EXECUTION COPY
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AVIS RENT A CAR, INC.
THE SUBSIDIARY GUARANTORS PARTIES HERETO,
AND
THE BANK OF NEW YORK,
AS TRUSTEE
11% Senior Subordinated Notes due 2009
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INDENTURE
Dated as of June 30, 1999
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference ............................ 1
SECTION 1.1. Definitions ............................................. 1
SECTION 1.2. Other Definitions ....................................... 31
SECTION 1.3. Incorporation by Reference of Trust Indenture Act ....... 33
SECTION 1.4. Rules of Construction ................................... 33
ARTICLE II
The Securities ........................................................ 34
SECTION 2.1. Form, Dating and Terms .................................. 34
SECTION 2.2. Execution and Authentication ............................ 40
SECTION 2.3. Registrar and Paying Agent .............................. 41
SECTION 2.4. Paying Agent To Hold Money in Trust ..................... 41
SECTION 2.5. Securityholder Lists .................................... 42
SECTION 2.6. Transfer and Exchange ................................... 42
SECTION 2.7. Form of Certificate to be Delivered in Connection
with Transfers to Institutional Accredited Investors .... 45
SECTION 2.8. Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulation S ................. 47
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities ......... 48
SECTION 2.10. Outstanding Securities .................................. 49
SECTION 2.11. Temporary Securities .................................... 50
SECTION 2.12. Cancellation ............................................ 50
SECTION 2.13. Payment of Interest; Defaulted Interest ................. 50
SECTION 2.14. Computation of Interest ................................. 51
SECTION 2.15. CUSIP Numbers ........................................... 51
ARTICLE III
Covenants ............................................................. 51
SECTION 3.1. Payment of Securities ................................... 51
SECTION 3.2. SEC Reports and Available Information ................... 52
SECTION 3.3. Limitation on Indebtedness .............................. 52
SECTION 3.4. Limitation on Restricted Payments ....................... 55
SECTION 3.5. Limitation on Restrictions on Distributions
from Restricted Subsidiaries ............................ 58
SECTION 3.6. Limitation on Sales of Assets and Subsidiary Stock ...... 59
SECTION 3.7. Limitation on Affiliate Transactions..................... 61
(i)
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SECTION 3.8. Change of Control ....................................... 62
SECTION 3.9. Limitation on Sale of Capital Stock of
Restricted Subsidiaries ................................. 64
SECTION 3.10. Limitation on Liens ..................................... 65
SECTION 3.11. Future Subsidiary Guarantors ............................ 65
SECTION 3.12. Limitation on Lines of Business ......................... 65
SECTION 3.13. Limitation on Permitted Vehicle Indebtedness ............ 65
SECTION 3.14. Maintenance of Office or Agency ......................... 66
SECTION 3.15. Limitation on Layering .................................. 67
SECTION 3.16. Corporate Existence ..................................... 67
SECTION 3.17. Payment of Taxes and Other Claims ....................... 67
SECTION 3.18. Payments for Consent .................................... 67
SECTION 3.19. Compliance Certificate .................................. 67
SECTION 3.20. Further Instruments and Acts ............................ 68
SECTION 3.21. Statement by Officers as to Default ..................... 68
ARTICLE IV
Successor Company ..................................................... 68
SECTION 4.1. Merger and Consolidation ................................ 68
ARTICLE V
Redemption of Securities .............................................. 69
SECTION 5.1. Optional Redemption ..................................... 69
SECTION 5.2. Applicability of Article ................................ 69
SECTION 5.3. Election to Redeem; Notice to Trustee ................... 69
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed ....... 70
SECTION 5.5. Notice of Redemption .................................... 70
SECTION 5.6. Deposit of Redemption Price ............................. 71
SECTION 5.7. Notes Payable on Redemption Date ........................ 71
SECTION 5.8. Securities Redeemed in Part ............................. 71
ARTICLE VI
Defaults and Remedies ................................................. 72
SECTION 6.1. Events of Default ....................................... 72
