued but for any such event, whether
or not such claims are allowable under applicable law.
"INTEREST PAYMENT DATE" means, when used with respect to any Note,
the Stated Maturity of an installment of interest on such Note, as set forth in
such Note.
"INTEREST RATE AGREEMENTS" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
obligations of any Person pursuant to any arrangement with any other Person
whereby, directly or indirectly, such Person is entitled to receive from time to
time periodic payments calculated by applying either a floating or a fixed rate
of interest on a stated notional amount in exchange for periodic payments made
by such Person calculated by applying a fixed or a floating rate of interest on
the same notional amount or any other arrangement involving payments by or to
such Person based upon fluctuations in interest rates (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements)
and/or other types of interest rate hedging agreements from time to time.
"INVESTMENT" means, with respect to any Person, any direct or
indirect advance, loan or other extension of credit (including by means of a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others or otherwise), or any purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by any other Person and all other items that would be
classified as
11
investments on a balance sheet prepared in accordance with GAAP. Investments
shall exclude extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices. In addition to the foregoing, any
Currency Agreement, Interest Rate Agreement or similar agreement shall
constitute an Investment. Notwithstanding the foregoing, the acquisition of
assets, businesses or securities to the extent such Acquisition is for
consideration consisting of Qualified Capital Stock of the Company shall not be
an Investment.
"ISSUE DATE" means the original issue date of the Notes hereunder.
"LIEN" means any mortgage or deed of trust, charge, pledge, lien
(statutory or other), privilege, security interest, hypothecation, cessation and
transfer, assignment for security, claim, deposit arrangement, or preference or
priority or other encumbrance upon or with respect to any property of any kind
(including any conditional sale, capital lease or other title retention
agreement, any leases in the nature thereof, and any agreement to give any
security interest), whether real, personal or mixed, movable or immovable, now
owned or hereafter acquired. A Person shall be deemed to own subject to a Lien
any property which it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement.
"MATERIAL SUBSIDIARY" means each Restricted Subsidiary of the
Company that is a "significant subsidiary" as defined in Rule 1-02 of Regulation
S-X under the Securities Act and the Exchange Act (as such regulation is in
effect on the Issue Date).
"MATURITY DATE" means, with respect to any Note, the date on which
any principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or otherwise.
"NET CASH PROCEEDS" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof (without duplication in respect of all Asset Sales)
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or Cash Equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary) net of (i) brokerage commissions and other reasonable
fees and expenses (including fees and expenses of legal counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes payable as a
result of such Asset Sale, (iii) payments made to retire Indebtedness where
payment of such Indebtedness is secured by the assets or properties the subject
of such Asset Sale, (iv) amounts required to be paid to any Person (other than
the Company or any Restricted Subsidiary) owning a beneficial interest in or
having a Lien on the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale (provided that
12
the amount of any such reserves shall be deemed to constitute Net Cash Proceeds
at the time such reserves shall have been released or are not otherwise required
to be retained as a reserve), all as reflected in an Officers' Certificate
delivered to the Trustee and (b) with respect to any issuance or sale of Capital
Stock that have been converted into or exchanged for Capital Stock as referred
to Section 10.14, the proceeds of such issuance or sale in the form of cash or
Cash Equivalents including payments in respect of deferred payment obligations
when received in the form of, or stock or other assets when disposed of for,
cash or Cash Equivalents (except to the extent that such obligations are
financed or sold with recourse to the Company or any Restricted Subsidiary), net
of attorney's fees, accountant's fees and brokerage, consultation, underwriting
and other fees and expenses actually incurred in connection with such issuance
or sale and net of taxes paid or payable as a result thereof.
"NON-U.S. PERSON" has the meaning assigned to such term in
Regulation S.
"NOTES" shall have the meaning specified in the Recitals of this
Indenture.
"OFFER" means a Change of Control Offer made pursuant to Section
10.11 or an Asset Sale Offer made pursuant to Section 10.16.
"OFFERING MEMORANDUM" means the offering memorandum dated March 25,
1999 relating to the Notes.
"OFFICER" means, with respect to the Company or any Guarantor, the
Chief Executive Officer, the President, a Vice President, the Secretary, an
Assistant Secretary, the Treasurer, an Assistant Treasurer, or the Chief
Financial Officer.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chief
Executive Officer, the President, the Chief Financial Officer or a Vice
President, and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Company or any Guarantor, as the case may be, and
delivered to the Trustee.
"144A GLOBAL NOTE" means a permanent global note in registered form
representing the aggregate principal amount of Notes sold in reliance on Rule
144A under the Securities Act.
"OPINION OF COUNSEL" means a written opinion of counsel who may be
counsel for the Company, a Guarantor, or the Trustee, and who shall be
reasonably acceptable to the Trustee.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent
13
(other than the Company or any Guarantor or any Affiliate thereof) in
trust or set aside and segregated in trust by the Company or any Guarantor
or any Affiliate thereof (if the Company or such Guarantor or Affiliate
shall act as Paying Agent) for the Holders of such Notes; PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Notes with respect to which the Company has effected defeasance
or covenant defeasance as provided in Article Four, to the extent provided
in Sections 4.02 and 4.03; and
(iv) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any
such Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Notes are held by a bona fide
purchaser in whose hands the Notes are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company, any Guarantor or any other obligor upon the Notes or any Affiliate
of the Company, any Guarantor or such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible Officer of
the Trustee knows to be so owned shall be so disregarded. The Company shall
notify the Trustee, in writing, when it repurchases or otherwise acquires Notes,
of the aggregate principal amount of such Notes so repurchased or otherwise
acquired. Notes so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act as a Holder with respect to such Notes and that the
pledgee is not the Company, any Guarantor or any other obligor upon the Notes or
any Affiliate of the Company, any Guarantor or such other obligor. If the Paying
Agent holds, in its capacity as such, on any Maturity Date or on any optional
redemption date money sufficient to pay all accrued interest and principal with
respect to such Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes cease to be Outstanding and interest on them
ceases to accrue. Notes may also cease to be outstanding to the extent expressly
provided in Article Four.
"PARI PASSU INDEBTEDNESS" means (a) any Indebtedness of the Company
which ranks PARI PASSU in right of payment to the Notes and (b) with respect to
any Guarantor, Indebtedness which ranks PARI PASSU in right of payment to the
Guarantee of such Guarantor.
"PERMITTED INDEBTEDNESS" has the meaning set forth in Section
10.12.
"PERMITTED INVESTMENTS" means (a) Cash Equivalents; (b) Investments
in prepaid expenses, negotiable instruments held for collection and lease,
utility and workers' compensation, performance and other similar deposits; (c)
loans and advances to employees made in the
14
ordinary course of business not to exceed $1.0 million in the aggregate at any
one time outstanding, (d) Interest Rate Agreements and Currency Agreements
permitted under clause (vi) or (vii) of the second paragraph of Section 10.12,
(e) Investments represented by accounts receivable created or acquired in the
ordinary course of business, (f) loans or advances to vendors in the ordinary
course of business in an amount not to exceed $1.0 million at any time, (g)
Investments existing on the Issue Date and any renewal or replacement thereof on
terms and conditions no less favorable in any respect than that existing on the
Issue Date, (h) any Investment to the extent that the consideration therefor is
Qualified Capital Stock of the Company, (i) bonds, notes, debentures or other
securities received in connection with an Asset Sale permitted under Section
10.16 not to exceed 25% of the total consideration in such Asset Sale, (j)
shares of Capital Stock or other securities received in settlement of debts owed
to the Company or any of the Restricted Subsidiaries as a result of foreclosure,
perfection or enforcement of any Lien or indebtedness or in connection with any
good faith settlement of a bankruptcy proceeding, (k) the acceptance of notes
payable from employees of the Company or its Subsidiaries in payment for the
purchase of Capital Stock by such employees and (1) Investments in the Company,
any Restricted Subsidiary or any Person that as a result of such Investment
becomes a Restricted Subsidiary or is merged with or into or consolidated with
the Company or a Restricted Subsidiary (provided the Company or a Restricted
Subsidiary is the survivor) as a result of or in connection with such
Investment.
"PERMITTED JUNIOR SECURITIES" means Capital Stock of the Company or
debt securities that are subordinated to all Senior Indebtedness (and any debt
securities issued in exchange for Senior Indebtedness) to at least the same
extent as the Notes are subordinated to Senior Indebtedness.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.07 hereof in exchange for a
mutilated Note or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"PREFERRED STOCK" means, with respect to any Person, Capital Stock
of any class or, classes (however designated) of such Person which is preferred
as to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over Capital Stock of any other class of such Person.
"PRIVATE EXCHANGE SECURITIES" shall have the meaning specified in
the Registration Rights Agreement.
"PRIVATE PLACEMENT LEGEND" shall mean the first paragraph of the
legend initially set forth in the Securities in the form set forth on Exhibit
A-1.
15
"PURCHASE MONEY OBLIGATION" means any Indebtedness secured by a Lien
on assets related to the business of the Company and the Restricted Subsidiaries
and any additions and accessions thereto, which are purchased by the Company or
any Restricted Subsidiary at any time after the Notes are issued; PROVIDED that
(i) the security agreement or conditional sales or other title retention
contract pursuant to which the Lien on such assets is created (collectively, a
"Purchase Money Security Agreement") shall be entered into within 180 days after
the purchase or substantial completion of the construction of such assets and
shall at all times be confined solely to the assets so purchased or acquired,
any additions and accessions thereto and any proceeds therefrom, (ii) at no time
shall the aggregate principal amount of the outstanding Indebtedness secured
thereby be increased, except in connection with the purchase of additions and
accessions thereto and except in respect of fees and other obligations in
respect of such Indebtedness and (iii) (A) the aggregate outstanding principal
amount of Indebtedness secured thereby (determined on a per asset basis in the
case of any additions and accessions) shall not at the time such Purchase Money
Security Agreement is entered into exceed 100% of the purchase price to the
Company and the Restricted Subsidiaries of the assets subject thereto or (B) the
Indebtedness secured thereby shall be with recourse solely to the assets so
purchased or acquired, any additions and accessions thereto and any proceeds
therefrom.
"QUALIFIED CAPITAL STOCK" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"QUALIFIED EQUITY OFFERING" means (i) any underwritten public
offering of Capital Stock (other than Redeemable Capital Stock) of the Company
made on a primary basis by the Company pursuant to a registration statement
filed with and declared effective by the Commission in accordance with the
Securities Act or (ii) any sale of Capital Stock (other than Redeemable Capital
Stock) for gross cash proceeds of at least $20.0 million to one or more Persons,
provided that such Persons are not Affiliates of the Company at the time of such
sale.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"REDEEMABLE CAPITAL STOCK" means any class or series of Capital
Stock to the extent that, either by its terms, by the terms of any security into
which it is convertible or exchangeable, or by contract or otherwise, is or upon
the happening of an event or passage of time would be, required to be redeemed
prior to any Stated Maturity of the principal of the Notes or is redeemable at
the option of the holder thereof at any time prior to such Stated Maturity, or
is convertible into or exchangeable for debt securities at any time prior to
such Stated Maturity.
"REFERENCE PERIOD" has the meaning set forth under the definition
of "Consolidated Fixed Charge Coverage Ratio."
"REGISTRABLE SECURITIES" shall have the meaning specified in the
Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of March 30, 1999 by and among the Company, the Guarantors
and the Initial Purchasers, as
16
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof attached hereto as Exhibit E.
"REGULAR RECORD DATE" means the Regular Record Date specified in
the Notes.
"REGULATION S" means Regulation S under the Securities Act.
"REGULATION S GLOBAL NOTE" means a permanent global note in
registered form representing the aggregate principal amount of Notes sold in
reliance on Regulation S under the Securities Act.
"REORGANIZATION SECURITIES" means , with respect to any insolvency
or liquidation proceeding involving the Company, Capital Stock or other
securities of the Company as reorganized or readjusted (or Capital Stock or any
other securities of any other Person provided for by a plan of reorganization or
readjustment) that are subordinated, at least to the same extent as the Notes,
to the payment of all outstanding Senior Indebtedness after giving effect to
such plan of reorganization or readjustment; PROVIDED, HOWEVER, that if debt
securities such securities shall not provide for amortization (including sinking
fund and mandatory prepayment provisions) commencing prior to three months
following the final scheduled maturity of all Senior Debt of the Company (as
modified by such plan of reorganization or readjustment).
"RESPONSIBLE OFFICER" means, with respect to the Trustee, the
chairman or vice chairman of the board of directors, the chairman or vice
chairman of the executive committee of the board of directors, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller and any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer of the Trustee to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"RESTRICTED NOTE" means a Note that constitutes a "restricted
security" within the meaning of Rule 144(a)(3) under the Securities Act;
PROVIDED, HOWEVER, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Note.
"RESTRICTED PAYMENT" has the meaning set forth under
Section 10.14.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that has
not been designated by the Board of Directors of the Company, by a Board
Resolution delivered to the Trustee, as an Unrestricted Subsidiary pursuant to
and in compliance with Section 10.21. Any such designation may be revoked by a
Board Resolution of the Board of Directors of the Company delivered to the
Trustee, subject to the provisions of such covenant.
"REVOCATION" has the meaning set forth in Section 10.21.
17
"RULE 144A" means Rule 144A under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the Commission thereunder.
"SENIOR INDEBTEDNESS" means, with respect to the Company or any
Guarantor, as applicable, the principal of, premium, if any, interest on any
Indebtedness of the Company or such Guarantor, as the case may be, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to any
Indebtedness of the Company or such Guarantor, as the case may be. Without
limiting the generality of the foregoing, "Senior Indebtedness" will include the
principal of, premium, if any, interest (including interest that would accrue
but for the filing of a petition initiating any proceeding under any state or
federal bankruptcy laws, whether or not such claim is allowable in such
proceeding) on all obligations of every nature of the Company or such Guarantor,
as the case may be, and all indemnity and other payment obligations from time to
time owed to the lenders under the Credit Facility, including, without
limitation, principal of and interest on, and all indemnities, fees and expenses
payable under the Credit Facility. Notwithstanding the foregoing, "Senior
Indebtedness" shall not include, to the extent constituting Indebtedness, (i)
Indebtedness evidenced by the Notes or the Guarantees, (ii) Indebtedness that is
subordinate or junior in right of payment to any Indebtedness of the Company or
any Guarantor, (iii) Indebtedness which, when incurred and without respect to
any election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to the Company or any Guarantor, (iv) Indebtedness which is represented
by Redeemable Capital Stock, (v) Indebtedness for goods, materials or services
purchased in the ordinary course of business or Indebtedness consisting of trade
payables or other current liabilities (other than any current liabilities owing
under the Credit Facility or the current portion of any long-term Indebtedness
which would constitute Senior Indebtedness but for the operation of this clause
(v)), (vi) Indebtedness of or amounts owed by the Company or any Guarantor for
compensation to employees or for services rendered to the Company or such
Guarantor, (vii) any liability for federal, state, local or other taxes owed or
owing by the Company or any Guarantor, (viii) Indebtedness of the Company or any
Guarantor to a Subsidiary of the Company, and (ix) that portion of any
Indebtedness which at the time of issuance is issued in violation of this
Indenture.
"SPECIAL RECORD DATE" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.08 hereof.
"STATED MATURITY" means, with respect to any Note or any installment
of interest thereon, the dates specified in such Note as the fixed date on which
the principal of such Note or such installment of interest is due and payable,
and when used with respect to any other Indebtedness, means the date specified
in the instrument governing such Indebtedness as the fixed date on which the
principal of such Indebtedness, or any installment of interest is due and
payable.
18
"SUBORDINATED INDEBTEDNESS" means, with respect to the Company,
Indebtedness of the Company which is expressly subordinated in right of payment
to the Notes or, with respect to any Guarantor, Indebtedness of such Guarantor
which is expressly subordinated in right of payment to the Guarantee of such
Guarantor.
"SUBSIDIARY" means, with respect to any Person, (a) any corporation
of which the outstanding shares of Voting Capital Stock having at least a
majority of the votes entitled to be cast in the election of directors shall at
the time be owned, directly or indirectly, by such Person, or (b) any other
Person of which at least a majority of the shares of Voting Capital Stock are at
the time, directly or indirectly, owned by such first named Person.
"SURVIVING PERSON" means, with respect to any Person involved in any
consolidation or merger, or any sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of its properties and assets as an
entirety, the Person formed by or surviving such merger or consolidation or the
Person to which such sale, assignment, conveyance, transfer or lease is made.
"TRANSACTION DATE" has the meaning set forth under the definition
of "Consolidated Fixed Charge Coverage Ratio."
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of
1939, as amended.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"UNRESTRICTED NOTES" means one or more Notes that do not and are not
required to bear the Private Placement Legend in the form set forth in Exhibit
A, including, without limitation, the Exchange Notes.
"UNRESTRICTED SUBSIDIARY" means each Subsidiary of the Company
(other than a Guarantor) designated as such pursuant to and in compliance with
Section 10.21, and each Subsidiary of each such Subsidiary of the Company. Any
such designation may be revoked by a Board Resolution of the Company delivered
to the Trustee, subject to the provisions of such Section 10.21.
"UNUTILIZED NET CASH PROCEEDS" has the meaning set forth in
Section 10.16.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof at any
time prior to the Stated Maturity of the Notes, and shall also include a
depository receipt issued by a bank (as
19
defined in Section 3(a)(2) of the Securities Act) as custodian with respect to
any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt; PROVIDED, HOWEVER, that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
"VOTING STOCK" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the Board of Directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary
of which 100% of the outstanding Capital Stock is owned by the Company and/or
another Wholly-Owned Restricted Subsidiary. For purposes of this definition, any
directors' qualifying shares shall be disregarded in determining the ownership
of a Restricted Subsidiary.
Section 1.02. OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
---- ----------
"Act" 1.05
"Agent Member" 3.16
"Asset Sale Offer" 10.16
"Asset Sale Offer Purchase Date: 10.16
"Change of Control Date" 10.11
"Change of Control Offer" 10.11
"Change of Control Purchase Date" 10.11
"Change of Control Purchase Price" 10.11
"Defaulted Interest" 3.08
"Defeased Notes" 4.01
"EBITDA" 3.01
"EBITDA Target" 3.01
"insolvent Person" 4.04
"Interest Payment Triggering Event" 3.01
"Non-payment Default" 14.03
"Note Register" 3.06
"Registrar" 3.03
"Paying Agent" or "Agent" 3.03
"Payment Blockage Period" 14.03
20
"Permitted Payment" 10.14
"Physical Notes" 3.16
"Required Filing Dates" 10.16
"Restricted Payments" 10.14
"Restricted Period" 3.17
Section 1.03. RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(e) all references to "$" or "dollars" refer to the lawful currency
of the United States of America; and
(f) the words "include," "included" and "including" as used herein
are deemed in each case to be followed by the phrase "without limitation."
Section 1.04. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or any
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or any
Guarantor stating that the information with respect to such factual matters is
21
in the possession of the Company or any Guarantor, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in Person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution (as provided below in
subsection (b) of this Section 1.05) of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the transfer thereof or
in exchange therefor or in lieu thereof to the same extent as the original
Holder, in respect of anything done, suffered or omitted to be done by the
Trustee, any Paying Agent or the Company or any Guarantor in reliance thereon,
whether or not notation of such action is made upon such Note.
Section 1.06. NOTICES, ETC., TO THE TRUSTEE, THE COMPANY AND THE GUARANTORS.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor
shall be sufficient for every purpose hereunder if made, given, furnished
or filed, in writing, to or with the Trustee at Xxxxxxx Square, 000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, XX 00000, Facsimile: (000) 000-0000,
Attention: Xxxxx Xxxxxx (Vice President) Reference:
22
Pentacon 1999 or at any other address previously furnished in writing to
the Holders, the Company and the Guarantors by the Trustee; or
(b) the Company or a Guarantor by the Trustee or by any Holder shall
be sufficient for every purpose (except as otherwise expressly provided
herein) hereunder if in writing and mailed, first-class postage prepaid,
to the Company or such Guarantor addressed to it at Pentacon, Inc., 00000
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Facsimile: (713)
860-1001, Attention: Chief Executive Officer and General Counsel, or at
any other address previously furnished in writing to the Trustee by the
Company.
Section 1.07. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise expressly provided
herein) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
23
Section 1.09. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.10. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and
the Guarantors, shall bind their respective successors and assigns, whether so
expressed or not.
Section 1.11. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes or any
Guarantee issued pursuant hereto shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 1.12. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes or in any Guarantee issued
pursuant hereto, express or implied, shall give to any Person (other than the
parties hereto and their successors hereunder, any Paying Agent and the Holders)
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 1.13. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
Section 1.14. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the
Company or of a Guarantor shall not have any liability for any obligations of
the Company or a Guarantor under the Notes, the Guarantees or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation.
Section 1.15. INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.
24
Section 1.16. EXHIBITS.
All exhibits attached hereto are by this reference made a part
hereof with the same effect as if herein set forth in full.
Section 1.17. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
telecopier, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 1.18. DUPLICATE 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.
ARTICLE TWO
NOTE AND GUARANTEE FORMS
Section 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication with
respect thereto and the Guarantees shall be in substantially the forms set
forth, or referenced, in Exhibit X-0, Xxxxxxx X-0 and Exhibit D, respectively,
annexed hereto, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with any applicable law
or with the rules of the Depository, any clearing agency or any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Notes and Guarantees, as evidenced by their execution thereof.
The definitive Notes and Guarantees shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which the Notes and such Guarantees may be listed, if any, all as
determined by the officers executing such Notes and Guarantees, as evidenced by
their execution of such Notes and Guarantees.
Each Note shall be dated the date of its issuance and shall show the
date of its authentication. The terms and provisions contained in the Notes
shall constitute, and are expressly made, a part of this Indenture.
25
ARTICLE THREE
THE NOTES
Section 3.01. TITLE AND TERMS.
PRINCIPAL AMOUNT. The aggregate principal amount of Notes which may
be authenticated and delivered under this Indenture is limited to $100,000,000
in aggregate principal amount of Notes, except for Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Section 3.04, 3.05, 3.06, 3.07 or 9.06.
MATURITY AND INTEREST. The Notes will mature on April 1, 2009.
Interest on the Notes will accrue at the rate of 12 1/4% per annum from the
Issue Date through maturity; PROVIDED that in the event either (x) EBITDA (as
defined below) of the Company and the Restricted Subsidiaries does not equal or
exceed $7.25 million (the "EBITDA Target") for the quarter ended March 31, 1999,
the interest rate on the Notes will increase by 0.50% per annum to a rate of 12
3/4% per annum and the Notes will begin accruing interest at such higher rate on
April 1, 1999, or (y) EBITDA of the Company and the Restricted Subsidiaries does
not equal or exceed the EBITDA Target for the quarter ended June 30, 1999, the
interest rate on the Notes will increase by 0.50% per annum to a rate of 12 3/4%
per annum and the Notes would begin accruing interest at such higher rate on
July 1, 1999; PROVIDED, FURTHER, that the interest rate on the Notes will not
exceed 12 3/4% per annum. Following any increase in interest rate as stated
above, no further adjustment (upward or downward) shall be made to the interest
rate on the Notes through maturity. In the event the Company and the Restricted
Subsidiaries meet the EBITDA Target for each of the quarters ended March 31,
1999 and June 30, 1999, no adjustment (upward or downward) will be made to the
interest rate. In the event the interest rate is increased pursuant to this
paragraph, such event shall be referred to as an "Interest Payment Triggering
Event." If the Company fails to file a quarterly report on Form 10-Q for a
quarter when it would otherwise be required by the Commission's rules, whether
or not it is so obligated to do so under Section 10.10 hereof, for which the
EBITDA Target is being determined, EBITDA for such quarter shall be deemed to be
less than the EBITDA Target.
As used in the preceding paragraph, "EBITDA" means Consolidated Cash
Flow Available for Fixed Charges; PROVIDED that all Consolidated Cash Flow
Available for Fixed Changes attributable to any Persons, assets or property that
were the subject of any Asset Acquisition or Investment (without giving effect
to the last sentence of the definition of Investment) made during the quarters
ended March 31, 1999 and June 30, 1999, shall be excluded from EBITDA. EBITDA
shall be derived from the applicable unaudited interim consolidated financial
statements of the Company and shall be determined in good faith by the Company,
consistent with the audited financial statements of the Company as included in
the Offering Memorandum, with all necessary normal recurring adjustments, and
shall be communicated to the Trustee by Officer's Certificate signed by two
officers of the Company on or prior to the date such financial statements are
filed with the Commission.
26
Interest will be payable semi-annually on each April 1 and October
1, commencing October 1, 1999, to the holders of record of Notes at the close of
business on the March 15 and September 15, respectively, immediately preceding
such interest payment date. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the Issue Date. Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
Pursuant to the Registration Rights Agreement, the interest rate on
the Notes is subject to increase under certain circumstances if the Company is
not in compliance with its obligations under the Registration Rights Agreement.
The terms and provisions contained in the Notes annexed hereto as
Exhibits A-1 and A-2 (including the Guarantees annexed hereto as Exhibit D)
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 3.02. OPTIONAL REDEMPTION.
The Notes will be redeemable at the option of the Company as set
forth in the Notes and in Article Thirteen.
Section 3.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Notes may be presented for registration of transfer or for exchange (the
"Registrar"), an office or agency (which shall be located in the Borough of
Manhattan in The City of New York, State of New York) where Notes may be
presented for payment (the "Paying Agent" or "Agent") and an office or agency
where notices and demands to or upon the Company in respect of the Notes, the
Guarantees and this Indenture may be served. The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" or "Agent" includes any additional paying agent. The Company may act as
its own Paying Agent, except for the purposes of payments on account of
principal on the Notes pursuant to Sections 10.11 and 10.16 hereof.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the Trust Indenture Act. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 6.07 hereof.
27
The Company initially appoints the Trustee as the Registrar and
Paying Agent and agent for service of notices and demands at the Corporate Trust
Office in connection with the Notes.
Section 3.04. EXECUTION AND AUTHENTICATION.
The Initial Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A-1 hereto. The Exchange Notes and
the Trustee's certificate of authentication relating thereto shall be
substantially in the form of Exhibit A-2 hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall approve the form of the Notes and any notation, legend or
endorsement thereon. Each Note shall be dated the date of issuance and shall
show the date of its authentication. Each Note shall have an executed Guarantee
from each of the Guarantors endorsed thereon substantially in the form of
Exhibit D hereto.
Notes shall be issued initially in the form of one or more Global
Notes, substantially in the form set forth in Exhibit A-1, deposited with the
Trustee, as custodian for the Depository, duly executed by the Company (and
having an executed Guarantee from each of the Guarantors endorsed thereon) and
authenticated by the Trustee as hereinafter provided and shall bear the legend
set forth in Exhibit B. The aggregate principal amount of the Global Notes may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depository, as hereinafter provided.
Two Officers shall sign, or one Officer shall sign, and one Officer
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to, the Notes for the Company, and the
Guarantees for the Guarantors, by manual or facsimile signature.
If an Officer or Assistant Secretary whose signature is on a Note or
a Guarantee, as the case may be, was an Officer or Assistant Secretary at the
time of such execution but no longer holds that office or position at the time
the Trustee authenticates the Note, the Note shall nevertheless be valid.
The Trustee shall authenticate (i) Initial Notes for original issue
in an aggregate principal amount not to exceed $100,000,000, (ii) Private
Exchange Notes from time to time only in exchange for a like principal amount of
Initial Notes and (iii) Unrestricted Notes from time to time only in exchange
for (A) a like principal amount of Initial Notes or (B) a like principal amount
of Private Exchange Notes, in each case upon a written order of the Company in
the form of an Officers' Certificate of the Company. Each such written order
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes,
Private Exchange Notes or Unrestricted Notes and such other information as the
Trustee may reasonably request. The aggregate principal amount of Notes
outstanding at any time may not exceed $100,000,000, except as provided in
Section 3.07.
Notwithstanding the foregoing, all Notes issued under this Indenture
shall vote and consent together on all matters (as to which any of such Notes
may vote or consent) as one
28
class and no series of Notes will have the right to vote or consent as a
separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Notes. Unless otherwise provided in
the appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
Section 3.05. TEMPORARY NOTES.
Until definitive Notes are prepared and ready for delivery, the
Company may execute and upon a Company Order the Trustee shall authenticate and
deliver temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes, in any authorized denominations, but may have variations that
the Company reasonably considers appropriate for temporary Notes as conclusively
evidenced by the Company's execution of such temporary Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay but in no event later than the
date that the Exchange Offer is consummated. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 10.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of like tenor and of
authorized denominations. Until so exchanged the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes.
Section 3.06. TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 10.02 being sometimes referred
to herein as the "Note Register") in which, subject to such reasonable
regulations as the Registrar may prescribe, the Company shall provide for the
registration of Notes and of transfers and exchanges of Notes. The Trustee is
hereby initially appointed Registrar for the purpose of registering Notes and
transfers of Notes as herein provided.
Subject to Sections 3.16 and 3.17, when Notes are presented to the
Registrar or a co-Registrar with a request from the Holder of such Notes to
register the transfer or exchange for an equal principal amount of Notes of
other authorized denominations, the Registrar shall
29
register the transfer or make the exchange as requested; PROVIDED, HOWEVER, that
every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or be accompanied by a written instrument of transfer or
exchange in form satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing. Whenever any
Notes are so presented for exchange, the Company and any Guarantor shall
execute, and the Trustee shall authenticate and deliver, the Notes and
Guarantees which the Holder making the exchange is entitled to receive. No
service charge shall be made to the Noteholder for any registration of transfer
or exchange. The Company may require from the Noteholder payment of a sum
sufficient to cover any transfer taxes or other governmental charge that may be
imposed in relation to a transfer or exchange, but this provision shall not
apply to any exchange pursuant to Sections 9.06, 10.11, 10.16 or 13.06 hereof
(in which events the Company will be responsible for the payment of all such
taxes which arise solely as a result of the transfer or exchange and do not
depend on the tax status of the Holder). The Trustee shall not be required to
exchange or register the transfer of any Note for a period of 15 days
immediately preceding the first mailing of notice of redemption of Notes to be
redeemed or of any Note selected, called or being called for redemption except,
in the case of any Note where public notice has been given that such Note is to
be redeemed in part, the portion thereof not to be redeemed.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange.
Any Holder of a beneficial interest in a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests in
such Global Notes may be effected only through a book-entry system maintained by
the Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Note shall be required to be reflected in a
book-entry system.
Section 3.07. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note of claims that the Note has been lost, destroyed or wrongfully taken,
the Company shall execute and upon a Company Order, the Trustee shall
authenticate and deliver a replacement Note of like tenor and principal amount,
bearing a number not contemporaneously outstanding, and the Guarantors shall
execute a replacement Guarantee, if the Holder of such Note furnishes to the
Company and to the Trustee evidence reasonably acceptable to them of the
ownership and the destruction, loss or theft of such Note and an indemnity bond
shall be posted by such Holder, sufficient in the judgment of the Company or the
Trustee, as the case may be, to protect the Company, the Trustee or any Agent
from any loss that any of them may suffer if such Note is replaced. The Company
may charge such Holder for the Company's and any Guarantor's expenses in
replacing such Note (including (i) expenses of the Trustee charged to the
Company and (ii) any tax or other governmental charge that may be imposed) and
the Trustee may charge the Company for the Trustee's expenses in replacing such
Note.
30
Every replacement Note and Guarantee issued pursuant to this Section
in lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company and each Guarantor, whether or
not the destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
Section 3.08. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Note (or one or more Predecessor Notes) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Notes, to
the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as provided in this subsection (a). Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company in writing of such Special Record Date. In the name and
at the expense of the Company, the Trustee shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at its
address as it appears in the Note Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Notes
(or their respective Predecessor Notes) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
subsection (b).
31
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after written notice given by the
Company to the Trustee of the proposed payment pursuant to this subsection
(b), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Section 3.09. PERSONS DEEMED OWNERS.
Prior to and at the time of due presentment for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Note is registered in the Note Register
as the owner of such Note for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.08) interest on such Note and for all
other purposes whatsoever, whether or not such Note shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 3.10. CANCELLATION.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
canceled, shall be promptly canceled by it. The Company and any Guarantor may at
any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company or such Guarantor may
have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Trustee. The Registrar and the Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer or exchange, redemption or payment. The Trustee and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section 3.10, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be destroyed and certification of their destruction delivered to the
Company unless by a Company Order the Company shall direct that the canceled
Notes be returned to it. The Trustee shall provide the Company a list of all
Notes that have been canceled from time to time as requested by the Company. If
the Company or any Affiliate of the Company acquires any Notes (other than by
redemption pursuant to Section 13.07 or an Offer pursuant to Section 10.11 or
10.16), such acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Notes unless and until such Notes are
delivered to the Trustee for cancellation.
32
Section 3.11. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest or Stated Maturity of any Note
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of principal, premium, if any, or interest
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date,
Redemption Date, date established for the payment of Defaulted Interest or at
the Stated Maturity, as the case may be. In such event, no interest shall accrue
with respect to such payment for the period from and after such Interest Payment
Date, Redemption Date, date established for the payment of Defaulted Interest or
Stated Maturity, as the case may be, to the next succeeding Business Day and,
with respect to any Interest Payment Date, interest for the period from and
after such Interest Payment Date shall accrue with respect to the next
succeeding Interest Payment Date.
Section 3.12. CUSIP AND CINS NUMBERS.
The Company in issuing the Notes may use "CUSIP" and "CINS" numbers
(if then generally in use), and if so, the Trustee shall use the CUSIP or CINS
numbers, as the case may be, in notices of redemption or exchange as a
convenience to Holders; PROVIDED, HOWEVER, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP or CINS
number, as the case may be, printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Company shall promptly notify the Trustee in writing of any change in
the CUSIP or CINS number of any type of Notes.
Section 3.13. PAYING AGENT TO HOLD MONEY IN TRUST.
Each Paying Agent shall hold in trust for the benefit of the
Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. Money held in
trust by the Paying Agent need not be segregated except as required by law and
except if the Company, any Guarantor or any of their respective Affiliates is
acting as Paying Agent, and in no event shall the Paying Agent be liable for any
interest on any money received by it hereunder. The Company at any time may
require the Paying Agent to pay all money held by it to the Trustee and account
for any funds disbursed and the Trustee may at any time during the continuance
of any Event of Default, upon a Company Order to the Paying Agent, require such
Paying Agent to pay forthwith all money so held by it to the Trustee and to
account for any funds disbursed. Upon making such payment, the Paying Agent
shall have no further liability for the money delivered to the Trustee.
Section 3.14. TREASURY NOTES.
In determining whether the Holders of the required aggregate
principal amount of Notes have concurred in any direction, waiver, consent or
notice, Notes owned by the Company or an Affiliate of the Company shall be
considered as though they are not outstanding, except
33
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which the Trustee
actually knows are so owned shall be so considered. The Company shall notify the
Trustee, in writing, when it or any of its Affiliates repurchases or otherwise
acquires Notes, of the aggregate principal amount of such Notes so repurchased
or otherwise acquired.
Section 3.15. DEPOSITS OF MONIES.
Prior to 11:30 a.m. New York City time on each Interest Payment
Date, maturity date, Change of Control Purchase Date and Asset Sale Offer
Purchase Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, maturity date, Change of Control Purchase Date
and Asset Sale Offer Purchase Date, as the case may be, in a timely manner which
permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, maturity date, Change of Control Purchase Date and Asset Sale
Offer Purchase Date, as the case may be.
Section 3.16. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.
(a) The Global Notes initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Notes may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository. In addition, Notes in the form of Exhibit A-1 or Exhibit A-2, as
the case may be, (without bearing the legends set forth on Exhibit B (the
"Physical Notes")), shall be transferred to all beneficial owners in exchange
for their beneficial interests in Global Notes if (i) the Depository notifies
the Company that it is unwilling or unable to continue as Depository for any
Global Note, or that it will cease to be a "Clearing Agency" under the Exchange
Act, and in either case a successor depositary is not appointed by the Company
within 90 days of such notice or (ii) an Event of Default has occurred and is
continuing and the Registrar has received a written request from the Depository
to issue Physical Notes.
34
(c) In connection with the transfer of Global Notes as an entirety
to beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Notes, an equal aggregate principal amount at maturity of Physical
Notes of like tenor of authorized denominations.
(d) Any Physical Note constituting a Restricted Note delivered in
exchange for an interest in a Global Note pursuant to subparagraph (b) or (c) of
this Section 3.16 shall, except as otherwise provided by Section 3.17, bear the
Private Placement Legend set forth on Exhibit A-1.
(e) The Holder of any Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
Section 3.17. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-U.S. PERSONS. The following additional
provisions shall apply with respect to the registration of any proposed
transfer of an Initial Note to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Initial Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the second anniversary of the Issue Date;
PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Note, or portion thereof,
at any time on or prior to the second anniversary of the Issue Date and
such transfer can otherwise be lawfully made under the Securities Act
without registering such Initial Notes thereunder or (y) the proposed
transferor has delivered to the Registrar a certificate substantially in
the form of Exhibit C hereto;
(ii) if the proposed transferee is an Agent Member and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Regulation S Global Note upon receipt by
the Registrar of (x) written instructions given in accordance with the
Depository's and the Registrar's procedures and (y) the appropriate
certificate, if any, required by clause (y) of paragraph (i) above,
together with any required legal opinions and certifications, the
Registrar shall register the transfer and reflect on its books and records
the date and an increase in the principal amount of the Regulation S
Global Note in an amount equal to the principal amount of Physical Notes
to be transferred, and the Trustee shall cancel the Physical Notes so
transferred;
(iii) if the proposed transferor is an Agent Member seeking to transfer
an interest in a Global Note, upon receipt by the Registrar of (x) written
instructions given in accordance with the Depository's and the Registrar's
procedures and (y) the appropriate certificate, if any, required by clause
(y) of paragraph (i) above, together with any
35
required legal opinions and certifications, the Registrar shall register
the transfer and reflect on its books and records the date and (A) a
decrease in the principal amount of the Global Note from which such
interests are to be transferred in an amount equal to the principal amount
of the Notes to be transferred and (B) an increase in the principal amount
of the Regulation S Global Note in an amount equal to the principal amount
of the Global Note to be transferred; and
(iv) until the 41st day after the Issue Date (the "Restricted
Period"), an owner of a beneficial interest in the Regulation S Global
Note may not transfer such interest to a transferee that is a U.S. Person
or for the account or benefit of a U.S. Person within the meaning of Rule
902(o) of the Securities Act. During the Restricted Period, all beneficial
interests in the Regulation S Global Note shall be transferred only
through Cedel or Euroclear, either directly if the transferor and
transferee are participants in such systems, or indirectly through
organizations that are participants.
(b) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of an Initial Note to a QIB
(excluding Non-U.S. Persons):
(i) the Registrar shall register the transfer of any Initial Note,
whether or not such Note bears the Private Placement Legend, if (x) the
requested transfer is after the second anniversary of the Issue Date;
PROVIDED, HOWEVER, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Note, or portion thereof,
at any time on or prior to the second anniversary of the Issue Date and
such transfer can otherwise be lawfully made under the Securities Act
without registering such Initial Note thereunder or (y) such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note 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 QIB within the
meaning of Rule 144A, 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 it 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 its foregoing representations in
order to claim the exemption from registration provided by Rule 144A;
(ii) if the proposed transferee is an Agent Member and the Notes to be
transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the 144A Global Note, upon receipt by the
Registrar of written instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall register
the transfer and reflect on its book and records the date and an increase
in the principal amount of the 144A Global Note in an amount equal to the
principal amount
36
of Physical Notes to be transferred, and the Trustee shall cancel the
Physical Note so transferred; and
(iii) if the proposed transferor is an Agent Member seeking to transfer
an interest in a Global Note, upon receipt by the Registrar of written
instructions given in accordance with the Depository's and the Registrar's
procedures, the Registrar shall register the transfer and reflect on its
books and records the date and (A) a decrease in the principal amount of
the Global Note from which interests are to be transferred in an amount
equal to the principal amount of the Notes to be transferred and (B) an
increase in the principal amount of the 144A Global Note in an amount
equal to the principal amount of the Global Note to be transferred.
(c) PRIVATE PLACEMENT LEGEND. Upon the registration of transfer,
exchange or replacement of Notes not bearing the Private Placement Legend, the
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the registration of transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear the
Private Placement Legend unless (i) the circumstances contemplated by paragraph
(a)(i)(x) of this Section 3.17 exist, (ii) there is delivered to the Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act or (iii) such Note has been sold pursuant to an effective registration
statement under the Securities Act.
(d) OTHER TRANSFERS. If a Holder proposes to transfer a Note
constituting a Restricted Note pursuant to any exemption from the registration
requirements of the Securities Act other than as provided for by Section
3.17(a), (b) and (c), the Registrar shall only register such transfer or
exchange if such transferor delivers an Opinion of Counsel satisfactory to the
Company and the Registrar that such transfer is in compliance with the
Securities Act and the terms of this Indenture; PROVIDED, HOWEVER, that the
Company may, based upon the opinion of its counsel, instruct the Registrar by a
Company Order not to register such transfer in any case where the proposed
transferee is not a QIB or Non-U.S. Person.
(e) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 3.16 or this Section 3.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable prior written notice to the Registrar.
37
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution, at any time,
with respect to the Notes, elect to have either Section 4.02 or Section 4.03 be
applied to all of the Outstanding Notes (the "Defeased Notes"), upon compliance
with the conditions set forth below in this Article Four.
Section 4.02. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.02, the Company and each Guarantor shall be deemed
to have been discharged from their obligations with respect to the Defeased
Notes and the related Guarantees on the date the conditions set forth below are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Defeased Notes, which shall thereafter be deemed
to be "Outstanding" only for the purposes of Section 4.05 and the other Sections
of this Indenture referred to in (a) and (b) below, and to have satisfied all
its other obligations under such Notes and this Indenture insofar as such Notes
are concerned (and the Trustee, at the expense of the Company, and, upon Company
Request, shall execute proper instruments acknowledging the same), except for
the following, which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Notes to receive, solely from
the trust funds described in Section 4.04 and as more fully set forth in such
section, payments in respect of the principal of, premium, if any, and interest
on such Notes when such payments are due, (b) the Company's obligations with
respect to such Defeased Notes under Sections 3.05, 3.06, 3.07, 10.02 and 10.03,
(c) the rights, powers, trusts, duties and immunities of the Trustee hereunder,
including, without limitation, the Trustee's rights under Section 6.07, and (d)
this Article Four. Subject to compliance with this Article Four, the Company may
exercise its option under this Section 4.02 notwithstanding the prior exercise
of its option under Section 4.03 with respect to the Notes.
Section 4.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.03, the Company and each Guarantor shall be
released from their obligations under any covenant or provision contained in
Sections 10.05 through 10.08 and 10.10 through 10.23 and the provisions of
Article Eight and Article Fourteen shall not apply, with respect to the Defeased
Notes, on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Defeased Notes shall thereafter be
deemed not to be "Outstanding" for the purposes of any direction, waiver,
consent or declaration or Act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
38
means that, with respect to the Defeased Notes, the Company and each Guarantor
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in Sections 10.05 through 10.08 and 10.10
through 10.23 or Article Eight, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document and such omission to comply shall not constitute a Default under
Sections 5.01(c), (d), (e) (other than a Default thereunder arising by reason of
the covenant defeasance itself), (g), or (k), but, except as specified above,
the remainder of this Indenture and such Defeased Notes shall be unaffected
thereby.