SECTION 6.2. Acceleration ............................................ 74
SECTION 6.3. Other Remedies .......................................... 75
SECTION 6.4. Waiver of Past Defaults ................................. 75
SECTION 6.5. Control by Majority ..................................... 76
SECTION 6.6. Limitation on Suits ..................................... 76
SECTION 6.7. Rights of Holders to Receive Payment .................... 76
SECTION 6.8. Collection Suit by Trustee .............................. 77
SECTION 6.9. Trustee May File Proofs of Claim ........................ 77
(ii)
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SECTION 6.10. Priorities .................................................. 77
SECTION 6.11. Undertaking for Costs ....................................... 77
SECTION 6.12. Additional Payments ......................................... 78
ARTICLE VII
Trustee ................................................................... 78
SECTION 7.1. Duties of Trustee ........................................... 78
SECTION 7.2. Rights of Trustee ........................................... 79
SECTION 7.3. Individual Rights of Trustee ................................ 80
SECTION 7.4. Trustee's Disclaimer ........................................ 80
SECTION 7.5. Notice of Defaults .......................................... 80
SECTION 7.6. Reports by Trustee to Holders ............................... 80
SECTION 7.7. Compensation and Indemnity .................................. 80
SECTION 7.8. Replacement of Trustee ...................................... 81
SECTION 7.9. Successor Trustee by Merger ................................. 82
SECTION 7.10. Eligibility; Disqualification ............................... 82
SECTION 7.11. Preferential Collection of Claims Against Company ........... 83
SECTION 7.12. Trustees Application for Instruction from the Company ....... 83
ARTICLE VIII
Discharge of Indenture; Defeasance ........................................ 83
SECTION 8.1. Discharge of Liability on Securities; Defeasance ............ 83
SECTION 8.2. Conditions to Defeasance .................................... 84
SECTION 8.3. Application of Trust Money .................................. 86
SECTION 8.4. Repayment to Company ........................................ 86
SECTION 8.5. Indemnity for U.S. Government Obligations ................... 86
SECTION 8.6. Reinstatement ............................................... 86
ARTICLE IX
Amendments ................................................................ 87
SECTION 9.1. Without Consent of Holders .................................. 87
SECTION 9.2. With Consent of Holders ..................................... 87
SECTION 9.3. Compliance with Trust Indenture Act ......................... 88
SECTION 9.4. Revocation and Effect of Consents and Waivers ............... 88
SECTION 9.5. Notation on or Exchange of Securities ....................... 89
SECTION 9.6. Trustee To Sign Amendments .................................. 89
(iii)
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ARTICLE X
Subordination ......................................................... 89
SECTION 10.1. Agreement To Subordinate ............................... 89
SECTION 10.2. Liquidation, Dissolution, Bankruptcy ................... 89
SECTION 10.3. Default on Senior Indebtedness ......................... 90
SECTION 10.4. Acceleration of Payment of Securities .................. 91
SECTION 10.5. When Distribution Must Be Paid Over .................... 91
SECTION 10.6. Subrogation ............................................ 91
SECTION 10.7. Relative Rights ........................................ 91
SECTION 10.8. Subordination May Not Be Impaired by Company ........... 91
SECTION 10.9. Rights of Trustee and Paying Agent ..................... 91
SECTION 10.10 Distribution or Notice to Representative ............... 92
SECTION 10.11. Not To Prevent Events of Default or Limit Right
To Accelerate .......................................... 92
SECTION 10.12. Trust Moneys Not Subordinated .......................... 92
SECTION 10.13. Trustee Entitled To Rely ............................... 92
SECTION 10.14. Trustee To Effectuate Subordination .................... 93
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness ........................................... 93
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Indebtedness on Subordination Provisions ............... 93
ARTICLE XI
Guarantee ............................................................. 93
SECTION 11.1. Guarantee .............................................. 93
SECTION 11.2. Limitation on Liability; Termination, Release