Section 4.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 4.02 or Section 4.03 to the Defeased Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Four applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (a) cash in
United States dollars in an amount, or (b) U.S. Government Obligations
which through the scheduled payment of principal, premium, if any, and
interest in respect thereof in accordance with their terms will provide,
not later than one day before the due date of any payment, money in an
amount, or (c) a combination thereof, in any such case, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of, premium, if
any, and interest on the Defeased Notes at the Stated Maturity of such
principal or installment of principal, premium, if any, or interest or at
redemption (if a notice of redemption has been duly given in accordance
with Article Thirteen), as the case may be; PROVIDED, however, that the
Company may only make such deposit if Article Fourteen does not prohibit
payments on the Notes at the time of the deposit; PROVIDED FURTHER,
HOWEVER, that the Trustee shall have been irrevocably instructed to apply
such cash or the proceeds of such U.S. Government Obligations to said
payments with respect to the Notes;
(2) No Default shall have occurred and be continuing on the date of
such deposit or, insofar as Sections 5.01(h), (i) or (j) are concerned, at
any time during the period ending on the ninety-first day after the date
of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period);
(3) Neither the Company nor any Subsidiary of the Company is an
"insolvent Person" within the meaning of any applicable Bankruptcy Law on
the date of such deposit or at any time during the period ending on the
ninety-first day after the date of
39
such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period);
(4) Such defeasance or covenant defeasance shall not cause the
Trustee for the Notes to have a conflicting interest in violation of
Section 6.08 and for purposes of the Trust Indenture Act with respect to
any securities of the Company or any Guarantor;
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company or any
Guarantor is a party or by which it is bound;
(6) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940, as amended, unless such
trust shall be registered under such Act or exempt from registration
thereunder;
(7) The Company shall have delivered to the Trustee an Opinion of
Counsel in the United States to the effect that after the 91st day
following the deposit, the trust funds will not be subject to the effect
of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Notes or any Guarantee over the
other creditors of the Company or any Guarantor with the intent of
defeating, hindering, delaying or defrauding creditors of the Company, any
Guarantor or others;
(9) No event or condition shall exist that would prevent the Company
from making payments of the principal of, premium, if any, and interest on
the Notes on the date of such deposit on the date of such deposit;
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (which counsel shall practice in the
United States), each stating that (i) all conditions precedent provided
for relating to either the defeasance under Section 4.02 or the covenant
defeasance under Section 4.03 (as the case may be) have been complied with
as contemplated by this Section 4.04 and (ii) if any other Indebtedness of
the Company or any Guarantor shall then be outstanding or committed, such
defeasance or covenant defeasance will not violate the provisions of the
agreements or instruments evidencing such Indebtedness;
(11) In the case of an election under Section 4.02, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (x)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date hereof, there has
been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Notes will not recognize income, gain or loss
for Federal
40
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred; and
(12) In the case of an election under Section 4.03, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
Opinions required to be delivered under this Section shall be
delivered by independent counsel (other than as set forth above) and may have
such qualifications as are customary for opinions of the type required and
reasonably acceptable to the Trustee, and counsel delivering such opinion may
rely on certificates of the Company or government officials customary for
opinions of the type required.
Section 4.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the proviso of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 4.05, the "Trustee") pursuant to Section 4.04 in respect of the Defeased
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (other than the Company) as the Trustee may determine,
to the Holders of such Notes of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law. Money
deposited with the Trustee or a Paying Agent pursuant to this Article Four shall
not be subject to Article Fourteen.
The Company shall pay and indemnify the Trustee and hold it harmless
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 4.04 or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
Defeased Notes.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 4.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
41
Section 4.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 4.02 or 4.03, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations of the Company and of any Guarantor under this Indenture, the Notes
and the Guarantees shall be revived and reinstated as though no deposit had
occurred pursuant to Section 4.02 or 4.03, as the case may be, until such time
as the Trustee or Paying Agent is permitted to apply all such money and U.S.
Government Obligations in accordance with Section 4.02 or 4.03, as the case may
be; PROVIDED, HOWEVER, that if the Company makes any payment of principal,
premium, if any, or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money and U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 5.01. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of the principal of or premium, if any,
when due and payable, on any of the Notes (at its Stated Maturity, upon
optional redemption, acceleration, required purchase, sinking fund,
scheduled principal payment or otherwise) (without regard to the
subordination provisions contained in this Indenture); or
(b) default in the payment of an installment of interest on any of
the Notes, when due and payable, continued for 30 days or more (without
regard to the subordination provisions contained in this Indenture); or
(c) the Company or any Guarantor fails to comply with any of its
obligations described under Article 8 or Sections 10.11 or 10.16; or
(d) the Company or any Guarantor fails to perform or observe any
other term, covenant or agreement contained in the Notes, the Guarantees
or this Indenture (other than a default specified in (a), (b) or (c)
above) for a period of 30 days after written notice of such failure
requiring the Company to remedy the same shall have been given (x) to the
Company by the Trustee or (y) to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes then
Outstanding; or
42
(e) default or defaults under one or more agreements, indentures or
instruments under which the Company, any Guarantor or any Restricted
Subsidiary then has outstanding Indebtedness in excess of $10.0 million
individually or in the aggregate and either (a) such Indebtedness is
already due and payable in full or (b) such default or defaults result in
the acceleration of the maturity of such Indebtedness; or
(f) (a) any Guarantee ceases to be in full force and effect or is
declared null and void or (b) any Guarantor denies that it has any further
liability under any Guarantee, or gives notice to such effect (other than,
in each case, by reason of the termination of this Indenture or the
release of any such Guarantee in accordance with Section 12.05, provided,
with respect to any Guarantor that is not a Material Subsidiary, if an
event described under subclause (a) or (b) will occur such event will not
be an Event of Default unless such event shall have continued for a period
of 30 days after (x) in the case of subclause (a) of this clause (f),
written notice of such condition shall have been given to the Company and
the Guarantor by the Trustee or to the Company, the Guarantor and the
Trustee by the Holders of 25% in the aggregate principal amount of the
Notes then Outstanding or (y) in the case of subclause (b) of this clause
(f), the date of such denial or notice by the Guarantor; or
(g) one or more judgments, orders or decrees of any court or
regulatory or administrative agency for the payment of money in excess of
$10.0 million either individually or in the aggregate, not covered by
insurance (provided that, to the extent covered by insurance, the insurer
has not disclaimed or indicated an intent to disclaim responsibility for
the payment thereof) shall have been rendered against the Company, any
Guarantor or any Restricted Subsidiary or any of their respective
properties and shall not have been discharged and either (a) any creditor
shall have commenced an enforcement proceeding upon such judgment, order
or decree or (b) there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment, order or decree, by
reason of a pending appeal or otherwise, shall not be in effect; or
(h) the Company, any Guarantor or any Material Subsidiary of the
Company pursuant to or under or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding;
(ii) consents to the making of a Bankruptcy Order in an
involuntary case or proceeding or the commencement of any case
against it;
(iii) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(iv) makes a general assignment for the benefit of its
creditors;
(v) files an answer or consent seeking reorganization or
relief;
(vi) shall admit in writing its inability to pay its debts
generally; or
43
(vii) consents to the filing of a petition in bankruptcy; or
(i) a court of competent jurisdiction in any involuntary case or
proceeding enters a Bankruptcy Order against the Company, any Guarantor or
any Material Subsidiary, and such Bankruptcy Order remains unstayed and in
effect for 60 consecutive days; or
(j) a Custodian shall be appointed out of court with respect to the
Company, any Guarantor or any Material Subsidiary or with respect to all
or any substantial part of the assets or properties of the Company, any
Guarantor or any Material Subsidiary; or
(k) any holder of at least $10.0 million in aggregate principal
amount of Indebtedness of the Company, any Guarantor or any Restricted
Subsidiary shall commence judicial proceedings to foreclose upon assets of
the Company, any Guarantor or any of its Restricted Subsidiaries having an
aggregate Fair Market Value, individually or in the aggregate, in excess
of $10.0 million or shall have exercised any right under applicable law or
applicable security documents to take ownership of any such assets in lieu
of foreclosure.
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than as specified in Sections 5.01(h),
(i) or (j) with respect to the Company) shall occur and be continuing, the
Trustee, by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Notes then Outstanding, by notice to the Trustee and the
Company, may declare the principal of, premium, if any, and accrued interest on
all of the Outstanding Notes due and payable immediately, upon which declaration
all such amounts payable in respect of the Notes will become and be immediately
due and payable; PROVIDED that so long as the Credit Facility shall be in full
force and effect, if an Event of Default shall have occurred and be continuing
(other than as specified in Sections 5.01(h), (i) or (j) with respect to the
Company), any such acceleration shall not be effective until the earlier to
occur of (x) five Business Days following delivery of a notice of such
acceleration to the representative under the Credit Facility and (y) the
acceleration of any Indebtedness under the Credit Facility. If an Event of
Default specified in Sections 5.01(h), (i) or (j) with respect to the Company
occurs and is continuing, then the principal of, premium, if any, and accrued
interest on all of the Outstanding Notes will IPSO FACTO become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder of Notes.
Notwithstanding the preceding paragraph, in the event of a
declaration of acceleration in respect of the Notes due to an Event of Default
specified in Section 5.01(e) shall have occurred and be continuing, such
declaration of acceleration will be automatically annulled if the Indebtedness
that is the subject of such Event of Default has been discharged or paid (if
permitted by the terms thereof) or the requisite holders thereof have rescinded
their declaration of acceleration in respect of such Indebtedness, and written
notice of such discharge or rescission, as the case may be, shall have been
given to the Trustee by the Company, within 45 days after
44
such acceleration in respect of the Notes and no other Event of Default has
occurred which has not been cured or waived during such 45-day period.
At any time after a declaration of acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Notes, by written notice to the Company and the Trustee, may rescind
such declaration if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay (i) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, (ii) all overdue interest
on all Outstanding Notes, (iii) the principal of and premium, if any, on
any Outstanding Notes which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by the
Outstanding Notes, and (iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by the
Outstanding Notes, and
(b) all Events of Default, other than the non-payment of principal
of, premium, if any, and interest on the Notes that has become due solely
by such declaration of acceleration, have been cured or waived as provided
in Section 5.13.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS. for Enforcement by Trustee.
The Company and each Guarantor covenant that if an Event of Default
specified in Section 5.01(a) or 5.01(b) shall have occurred and be continuing,
the Company and each Guarantor will, jointly and severally, upon demand of the
Trustee, pay to the Trustee, for the benefit of the Holders of such Notes, the
whole amount then due and payable on such Notes for principal, premium, if any,
and interest, with interest upon the overdue principal, premium, if any, and, to
the extent that payment of such interest shall be legally enforceable, upon
overdue installments of interest, at the rate then borne by the Notes; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company and each Guarantor fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may, but is not obligated under this paragraph to, institute a judicial
proceeding for the collection of the sums so due and unpaid and may, but is not
obligated under this paragraph to, prosecute such proceeding to judgment or
final decree, and may, but is not obligated under this paragraph to, enforce the
same against the Company, any Guarantor or any other obligor upon the Notes and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any Guarantor or any other obligor
upon the Notes, wherever situated.
45
If an Event of Default occurs and is continuing, the Trustee may in
its discretion but is not obligated under this paragraph to, (i) proceed to
protect and enforce its rights and the rights of the Holders under this
Indenture or any Guarantee by such appropriate private or judicial proceedings
as the Trustee shall deem most effectual to protect and enforce such rights,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted herein, including,
without limitation, seeking recourse against any Guarantor or (ii) proceed to
protect and enforce any other proper remedy, including, without limitation,
seeking recourse against any Guarantor. No recovery of any such judgment upon
any property of the Company or any Guarantor shall affect or impair any rights,
powers or remedies of the Trustee or the Holders.
Section 5.04. TRUSTEE MAY FILE PROOFS OF CLAIMS.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Notes, including each Guarantor or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, fees, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian, in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
46
Section 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture, the Notes or
any Guarantee may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name and as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
fees, expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the Notes in respect of
which such judgment has been recovered.
Section 5.06. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: to the Trustee for amounts due under Section 6.07;
Second: to the holders of Senior Indebtedness to the extent
required by Article Fourteen.
Third: to Holders for interest accrued on the Notes, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes for interest;
Fourth: to Holders for principal and premium, if any, amounts
owing under the Notes, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and premium, if any; and
Fifth: the balance, if any, to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
5.06.
Section 5.07. LIMITATION ON SUITS.
No holder of any of the Notes has any right to institute any
proceeding with respect to this Indenture or any remedy thereunder, unless
(i) the Holders of at least 25% in aggregate principal amount of the
Outstanding Notes have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as Trustee under
the Notes and this Indenture,
(ii) the Trustee has failed to institute such proceeding within 60
days after receipt of such notice and offer of indemnity, and
47
(iii) the Trustee, within such 60-day period, has not received
directions inconsistent with such written request by Holders of a majority
in aggregate principal amount of the Outstanding Notes. Such limitations
do not apply, however, to a suit instituted by a holder of a Note for the
enforcement of the payment of the principal of, premium, if any, or
interest on such Note on or after the respective due dates expressed in
such Note;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing to, any provision of
this Indenture, any Note or any Guarantee to affect, disturb or prejudice the
rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture,
any Note or any Guarantee, except in the manner provided in this Indenture and
for the equal and ratable benefit of all the Holders.
Section 5.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, but subject
to Article Fourteen, the Holder of any Note shall have the right, which is
absolute and unconditional, to receive cash payment of the principal of,
premium, if any, and (subject to Section 3.08 hereof) interest on such Note on
the respective Stated Maturities expressed in such Note (or, in the case of
redemption, a Change of Control Offer or Asset Sale Offer, on the Redemption
Date, Change of Control Purchase Date or Asset Sale Offer Purchase Date,
respectively) and to institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of such Holder.
Section 5.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture, any Note or any Guarantee and
such proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, each of the Guarantor, the Trustee and the Holders shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 5.10. RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
48
Section 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, PROVIDED, HOWEVER, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, any Note or any Guarantee or expose the Trustee to
personal liability; and
(b) subject to Section 315 of the TIA, the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with
such direction.
Section 5.13. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes may on behalf of the Holders of all the Notes
waive any past Default hereunder and its consequences, except a Default:
(a) in the payment of the principal of, premium, if any, or
interest on any Note or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected thereby.
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 5.14. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Note by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion
49
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section 5.14 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Notes, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of, premium,
if any, or interest on any Note on or after the respective Stated Maturities
expressed in such Note (or, in the case of redemption, on or after the
respective Redemption Dates).
Section 5.15. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will 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 or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Notes contemplated herein or in the Notes or which may affect the
covenants or the performance of this Indenture; and each of the Company and the
Guarantors (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by provision hereof
are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
50
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise thereof, as
a prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, 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 6.01.
Section 6.02. NOTICE OF DEFAULTS.
Within 30 days after the occurrence of any Default, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Note Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; PROVIDED, HOWEVER, that, except in
the case of a Default in the payment of the principal of, premium, if any, or
interest on any Note, the Trustee shall be protected in withholding such notice
if and so long as a trust committee of Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interest of
the Holders.
Section 6.03. CERTAIN RIGHTS OF TRUSTEE.
Subject to Section 6.01 hereof and the provisions of Section 315 of
the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
Board Resolution of the Company or any Guarantor may be sufficiently
evidenced by a Board Resolution thereof;
(c) the Trustee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and
51
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by the
Trustee in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other
than any liabilities arising out of its own negligence, bad faith or
willful misconduct;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security, other
evidence of indebtedness or other paper or document unless requested in
writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Notes then Outstanding; PROVIDED, HOWEVER, that,
if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such investigation shall be paid by the Company or, if paid by the Trustee
or any predecessor Trustee, shall be repaid by the Company upon demand;
PROVIDED, FURTHER, the Trustee in its discretion may make such further
inquiry or investigation into such facts or matters as it may deem fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company and its Subsidiaries, personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 6.04. TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITIONS OF NOTES OR
APPLICATION OF PROCEEDS THEREOF.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company
and the Guarantors, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes or of any Guarantee except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder and that
the statements made by it in a Statement of
52
Eligibility and Qualification on Form T-1, if any, to be supplied to the Company
are true and accurate subject to the qualifications set forth therein. The
Trustee shall not be accountable for the use or application by the Company of
Notes or the proceeds thereof.
Section 6.05. TRUSTEE AND AGENTS MAY HOLD NOTES; COLLECTIONS; ETC.
The Trustee, any Paying Agent, Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Notes, with the same rights it would have if it were not the Trustee,
Paying Agent, Registrar or such other agent and, subject to Sections 6.08 and
6.13 hereof and Sections 310 and 311 of the Trust Indenture Act, may otherwise
deal with the Company and receive, collect, hold and retain collections from the
Company with the same rights it would have if it were not the Trustee, Paying
Agent, Registrar or such other agent.
Section 6.06. MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required herein
or by law. Except for funds or securities deposited pursuant to Article Four,
the Trustee shall be required to invest all moneys received by it, until used or
applied as herein provided, in Cash Equivalents in accordance with the Company's
directions. The Trustee shall not be under any liability for interest on any
moneys received by it hereunder, except as otherwise agreed in writing with the
Company.
Section 6.07. COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR
CLAIM.
The Company and each Guarantor covenant and agree:
(a) to pay to the Trustee from time to time, and the Trustee shall
be entitled to, reasonable compensation for all services rendered by it
hereunder (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) to reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, fees, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the
provisions of this Indenture (including the reasonable compensation, fees,
and the expenses and disbursements of its counsel and of all agents and
other Persons not regularly in its employ), except any such expense,
disbursement or advance as may arise from its negligence, bad faith or
willful misconduct; and
(c) to indemnify the Trustee and each predecessor Trustee for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence, bad faith or willful misconduct on its part, arising
out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including
enforcement of this Section 6.07.
53
The obligations of the Company and each Guarantor under this Section to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, fees,
disbursements and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this Indenture.
Section 6.08. CONFLICTING INTERESTS.
The Trustee shall be subject to and comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under Trust Indenture Act Sections 310(a)(1) and (2)
and which shall have a combined capital and surplus of at least $25,000,000;
provided that, to the extent such capital and surplus is not at least
$100,000,000, such Trustee shall be a direct or indirect subsidiary of a bank
holding company which bank holding company shall have a combined capital and
surplus of at least $100,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of any
Federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee, or any trustee or trustees hereinafter appointed,
may at any time resign by giving written notice thereof to the Company at least
20 Business Days prior to the date of such proposed resignation. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board of Directors of
the Company, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor Trustee. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 20 Business Days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Note for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee. Such court
may thereupon, after such notice, if any, as it may deem proper, appoint a
successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders
of a majority in principal amount of the Outstanding Notes, delivered to the
Trustee and to the Company.
54
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act in accordance with Section 6.08 hereof
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose or
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) the Holder of any Note who has been a bona fide Holder of a Note for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution of its Board of Directors, shall promptly appoint
a successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Company or the Holders of the Notes and accepted appointment in the
manner hereinafter provided, the Holder of any Note who has been a bona fide
Holder for at least six months may on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Notes as their names and addresses appear in the Note Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment,
55
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee as if originally named as Trustee hereunder; but,
nevertheless, on the written request of the Company or the successor Trustee,
upon payment of amounts due it pursuant to Section 6.07, such retiring Trustee
shall duly assign, transfer and deliver to the successor Trustee all moneys and
property at the time held by it hereunder and shall execute and deliver an
instrument transferring to such successor Trustee all the rights, powers, duties
and obligations of the retiring Trustee. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights
and powers.
No successor Trustee with respect to the Notes shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
Upon acceptance of appointment by any successor Trustee as provided
in this Section 6.11, the successor, at the expense of the Company, shall give
notice thereof to the Holders of the Notes, by mailing such notice to such
Holders at their addresses as they shall appear on the Note Register. If the
acceptance of appointment is substantially contemporaneous with the resignation,
then the notice called for by the preceding sentence may be combined with the
notice called for by Section 6.10.
Section 6.12. MERGER, CONVERSION, AMALGAMATION, CONSOLIDATION OR SUCCESSION
TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or amalgamated, or any corporation resulting
from any merger, conversion, amalgamation or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided such corporation shall be
eligible under this Article Six to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 shall succeed to the trusts created by this Indenture any of the Notes
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 Notes so authenticated; and, in case at that time any of the
Notes shall not have been authenticated, any successor to the Trustee under this
Section 6.12 may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have been
authenticated.
56
Section 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY AND
GUARANTORS.
If and when the Trustee shall be or become a creditor of the Company
or any Guarantor (or other obligor on the Notes), the Trustee shall be subject
to the provisions of the TIA regarding the collection of claims against the
Company or any such Guarantor (or any such other obligor). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
set forth therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. PRESERVATION OF INFORMATION; COMPANY TO FURNISH TRUSTEE NAMES
AND ADDRESSES OF HOLDERS.
(a) The Trustee shall preserve the names and addresses of the
Noteholders and otherwise comply with TIA Section 312(a). If the Trustee is not
the Registrar, the Company shall furnish or cause the Registrar to furnish to
the Trustee before each Interest Payment Date, and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Noteholders.
Neither the Company nor the Trustee shall be under any responsibility with
regard to the accuracy of such list.
(b) The Company will furnish or cause to be furnished to the Trustee
(i) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request,
a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
PROVIDED, HOWEVER, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished pursuant to this Subsection 7.01(b).
Section 7.02. COMMUNICATIONS OF HOLDERS.
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Notes pursuant to Section 312(b) of the
Trust Indenture Act. The Company and the Trustee and any and all other Persons
benefited by this Indenture shall have the protection afforded by Section 312(c)
of the Trust Indenture Act.
57
Section 7.03. REPORTS BY TRUSTEE.
Within 60 days after May 15 of each year commencing with the first
May 15 following the date of this Indenture, the Trustee shall mail to all
Holders, as their names and addresses appear in the Note Register, a brief
report dated as of such May 15, in accordance with, and to the extent required
under Section 313 of the Trust Indenture Act. At the time of its mailing to
Holders, a copy of each such report shall be filed by the Trustee with the
Company, the Commission and with each stock exchange on which the Notes are
listed. The Company shall notify the Trustee when the Notes are listed on any
stock exchange.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.
Section 8.01. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company will not, in any transaction or series of related
transactions, merge or consolidate with or into, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets as an entirety to, any Person or Persons, and the Company
will not permit any of the Restricted Subsidiaries to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially all of
the properties and assets of the Company and the Restricted Subsidiaries (taken
as a whole) to any Person or Persons, unless at the time and after giving effect
thereto
(i) either (A)(1) if the transaction or transactions is a merger or
consolidation involving the Company, the Company shall be the Surviving
Person of such merger or consolidation or (2) if the transaction or
transactions is a merger or consolidation involving a Restricted
Subsidiary, such Restricted Subsidiary shall be the Surviving Person of
such merger or consolidation, or (B)(1) the Surviving Person shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia, and (2)(x) in the
case of a transaction involving the Company, the Surviving Person shall
expressly assume, by a supplemental indenture executed and delivered to
the Trustee, in form satisfactory to the Trustee, all the obligations of
the Company under the Notes, this Indenture and the Registration Rights
Agreement and, in each case, the Notes, this Indenture and the
Registration Rights Agreement shall remain in full force and effect, or
(y) in the case of a transaction involving a Restricted Subsidiary that is
a Guarantor, the Surviving Person shall expressly assume by a supplemental
indenture executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of such Restricted Subsidiary under its
Guarantee and this Indenture and the Registration Rights Agreement and, in
each case, such Guarantee and this Indenture and the Registration Rights
Agreement shall remain in full force and effect;
58
(ii) immediately after giving effect to such transaction or series of
related transactions on a PRO FORMA basis, no Default or Event of Default
shall have occurred and be continuing; and
(iii) the Company, or the Surviving Person, as the case may be,
immediately after giving effect to such transaction or series of related
transactions on a PRO FORMA basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or
in respect of such transaction or series of transactions), could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under
Section 10.12 hereof.
No Guarantor (other than a Guarantor whose Guarantee is to be
released in accordance with the terms of its Guarantee and this Indenture as
provided in Section 12.05) shall, in any transaction or series of related
transactions, consolidate with or merge with or into another Person, whether or
not such Person is affiliated with such Guarantor and whether or not such
Guarantor is the Surviving Person, unless (i) the Surviving Person (if other
than such Guarantor) is a corporation organized and validly existing under the
laws of the United States, any State thereof or the District of Columbia; (ii)
the Surviving Person (if other than such Guarantor) expressly assumes by a
supplemental indenture all the obligations of such Guarantor under its Guarantee
and the performance and observance of every covenant of this Indenture and the
Registration Rights Agreement to be performed or observed by such Guarantor; and
(iii) immediately after giving effect to such transaction or series of related
transactions on a PRO FORMA basis, no Default shall have occurred and be
continuing.
In connection with any consolidation, merger, transfer, lease or
other disposition contemplated hereby, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, transfer, lease or other disposition and the
supplemental indenture in respect thereof comply with the requirements of this
Indenture. In addition, each Guarantor, in the case of a transaction described
in the first paragraph of this Section 8.01, unless it is the other party to the
transaction or unless its Guarantee will be released and discharged in
accordance with its terms as a result of the transaction, will be required to
confirm, by supplemental indenture, that its Guarantee will continue to apply to
the obligations of the Company or the Surviving Person under this Indenture.
Section 8.02. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger of the Company or any Guarantor, or
any sale, assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the properties and assets of the Company or any Guarantor
in accordance with Section 8.01 hereof in which the Company or a Guarantor is
not the Surviving Person, the Surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of, the Company, under
this Indenture, the Notes and the Registration Rights Agreement or such
Guarantor under this Indenture, the Guarantee of such Guarantor and the
Registration Rights Agreement, as the case may be, with the same effect as if
such successor corporation had been named as the
59
Company or such Guarantor, as the case may be, herein, and in the Notes and in
the Registration Rights Agreement and, thereafter, except in the case of (a) a
lease or (b) any sale, assignment, conveyance, transfer, lease or other
disposition to a Restricted Subsidiary of the Company or such Guarantor, the
Company shall be discharged from all obligations and covenants under this
Indenture, the Notes and the Registration Rights Agreement and such Guarantor
shall be discharged from all obligations and covenants under this Indenture, the
Registration Rights Agreement and the Guarantee of such Guarantor, as the case
may be.
For all purposes of this Indenture and the Notes (including this
Article Eight and Sections 10.12, 10.14 and 10.17 hereof), Subsidiaries of any
Surviving Person will, upon such transaction or series of related transactions
described in this Article Eight, become Restricted Subsidiaries unless and until
designated as Unrestricted Subsidiaries pursuant to and in accordance with
Section 10.21 and all Indebtedness, and all Liens on property or assets, of the
Company and the Restricted Subsidiaries in existence immediately prior to such
transaction or series of related transactions will be deemed to have been
incurred upon such transaction or series of related transactions.
ARTICLE NINE
SUPPLEMENTAL INDENTURES AND WAIVERS
Section 9.01. SUPPLEMENTAL INDENTURES, AGREEMENTS AND WAIVERS WITHOUT
CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Guarantors,
when authorized by a Board Resolution of the Board of Directors of the Company
and each Guarantor, and the Trustee, at any time and from time to time, may
amend, waive, modify or supplement this Indenture or the Notes or the Guarantees
for any of the following purposes:
(a) to evidence the succession of another Person to the Company or a
Guarantor, and the assumption by any such successor of the covenants of
the Company or such Guarantor herein and in the Notes and/or in any
Guarantee, as the case may be, in accordance with Article Eight;
(b) to add to the covenants of the Company or any Guarantor for the
benefit of the Holders, or to surrender any right or power herein
conferred upon the Company or any Guarantor, as applicable, herein, in the
Notes or in any Guarantee, as the case may be;
(c) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, in the Notes, or in any Guarantee;
60
(d) to comply with the requirements of the Commission in order to
maintain the qualification of this Indenture under the Trust Indenture
Act;
(e) to secure the Notes pursuant to the requirements of Section
10.17 hereof or otherwise or to add a Guarantor pursuant to the
requirements of Section 10.18 hereof or otherwise;
(f) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder; or
(g) to make any other provisions with respect to matters or
questions arising under this Indenture, the Notes or any Guarantee;
PROVIDED, that, in any case, such provisions shall not materially adversely
affect the interests or rights of any of the Holders of the Notes and the
Company shall have delivered to the Trustee an Opinion of Counsel to such
effect.
Section 9.02. SUPPLEMENTAL INDENTURES, AGREEMENTS AND WAIVERS WITH CONSENT
OF HOLDERS.
Amendments and modifications of this Indenture or the Notes may be
made by the Company, the Guarantors and the Trustee with the consent of the
Holders of not less than a majority of the aggregate principal amount of the
outstanding Notes; PROVIDED, HOWEVER, that no such modification or amendment
may, without the consent of the holder of each outstanding Note affected
thereby,
(a) change the maturity of the principal of, or any installment of
interest on, any such Note or alter the optional redemption or repurchase
provisions of any such Note or this Indenture in a manner adverse to the
Holders of the Notes;
(b) reduce the principal amount of (or the premium of) any such
Note;
(c) reduce the rate of or extend the time for payment of interest on
any such Note;
(d) change the place or currency of payment of principal of (or
premium), or interest on, any such Note;
(e) modify any provisions of this Indenture relating to the waiver
of past defaults (other than to add sections of this Indenture or the
Notes subject thereto) or the right of the Holders of Notes to institute
suit for the enforcement of any payment on or with respect to any such
Note or any Guarantee or the modification and amendment provisions of this
Indenture and the Notes (other than to add sections of this Indenture or
the Notes which may not be amended, supplemented or waived without the
consent of each Holder therein affected);
61
(f) reduce the percentage of the principal amount of outstanding
Notes necessary for amendment to or waiver of compliance with any
provision of this Indenture or the Notes or for waiver of any Default in
respect thereof;
(g) waive a default in the payment of principal of, premium, if any,
or interest on, or redemption payment with respect to, the Notes (except a
rescission of acceleration of the Notes by the Holders thereof as provided
in this Indenture and a waiver of the payment default that resulted from
such acceleration);
(h) modify the ranking or priority of any Note or the Guarantee of
any Guarantor or make any change to Article Fourteen;
(i) following the occurrence of a Change of Control or Asset Sale,
modify the provisions of any covenant (or the related definitions) in this
Indenture requiring the Company to make and consummate a Change of Control
Offer in respect of such Change of Control or Asset Sale Offer in respect
of an Asset Sale or modify any of the provisions or definitions with
respect thereto in a manner materially adverse to the Holders of Notes
affected thereby otherwise than in accordance with this Indenture; or
(j) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with this
Indenture.
Upon the written request of the Company and each Guarantor
accompanied by a copy of a Board Resolution of the Board of Directors of the
Company and each Guarantor authorizing the execution of any such supplemental
indenture or other agreement, instrument or waiver, and upon the filing with the
Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall
join with the Company and each Guarantor in the execution of such supplemental
indenture or other agreement, instrument or waiver.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture or other
agreement, instrument or waiver, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES, AGREEMENTS AND WAIVERS.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01 hereof) shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate from each obligor under the Notes entering into such
supplemental indenture, agreement, instrument or waiver, each stating that the
execution of such supplemental indenture, agreement, instrument or waiver (a) is
authorized or permitted by this Indenture and (b) does not violate the
provisions of any agreement or instrument evidencing any other Indebtedness of
the Company, any Guarantor or any other Subsidiary of the Company. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture,
62
agreement, instrument or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture, the Notes, any Guarantee or otherwise.
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture, the Notes, if applicable, and/or the applicable Guarantee
shall be modified in accordance therewith, and such supplemental indenture shall
form a part of this Indenture, the Notes, if applicable, and/or the applicable
Guarantee, as the case may be, for all purposes; every Holder of Notes
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the Board
of Directors of the Company, to any such supplemental indenture may be prepared
and executed by the Company and each Guarantor and authenticated and delivered
by the Trustee upon a Company Order in exchange for Outstanding Notes.
Section 9.07. RECORD DATE.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any
supplemental indenture, agreement or instrument or any waiver, and shall
promptly notify the Trustee of any such record date. If a record date is fixed,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to consent to such
supplemental indenture, agreement or instrument or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective with respect
to such supplemental indenture, agreement or instrument or waiver which is
entered into more than 90 days after such record date.
Section 9.08. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if a notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as to
his Note or portion of a Note if the Trustee receives the notice of revocation
63
before the date the amendment or waiver becomes effective. An amendment or
waiver shall become effective in accordance with its terms and thereafter bind
every Holder.
ARTICLE TEN
COVENANTS
Section 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of, premium,
if any, and interest on the Notes in accordance with the terms of the Notes,
this Indenture and the Registration Rights Agreement.
Section 10.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain, in the Borough of Manhattan in The City
of New York, State of New York, an office or agency where Notes may be presented
or surrendered for payment, where Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The office of the Trustee
at its Corporate Trust Office will be such office or agency of the Company,
unless the Company shall designate and maintain some other office or agency for
one or more of such purposes. The Company will give prompt written notice to the
Trustee of any change in the location of any such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York, State of New York)
where the Notes may be presented or surrendered for any or all such purposes,
and may from time to time rescind such designation; PROVIDED, HOWEVER, that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York, State of New
York for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such other office or agency.
Section 10.03. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company or any of its Affiliates shall at any time act as its
own Paying Agent, it will, on or before each due date of the principal of,
premium, if any, or interest on any of the Notes, segregate and hold in trust
for the benefit of the Holders entitled thereto a sum sufficient to pay the
principal, premium, if any, or interest so becoming due until such sums shall
64
be paid to such Persons or otherwise disposed of as herein provided, and will
promptly notify the Trustee of its action or failure so to act.
If the Company or any of its Affiliates is not acting as Paying
Agent, the Company will, on or before each due date of the principal of,
premium, if any, or interest on, any Notes, deposit with a Paying Agent a sum in
same day funds sufficient to pay the principal, premium, if any, or interest so
becoming due, such sum to be held in trust for the benefit of the Holders
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent will agree with the Trustee, subject to
the provisions of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Notes in trust for the benefit of the
Holders entitled thereto until such sums shall be paid to such Holders or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any
Guarantor (or any other obligor upon the Notes) in the making of any
payment of principal of, premium, if any, or interest on the Notes;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and
liabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent will be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company upon receipt of a Company Request therefor, or (if then held by
the Company) will be discharged from such trust; and the Holder of such Note
will thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such
65
repayment, may at the expense of the Company cause to be published once, at the
option of the Company in the New York Times or the Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining shall be repaid
to the Company.
Section 10.04. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory), licenses and franchises of the
Company and each of the Restricted Subsidiaries; PROVIDED, HOWEVER, that the
Company will not be required to preserve any such right, license or franchise if
the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
the Restricted Subsidiaries as a whole and that the loss thereof is not adverse
in any material respect to the Holders; PROVIDED FURTHER, that the foregoing
will not prohibit a sale, transfer or conveyance of a Subsidiary of the Company
or any of its assets in compliance with the terms of this Indenture.
Section 10.05. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed (i) upon the Company or any of its
Restricted Subsidiaries or (ii) upon the income, profits or property of the
Company or any of the Restricted Subsidiaries and (b) all material lawful claims
for labor, materials and supplies, which, if unpaid, could reasonably be
expected to become a Lien upon the property of the Company or any of the
Restricted Subsidiaries; PROVIDED, HOWEVER, that the Company will not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings properly instituted and
diligently conducted and for which appropriate provision has been made.
Section 10.06. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties owned by the Company
or any of the Restricted Subsidiaries or used or held for use in the conduct of
their respective businesses to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will 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 10.06
will prevent (a) the Company from discontinuing the maintenance of any of such
properties if such discontinuance is, in the judgment of the Company (as
evidenced, in each instance where the fair market value of such property or
properties exceeds $5.0 million, by a Board Resolution of the Company),
desirable in the conduct of its business or the business of any of the
Restricted Subsidiaries and is not disadvantageous in any material respect to
the Holders or (b) a sale, transfer, merger,
66
consolidation or conveyance of assets in compliance with Article Eight or
Section 10.16 and, in each case, otherwise complies with the provisions of this
Indenture.
Section 10.07. INSURANCE.
The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size and type, including property and casualty loss, and workers'
compensation insurance.
Section 10.08. BOOKS AND RECORDS.
The Company will keep proper books of record and account, in which
full and correct entries will be made of all financial transactions and the
assets and business of the Company and each Restricted Subsidiary of the Company
in material compliance with GAAP.
Section 10.09. GUARANTEES.
Each of the Guarantors and the Company will, and the Company will
cause each of the Guarantors to, ensure at all times that, unless otherwise
permitted by this Indenture, each Guarantee will remain in full force and
effect.
Section 10.10. PROVISION OF FINANCIAL STATEMENTS.
For so long as the Notes are outstanding, whether or not the Company
or any Guarantor is subject to Section 13(a) or 15(d) of the Exchange Act, or
any successor provision thereto, the Company will, to the extent permitted by
Commission practice and applicable law and regulations, file with the Commission
the annual reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to such Section
13(a) or 15(d), or any successor provision thereto, if the Company was so
subject, such documents to be filed with the Commission on or prior to the date
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company was so subject. The Company will also in
any event (x) within 15 days of each Required Filing Date, whether or not
permitted or required to be filed with the Commission, (i) transmit or cause to
be transmitted by mail to all Holders of Notes, as their names and addresses
appear in the security register, without cost to such Holders, as their names
appear on the Note Register, without cost to such Holders and (ii) file with the
Trustee, copies of the annual reports, quarterly reports and other documents
which the Company would have been required to file with the Commission pursuant
to Section 13(a) or 15(d) of the Exchange Act, or any successor provision
thereto, if the Company was subject to either of such Sections and (y) if filing
such documents by the Company with the Commission is not permitted under the
Exchange Act, promptly upon written request and payment of the reasonable cost
of duplication and delivery, supply copies of such documents to any prospective
holder at the Company's cost. In addition, for so long as any Notes remain
outstanding, the Company will furnish to the Holders of Notes and to securities
analysts and prospective investors, upon their request, the
67
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, and, to any beneficial Holder of Notes, if not obtainable from
the Commission, information of the type that would be filed with the Commission
pursuant to the foregoing provisions, upon the request of any such Holder.
Section 10.11. CHANGE OF CONTROL.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 60
days after the Change of Control Date, to make and consummate an offer to
purchase (a "Change of Control Offer") all of the then outstanding Notes at a
purchase price (the "Change of Control Purchase Price") in cash equal to 101% of
the principal amount thereof, plus accrued and unpaid interest thereon, if any,
to the purchase date. The Company shall purchase all Notes properly tendered in
the Change of Control Offer and not withdrawn. Failure of the Company to
repurchase all of the Notes properly tendered for purchase and not withdrawn
will constitute an Event of Default under Section 5.01(c).
In order to effect such Change of Control Offer, the Company will,
not later than the 30th day after the Change of Control Date, mail to each
Holder of Notes a notice of the Change of Control Offer, which notice will
govern the terms of the Change of Control Offer and will state, among other
things, the procedures that Holders must follow to accept the Change of Control
Offer. The Change of Control Offer shall be kept open for a period of at least
20 Business Days and until 5:00 p.m., New York City time, on the last day of
such period (the "Change of Control Purchase Date"). The notice, which shall
govern the terms of the Change of Control Offer, shall include such disclosures
as are required by law and shall state:
(a) that the Change of Control Offer is being made pursuant to this
Section 10.11 and that all Notes tendered into the Change of Control Offer
will be accepted for payment; and that the Change of Control Offer shall
remain open for a period of 20 Business Days or such longer period as may
be required by applicable law;
(b) the purchase price (including the amount of accrued interest, if
any) for each Note, the Change of Control Purchase Date and the date on
which the Change of Control Offer expires;
(c) that any Note not tendered for payment will continue to accrue
interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Purchase Date;
(e) that Holders electing to have Notes purchased pursuant to a
Change of Control Offer will be required to surrender their Notes to the
Paying Agent at the address specified in the notice prior to 5:00 p.m.,
New York City time, on the Change of Control
68
Purchase Date and must complete any form letter of transmittal proposed by
the Company and acceptable to the Trustee and the Paying Agent;
(f) that Holders of Notes will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Change of Control Purchase Date, a facsimile
transmission or letter setting forth the name of the Holders, the
principal amount of Notes the Holders delivered for purchase, the Note
certificate number (if any) and a statement that such Holder is
withdrawing his election to have such Notes purchased;
(g) that Holders whose Notes are purchased only in part will be
issued Notes of like tenor equal in principal amount to the unpurchased
portion of the Notes surrendered;
(h) the instructions that Holders must follow in order to tender
their Notes; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not
permitted to file any such reports with the Commission, the comparable
reports prepared pursuant to Section 10.10), a description of material
developments in the Company's business, information with respect to pro
forma historical financial information after giving effect to such Change
of Control and such other information concerning the circumstances and
relevant facts regarding such Change of Control and Change of Control
Offer as would, in the good faith judgment of the Company, be material to
a Holder of Notes in connection with the decision of such Holder as to
whether or not it should tender Notes pursuant to the Change of Control
Offer.
On the Change of Control Purchase Date, the Company will (i) accept
for payment Notes or portions thereof in integral multiples of $1,000 tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money, in immediately available funds, sufficient to pay the purchase price of
all Notes or portions thereof so tendered and accepted and (iii) deliver to the
Trustee the Notes so accepted together with an Officers' Certificate setting
forth the Notes or portions thereof tendered to and accepted for payment by the
Company. The Paying Agent will promptly mail or deliver to the Holders of Notes
so accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Note of
like tenor equal in principal amount to any unpurchased portion of the Note
surrendered. Any Notes not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company will publicly announce the
results of the Change of Control Offer not later than the first Business Day
following the Change of Control Purchase Date.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act, and any other securities laws
or regulations and any applicable requirements of any securities exchange on
which the Notes are listed, in connection
69
with the repurchase of Notes pursuant to a Change of Control Offer. To the
extent that the provisions of any securities laws or regulations conflict with
the provisions of this Section 10.11, the Company will comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 10.11 by virtue thereof.
Section 10.12. LIMITATION ON INDEBTEDNESS.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, issue, guarantee
or in any manner become liable for or with respect to, contingently or otherwise
(in each case, to "incur"), the payment of any Indebtedness (including Acquired
Indebtedness), PROVIDED, HOWEVER, that (i) the Company or a Guarantor may incur
Indebtedness (including Acquired Indebtedness) and (ii) a Restricted Subsidiary
(which is not a Guarantor) may incur Acquired Indebtedness, if, in either case,
immediately after giving PRO FORMA effect thereto, the Consolidated Fixed Charge
Coverage Ratio of the Company is at least equal to 2.0:1.0.