and Discharge .......................................... 95
SECTION 11.3. Right of Contribution .................................. 96
SECTION 11.4. No Subrogation ......................................... 96
ARTICLE XII
Subordination of Subsidiary Guarantees ................................ 96
SECTION 12.1. Agreement To Subordinate ............................... 96
SECTION 12.2. Liquidation, Dissolution, Bankruptcy ................... 96
SECTION 12.3. Default on Guarantor Senior Indebtedness ............... 97
SECTION 12.4. Acceleration of Payment of Securities .................. 98
SECTION 12.5. When Distribution Must Be Paid Over .................... 98
SECTION 12.6. Subrogation ............................................ 98
SECTION 12.7. Relative Rights ........................................ 98
SECTION 12.8. Subordination May Not Be Impaired by Company ........... 98
SECTION 12.9. Rights of Trustee and Paying Agent ..................... 99
SECTION 12.10. Distribution or Notice to Representative ............... 99
SECTION 12.11. Article XII Not To Prevent Events of Default or
Limit Right To Accelerate .............................. 99
(iv)
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SECTION 12.12. Trust Moneys Not Subordinated ......................... 99
SECTION 12.13. Trustee Entitled To Rely .............................. 99
SECTION 12.14. Trustee To Effectuate Subordination ................... 100
SECTION 12.15. Trustee Not Fiduciary for Holders of Guarantor
Senior Indebtedness ................................... 100
SECTION 12.16. Reliance by Holders of Guarantor Senior Indebtedness
on Indebtedness on Subordination Provisions ........... 100
ARTICLE XIII
Miscellaneous ........................................................ 100
SECTION 13.1. Trust Indenture Act Controls .......................... 100
SECTION 13.2. Notices ............................................... 101
SECTION 13.3. Communication by Holders with other Holders ........... 101
SECTION 13.4. Certificate and Opinion as to Conditions Precedent .... 101
SECTION 13.5. Statements Required in Certificate or Opinion ......... 102
SECTION 13.6. When Securities Disregarded ........................... 102
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar .......... 102
SECTION 13.8. Legal Holidays ........................................ 102
SECTION 13.9. GOVERNING LAW ......................................... 103
SECTION 13.10. No Recourse Against Others ............................ 103
SECTION 13.11. Successors ............................................ 103
SECTION 13.12. Multiple Originals .................................... 103
SECTION 13.13. Variable Provisions ................................... 103
SECTION 13.14. Qualification of Indenture ............................ 103
SECTION 13.15. Table of Contents; Headings ........................... 103
(v)
INDENTURE dated as of June 30, 1999, among AVIS RENT A CAR, INC., a Delaware
corporation (the "Company"), THE SUBSIDIARY GUARANTORS (as defined) and The Bank
of New York, a New York banking corporation (the "Trustee") as Trustee.
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) the Company's 11%
Senior Subordinated Notes due 2009 on the date hereof (the "Original Securities"
or "Initial Securities"), and (ii) if and when issued in exchange for Initial
Securities as provided in the Registration Rights Agreement or a similar
agreement relating to Initial Securities (as hereinafter defined), the Company's
11% Senior Subordinated Notes due 2009 (the "Exchange Securities") and (iii) if
and when issued as provided in the Registration Rights Agreement, the Private
Exchange Securities (as defined in the Registration Rights Agreement; together
with Initial Securities and Exchange Securities, the "Securities").
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
"Acquisition Subsidiary" means Avis Fleet Leasing and Management
Corporation and any successor thereto.
"Additional Assets" means:
(1) any property or assets (other than Indebtedness and Capital
Stock) to be used by the Company or a Restricted Subsidiary in a Related
Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or a Restricted Subsidiary of the Company; or
(3) Capital Stock consulting a minority interest in any Person that
at such time is a Restricted Subsidiary of the Company.
provided, however, that, in the case of clauses (2) and (3), such Restricted
Subsidiary is primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing;
provided that beneficial ownership of 10% or more of the Voting Stock of a
Person shall be deemed to be control.
"ARACS" means Avis Rent A Car System, Inc. and its successor and
assigns.