Notwithstanding the foregoing, the Company and, to the extent set
forth below, the Guarantors and the Restricted Subsidiaries may incur each and
all of the following (collectively, "Permitted Indebtedness"):
(i) Indebtedness of the Company or any Guarantor under the Credit
Facility in an aggregate principal amount at any one time outstanding not
to exceed the greater of (x) $100.0 million or (y) the sum of (A) 85% of
the book value of the accounts receivable of the Company and the
Restricted Subsidiaries on a consolidated basis in accordance with GAAP
and (B) 60% of the book value of the inventory of the Company and the
Restricted Subsidiaries on a consolidated basis in accordance with GAAP,
less any voluntary or mandatory prepayments actually made thereunder (to
the extent that the corresponding commitments have been permanently
reduced);
(ii) Indebtedness of the Company pursuant to the Notes and
Indebtedness of any Guarantor pursuant to a Guarantee of the Notes;
(iii) Indebtedness of the Company owing to a Restricted Subsidiary;
PROVIDED that any Indebtedness for borrowed money of the Company owing to
a Restricted Subsidiary is subordinated in accordance with provisions set
forth in this Indenture; PROVIDED, FURTHER, that any disposition, pledge
or transfer of any such Indebtedness to a Person (other than a
disposition, pledge or transfer to a Restricted Subsidiary) shall be
deemed to be an incurrence of such Indebtedness by the Company not
permitted by this clause (iii);
(iv) Indebtedness of a Restricted Subsidiary owing to and held by
the Company or another Restricted Subsidiary which is unsecured; PROVIDED
that (a) any disposition, pledge or transfer of any such Indebtedness to a
Person (other than the Company or a Restricted Subsidiary) shall be deemed
to be an incurrence of such Indebtedness by the obligor not permitted by
this clause (iv), and (b) any transaction pursuant to which any Restricted
Subsidiary, which has Indebtedness owing to the Company or any other
Restricted Subsidiary, ceases to be a
70
Restricted Subsidiary shall be deemed to be the incurrence of Indebtedness
by such Restricted Subsidiary that is not permitted by this clause (iv);
(v) Indebtedness of the Company or any Restricted Subsidiary under
Interest Rate Agreements not entered into for speculative purposes and
covering Indebtedness of the Company or such Restricted Subsidiary (which
Indebtedness (a) bears interest at fluctuating interest rates and (b) is
otherwise permitted to be incurred under this Section 10.12);
(vi) Indebtedness of the Company or any Restricted Subsidiary under
Currency Agreements relating to (a) Indebtedness of the Company or such
Restricted Subsidiary and/or (b) obligations to purchase or sell assets or
properties, in each case, incurred in the ordinary course of business of
the Company; PROVIDED, HOWEVER, that such Currency Agreements do not
increase the Indebtedness or other obligations of the Company outstanding
other than as a result of fluctuations in foreign currency exchange rates
or by reason of fees, indemnities and compensation payable thereunder;
(vii) Indebtedness of the Company or any Guarantor represented by
Capitalized Lease Obligations or Purchase Money Obligations or other
Indebtedness incurred or assumed in connection with the acquisition or
development of real or personal movable or immovable property in each case
incurred for the purpose of financing or refinancing all or any part of
the purchase price or cost of construction or improvement of property used
in the business of the Company or such Guarantor, in an aggregate
principal amount pursuant to this clause (vii) not to exceed $20.0 million
per year; PROVIDED, that the principal amount of any Indebtedness
permitted under this clause (vii) did not in each case at the time of
incurrence exceed the Fair Market Value, as determined by the Company or
such Guarantor in good faith, of the acquired or constructed asset or
improvement so financed;
(viii) reimbursement obligations under letters of credit and letters
of credit, in each case, to support workers compensation obligations and
bankers acceptances and performance bonds, surety bonds and performance
guarantees, of the Company or any Guarantor, in each case, in the ordinary
course of business consistent with past practice;
(ix) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any
Indebtedness outstanding on the Issue Date or incurred under the first
paragraph of this Section 10.12 or clause (ii) above, including any
successive refinancings so long as the aggregate principal amount of
Indebtedness represented thereby is not increased by such refinancing plus
the amount of any stated or reasonably determined prepayment premium paid
in connection with such a refinancing, plus the amount of expenses of the
Company or a Restricted Subsidiary incurred in connection with such
refinancing and (A) in the case of any refinancing of Indebtedness that is
Subordinated Indebtedness, such new Indebtedness is subordinated to the
Notes at least to the same extent as the Indebtedness being refinanced and
(B) such
71
new Indebtedness has an Average Life to Stated Maturity equal to or
greater than the Average Life to Stated Maturity of the Subordinated
Indebtedness being repurchased, redeemed, defeased, retired, acquired or
paid; and
(x) Indebtedness of the Company or any Restricted Subsidiary in
addition to that described in clauses (i) through (ix) above, so long as
the aggregate principal amount of all such additional Indebtedness shall
not exceed $25.0 million outstanding at any one time in the aggregate.
Section 10.13. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 45 days after the
end of the first three fiscal quarters of the Company and 90 days after the end
of each fiscal year of the Company ending after the date hereof, a written
statement signed by the chief executive officer and either the principal
financial officer or principal accounting officer of the Company, stating (i)
that a review of the activities of the Company during the preceding fiscal
quarter or year, as applicable, has been made under the supervision of the
signing officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and (ii)
that, to the knowledge of each officer signing such certificate, the Company has
kept, observed, performed and fulfilled each and every covenant and condition
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions, conditions and covenants hereof (or,
if a Default shall have occurred, describing all such Defaults of which such
officers may have knowledge, their status and what action the Company is taking
or proposes to take with respect thereto). When any Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Restricted Subsidiary
gives any notice or takes any other action with respect to a claimed Default,
the Company will promptly notify the Trustee of such Default, notice or action
and will deliver to the Trustee by registered or certified mail or by telegram,
or facsimile transmission followed by hard copy by registered or certified mail
an Officers' Certificate specifying such event, notice or other action within
five Business Days after the Company becomes aware of such occurrence and what
action the Company is taking or proposes to take with respect thereto.
Section 10.14. LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly:
(i) declare or pay any dividend or make any other distribution or
payment on or in respect of Capital Stock of the Company or any payment to
the direct or indirect holders (in their capacities as such) of Capital
Stock of the Company (other than dividends or distributions to the extent
payable in shares of Qualified Capital Stock of the Company or in options,
warrants or other rights to acquire shares of such Qualified Capital
Stock); or
72
(ii) purchase, redeem, defease or otherwise acquire or retire for
value, directly or indirectly, the Company's Capital Stock or any Capital
Stock of any Restricted Subsidiary (other than any such Capital Stock
owned by the Company or any Restricted Subsidiary); or
(iii) make any principal payment on, or purchase, repurchase, redeem,
defease, retire or otherwise acquire for value, prior to any scheduled
maturity, scheduled repayment, scheduled sinking fund payment or other
Stated Maturity, any Subordinated Indebtedness (other than any
Subordinated Indebtedness owed to and held by the Company or a Restricted
Subsidiary); or
(iv) declare or pay any dividend or make any distribution or payment
on or in respect of any Capital Stock of any Restricted Subsidiary or any
payment to the direct or indirect holders (in their capacities as such) of
any Capital Stock of any Restricted Subsidiary (other than to the Company
or any Restricted Subsidiary and other than to minority stockholders of
any Restricted Subsidiary), provided that such dividends, payments or
distributions are made on a pro rata basis to the stockholders of such
Restricted Subsidiary; or
(v) make any Investment (other than any Permitted Investment) in any
Person;
any of the foregoing actions described in clauses (i) through (v), other
than any such action that is a Permitted Payment, collectively, "Restricted
Payments") (the amount of any such Restricted Payment, if other than cash, shall
be the Fair Market Value of the asset(s) proposed to be transferred by the
Company or such Restricted Subsidiary, as the case may be, in each case, as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution), unless (1) immediately
before and immediately after giving effect to such Restricted Payment on a PRO
FORMA basis, no Default shall have occurred and be continuing; (2) immediately
before and immediately after giving effect to such Restricted Payment on a PRO
FORMA basis, the Company could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under the provisions of Section 10.12, and (3)
immediately after giving effect to the proposed Restricted Payment, the
aggregate amount of all such Restricted Payments (including any Designation
Amounts) declared or made after the Issue Date, does not exceed an amount equal
to the sum of, without duplication:
(A) 50% of the cumulative Consolidated Net Income of the Company
during the period (treated as one accounting period) beginning on January
1, 1999 and ending on the last day of the Company's last fiscal quarter
ending prior to the date of the Restricted Payment (or, if such aggregate
cumulative Consolidated Net Income shall be a deficit, minus 100% of such
deficit); plus
(B) the aggregate Net Cash Proceeds received after the Issue Date by
the Company from the issuance or sale (other than to any of the Restricted
Subsidiaries) of Qualified Capital Stock of the Company or from the
exercise of any options, warrants or rights to purchase such Qualified
Capital Stock of the Company (except, in each case, to the extent such
proceeds are used to purchase, redeem or otherwise retire Capital Stock or
73
Subordinated Indebtedness as set forth in clause (ii) or (iii) of the
following paragraph and excluding the net cash proceeds from any issuance
and sale of Capital Stock or from any such exercises, in each case,
financed, directly or indirectly, using funds borrowed from the Company or
any Restricted Subsidiary until and to the extent such borrowing is
repaid); plus
(C) the aggregate Net Cash Proceeds received after the Issue Date by
the Company from the conversion or exchange, if any, of debt securities or
Redeemable Capital Stock of the Company or its Subsidiaries into or for
Qualified Capital Stock of the Company plus, whether or not such debt
securities or Redeemable Capital Stock were issued prior to or after the
Issue Date, the aggregate Net Cash Proceeds from their original issuance,
less any principal and sinking fund payments made thereon; plus
(D) in the case of the disposition or repayment of any Investment
(in whole or in part) constituting a Restricted Payment made after the
Issue Date (other than an Investment made under clause (vi) of the
following paragraph), an amount (to the extent not included in
Consolidated Net Income) equal to the lesser of the return of capital with
respect to such Investment and the initial amount of such Investment which
was treated as a Restricted Payment, in either case, less the cost of
disposition of such Investment; plus
(E) so long as the Designation thereof was treated as a Restricted
Payment made after the Issue Date, with respect to any Unrestricted
Subsidiary that has been redesignated as a Restricted Subsidiary after the
Issue Date in accordance with Section 10.21, the Fair Market Value of the
Capital Stock of such Subsidiary owned by the Company and the Restricted
Subsidiaries, provided that such amount shall not in any case exceed the
Designation Amount with respect to such Restricted Subsidiary upon its
Designation.
Notwithstanding the foregoing, and in the case of clauses (ii)
through (v) below, so long as no Default shall have occurred and be continuing
or would arise therefrom, the foregoing provisions shall not prohibit the
following actions (each of clauses (i) through (vii) being referred to as a
"Permitted Payment"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment was
permitted by the provisions of this Indenture;
(ii) the repurchase, redemption, or other acquisition or retirement of
any shares of any class of Capital Stock of the Company in exchange for
(including any such exchange pursuant to the exercise of a conversion
right or privilege in connection with which cash is paid in lieu of the
issuance of fractional shares or scrip), or out of the Net Cash Proceeds
of a substantially concurrent issue and sale for cash to any Person (other
than to a Restricted Subsidiary) of, shares of Qualified Capital Stock of
the Company; PROVIDED, that the Net Cash Proceeds from the issuance of
such shares of Qualified Capital Stock are excluded from clause (B) of the
first paragraph of this Section 10.14;
74
(iii) the repurchase, redemption, defeasance, retirement or acquisition
for value or payment of principal of any Subordinated Indebtedness in
exchange for, or out of the Net Cash Proceeds of a substantially
concurrent issuance and sale for cash to any Person (other than to the
Company or any Restricted Subsidiary) of, any Qualified Capital Stock of
the Company; PROVIDED, that the Net Cash Proceeds from the issuance of
such shares of Qualified Capital Stock are excluded from clause (B) of the
first paragraph of this Section 10.14;
(iv) the repurchase, redemption, defeasance, retirement, acquisition
for value or payment of principal of any Subordinated Indebtedness (other
than Redeemable Capital Stock) of the Company in exchange for, or out of
the Net Cash Proceeds of a substantially concurrent issuance and sale for
cash to any Person (other than to a Restricted Subsidiary) of, new
Subordinated Indebtedness of the Company (which may be guaranteed by a
Guarantor on a basis such that it constitutes Subordinated Indebtedness),
PROVIDED that any such new Subordinated Indebtedness (1) shall be in a
principal amount that does not exceed the principal amount so repurchased,
redeemed, defeased, retired, acquired or paid (or, if such Subordinated
Indebtedness provides for an amount less than the principal amount thereof
to be due and payable upon a declaration of acceleration thereof, then
such lesser amount as of the date of determination), plus the amount of
any stated or reasonably determined prepayment premium paid in connection
with such repurchase, redemption, defeasance, retirement, acquisition or
payment, plus the amount of expenses of the Company and the Restricted
Subsidiaries incurred in connection with such repurchase, redemption,
defeasance, retirement, acquisition or payment; (2) has an Average Life to
Stated Maturity equal to or greater than the Average Life to Stated
Maturity of the Subordinated Indebtedness being repurchased, redeemed,
defeased, retired, acquired or paid; and (3) is expressly subordinated in
right of payment to the Notes at least to the same extent as the
Subordinated Indebtedness to be repurchased, redeemed, defeased, retired,
acquired or paid;
(v) the repurchase, redemption or other acquisition, cancellation or
retirement for value of any Capital Stock of the Company or similar
securities, held by (a) officers, directors or employees or former
officers, directors or employees of the Company or any of its Subsidiaries
(or their estates or beneficiaries under their estates) pursuant to any
management, stock option agreement or stock option plan, not to exceed
$2.0 million in any fiscal year of the Company and (b) the repurchase,
redemption or other acquisition, cancellation or retirement for value of
any Capital Stock of the Company held by former owners of Subsidiaries of
the Company, that was, as of the date of acquisition of such stock by such
Persons subject to a lock-up agreement or other similar agreement with the
Company restricting the resale of such Capital Stock, so long as the
aggregate amount utilized under this clause (v) does not exceed $7.0
million during the term of the Notes;
(vi) cash payments in lieu of fractional shares issuable as dividends
on preferred securities of the Company, not to exceed $250,000 in any
fiscal year of the Company; and
75
(vii) Investments (in addition to Permitted Investments) not to exceed
$10.0 million at any time outstanding.
In computing the amount of Restricted Payments previously made for
purposes of clause (3) of the first paragraph of this covenant, Restricted
Payments under the immediately preceding clause (i) of the immediately preceding
paragraph shall be included. If the Company makes a Restricted Payment which, at
the time of the making of such Restricted Payment would in the good faith
determination of the Company be permitted under the provisions of this
Indenture, such Restricted Payment shall be deemed to have been made in
compliance with this Indenture notwithstanding any subsequent adjustments made
in good faith to the Company's financial statements affecting Consolidated Net
Income of the Company for any period.
Section 10.15. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not cause or permit any of the
Restricted Subsidiaries to, directly or indirectly, conduct any business or
enter into or suffer to exist any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or lease of assets,
property or services) with, or for the benefit of, any Affiliate of the Company
or of a Restricted Subsidiary (other than the Company or a Restricted
Subsidiary) or any officer or director of the Company or any Restricted
Subsidiary unless such transaction or series of related transactions is entered
into in good faith and in writing and (a) such transaction is on terms that are
no less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those that would be available in a comparable transaction in
arm's-length dealings with an unrelated third party and (b) with respect to any
transaction or series of related transactions involving aggregate value in
excess of $5.0 million, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related transactions
complies with the requirements of this Section 10.15 and, with respect to any
transaction or series of related transactions involving aggregate value in
excess of $10.0 million, either (i) such transaction or series of transactions
has been approved by a majority of the Board of Directors of the Company,
including a majority of the Disinterested Directors of the Company, or in the
event there is only one Disinterested Director, by such Disinterested Director,
or (ii) the Company delivers to the Trustee a written opinion of an Independent
Financial Advisor stating that the transaction or series of related transactions
is fair to the Company or such Restricted Subsidiary from a financial point of
view.
The requirements of this Section 10.15 shall not apply to (i) any
transaction with an officer, director or employee of the Company entered into in
the ordinary course of business (including compensation and employee benefit
arrangements with any officer or director of the Company, including under any
stock option or stock incentive plans); PROVIDED that such transaction has been
approved in the manner described in clause (b) above if such transaction would,
pursuant to clause (b) above, require such approval, (ii) the payment of
reasonable and customary compensation and fees to directors of the Company or
any Restricted Subsidiary who are not employees of the Company or any Restricted
Subsidiary, (iii) the payment of dividends otherwise in compliance with Section
10.14, (iv) indemnification agreements for the benefit of officers, directors
and employees, (v) transactions with or among the Company and any
76
Restricted Subsidiary or between or among Restricted Subsidiaries, so long as no
Person (other than a Restricted Subsidiary) which would otherwise be an
Affiliate, officer or director of the Company or a Restricted Subsidiary has any
direct or indirect interest in any such Restricted Subsidiary, (vi) any
transaction with Affiliates in existence on the Issue Date as in effect on the
Issue Date, and (vii) leases of property or equipment or other agreements
entered into in connection with an Asset Acquisition with Persons that were not
Affiliates, officers or directors of the Company or a Restricted Subsidiary
immediately prior to such Asset Acquisition.
Section 10.16. LIMITATION ON SALE OF ASSETS.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale unless (i) at
least 75% of the consideration from such Asset Sale is received in cash or Cash
Equivalents and (ii) the Company or such Subsidiary receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value of the
shares or assets subject to such Asset Sale.
If all or a portion of the Net Cash Proceeds of any Asset Sale are
not required to be applied to repay permanently any Senior Indebtedness
outstanding as required by the terms thereof, or the Company determines not to
apply such Net Cash Proceeds to the permanent repayment of the Senior
Indebtedness which is required to be prepaid, or if no such Indebtedness under
the Senior Indebtedness is outstanding then, the Company or such Restricted
Subsidiary may within 365 days of such Asset Sale, invest the Net Cash Proceeds
in capital expenditures, properties and other assets or inventories that (as
determined by the Board of Directors of the Company) replace the properties and
assets that were the subject of the Asset Sale or in properties and assets that
will be used in the businesses of the Company or its Subsidiaries existing on
the Issue Date or in businesses reasonably related thereto.
To the extent all or part of the Net Cash Proceeds of any Asset Sale
are not applied, or the Company determines not to so apply such Net Cash
Proceeds, within 365 days of such Asset Sale as described in the immediately
preceding paragraph (such Net Cash Proceeds, the "Unutilized Net Cash
Proceeds"), the Company shall, within 20 days after such 365th day or at any
earlier time after such Asset Sale, make an offer to purchase (the "Asset Sale
Offer") all outstanding Notes up to a maximum principal amount (expressed as a
multiple of $1,000) of Notes equal to such Unutilized Net Cash Proceeds, at a
purchase price in cash equal to 100% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the Asset Sale Offer Purchase
Date; PROVIDED, HOWEVER, that the Asset Sale Offer may be deferred until there
are aggregate Unutilized Net Cash Proceeds equal to or in excess of $10.0
million, at which time the entire amount of such Unutilized Net Cash Proceeds,
and not just the amount in excess of $10.0 million shall be applied as required
pursuant to this paragraph. An Asset Sale Offer will be required to be kept open
for a period of at least 20 Business Days.
With respect to any Asset Sale Offer effected pursuant to this
Section 10.16, among the Notes, to the extent the aggregate principal amount of
Notes tendered pursuant to such Asset Sale Offer exceeds the Unutilized Net Cash
Proceeds to be applied to the repurchase thereof, such Notes shall be purchased
PRO RATA based on the aggregate principal amount of such
77
Notes tendered by each Holder. To the extent the Unutilized Net Cash Proceeds
exceed the aggregate amount of Notes tendered by the Holders of the Notes
pursuant to such Asset Sale Offer, the Company may retain and utilize any
portion of the Unutilized Net Cash Proceeds not applied to repurchase the Notes
for any purpose consistent with the other terms of this Indenture.
Notice of an Asset Sale Offer shall be mailed by the Company not
more than 20 days after the obligation to make such Asset Sale Offer arises to
the Holders of Notes at their last registered addresses with a copy to the
Trustee and the Paying Agent. The Asset Sale Offer shall remain open from the
time of mailing for at least 20 Business Days or such longer period as may be
required by applicable law and until 5:00 p.m., New York City time, on the last
day of the period (the "Asset Sale Offer Purchase Date"). The notice, which
shall govern the terms of the Asset Sale Offer, shall include such disclosures
as are required by law and shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
10.16 and that all Notes in integral multiples of $1,000 tendered into the
Asset Sale Offer shall be accepted for payment; PROVIDED, HOWEVER, that if
the aggregate principal amount of Notes tendered in the Asset Sale Offer
exceeds the Unutilized Net Cash Proceeds, the Company shall select the
Notes to be purchased on a PRO RATA basis based upon the aggregate
principal amount of such Notes tendered by each Holder; and that the Asset
Sale Offer shall remain open for a period of 20 Business Days or such
longer period as may be required by applicable law;
(b) the purchase price (including the amount of accrued interest, if
any) for each Note, the Asset Sale Offer Purchase Date and the date on
which the Asset Sale Offer expires;
(c) that any Note not tendered for payment shall continue to accrue
interest in accordance with the terms thereof;
(d) that, unless the Company shall default in the payment of the
purchase price, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Asset Sale Offer Purchase
Date;
(e) that Holders electing to have Notes purchased pursuant to an
Asset Sale Offer shall be required to surrender their Notes to the Paying
Agent at the address specified in the notice prior to 5:00 p.m., New York
City time, on the Asset Sale Offer Purchase Date and must complete any
form letter of transmittal proposed by the Company and acceptable to the
Trustee and the Paying Agent;
(f) that any Holder of Notes shall be entitled to withdraw its
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the Asset Sale Offer Purchase Date, a facsimile transmission
or letter setting forth the name of such Holder, the principal amount of
Notes the Holder delivered for purchase, the Note certificate number (if
any) and a statement that such Holder is withdrawing its election to have
such Notes purchased;
78
(g) that Holders whose Notes are purchased only in part shall be
issued Notes of like tenor equal in principal amount to the unpurchased
portion of the Notes surrendered;
(h) the instructions that Holders must follow in order to tender
their Notes; and
(i) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the
Commission pursuant to the Exchange Act (or, if the Company is not
permitted to file any such reports with the Commission, the comparable
reports prepared pursuant to Section 10.10), a description of material
developments in the Company's business, information with respect to pro
forma historical financial position and results of operations after giving
effect to such Asset Sale and such other information concerning the
circumstances and relevant facts regarding such Asset Sale and Asset Sale
Offer as would, in the good faith judgment of the Company, be material to
a Holder of Notes in connection with the decision of such Holder as to
whether or not it should tender Notes pursuant to the Asset Sale Offer.
On the Asset Sale Offer Purchase Date, the Company shall (i) accept
for payment (subject to pro ration as described in the second preceding
paragraph) Notes or portions thereof in integral multiples of $1,000 tendered
pursuant to the Asset Sale Offer, (ii) deposit with the Paying Agent money, in
immediately available funds, sufficient to pay the purchase price of all Notes
or portions thereof so tendered and accepted and (iii) deliver to the Trustee
the Notes so accepted together with an Officers' Certificate setting forth the
Notes or portions thereof tendered to and accepted for payment by the Company.
The Paying Agent shall promptly mail or deliver to the Holders of Notes so
accepted payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Note of like
tenor equal in principal amount to any unpurchased portion of the Note
surrendered. Any Notes not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer not later than the first Business Day following
the Asset Sale Offer Purchase Date.
In the event that the Company makes an Asset Sale Offer, the Company
shall comply, to the extent applicable, with the requirements of Section 14(e)
of the Exchange Act, and any other applicable securities laws or regulations and
any applicable requirements of any securities exchange on which the Notes are
listed, and any violations of the provisions of this Section 10.16 relating to
such Asset Offer occurring as a result of such compliance shall not be deemed a
Default.
Section 10.17. LIMITATION ON LIENS.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume, suffer to exist or
affirm any Lien of any kind securing any Pari Passu Indebtedness or Subordinated
Indebtedness (including any assumption, guarantee or other liability with
respect thereto by any Restricted Subsidiary) upon any of its property or assets
(including any intercompany notes), whether owned on the Issue Date or
79
acquired after the Issue Date, or any proceeds, income or profits therefrom, or
assign or convey any right to receive proceeds, income or profits therefrom,
unless the Notes are directly secured equally and ratably with (or, in the case
of Subordinated Indebtedness, prior or senior to, with the same relative
priority as the Notes shall have with respect to such Subordinated Indebtedness)
the obligation or liability secured by such Lien, except for Liens (A) securing
any Indebtedness which was created prior to (and not created in connection with,
or in contemplation of) the incurrence of such Pari Passu Indebtedness or
Subordinated Indebtedness (including any assumption, guarantee or other
liability with respect thereto by any Restricted Subsidiary) and which
Indebtedness is permitted under Section 10.12 or (B) securing any Indebtedness
incurred in connection with any refinancing, renewal, substitution or
replacement of any such Indebtedness described in clause (A), so long as the
aggregate principal amount of Indebtedness represented thereby is not increased
by such refinancing by an amount greater than the amount of any stated or
reasonably determined prepayment premium paid in connection with such a
refinancing plus the amount of expenses of the Company and the Restricted
Subsidiaries incurred in connection with such refinancing; PROVIDED, HOWEVER,
that in the case of clauses (A) and (B) any such Lien only extends to the assets
that were subject to such Lien securing such Indebtedness prior to the related
acquisition by the Company or the Restricted Subsidiaries.
Section 10.18. LIMITATION ON INCURRENCE OF SENIOR SUBORDINATED INDEBTEDNESS.
The Company will not, and will not permit any Guarantor to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise in any
manner become directly or indirectly liable for or with respect to or otherwise
permit to exist any Indebtedness that is subordinate or junior in right of
payment to any Indebtedness of the Company or such Guarantor, as the case may
be, unless such Indebtedness is also PARI PASSU with the Notes or the Guarantee
of such Guarantor or subordinate or junior, in right of payment to the Notes or
such Guarantee at least to the same extent as the Notes or such Guarantee are
subordinate or junior in right of payment to Senior Indebtedness or Senior
Indebtedness of such Guarantor, as the case may be.
The Company will not cause or permit any Restricted Subsidiary,
other than the Guarantors, directly or indirectly, to secure the payment of any
Senior Indebtedness of the Company and the Company will not, and will not permit
any Restricted Subsidiary to, pledge any intercompany notes representing
obligations of any Restricted Subsidiary (other than the Guarantors) to secure
the payment of any Senior Indebtedness unless in each case such Restricted
Subsidiary simultaneously executes and delivers a supplemental indenture to this
Indenture providing for a guarantee of payment of the Notes by such Restricted
Subsidiary, which guarantee shall be on the same terms as the guarantee of the
Senior Indebtedness (if a guarantee of Senior Indebtedness is granted by any
such Restricted Subsidiary) except that the guarantee of the Notes need not be
secured and shall be subordinated to the claims against such Restricted
Subsidiary in respect of Senior Indebtedness to the same extent as the Notes are
subordinated to Senior Indebtedness of the Company under this Indenture.
80
Section 10.19. LIMITATION ON SALE OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.
The Company will not sell and will not cause or permit any
Restricted Subsidiary of the Company to issue, sell or transfer any Preferred
Stock of any Restricted Subsidiary (other than to the Company or to a
Wholly-Owned Restricted Subsidiary) or permit any Person (other than the Company
or a Wholly-Owned Restricted Subsidiary) to own any Preferred Stock of any
Restricted Subsidiary. In addition, the Company will not sell or otherwise
dispose of any Capital Stock of a Restricted Subsidiary, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any of its Capital Stock except, subject to compliance with the other
covenants herein, (i) to the Company or a Restricted Subsidiary, (ii) directors'
qualifying shares, (iii) if, immediately after giving effect to such issuance,
sale or other disposition, either (x) neither the Company nor any of its
Subsidiaries own any Capital Stock of such Restricted Subsidiary or (y) such
Restricted Subsidiary would remain a Restricted Subsidiary, and (iv) if,
immediately after giving effect to such issuance, sale or other disposition,
such Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect thereto would
have been permitted to be made (and shall be deemed to have been made) under
Section 10.14 of this Indenture on the date of such issuance, sale or other
disposition.
Section 10.20. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective or enter into any agreement with any Person that would
cause to become effective, any consensual encumbrance or restriction of any
kind, on the ability of any Restricted Subsidiary to (i) pay dividends, in cash
or otherwise, or make any other distribution on or in respect of its Capital
Stock or any other interest or participation in, or measured by, its profits, to
the Company or any other Restricted Subsidiary, (ii) pay any Indebtedness owed
to the Company or any other Restricted Subsidiary, (iii) make any Investment in
the Company or any other Restricted Subsidiary or (iv) transfer any of its
properties or assets to the Company or any other Restricted Subsidiary, except
for: (a) any encumbrance or restriction existing under any agreement in effect
on the Issue Date; (b) any encumbrance or restriction, with respect to a
Subsidiary that is not a Restricted Subsidiary of the Company on the Issue Date,
in existence at the time such Person becomes a Restricted Subsidiary of the
Company and not incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary; PROVIDED, HOWEVER, that such encumbrances and
restrictions are not applicable to the Company or any other Restricted
Subsidiary, or the properties or assets of the Company or any other Restricted
Subsidiary; (c) any encumbrance or restriction existing under any agreement that
extends, renews, refinances or replaces the agreements containing the
encumbrances or restrictions in the foregoing clauses (a) and (b), or in this
clause (c), PROVIDED that the terms and conditions of any such encumbrances or
restrictions are no more restrictive in any material respect than those under or
pursuant to the agreement evidencing the Indebtedness so extended, renewed,
refinanced or replaced; and (d) with respect to (iv) above, any restriction in
any customary non-assignment provision in any contract or lease governing any
leasehold interest entered into in the ordinary course of business.
81
Section 10.21. LIMITATIONS ON UNRESTRICTED SUBSIDIARIES.
The Company will not make, and will not permit the Restricted
Subsidiaries to make, any Investment in Unrestricted Subsidiaries if, at the
time thereof, the aggregate amount of such Investments would exceed the amount
of Restricted Payments then permitted to be made pursuant to Section 10.14 under
this Indenture. Any Investments in Unrestricted Subsidiaries permitted to be
made pursuant to this Section 10.21, (i) will be treated as a Restricted Payment
in calculating the amount of Restricted Payments made by the Company and (ii)
may be made in cash or property.
The Company may designate after the Issue Date any Subsidiary (other
than a Guarantor) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") only if:
(i) no Default shall have occurred and be continuing at the time of
or after giving effect to such Designation;
(ii) the Company would be permitted to make an Investment at the time
of Designation (assuming the effectiveness of such Designation) pursuant
to the provision described under the first paragraph of Section 10.14 in
an amount (the "Designation Amount") equal to the Fair Market Value of the
interest of the Company or any Restricted Subsidiary in such Subsidiary on
such date calculated in accordance with GAAP; and
(iii) the Company would be permitted under this Indenture to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 10.12 at the time of such Designation (assuming the
effectiveness of such Designation).
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
10.14 for all purposes of this Indenture in the Designation Amount.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, at any time (x) provide credit support for or subject any of its
property or assets (other than the Capital Stock of any Unrestricted Subsidiary)
to the satisfaction of, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary), except any non-recourse guarantee given solely to support the
pledge by the Company or any Restricted Subsidiary of the Capital Stock of an
Unrestricted Subsidiary. No Unrestricted Subsidiary shall at any time guarantee
or otherwise provide credit support for any obligation of the Company or any
Restricted Subsidiary. All Subsidiaries of Unrestricted Subsidiaries shall
automatically be deemed to be Unrestricted Subsidiaries.
82
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the time of
and after giving effect to such Revocation;
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if incurred at
such time, have been permitted to be incurred for all purposes of this
Indenture; and
(iii) any transaction (or series of related transactions) between such
Subsidiary and any of its Affiliates that occurred while such Subsidiary
was an Unrestricted Subsidiary would be permitted by Section 10.15 as if
such transaction (or series of related transactions) had occurred at the
time of such Revocation.
All Designations and Revocations must be evidenced by Board
Resolutions of the Company delivered to the Trustee certifying compliance with
the foregoing provisions.
Section 10.22. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company, the
Guarantors and any other obligor on the Notes will furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including any covenants compliance with which constitutes
a condition precedent) relating to the proposed action have been complied with,
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents,
certificates and/or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture will include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 each such individual, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether such covenant or
condition has been complied with; and
83
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
Section 11.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as to
surviving rights or registration of transfer or exchange of Notes herein
expressly provided for) and the Trustee, on written demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when either
(i) (a) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.07 hereof and (ii) Notes for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.03) have been
delivered to the Trustee for cancellation; or (b) all such Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee in trust an amount of money in
dollars sufficient to pay and discharge the entire Indebtedness on such
Notes not theretofore delivered to the Trustee for cancellation, for the
principal of, premium, if any, and interest to the date of such deposit;
(ii) the Company or any Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantor; and
(iii) the Company and each of the Guarantors have delivered to the
Trustee (a) irrevocable instructions to apply the deposited money toward
payment of the Notes at the Stated Maturities and the Redemption Dates
thereof, and (b) an Officers' Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with and
that such satisfaction and discharge will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company, any Guarantor or
any Subsidiary is a party or by which the Company, any Guarantor or any
Subsidiary is bound.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.07 and, if money
shall have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 11.01, the obligations of the Trustee under Section 11.02 and the last
paragraph of Section 10.03 shall survive.
84
Section 11.02. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.03,
all money deposited with the Trustee pursuant to Section 11.01 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), as the Trustee may
determine, to the Persons entitled thereto, of the principal of, premium, if
any, and interest on the Notes for whose payment such money has been deposited
with the Trustee.
ARTICLE TWELVE
GUARANTEE OF NOTES
Section 12.01. UNCONDITIONAL GUARANTEE.
Each Guarantor hereby jointly and severally absolutely and
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the invalidity, illegality, or unenforceability of this Indenture, the Notes
or any extension, compromise, waiver or release in respect of any obligation of
the Company or any other Guarantor under any Note, this Indenture or any
modification or amendment of or supplement to this Indenture, that: (a) the
principal of, premium, if any, and interest on the Notes will be duly and
punctually paid in full when due, whether at maturity, upon redemption, by
acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Notes and all other
obligations of the Company or the Guarantor to the Holders or the Trustee
hereunder or thereunder (including fees, expenses or other) and all other
Indenture Obligations will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other Indenture
Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed, or failing performance of any other obligation of the Company to
the Holders, for whatever reason, each Guarantor shall be obligated to pay, or
to perform or cause the performance of, the same immediately. An Event of
Default under this Indenture or the Notes shall constitute an event of default
under this Guarantee, and shall entitle the Holders of Notes to accelerate the
obligations of the Guarantor hereunder in the same manner and to the same extent
as the obligations of the Company.
Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, any release of any other Guarantor, the recovery of any
judgment against the Company, any action to enforce the same, whether or not a
Guarantee is affixed to any particular Note, or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
85
Each Guarantor hereby waives the benefit of diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that its
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Notes, this Indenture and this Guarantee. This
Guarantee is a guarantee of payment and not of collection. If any Holder or the
Trustee is required by any court or otherwise to return to the Company or to any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or such Guarantor, any amount paid by the
Company or such Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between it, on the one hand, and the
Holders of Notes and the Trustee, on the other hand, (a) subject to this Article
Twelve, the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Five hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Article Five
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantor for the purpose of this Guarantee.
Section 12.02. SUBORDINATION OF GUARANTEES.
The obligations of any Guarantor under its Guarantee will be
subordinated, to the same extent as the obligations of the Company in respect of
the Notes, to the prior payment in full of all Senior Indebtedness of such
Guarantor, which will include any guarantee issued by such Guarantor of any
Senior Indebtedness; provided that payment blockage periods in respect of the
Guarantees may only be instituted by a holder of Designated Senior Indebtedness
of the Company entitled to the benefit of a guarantee from the applicable
Guarantor at the same time as instituted in respect of Senior Indebtedness of
the Company and for a contemporaneous period.
Section 12.03. EXECUTION AND DELIVERY OF GUARANTEE.
To further evidence the Guarantee set forth in Section 12.01, each
Guarantor hereby agrees that a notation of such Guarantee in the form annexed
hereto as Exhibit D shall be endorsed on each Note authenticated and delivered
by the Trustee and executed by either manual or facsimile signature of an
Officer of each Guarantor.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 12.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or
a Guarantee no longer holds that office at the time the Trustee authenticates
such Note or at any time thereafter, such Guarantor's Guarantee of such Note
shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Guarantor.
86
Section 12.04. ADDITIONAL GUARANTORS.
Any Person that was not a Guarantor on the date of this Indenture
may become a Guarantor by executing and delivering to the Trustee (a) a
supplemental indenture in form and substance satisfactory to the Trustee, which
subjects such Person to the provisions (including the representations and
warranties) of this Indenture as a Guarantor, (b) in the event that as of the
date of such supplemental indenture any Registrable Securities are outstanding,
an instrument in form and substance satisfactory to the Trustee which subjects
such Person to the provisions of the Registration Rights Agreement with respect
to such outstanding Registrable Securities, and (c) an Opinion of Counsel to the
effect that such supplemental indenture has been duly authorized and executed by
such Person and constitutes the legal, valid and binding obligation of such
Person (subject to such customary assumptions and exceptions as may be
acceptable to the Trustee in its reasonable discretion).
Section 12.05. RELEASE OF A GUARANTOR.
Upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Company's Capital Stock in, or all or
substantially all the assets of, any Subsidiary of the Company that is a
Guarantor, which transaction is in compliance with the terms of this Indenture
(including, but not limited to, Article Eight and Section 10.16 under this
Indenture) and such Subsidiary is simultaneously unconditionally released from
all guarantees, if any, by it of other Indebtedness of the Company or any
Restricted Subsidiaries or (ii) (with respect to any Guarantees created after
the date of this Indenture) the release by the holders of the Indebtedness of
the Company of their security interest or their guarantee by such Restricted
Subsidiary (including any deemed release upon payment in full of all obligations
under such Indebtedness), at a time when (A) no other Indebtedness of the
Company has been secured or guaranteed by, such Restricted Subsidiary, as the
case may be, or (B) the holders of all such other Indebtedness which is secured
or guaranteed by such Restricted Subsidiary also release their security interest
in, or guarantee by such Restricted Subsidiary (including any deemed release
upon payment in full of all obligations under such Indebtedness), in either
case, such Guarantor shall be automatically and unconditionally released and
discharged from all obligations under this Article Twelve without any further
action required on the part of the Trustee or any Holder. The Trustee shall
deliver an appropriate instrument evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate certifying as to
the compliance with this Section. Any Guarantor not so released will remain
liable for the full amount of principal of, premium, if any, and interest on the
Notes as provided in this Article Twelve.
Section 12.06. WAIVER OF SUBROGATION.
Until this Indenture is discharged and all of the Notes are
discharged and paid in full, each Guarantor hereby irrevocably waives and agrees
not to exercise any claim or other rights which it may now or hereafter acquire
against the Company that arise from the existence, payment, performance or
enforcement of the Company's obligations under the Notes or this Indenture and
such Guarantor's obligations under this Guarantee and this Indenture, in any
such instance including, without limitation, any right of subrogation,
reimbursement, exoneration,
87
contribution, indemnification, and any right to participate in any claim or
remedy against the Company, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without limitation,
the right to take or receive from the Company, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim or other rights. If any amount shall be paid to any
Guarantor in violation of the preceding sentence and any amounts owing to the
Trustee or the Holders of Notes under the Notes, this Indenture, or any other
document or instrument delivered under or in connection with such agreements or
instruments, shall not have been paid in full, such amount shall have been
deemed to have been paid to such Guarantor for the benefit of, and held in trust
for the benefit of, the Holders of the Notes, and shall forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied to the Notes,
whether matured or unmatured, in accordance with the terms of this Indenture.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 12.06 is knowingly made in contemplation of
such benefits.
Section 12.07. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT
REGARDING DISSOLUTION, ETC. OF GUARANTORS.
Upon any payment or distribution of assets of any Guarantor referred
to in this Article Twelve, the Trustee, subject to the provisions of Section
6.01, and the Holders, shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Twelve; PROVIDED,
HOWEVER, that the foregoing shall apply only if such court has been fully
apprised of the provisions of this Article Twelve.
Section 12.08. ARTICLE TWELVE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article Twelve shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article Twelve in addition to or in place of the Trustee.
Section 12.09. NO SUSPENSION OF REMEDIES.
Nothing contained in this Article Twelve shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article Five or to pursue any rights or
remedies hereunder or under applicable law.
88
Section 12.10. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under this Guarantee
shall be limited to the maximum amount which, after giving effect to all other
contingent and fixed liabilities of such Guarantor, and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to its contribution obligations under this Article Twelve, will result
in the obligations of such Guarantor under its Guarantee not constituting such
fraudulent transfer or conveyance.
Section 12.11. CONTRIBUTION FROM OTHER GUARANTORS.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the net assets of each Guarantor, determined in accordance
with GAAP, so long as the exercise of such right does not impair the rights of
Holders of Notes under any Guarantee.
Section 12.12. OBLIGATIONS REINSTATED.
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Guarantor hereunder
(whether such payment shall have been made by or on behalf of the Company or by
or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders
upon the insolvency, bankruptcy, liquidation or reorganization of the Company or
any Guarantor or otherwise, all as though such payment had not been made. If
demand for, or acceleration of the time for, payment by the Company is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of the Company,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Guarantor as provided herein.
Section 12.13. NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY.
Neither the Trustee nor any other Person shall have any obligation
to enforce or exhaust any rights or remedies or to take any other steps under
any security for this Indenture Obligations or against the Company or any other
Person or any property of the Company or any other Person before the Trustee is
entitled to demand payment and performance by any or all Guarantors of their
liabilities and obligations under their Guarantees or under this Indenture.
89
Section 12.14. DEALING WITH THE COMPANY AND OTHERS.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given
by the Company or any third party with respect to the obligations or
matters contemplated by this Indenture or the Notes;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from
any security upon such part of the Indenture Obligations as the Holders
may see fit or change any such application in whole or in part from time
to time as the Holders may see fit; and
(f) otherwise deal with, or waive or modify their right to deal
with, the Company and all other Persons and any security as the Holders or
the Trustee may see fit.