"Asset Disposition" means any direct or indirect sale, lease (other
than an operating lease entered into in the ordinary course of business),
transfer, issuance or other disposition, or a series of related sales, leases,
transfers, issuances or dispositions that are part of a common plan, of shares
of Capital Stock of a Subsidiary (other than directors' qualifying shares),
property or other assets (each referred to for the purposes of this definition
as a "disposition") by the Company or any of its Restricted Subsidiaries,
including any disposition by means of a merger, consolidation or similar
transaction.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Dispositions:
(1) a disposition by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary (other
than a Securitization Entity);
(2) the sale of Cash Equivalents in the ordinary course of business;
(3) a disposition of inventory or Eligible Vehicles in the ordinary
course of business;
(4) a disposition of obsolete or worn out equipment or equipment
that is no longer useful in the conduct of the business of the Company and
its Restricted Subsidiaries (other than Eligible Vehicles) and that is
disposed of in each case in the ordinary course of business;
(5) transactions permitted under Section 4.1;
(6) an issuance of Capital Stock by a Restricted Subsidiary of the
Company to the Company or to a Wholly-Owned Subsidiary (other than a
Securitization Entity) or in the case of a Securitization Entity to any
Person;
(7) for purposes of Section 3.6 only, the making of a Permitted
Investment or a disposition subject to Section 3.3;
(8) sales of Permitted Vehicle Collateral or an interest therein of
the type specified in the definition of "Qualified Securitization
Transaction" to a Securitization Entity;
(9) dispositions of assets with an aggregate fair market value in
any fiscal year of less than $2.5 million; and
(10) dispositions in connection with Permitted Liens.
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded
semi-annually) of the total obligations of the lessee for rental payments
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during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1)
the sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock multiplied
by the amount of such payment by (2) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding
on the Issue Date or thereafter Incurred, payable by the Company under or in
respect of the Senior Credit Agreement and any related notes, collateral
documents, letters of credit and guarantees and any Interest Rate Agreement
entered into in connection with the Senior Credit Agreement, including
principal, premium, if any, interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company at the rate specified therein whether or not a claim for post filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banking institutions are authorized or required by law
to close in New York City.
"Call Transfer Agreement" means the Call Transfer Agreement made and
entered into March 4, 1997 between Avis Rent A Car System, Inc. and HFS
Incorporated.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation will be the capitalized amount of such obligation
at the time any determination thereof is to be made as determined in accordance
with GAAP, and the Stated Maturity thereof will be the date of the last payment
of rent or any other amount due under such lease prior to the first date such
lease may be terminated without penalty.
"Cash Equivalents" means:
(1) securities issued or directly and fully guaranteed or insured by
the United States or the United Kingdom Government or any agency or
instrumentality thereof, having maturities of not more than one year from
the date of acquisition;
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(2) marketable general obligations issued by the United Kingdom or
any state of the United States of America or any political subdivision of
any such state or any public instrumentality thereof maturing within one
year from the date of acquisition thereof and, at the time of acquisition
thereof, having a credit rating of "A" or better from either Standard &
Poor's Ratings Services or Xxxxx'x Investors Service, Inc.;
(3) certificates of deposit, time deposits, eurodollar time
deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof
issued by any commercial bank the long-term debt of which is rated at the
time of acquisition thereof at least "A" or the equivalent thereof by
Standard & Poor's Ratings Services, or "A" or the equivalent thereof by
Xxxxx'x Investors Service, Inc., and having combined capital and surplus
in excess of $500 million;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (1), (2) and
(3) entered into with any bank meeting the qualifications specified in
clause (3) above;
(5) commercial paper rated at the time of acquisition thereof at
least "A-2" or the equivalent thereof by Standard & Poor's Ratings
Services or "P-2" or the equivalent thereof by Xxxxx'x Investors Service,
Inc., or carrying an equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings
of investments, and in either case maturing within one year after the date
of acquisition thereof; and
(6) interests in any investment company or money market fund which
invests solely in instruments of the type specified in clauses (1) through
(5) above.
"Cendant" means Cendant Corporation and its successors or assigns.
"Change of Control" means:
(1) any "person" or "group" of related persons (as such terms are
used in Sections 13(d) and 14(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 such person or group shall be deemed to have "beneficial
ownership" of all shares that any such person or group has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company (or its successor by
merger, consolidation or purchase of all or substantially all of its
assets) (for the purposes of this clause, such person or group shall be
deemed to beneficially own any Voting Stock of the Company held by an
entity, if such person or group "beneficially owns" (as defined above),
directly or indirectly, more than 35% of the voting power of the Voting
Stock of such entity);
(2) 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 by such Board of
Directors or whose nomination
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for election by the shareholders of the Company, as the case may be, was
approved by a vote of at least a majority of the directors of the Company
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 the Board of
Directors of the Company then in office;
(3) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act);
(4) the adoption by the stockholders of the Company of a plan or
proposal for the liquidation or dissolution of the Company;
(5) a Change of Control Event as defined under the Master License
Agreement; or
(6) a Change of Control as defined in any certificate of designation
or similar instrument relating to any series of PHH Sub Preferred Stock.
"Closing Date" with respect to any Initial Securities, means the
date on which such Initial Securities are originally issued.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Avis Rent A Car, Inc. or a successor.
"Computer Services Agreement" means the Computer Service Agreement,
effective as of July 30, 1997 between Avis Rent A Car System, Inc. and WizCom
International, Ltd.
"Consolidated Coverage Ratio" means as of any date of determination,
with respect to any Person, the ratio of (x) the aggregate amount of
Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination for
which financial statements are in existence to (y) Consolidated Interest Expense
for such four fiscal quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary:
(a) has Incurred any Indebtedness since the beginning of such
period that remains outstanding on such date of determination or if
the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness,
Consolidated EBITDA and Consolidated Interest Expense for such
period will be calculated after giving effect on a pro forma basis
to such Indebtedness as if such Indebtedness had been Incurred on
the first day of such period (except that in making such
computation, the amount of Indebtedness under any revolving credit
facility outstanding on the date of such calculation will be
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computed based on (i) the average daily balance of such Indebtedness
during such four fiscal quarters or such shorter period for which
such facility was outstanding or (ii) if such facility was created
after the end of such four fiscal quarters, the average daily
balance of such Indebtedness during the period from the date of
creation of such facility to the date of such calculation) and the
discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period; or
(b) has repaid, repurchased, defeased or otherwise discharged
any Indebtedness since the beginning of the period that is no longer
outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio
involves a discharge of Indebtedness (in each case other than
Indebtedness incurred under any revolving credit facility unless
such Indebtedness has been permanently repaid and the related
commitment terminated), Consolidated EBITDA and Consolidated
Interest Expense for such period will be calculated after giving
effect on a pro forma basis to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness, as if such
discharge had occurred on the first day of such period;
(2) if since the beginning of such period the Company or any
Restricted Subsidiary will have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Asset Disposition:
(a) the Consolidated EBITDA for such period will be reduced by
an amount equal to the Consolidated EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset
Disposition for such period or increased by an amount equal to the
Consolidated EBITDA (if negative) directly attributable thereto for
such period; and
(b) Consolidated Interest Expense for such period will be
reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any
Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is
sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale);
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) will have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary or is merged with or into the Company) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder,
which constitutes all or substantially all of an operating unit, division
or line of business,
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Consolidated EBITDA and Consolidated Interest Expense for such period will
be calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period; and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
will have made any Asset Disposition or any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (2) or
(3) above if made by the Company or a Restricted Subsidiary during such
period, Consolidated EBITDA and Consolidated Interest Expense for such
period will be calculated after giving pro forma effect thereto as if such
Asset Disposition or Investment or acquisition of assets occurred on the
first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given under any calculation under this definition, the pro forma calculations
will be determined in good faith by a responsible financial or accounting
officer of the Company (including pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Securities Act).
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest expense on such Indebtedness will be calculated as if
the rate in effect on the date of determination had been the applicable rate for
the entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).
"Consolidated EBITDA" for any period means, without duplication, the
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income:
(1) Consolidated Interest Expense;
(2) Consolidated Income Taxes;
(3) consolidated non-vehicle related depreciation expense;
(4) consolidated non-vehicle related amortization of intangibles;
and
(5) other non-vehicle related non-cash charges reducing Consolidated
Net Income (excluding any such non-cash charge to the extent it represents
an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period not
included in the calculation).