ARTICLE THIRTEEN
REDEMPTIONS AND OFFERS TO PURCHASE
Section 13.01. NOTICE TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Section 13.07 it
shall furnish to the Trustee, at least 30 days but not more than 60 days before
notice of any redemption is to be mailed to Holders (or such shorter times as
may be satisfactory to the Trustee), an Officers' Certificate stating that the
Company has elected to redeem Notes pursuant to Section 13.07, the date notice
of redemption is to be mailed to Holders, the redemption date, the aggregate
principal amount of Notes to be redeemed, the redemption price for such Notes,
the amount of accrued and unpaid interest on such Notes as of the redemption
date and the manner in which Notes are to be selected for redemption if less
than all Outstanding Notes are to be redeemed. If the Trustee is not the
Registrar, the Company shall, concurrently with delivery of its notice to the
Trustee of a redemption, cause the Registrar to deliver to the Trustee a
certificate (upon which the Trustee may rely) setting forth the name of, and the
aggregate principal amount of Notes held by each Holder.
90
If the Company is required to offer to purchase Notes pursuant to
Sections 10.11 or 10.16, it shall furnish to the Trustee, at least two Business
Days before notice of the corresponding Offer is to be mailed to Holders, an
Officers' Certificate setting forth that the Offer is being made pursuant to
Sections 10.11 or 10.16, as the case may be, the Change of Control Purchase Date
or the Asset Sale Offer Purchase Date, the maximum principal amount of Notes the
Company is offering to purchase pursuant to such Offer, the purchase price for
such Notes, and the amount of accrued and unpaid interest on such Notes as of
the Change of Control Purchase Date or the Asset Sale Offer Purchase Date, as
the case may be.
The Company will also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption or Offer.
Section 13.02. SELECTION OF NOTES TO BE REDEEMED OR PURCHASED.
In the event that less than all of the Notes are to be redeemed at
any time, selection of Notes for redemption shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not listed on a
national securities exchange, on a PRO RATA basis, by lot or by such method as
the Trustee will deem fair and appropriate; PROVIDED, HOWEVER, that no Notes of
a principal amount of $1,000 or less shall be redeemed in part; PROVIDED,
FURTHER, HOWEVER, that any such redemption made with the net proceeds of a
Qualified Equity Offering shall be made on a PRO RATA basis or on as nearly a
PRO RATA basis as practicable (subject to the procedures of The Depository Trust
Company or any other depositary). If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note will state the portion of the
principal amount thereof to be redeemed. A new Note in a principal amount equal
to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note.
Section 13.03. NOTICE OF REDEMPTION.
(a) At least 30 days but not more than 60 days before any redemption
date, the Company shall mail a notice of redemption by first class mail to each
Holder of Notes or portions thereof that are to be redeemed at its registered
address. With respect to any redemption of Notes, the notice shall identify the
Notes or portions thereof to be redeemed and shall state: (1) the redemption
date; (2) the redemption price for the Notes and the amount of unpaid and
accrued interest on such Notes as of the date of redemption; (3) the paragraph
of the Notes pursuant to which the Notes called for redemption are being
redeemed; (4) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date, upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion will be issued; (5) the name and address of the Paying
Agent; (6) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price for, and any accrued and unpaid interest
on, such Notes; (7) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date; and (8) that no representation is made as to the
correctness or accuracy of the CUSIP number listed in such notice and printed on
the Notes.
91
(b) At the Company's request, the Trustee shall (at the Company's
expense) give the notice of any redemption to Holders; PROVIDED, HOWEVER, that
the Company shall deliver to the Trustee, at least 45 days prior to the date of
redemption and at least 10 days prior to the date that notice of the redemption
is to be mailed to Holders, an Officers' Certificate that (i) requests the
Trustee to give notice of the redemption to Holders, (ii) sets forth the
information to be provided to Holders in the notice of redemption, as set forth
in the preceding paragraph, and (iii) sets forth the aggregate principal amount
of Notes to be redeemed and the amount of accrued and unpaid interest thereon as
of the redemption date. If the Trustee is not a Registrar, the Company shall,
concurrently with any such request, cause the Registrar to deliver to the
Trustee a certificate (upon which the Trustee may rely) setting forth the name
of, the address of, and the aggregate principal amount of Notes held by, each
Holder; PROVIDED FURTHER that any such Officers' Certificate may be delivered to
the Trustee on a date later than permitted under this Section 13.03(b) if such
later date is acceptable to the Trustee.
Section 13.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Notes called for redemption
become due and payable on the redemption date at the price set forth in the
Note.
Section 13.05. DEPOSIT OF REDEMPTION PRICE.
(a) On or prior to any redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of, and accrued interest on, all Notes to be redeemed on that date. After
any redemption date, the Trustee or the Paying Agent shall promptly return to
the Company any money that the Company deposited with the Trustee or the Paying
Agent in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed.
(b) If the Company complies with the preceding paragraph, interest
on the Notes to be redeemed will cease to accrue on such Notes on the applicable
redemption date, whether or not such Notes are presented for payment. If a Note
is redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business of such
record date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest will be paid on the unpaid principal, premium,
if any, and interest from the redemption date until such principal, premium and
interest is paid, at the rate of interest provided in the Notes, the
Registration Rights Agreement and Section 10.01.
Section 13.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the Company's expense
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
92
Section 13.07. OPTIONAL REDEMPTION.
Except as set forth below, the Notes are not redeemable at the
Company's option. The Notes will be redeemable at the option of the Company, in
whole or in part, at any time on or after April 1, 2004, at the redemption
prices (expressed as percentages of the principal amount) set forth below, plus
accrued and unpaid interest thereon, if any, to the date of redemption, if
redeemed during the 12-month period beginning on April 1 of the years indicated
below:
YEAR REDEMPTION PRICE
---- ----------------
2004........................................ 106.125%
2005........................................ 104.083%
2006........................................ 102.041%
2007 and thereafter......................... 100.000%
On or prior to April 1, 2002, the Company may, at its option, use
the net proceeds of one or more Qualified Equity Offerings to redeem up to 35%
of the originally issued aggregate principal amount of the Notes, at a
redemption price in cash equal to 112.25% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the date of redemption;
PROVIDED, that at least 65% of the aggregate principal amount of Notes is
outstanding following such redemption. Notice of any such redemption must be
given not later than 60 days after the consummation of any such Qualified Equity
Offering.
On and after the redemption date, interest will cease to accrue on
Notes or portions thereof called for redemption so long as the Company has
deposited with the Paying Agent for the Notes funds in satisfaction of the
applicable redemption price pursuant to this Indenture.
Section 13.08. PROCEDURES RELATING TO MANDATORY OFFERS.
(a) On the Change of Control Purchase Date or the Asset Sale Offer
Purchase Date, as the case may be, for any Offer the Company will (i) in the
case of an Offer resulting from a Change of Control, accept for payment all
Notes or portions thereof tendered pursuant to such Offer and, in the case of an
Offer resulting from one or more Asset Sales, accept for payment the maximum
principal amount of Notes or portions thereof tendered pursuant to such Offer
that can be purchased out of Unutilized Net Cash Proceeds from such Asset Sales
to the extent provided in Section 10.16, (ii) deposit with the Paying Agent the
aggregate purchase price of all Notes or portions thereof accepted for payment
and any accrued and unpaid interest on such Notes as of the Purchase Date, and
(iii) deliver, or cause to be delivered, to the Trustee all Notes tendered
pursuant to the Offer, together with an Officers' Certificate setting forth the
name of each Holder that tendered Notes and the principal amount of the Notes or
portions thereof tendered by each such Holder.
93
(b) With respect to any Asset Sale Offer, (i) if less than all of
the Notes tendered pursuant to such Offer are to be accepted for payment by the
Company for any reason consistent with this Indenture, the Trustee shall select
on or prior to the Asset Sale Offer Purchase Date, the Notes or portions thereof
to be accepted for payment pursuant to Section 13.02, and (ii) if the Company
deposits with the Paying Agent on or prior to the Asset Sale Offer Purchase
Date, an amount sufficient to purchase all Notes accepted for payment, interest
shall cease to accrue on such Notes on the Asset Sale Offer Purchase Date;
PROVIDED, HOWEVER, that if the Company fails to deposit an amount sufficient to
purchase all Notes accepted for payment, the deposited funds shall be used to
purchase on a PRO RATA basis all Notes accepted for payment and interest shall
continue to accrue on all Notes not purchased.
(c) Promptly after consummation of an Offer, (i) the Paying Agent
shall mail to each Holder of Notes or portions thereof accepted for payment an
amount equal to the purchase price for, plus any accrued and unpaid interest on,
such Notes, (ii) with respect to any tendered Note not accepted for payment in
whole or in part, the Trustee shall return such Note to the Holder thereof, and
(iii) with respect to any Note accepted for payment in part, the Trustee shall
authenticate and mail to each such Holder a new Note equal in principal amount
to the unpurchased portion of the tendered Note.
(d) The Company will (i) publicly announce the results of the Offer
to Holders not later than the first Business Day after each Change of Control
Purchase Date or Asset Sale Offer Purchase Date, as the case may be, and (ii) as
set forth in Section 10.11 and Section 10.16, comply with the applicable tender
offer rules and all other securities laws and regulations in connection with any
Offer.
ARTICLE FOURTEEN
SUBORDINATION
Section 14.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, any
provisions of this Indenture or the Notes to the contrary notwithstanding, that
all obligations owed under and in respect of the Notes are subordinated in right
of payment, to the extent and in the manner provided in this Article Fourteen,
to the prior payment in full of all Senior Indebtedness of the Company, and that
the subordination of the Notes pursuant to this Article Fourteen is for the
benefit of all holders of all Senior Indebtedness of the Company, whether
outstanding on the Issue Date or incurred thereafter.
Section 14.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) In the event of any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company, or any liquidation,
dissolution or other winding-up of the
94
Company, whether voluntary or involuntary, or any assignment for the benefit of
creditors or other marshalling of assets or liabilities of the Company, the
holders of any Senior Indebtedness of the Company will be entitled to receive
payment in full, in cash of all obligations due in respect of such Senior
Indebtedness before the Holders will be entitled to receive any payment,
distribution, repurchase or redemption with respect to the Notes (excluding any
payment, distribution, repurchase or redemption from trusts previously created
pursuant to Section 14.02 and excluding any payment, distribution, repurchase or
redemption of, or repurchase or redemption in exchange for, Permitted Junior
Securities), and until all obligations with respect to such Senior Indebtedness
of the Company are paid in full, in cash, any payment or distribution to which
the Holders would be entitled shall be made to the holders of the Company's
Senior Indebtedness (pro rata to such holders on the basis of the amounts of
Senior Indebtedness held by them). Upon any such insolvency or liquidation
proceeding or other like proceeding referred to above with respect to the
Company, any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (excluding any payment or
distribution of, or repurchase or redemption in exchange for, securities
permitted by clause (b) of this Section 14.02 and excluding any payment,
distribution, repurchase or redemption for, Permitted Junior Securities), to
which the Holders or the Trustee would be entitled to except for the provisions
of this Indenture shall be paid by the Company, any Custodian or other Person
making such payment or distribution, or by the Holders or by the Trustee if
received by them, directly to the holders of the Company's Senior Indebtedness
(pro rata to such holders on the basis of the amounts of Senior Indebtedness
held by them) or their Representatives, as their interests may appear, for
application to the payment of all outstanding Senior Indebtedness of the Company
until all such Senior Indebtedness has been paid in full in cash, after giving
effect to all other payments or distributions to, or provisions made for,
holders of the Company's Senior Indebtedness.
(b) A distribution may consist of cash, securities or other
property, by set-off or otherwise. For purposes of this Article Fourteen, the
words "cash, securities or other property" shall not include any distribution of
securities of the Company or any other corporation provided for in any
reorganization proceeding under any Bankruptcy Law if (i) such securities
constitute Reorganization Securities, (ii) such distribution was authorized by
an order or decree of a court of competent jurisdiction, and (iii) such order
gives effect to (and states in such order or decree that effect has been given
to) the subordination of such securities to all Senior Indebtedness of the
Company not paid in full in connection with such reorganization; provided that
(a) all such Senior Indebtedness is assumed by the reorganized corporation, and
(b) the rights of the holders of any such Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization, which consent shall
be deemed to have been given if the holders of such Senior Indebtedness (or
their representative), individually or as a class, shall have approved such
reorganization.
(c) Notwithstanding anything to the contrary in this Indenture, any
disposition by or involving the Company, or the liquidation or dissolution of
the Company following any disposition, shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 14.02
if such disposition is permitted under Article Eight.
95
Section 14.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
(a) During the continuance of any default in the payment of any
Designated Senior Indebtedness pursuant to which the maturity thereof may
immediately be accelerated beyond any applicable grace period and after receipt
by the Trustee from representatives of holders of such Designated Senior
Indebtedness of written notice of such default, no payment or distribution of
any assets of the Company of any kind or character (excluding any payment,
distribution, redemption or repurchase from trusts previously created pursuant
to the provisions set forth in Article Four and excluding any payment or
distribution of Permitted Junior Securities) may be made on account of any of
the Indebtedness represented by, or the purchase, redemption or other
acquisition of, the Notes unless and until such default has been cured or waived
or has ceased to exist or such Designated Senior Indebtedness shall have been
discharged or paid in full.
(b) During the continuance of any non-payment default with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
immediately be accelerated (a "Non-payment Default") and upon the earlier to
occur of (x) the receipt by the Trustee from the representatives of holders of
such Designated Senior Indebtedness of a written notice of such Non-payment
Default or (y) if such Non-payment Default results from the acceleration of the
Notes, the date of such acceleration, no payment or distribution of any assets
of the Company of any kind or character (excluding any payment or distribution
from trusts previously created pursuant to the provisions set forth in Article
Four and excluding any payment or distribution of Permitted Junior Securities)
may be made by the Company on account of any of the Indebtedness represented by,
or the purchase, redemption or other acquisition of, the Notes for the period
specified below (the "Payment Blockage Period").
(c) The Payment Blockage Period will commence upon the earlier of
the receipt of notice of a Non-payment Default by the Trustee from the
representatives of holders of Designated Senior Indebtedness or the date of
acceleration referred to in clause (y) of Section 14.03(b), as the case may be,
and will end on the earlier to occur of the following events: (i) 179 days shall
have elapsed since the receipt of such notice of a Non-payment Default or the
date of acceleration referred to in clause (y) of Section 14.03(b) (provided
that such Designated Senior Indebtedness shall not theretofore have been
accelerated and the Company has not defaulted with respect to the payment of
such Designated Senior Indebtedness), (ii) such default is cured or waived or
ceases to exist or such Designated Senior Indebtedness is discharged or (iii)
such Payment Blockage Period shall have been terminated by written notice to the
Company or the Trustee from the representatives of holders of Designated Senior
Indebtedness initiating such Payment Blockage Period. After the end of any
Payment Blockage Period the Company shall promptly resume making any and all
required payments in respect of the Notes, including any missed payments.
Notwithstanding anything in the subordination provisions of this Indenture or
the Notes to the contrary, unless the provisions of Section 14.03(a) apply, (x)
in no event shall a Payment Blockage Period extend beyond 179 days from the date
of the receipt by the Trustee of the notice initiating such Payment Blockage
Period, (y) there shall be a period of at least 186 consecutive days in each
365-day period when no Payment Blockage Period is in effect and (z) not more
than one Payment Blockage Period with respect to the Notes may be
96
commenced within any period of 365 consecutive days. A Non-payment Default with
respect to Designated Senior Indebtedness that existed or was continuing on the
date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period cannot be
made the basis for the commencement of a second Payment Blockage Period, whether
or not within a period of 365 consecutive days, unless such default has been
cured or waived for a period of not less than 90 consecutive days and
subsequently recurs.
Section 14.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify each holder of the Company's
Designated Senior Indebtedness or their representatives of the acceleration and
provide copies of such notice to the Trustee.
Section 14.05. WHEN DISTRIBUTIONS MUST BE PAID OVER.
If the Company shall make any payment to the Trustee on account of
the principal of, or premium, if any, or interest on, the Notes, or any other
obligation in respect to the Notes, or the Holders shall receive from any source
any payment on account of the principal of, or premium, if any, or interest on,
the Notes or any obligation in respect of the Notes, at a time when such payment
is prohibited by this Article Fourteen, the Trustee or such Holders shall hold
such payment in trust for the benefit of, and shall pay over and deliver to, the
holders of the Company's Senior Indebtedness (PRO RATA as to each of such
holders on the basis of the respective amounts of such Senior Indebtedness held
by them) or their representative or the trustee under the indenture or other
agreement (if any) pursuant to which such Senior Indebtedness may have been
issued, as their respective interests may appear, for application to the payment
of all outstanding Senior Indebtedness of the Company until all such Senior
Indebtedness has been paid in full in cash, after giving effect to all other
payments or distributions to, or provisions made for, the holders of the
Company's Senior Indebtedness.
With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform only such obligations on its part as are
specifically set forth in this Article Fourteen, and no implied covenants or
obligations with respect to any holders of the Company's Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of the Company's Senior
Indebtedness, and shall not be liable to any holders of such Senior Indebtedness
if the Trustee shall pay over or distribute to, or on behalf of, Holders or the
Company or any other Person money or assets to which any holders of such Senior
Indebtedness are entitled pursuant to this Article Fourteen.
Section 14.06. NOTICE.
Neither the Trustee nor the Paying Agent shall at any time be
charged with the knowledge of the existence of any facts that would prohibit the
making of any payment to or by the Trustee or Paying Agent under this Article
Fourteen, unless the Trustee or the requisite Holders have given notice of
acceleration of the Notes or unless and until the Trustee or Paying Agent shall
have received written notice thereof from the Company or one or more holders of
the
97
Company's Senior Indebtedness or a representative of any holders of such Senior
Indebtedness; and, prior to the receipt of any such written notice, the Trustee
or Paying Agent shall be entitled to assume conclusively that no such facts
exist. The Trustee shall be entitled to rely on the delivery to it of written
notice by a Person representing itself to be a holder of the Company's Senior
Indebtedness (or a representative thereof) to establish that such notice has
been given.
The Company shall promptly notify the Trustee and the Paying Agent
in writing of any facts it knows that would cause a payment of principal of, or
premium, if any, or interest on, the Notes or any other obligation in respect of
the Notes to violate this Article Fourteen, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Indebtedness of
the Company provided in this Article Fourteen or the rights of holders of such
Senior Indebtedness under this Article Fourteen.
Section 14.07. SUBROGATION.
After all Senior Indebtedness of the Company has been paid in full
in cash and until the Notes are paid in full, Holders shall be subrogated
(equally and ratably with all other Pari Passu Indebtedness) to the rights of
holders of such Senior Indebtedness to receive distributions applicable to such
Senior Indebtedness to the extent that distributions otherwise payable to the
Holders have been applied to the payment of such Senior Indebtedness. A
distribution made under this Article Fourteen to holders of the Company's Senior
Indebtedness that otherwise would have been made to Holders is not, as between
the Company and Holders, a payment by the Company on its Senior Indebtedness.
Section 14.08. RELATIVE RIGHTS.
The provisions of this Article Fourteen are and are intended solely
for the purpose of defining the relative rights of Holders and holders of the
Company's Senior Indebtedness. Nothing in this Indenture shall: (1) impair, as
between the Company and Holders, the Company's Indenture Obligations, which are
absolute and unconditional, to pay principal of, and premium, if any, and
interest on, the Notes in accordance with their terms; (2) affect the relative
rights of Holders and the Company's creditors other than their rights in
relation to holders of the Company's Senior Indebtedness; or (3) prevent the
Trustee or any Holder from exercising its available remedies upon a Default,
subject to the rights of holders of the Company's Senior Indebtedness, if any,
under this Article Fourteen.
Nothing contained in this Article Fourteen or elsewhere in this
Indenture or in any Note is intended to or shall impair, as between the Company
and the Holders, the Indenture Obligations of the Company, which are absolute
and unconditional, to pay to the Holders the principal of, and premium, if any,
and interest on, the Notes as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Company other than the holders of the
Company's Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon Default under this Indenture, subject to the rights, if any,
under this Article Fourteen of the holders of such Senior Indebtedness.
98
The failure to make a payment on account of principal of, or
interest on the Notes by reason of any provision of this Article Fourteen shall
not be construed as preventing the occurrence of an Event of Default under
Section 5.01.
Section 14.09. THE COMPANY AND HOLDERS MAY NOT IMPAIR SUBORDINATION.
(a) No right of any holder of the Company's Senior Indebtedness to
enforce the subordination as provided in this Article Fourteen shall at any time
or in any way be prejudiced or impaired by any act or failure to act by the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture or the Notes or any other agreement regardless of
any knowledge thereof with which any such holder may have or be otherwise
charged.
(b) Without in any way limiting Section 14.09(a), the holders of any
Senior Indebtedness of the Company may, at any time and from time to time,
without the consent of or notice to any Holders, without incurring any
liabilities to any Holder and without impairing or releasing the subordination
and other benefits provided in this Indenture or the Holders' obligations to the
holders of such Senior Indebtedness, even if any Holder's right of reimbursement
or subrogation or other right or remedy is affected, impaired or extinguished
thereby, do any one or more of the following: (i) amend, renew, exchange,
extend, modify, increase or supplement in any manner such Senior Indebtedness or
any instrument evidencing or guaranteeing or securing such Senior Indebtedness
or any agreement under which such Senior Indebtedness is outstanding (including,
but not limited to, changing the manner, place or terms of payment or changing
or extending the time of payment of, or renewing, exchanging, amending,
increasing or altering, (1) the terms of such Senior Indebtedness, (2) any
security for, or any guarantee of, such Senior Indebtedness, (3) any liability
of any obligor on such Senior Indebtedness (including any guarantor) or any
liability issued in respect of such Senior Indebtedness); (ii) sell, exchange,
release, surrender, realize upon, enforce or otherwise deal with in any manner
and in any order any property pledged, mortgaged or otherwise securing such
Senior Indebtedness or any liability of any obligor thereon, to such holder, or
any liability issued in respect thereof; (iii) settle or compromise any such
Senior Indebtedness or any other liability of any obligor of such Senior
Indebtedness to such holder or any security therefor or any liability issued in
respect thereof and apply any sums by whomsoever paid and however realized to
any liability (including, without limitation, payment of any of the Company's
Senior Indebtedness) in any manner or order; and (iv) fail to take or to record
or otherwise perfect, for any reason or for no reason, any lien or security
interest securing such Senior Indebtedness by whomsoever granted, exercise or
delay in or refrain from exercising any right or remedy against any obligor or
any guarantor or any other Person, elect any remedy and otherwise deal freely
with any obligor and any security for such Senior Indebtedness or any liability
of any obligor to the holders of such Senior Indebtedness or any liability
issued in respect of such Senior Indebtedness.