Notwithstanding the preceding sentence, clauses (2) through (5)
relating to amounts of a Restricted Subsidiary of a Person will be added to
Consolidated Net Income to compute Consolidated EBITDA of such Person only to
the extent (and in the same proportion) that the net income (loss) of such
Restricted Subsidiary was included in calculating the Consolidated Net Income of
such Person and, to the extent the amounts set forth in clauses (2) through (5)
are in excess of those necessary to offset a net loss of such Restricted
Subsidiary
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or if such Restricted Subsidiary has net income for such period included in
Consolidated Net Income, only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Income Taxes" means, with respect to any Person for
any period, taxes imposed upon such Person or other payments required to be made
by such Person by any governmental authority which taxes or other payments are
calculated by reference to the income or profits of such Person or such Person
and its Restricted Subsidiaries (to the extent such income or profits were
included in computing Consolidated Net Income for such period), regardless of
whether such taxes or payments are required to be remitted to any governmental
authority.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
whether paid or accrued, excluding interest on Permitted Vehicle Indebtedness,
plus, to the extent not included in such interest expense:
(1) interest expense attributable to Capitalized Lease Obligations
and the interest portion of rent expense associated with Attributable
Indebtedness in respect of the relevant lease giving rise thereto,
determined as if such lease were a capitalized lease in accordance with
GAAP and the interest component of any deferred payment obligations;
(2) amortization of debt discount and debt issuance cost;
(3) non-cash interest expense (except with respect to Permitted
Vehicle Indebtedness);
(4) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(5) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
to the extent such Guarantee or Lien is called upon;
(6) net costs (if positive) associated with Hedging Obligations
(including amortization of fees);
(7) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period (except
with respect to Permitted Vehicle Indebtedness);
(8) the product of (a) all dividends paid or payable in cash, Cash
Equivalents or Indebtedness or accrued during such period on any series of
Disqualified Stock of such Person or on Preferred Stock of its Restricted
Subsidiaries payable to a party other than
-8-
the Company or a Wholly-Owned Subsidiary, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the
then current effective combined federal, state, provincial and local
statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP; and
(9) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust; provided,
however, that there will be excluded therefrom any such interest expense
of any Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted Subsidiary.
For purposes of the foregoing, total interest expense will be
determined after giving effect to any net payments made or received by the
Company and its Subsidiaries with respect to Interest Rate Agreements.
"Consolidated Net Income" means, for any period, the net income
(loss) of the Company and its consolidated Restricted Subsidiaries determined in
accordance with GAAP; provided, however, that there will not be included in such
Consolidated Net Income:
(1) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that:
(a) subject to the limitations contained in clauses (4), (5)
and (6) below, the Company's equity in the net income of any such
Person for such period will be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by
such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to
the limitations contained in clause (3) below); and
(b) the Company's equity in a net loss of any such Person
(other than an Unrestricted Subsidiary) for such period will be
included in determining such Consolidated Net Income to the extent
such loss has been funded with cash from the Company or a Restricted
Subsidiary;
(2) any net income (loss) of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(3) any net income (but not loss) of any Restricted Subsidiary if
such Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that:
(a) subject to the limitations contained in clauses (4), (5)
and (6) below, the Company's equity in the net income of any such
Restricted
-9-
Subsidiary for such period will be included in such Consolidated Net
Income up to the aggregate amount of cash that could have been
distributed by either such Restricted Subsidiary or the entity to
which the receivables or cash generated by such Consolidated Net
Income has been transferred for purposes of a Qualified
Securitization Transaction during such period to the Company or
another Restricted Subsidiary as a dividend (subject, in the case of
a dividend to another Restricted Subsidiary, to the limitation
contained in this clause); and
(b) the Company's equity in a net loss of any such Restricted
Subsidiary for such period will be included in determining such
Consolidated Net Income;
(4) any gain (loss) realized upon the sale or other disposition of
any property, plant or equipment of the Company or its consolidated
Restricted Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) which is not sold or otherwise disposed of in the ordinary
course of business and any gain (loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(5) any extraordinary gain or loss; and
(6) the cumulative effect of a change in accounting principles.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"Customer Lease Financing Loans" has the meaning set forth in the
definition of Specified Financing Subsidiary.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section
2.13.
"Definitive Securities" means certificated Securities.
"Designated Senior Indebtedness" means (1) the Bank Indebtedness (to
the extent such Bank Indebtedness constitutes Senior Indebtedness) and (2) any
other Senior Indebtedness which, at the date of determination, has an aggregate
principal amount outstanding of, or under which, at the date of determination,
the holders thereof are committed to lend up to, at least $50 million and is
specifically designated in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture.
"Determination Date" means the last calendar day of each month.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event:
-10-
(1) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or Disqualified
Stock (excluding Capital Stock which is convertible or exchangeable solely
at the option of the Company or a Restricted Subsidiary); or
(3) is redeemable at the option of the holder thereof, in whole or
in part, in each case on or prior to the date that is 91 days after the
date (a) on which the Securities mature or (b) on which there are no
Securities outstanding, provided that only the portion of Capital Stock
which so matures or is mandatorily redeemable, is so convertible or
exchangeable or is so redeemable at the option of the holder thereof prior
to such date will be deemed to be Disqualified Stock; provided, further
that any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the Company to
repurchase such Capital Stock upon the occurrence of a change of control
or asset sale (each defined in a substantially identical manner to the
corresponding definitions in this Indenture) shall not constitute
Disqualified Stock if the terms of such Capital Stock (and all such
securities into which it is convertible or for which it is ratable or
exchangeable) provide that the Company may not repurchase or redeem any
such Capital Stock (and all such securities into which it is convertible
or for which it is ratable or exchangeable) pursuant to such provision
prior to compliance by the Company with the provisions of Section 3.8 and
Section 3.6 and such repurchase or redemption complies with Section 3.4.
"Domestic Subsidiary" means any Restricted Subsidiary that is
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"DTC" means The Depository Trust Company, its nominees and their
respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Eligible Leases" means open-end and closed-end automobile fleet
leases originated by or on behalf of the Company and its Restricted Subsidiaries
which are of a type customarily eligible for inclusion in a Qualified
Securitization Transaction.
"Eligible Vehicles" shall mean the motor vehicle inventory of the
Company and its Restricted Subsidiaries, in each case, whether held for sale,
lease or rental purposes which are of a type customarily eligible for inclusion
in a Qualified Securitization Transaction.
"Equity Clawback" means the redemption of the Securities by the
Company with the Net Cash Proceeds of one or more Public Equity Offerings as
permitted by this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated the Issue Date among Chase Securities Inc.,
Xxxxxx Brothers Inc., the Subsidiary Guarantors and the Company.
-11-
"Exchange Securities" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
"Excluded Subsidiary" is a reference to a Foreign Subsidiary,
Securitization Entity, Specified Financing Subsidiary or any regulated bank
subsidiary or insurance subsidiary that has not issued a Guarantee of any Senior
Indebtedness.
"Fiscal Year" means a 52 or 53 week period ending on the last
Saturday in June.
"Fleet Receivables" means all receivables generated by the Company
and its Restricted Subsidiaries from obligors under fleet maintenance contracts,
fleet management contracts and fuel card contracts and any other service
contracts billed together with Eligible Leases, which are of a type customarily
eligible for inclusion in a Qualified Securitization Transaction.
"Foreign Subsidiary" means any Restricted Subsidiary that is not
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture will be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise); or
(2) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "Guarantee" will not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Guarantor Senior Indebtedness" means, with respect to a Subsidiary
Guarantor, the following obligations, whether outstanding on the date of this
Indenture or thereafter issued, without duplication:
-12-
(1) any Guarantee of the Bank Indebtedness by such Subsidiary
Guarantor and all other Guarantees by such Subsidiary Guarantor of Senior
Indebtedness of the Company or Guarantor Senior Indebtedness of any other
Subsidiary Guarantor; and
(2) all obligations consisting of principal of and premium, if any,
accrued and unpaid interest on, and fees and other amounts relating to,
all other Indebtedness of the Subsidiary Guarantor. Guarantor Senior
Indebtedness includes interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Subsidiary
Guarantor regardless of whether postfiling interest is allowed in such
proceeding.
Notwithstanding anything to the contrary in the preceding paragraph,
Guarantor Senior Indebtedness will not include:
(1) any Indebtedness which, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that
the obligations in respect of such Indebtedness are not superior in right
of, or are subordinate to, payment of the Securities and the Subsidiary
Guarantee;
(2) any obligations of such Subsidiary Guarantor to another
Subsidiary or the Company;
(3) any liability for Federal, state, local, foreign or other taxes
owed or owing by such Subsidiary Guarantor;
(4) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof
or instruments evidencing such liabilities);
(5) any Indebtedness, Guarantee or obligation of such Subsidiary
Guarantor that is expressly subordinate or junior in right of payment to
any other Indebtedness, Guarantee or obligation of such Subsidiary
Guarantor, including, without limitation, any Guarantor Senior
Subordinated Indebtedness and Guarantor Subordinated Obligations of such
Guarantor; or
(6) any Capital Stock.