Section 14.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made, or a notice given, to holders
of Senior Indebtedness of the Company, the distribution may be made and the
notice given to their
99
representative, if any. If any payment or distribution of the Company's assets
is required to be made to holders of any of the Company's Senior Indebtedness
pursuant to this Article Fourteen, the Trustee and the Holders shall be entitled
to rely upon any order or decree of any court of competent jurisdiction, or upon
any certificate of a representative of such Senior Indebtedness or a custodian,
in ascertaining the holders of such Senior Indebtedness entitled to participate
in any such payment or distribution, the amount to be paid or distributed to
holders of such Senior Indebtedness and all other facts pertinent to such
payment or distribution or to this Article Fourteen.
Section 14.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
The Trustee or Paying Agent may continue to make payments on the
Notes unless prior to any payment date it or the requisite Holders have given
notice of acceleration of the Notes or it has received written notice of facts
that would cause a payment of principal of, or premium, if any, or interest on,
the Notes to violate this Article Fourteen. Only the Company, a representative
of Senior Indebtedness, or a holder of Senior Indebtedness that has no
representative may give such notice.
To the extent permitted by the TIA, the Trustee in its individual
or any other capacity may hold Indebtedness of the Company (including Senior
Indebtedness) with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
Section 14.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by its acceptance thereof authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article
Fourteen, and appoints the Trustee as such Holder's attorney-in-fact for any and
all such purposes (including, without limitation, the timely filing of a claim
for the unpaid balance of the Note that such Holder holds in the form required
in any bankruptcy, reorganization, insolvency or receivership proceeding and
causing such claim to be approved).
If a proper claim or proof of debt in the form required in such
proceeding is not filed by or on behalf of all Holders prior to 30 days before
the expiration of the time to file such claims or proofs, then the holders or a
representative of any Senior Indebtedness of the Company are hereby authorized,
and shall have the right (without any duty), to file an appropriate claim for
and on behalf of the Holders.
Section 14.13. PAYMENT.
A payment on account of or with respect to any Note shall include,
without limitation, any direct or indirect payment of principal, premium or
interest with respect to or in connection with any optional redemption or
purchase provisions, any direct or indirect payment payable by reason of any
other Indebtedness or obligation being subordinated to the Notes, and any direct
or indirect payment or recovery on any claim as a Holder relating to or arising
out of
100
this Indenture or any Note, or the issuance of any Note, or the transactions
contemplated by this Indenture or referred to herein.
[SIGNATURE PAGES FOLLOW]
101
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
COMPANY: PENTACON, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
GUARANTORS: ALATEC PRODUCTS, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
AXS SOLUTIONS, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ASI AEROSPACE GROUP, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
CAPITOL BOLT & SUPPLY, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
102
MAUMEE INDUSTRIES, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
PACE PRODUCTS, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
SALES SYSTEMS, LIMITED
By:/S/ XXXXX X. XXXXX
Name:Xxxxx X. Xxxxx
Title:Vice President
TEXAS INTERNATIONAL AVIATION, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
PENTACON AEROSPACE GROUP, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
PENTACON INDUSTRIAL GROUP, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
103
TIA INTERNATIONAL, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ALATEC CABLE HARNESS & ASSEMBLY DIVISION,
INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ALATEC FASTENER AND COMPONENT GROUP, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ALATEC INTERNATIONAL SALES, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
ALATEC RACE, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
TRACE ALATEC SUPPLY COMPANY, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
000
XXXX XXXXX AERO PRODUCTS HOLDING
CORPORATION, INC.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
XXXXXXX ACQUISITION CORP.
By:/S/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: Vice President
TRUSTEE: STATE STREET BANK AND TRUST COMPANY
By:/S/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
105
EXHIBIT A-1
[FORM OF NOTE]
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS ACQUIRING THIS SECURITY IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AN "IAI"), (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k)
UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR
THE LAST DATE ON WHICH PENTACON, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE
RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 OF REGULATION S, (E) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (F) TO AN IAI OR (G) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT THE COMPANY, THE TRUSTEE, THE TRANSFER AGENT AND THE REGISTRAR
SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO
CLAUSE (D), (E), (F) OR (G) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN
EACH OF
A-1-1
THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-1-2
PENTACON, INC.
-----------------
12 1/4% Senior Subordinated Notes due 2009, SERIES A
CUSIP No. __________
No. ___________ $
This Note is issued with original issue discount for purposes of
Section 1271 et seq. of the Internal Revenue Code. For each $1,000 principal
amount at maturity of this Note, the issue price is $ and the amount of original
issue discount is $ .
PENTACON, INC., a corporation incorporated under the laws of the
State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on April 1, 2009, at the office or
agency of the Company referred to below, and to pay interest thereon on April 1
and October 1 (each an "Interest Payment Date"), of each year, commencing on
October 1, 1999, accruing from the Issue Date or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 12 1/4% per annum (unless otherwise increased to 12 3/4% pursuant to the
provisions of Section 3.01 of the Indenture), until the principal hereof is paid
or duly provided for. Interest shall be computed on the basis of a 360-day year
of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on the March 15
and September 15 (each a "Regular Record Date"), whether or not a Business Day,
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Notes, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency of the Company as may be maintained for such
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts;
A-1-3
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Company by check mailed to the address of the Person entitled thereto as such
address shall appear on the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture or any
Guarantee described on the reverse side hereof, or be valid or obligatory for
any purpose.
[Remainder of Page Intentionally Left Blank]
A-1-4
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
Dated: PENTACON, INC.
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 12 1/4% Senior Subordinated Notes due 2009,
Series A, referred to in the within-mentioned Indenture.
STATE STREET BANK & TRUST COMPANY, as
Trustee
By:___________________________
Authorized Officer
A-1-5
[REVERSE OF NOTE]
1. INDENTURE. This Note is one of a duly authorized issue of Notes
of the Company designated as its 12 1/4% Senior Subordinated Notes due 2009,
Series A (herein called the "Initial Notes"). The Notes are limited (except as
otherwise provided in the Indenture referred to below) in aggregate principal
amount to $100,000,000, which may be issued under an indenture (herein called
the "Indenture") dated as of March 30, 1999, by and among the Company, each of
the guarantors named in the Indenture, as guarantors (herein called the
"Guarantors"), and State Street Bank and Trust Company, as trustee (herein
called the "Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties, obligations and immunities thereunder of the Company, the Trustee, the
Guarantors and the Holders of the Notes, and of the terms upon which the Notes
are, and are to be, authenticated and delivered. The Notes include the Initial
Notes, the Private Exchange Securities and the Unrestricted Notes (including the
Exchange Notes referred to below), issued in exchange for the Initial Notes
pursuant to the Registration Rights Agreement. The Initial Notes, the Private
Exchange Securities and the Unrestricted Notes are treated as a single class of
securities under the Indenture.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. xx.xx. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this Note
or of the Indenture shall alter or impair the obligation of the Company or any
Guarantor, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the times, place, and rate, and in
the coin or currency, herein prescribed.
2. GUARANTEES. This Note is initially entitled to the benefits of
the certain senior subordinated Guarantees of the Guarantors and may thereafter
be entitled to certain other senior subordinated Guarantees made for the benefit
of the Holders. Reference is hereby made to Article Twelve of the Indenture and
to the Guarantees endorsed on this Note for a statement of the respective
rights, limitations of rights, duties and obligations thereunder of the
Guarantors, the Trustee and the Holders.
3. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement by and among the Company, the Guarantors and the Initial Purchasers,
the Company will be obligated to consummate an exchange offer pursuant to which
the Holder of this Note shall have the right to exchange this Note together with
the Guarantees hereof endorsed hereon for 12 1/4% Senior Subordinated Notes due
2009, Series B, of the Company (herein called the "Exchange Notes") and the
Guarantees endorsed thereon, which have been registered under the Securities
A-1-6
Act, in like principal amount and having identical terms as the Notes (other
than as set forth in this paragraph) and the Guarantees endorsed hereon,
respectively. The Holders of Notes shall be entitled to receive certain
liquidated damages in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
4. REDEMPTION. The Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or after April 1, 2004, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the date of
redemption, if redeemed during the 12-month period beginning on April 1 of the
years indicated below:
YEAR REDEMPTION PRICE
---- ----------------
2004.................................... 106.125%
2005.................................... 104.083%
2006.................................... 102.041%
2007 and thereafter..................... 100.000%
On or prior to April 1, 2002, the Company may, at its option, use
the net proceeds of a Qualified Equity Offering to redeem up to 35% of the
originally issued aggregate principal amount of the Notes, at a redemption price
in cash equal to 112.25% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of redemption; PROVIDED that at
least 65% of the aggregate principal amount of Notes is Outstanding following
such redemption. Notice of any such redemption must be given not later than 60
days after the consummation of any such Qualified Equity Offering.
5. OFFERS TO PURCHASE. Sections 10.11 and 10.16 of the Indenture
provide that upon the occurrence of a Change of Control and following certain
Asset Sales, and subject to certain conditions and limitations contained
therein, the Company shall make an offer to purchase all or a portion of the
Notes in accordance with the procedures set forth in the Indenture.
6. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Notes, plus all accrued and
unpaid interest, if any, to and including the date the Notes are paid, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
7. DEFEASANCE. The Indenture contains provisions (which provisions
apply to this Note) for defeasance at any time of (a) the entire indebtedness of
the Company and the Guarantors on this Note and (b) certain restrictive
covenants and related Defaults, in each case upon compliance by the Company with
certain conditions set forth therein.
8. AMENDMENTS AND WAIVERS. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and
A-1-7
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes at the time Outstanding. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Notes at the time Outstanding, on behalf of
the Holders of all the Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past Defaults under the Indenture and
this Note and their consequences. Any such consent or waiver by or on behalf of
the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note.
9. DENOMINATIONS, TRANSFER AND EXCHANGE. The Notes are issuable only
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Note Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company maintained for such purpose in the Borough of
Manhattan in The City of New York, State of New York, or at such other office or
agency of the Company as may be maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
10. PERSONS DEEMED OWNERS. Prior to and at the time of due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
11. GOVERNING LAW. THE INDENTURE, THIS NOTE AND EACH GUARANTEE SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made
to: Pentacon, Inc., 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
Attention: Secretary.
A-1-8
ASSIGNMENT FORM
If you, the holder, want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date of the declaration by the Commission of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the date two years (or such shorter period of time as
permitted by Rule 144(k) under the Securities Act or any successor provision
thereunder) after the later of the original issuance date appearing on the face
of this Note (or any Predecessor Note) or the last date on which the Company or
any Affiliate of the Company or any Guarantor was the owner of this Note (or any
Predecessor Note), the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer and that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A
thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents, including a transferor certificate
substantially in the form of Exhibit C to the Indenture in the case
of a transfer pursuant to Regulation S, are being
A-1-9
furnished which comply with the conditions of transfer set forth in
this Note and the Indenture.
If none of the foregoing boxes is checked and, in the case of (b) above, if the
appropriate document is not attached or otherwise furnished to the Trustee, the
Trustee or Registrar shall not be obligated to register this Note in the name of
any Person other than the Holder hereof unless and until the conditions to any
such transfer of registration set forth herein and in Section 3.17 of the
Indenture shall have been satisfied.
________________________________________________________________________________
Date: ______________ Your signature:_________________________________________
(Sign exactly as your name appears on
the other side of this Note)
By:_____________________________________________________
NOTICE: To be executed by an
executive officer
Signature Guarantee:____________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note 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
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 (including the information
specified in Rule 144A(d)(4)) 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:________________________ By:_____________________________________
NOTICE: To be executed by an
executive officer
A-1-10
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.11 or 10.16 of the Indenture, check the appropriate box:
Section 10.11 [ ] Section 10.16 [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.11 or 10.16 of the Indenture, state the amount:
$__________________
Date:______________ Your signature:__________________________
(Sign exactly as your name appears on
the other side of this Note)
By:______________________________________
NOTICE: To be executed by an
executive officer
Signature Guarantee:____________________
X-0-00
XXXXXXX X-0
[FORM OF NOTE]
PENTACON, INC.
-----------------
12 1/4% Senior Subordinated Notes due 2009, SERIES B
This Note is issued with original issue discount for purposes of
Section 1271 et seq. of the Internal Revenue Code. For each $1,000 principal
amount at maturity of this Note, the issue price is $ and the amount of original
issue discount is $ .
CUSIP No. __________
No. ___________ $
This Note is issued with original issue discount for purposes of
Section 1271 et seq. of the Internal Revenue Code. For each $1,000 principal
amount at maturity of this Note, the issue price is $ and the amount of original
issue discount is $ .
PENTACON, INC., a corporation incorporated under the laws of the
State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________ or registered assigns, the
principal sum of _______________ Dollars on April 1, 2009, at the office or
agency of the Company referred to below, and to pay interest thereon on April 1
and October 1 (each an "Interest Payment Date"), of each year, commencing on
October 1, 1999, accruing from the Issue Date or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, at the rate
of 12 1/4% per annum (unless otherwise increased to 12 3/4% pursuant to the
provisions of Section 3.01 of the Indenture), until the principal hereof is paid
or duly provided for. Interest shall be computed on the basis of a 360-day year
of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on the March 15
and September 15 (each a "Regular Record Date"), whether or not a Business Day,
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the then applicable interest rate borne by the Notes, to the extent
lawful, shall forthwith cease to be payable to the Holder on such Regular Record
Date, and may be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
A-2-1
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan in The City of New York, State of New York,
or at such other office or agency of the Company as may be maintained for such
purpose, in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture or any
Guarantee described on the reverse side hereof, or be valid or obligatory for
any purpose.
[Remainder of Page Intentionally Left Blank]
A-2-2
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
Dated: PENTACON, INC.
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 12 1/4% Senior Subordinated Notes due 2009,
Series B, referred to in the within-mentioned Indenture.
STATE STREET BANK & TRUST COMPANY, as
Trustee
By:________________________________________
Authorized Officer
A-2-3
[REVERSE OF NOTE]
1. INDENTURE. This Note is one of a duly authorized issue of Notes
of the Company designated as its 12 1/4% Senior Subordinated Notes due 2009
Series B (herein called the "Unrestricted Notes"). The Notes are limited (except
as otherwise provided in the Indenture referred to below) in aggregate principal
amount to $100,000,000, which may be issued under an indenture (herein called
the "Indenture") dated as of March 30, 1999, by and among the Company, each of
the Guarantors named in the Indenture, as guarantors (herein called the
"Guarantors"), and State Street Bank and Trust Company, as trustee (herein
called the "Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties, obligations and immunities thereunder of the Company, the Trustee, the
Guarantors and the Holders of the Notes, and of the terms upon which the Notes
are, and are to be, authenticated and delivered. The Notes include the Initial
Notes, the Private Exchange Securities and the Unrestricted Notes (including the
Exchange Notes), issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement. The Initial Notes, the Private Exchange
Securities and the Unrestricted Notes are treated as a single class of
securities under the Indenture.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. xx.xx. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture. Notwithstanding anything to the contrary herein, the Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and the TIA for a statement of such terms.
No reference herein to the Indenture and no provisions of this Note
or of the Indenture shall alter or impair the obligation of the Company or any
Guarantor, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the times, place, and rate, and in
the coin or currency, herein prescribed.
2. GUARANTEES. This Note is initially entitled to the benefits of
the certain senior subordinated Guarantees of the Guarantors and may thereafter
be entitled to certain other senior subordinated Guarantees made for the benefit
of the Holders. Reference is hereby made to Article Twelve of the Indenture and
to the Guarantees endorsed on this Note for a statement of the respective
rights, limitations of rights, duties and obligations thereunder of the
Guarantors, the Trustee and the Holders.
3. REDEMPTION. The Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or after April 1, 2004, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon, if any, to the date of
redemption, if redeemed during the 12-month period beginning on April 1 of the
years indicated below:
A-2-4
YEAR REDEMPTION PRICE
---- ----------------
2004.................................... 106.125%
2005.................................... 104.083%
2006.................................... 102.041%
2007 and thereafter..................... 100.000%
On or prior to April 1, 2002, the Company may, at its option, use
the net proceeds of a Qualified Equity Offering to redeem up to 35% of the
originally issued aggregate principal amount of the Notes, at a redemption price
in cash equal to 112.25% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of redemption; PROVIDED that at
least 65% of the aggregate principal amount of Notes is Outstanding following
such redemption. Notice of any such redemption must be given not later than 60
days after the consummation of any such Qualified Equity Offering.
4. OFFERS TO PURCHASE. Sections 10.11 and 10.16 of the Indenture
provide that upon the occurrence of a Change of Control and following certain
Asset Sales, and subject to certain conditions and limitations contained
therein, the Company shall make an offer to purchase all or a portion of the
Notes in accordance with the procedures set forth in the Indenture.
5. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the principal of all of the Outstanding Notes, plus all accrued and
unpaid interest, if any, to and including the date the Notes are paid, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
6. DEFEASANCE. The Indenture contains provisions (which provisions
apply to this Note) for defeasance at any time of (a) the entire indebtedness of
the Company and the Guarantors on this Note and (b) certain restrictive
covenants and related Defaults, in each case upon compliance by the Company with
certain conditions set forth therein.
7. AMENDMENTS AND WAIVERS. The Indenture permits, with certain
exceptions as provided therein, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the Notes
at the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Notes at
the time Outstanding, on behalf of the Holders of all the Notes, to waive
compliance by the Company with certain provisions of the Indenture and certain
past Defaults under the Indenture and this Note and their consequences. Any such
consent or waiver by or on behalf of the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note.
A-2-5
8. DENOMINATIONS, TRANSFER AND EXCHANGE. The Notes are issuable only
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of a different authorized denomination, as requested
by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable on the Note Register
of the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company maintained for such purpose in the Borough of
Manhattan in The City of New York, State of New York, or at such other office or
agency of the Company as may be maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
9. PERSONS DEEMED OWNERS. Prior to and at the time of due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
10. GOVERNING LAW. THE INDENTURE, THIS NOTE AND EACH GUARANTEE SET
FORTH BELOW SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of this Indenture. Requests may be made
to: Pentacon, Inc., 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000,
Attention: Secretary.
A-2-6
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
Date: ______________ Your signature:_________________________________
(Sign exactly as your name appears
on the other side of this Note)
BY:___________________________________
NOTICE: To be executed by an
executive officer
Signature Guarantee: _______________________
A-2-7
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.11 or 10.16 of the Indenture, check the appropriate box:
Section 10.11 [ ] Section 10.16 [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.11 or 10.16 of this Indenture, state the amount:
$________________
Date:______________ Your signature:________________________________
(Sign exactly as your name
appears on the other side of this Note)
By:___________________________________________
NOTICE: To be executed by an executive
officer
Signature Guarantee:____________________
A-2-8
EXHIBIT B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A
TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
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.
B-1
EXHIBIT C
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
______________, ____
State Street Bank and Trust
Company
Corporate Trust
Xxxxxxx Square
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx/Vice President
Re: Pentacon, Inc. (the "Company")
12 1/4% Senior Subordinated Notes due 2009 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal amount
of the Securities, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any Person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any Person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities;
C-1
(6) if the circumstances set forth in Rule 904(c) under the
Securities Act are applicable, we have complied with the additional
conditions therein, including (if applicable) sending a confirmation or
other notice stating that the Securities may be offered and sold during
the restricted period specified in Rule 903(c)(2) or (3), as applicable,
in accordance with the provisions of Regulation S; pursuant to
registration of the Securities under the Securities Act; or pursuant to an
available exemption from the registration requirements under the
Securities Act; and
(7) if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) are applicable thereto, we confirm that such
sale has been made in accordance with such provisions.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:________________________________________
Authorized Signature
C-2
EXHIBIT D
FORM OF GUARANTEE
For value received, the undersigned hereby fully and unconditionally
guarantees to the Holder of this Note the cash payments in United States dollars
of principal of, premium, if any, and interest on this Note in the amounts and
at the time when due and interest on the overdue principal, premium, if any, and
interest, if any, on this Note, if lawful, and the payment or performance of all
other obligations of the Company under the Indenture or the Notes, to the Holder
of this Note and the Trustee, all in accordance with and subject to the terms
and limitations of this Note, Article Twelve of the Indenture and this
Guarantee. This Guarantee will become effective in accordance with Article
Twelve of the Indenture and its terms shall be evidenced therein. The validity
and enforceability of any Guarantee shall not be affected by the fact that it is
not affixed to any particular Note. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Indenture dated as of
March 30, 1999, by and among Pentacon, Inc., the Guarantors named therein
(including the undersigned) and State Street Bank and Trust Company, as Trustee,
as amended or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Notes and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth
in Article Twelve of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
THIS GUARANTEE WILL 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 GUARANTOR HEREUNDER AGREES TO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION
OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THE INDENTURE, THE NOTES OR THIS GUARANTEE.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
IN WITNESS WHEREOF, the undersigned Guarantors have caused this
Guarantee to be duly executed.
Dated:
[NAME OF GUARANTOR]
By: _______________________________
Name:
Title:
D-1
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
[See attached]
E-1