"Guarantor Senior Subordinated Indebtedness" means, with respect to
a Subsidiary Guarantor, the obligations of such Subsidiary Guarantor under the
Subsidiary Guarantee and any other Indebtedness of such Subsidiary Guarantor
(whether outstanding on the Issue Date or thereafter Incurred) that specifically
provides that such Indebtedness is to rank equally in right of payment with the
obligations of such Subsidiary Guarantor under the Subsidiary Guarantee and is
not expressly subordinated by its terms in right of payment to any Indebtedness
of such Subsidiary Guarantor which is not Guarantor Senior Indebtedness of such
Subsidiary Guarantor.
"Guarantor Subordinated Obligation" means, with respect to a
Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether
outstanding on the Issue
-13-
Date or thereafter Incurred) which is expressly subordinate in right of payment
to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee
pursuant to a written agreement.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered in the Note Register.
"Incur" means issue, create, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) will be deemed to
be incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary; and the terms "Incurred" and "Incurrence" have meanings correlative
to the foregoing.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money (including in respect of Qualified
Securitization Transactions);
(2) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(3) the principal component of all obligations of such Person in
respect of letters of credit, bankers' acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of Incurrence);
(4) the principal component of all obligations of such Person to pay
the deferred and unpaid purchase price of property (except trade
payables), which purchase price is due more than six months after the date
of placing such property in service or taking delivery and title thereto;
(5) Capitalized Lease Obligations and all Attributable Indebtedness
of such Person;
(6) the principal component of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any Preferred
Stock;
(7) the principal component of all Indebtedness of other Persons
secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however, that the amount
of such Indebtedness will be the lesser of
-14-
(a) the fair market value of such asset at such date of determination and
(b) the amount of such Indebtedness of such other Persons;
(8) the principal component of Indebtedness of other Persons to the
extent Guaranteed by such Person; and
(9) to the extent not otherwise included in this definition, net
obligations of such Person under Currency Agreements and Interest Rate
Agreements (the amount of any such obligations to be equal at any time to
the termination value of such agreement or arrangement giving rise to such
obligation that would be payable by such Person at such time).
The amount of Indebtedness of any Person at any date will be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
In addition, "Indebtedness" of any Person shall include Indebtedness
described in the preceding paragraph that would not appear as a liability on the
balance sheet of such Person if:
(1) such Indebtedness is the obligation of a partnership or joint
venture that is not a Restricted Subsidiary (a "Joint Venture");
(2) such Person or a Restricted Subsidiary of such Person is a
general partner of the Joint Venture (a "General Partner"); and
(3) there is recourse, by contract or operation of law, with respect
to the payment of such Indebtedness to property or assets of such Person
or a Restricted Subsidiary of such Person; and then such Indebtedness
shall be included in an amount not to exceed:
(a) the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets
of such Person or a Restricted Subsidiary of such Person; or
(b) if less than the amount determined pursuant to clause (a)
immediately above, the actual amount of such Indebtedness that is
recourse to such Person or a Restricted Subsidiary of such Person,
if the Indebtedness is evidenced by a writing and is for a
determinable amount and the related interest expense shall be
included in Consolidated Interest Expense to the extent actually
paid by the Company or its Restricted Subsidiaries.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Initial Securities" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
-15-
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of any direct or
indirect advance, loan (other than advances to customers in the ordinary course
of business) or other extension of credit (including by way of Guarantee or
similar arrangement, but excluding any debt or extension of credit represented
by a bank deposit other than a time deposit) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by, such Person and all other items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided that:
(1) Hedging Obligations entered into in the ordinary course of
business and in compliance with this Indenture;
(2) endorsements of negotiable instruments and documents in the
ordinary course of business; and
(3) an acquisition of assets, Capital Stock or other securities by
the Company or a Restricted Subsidiary for consideration consisting
exclusively of common equity securities of the Company, shall in each case
not be deemed to be an Investment.
For purposes of Section 3.4,
(1) "Investment" will include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such
Restricted Subsidiary of the Company at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (a) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (b) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets (as conclusively determined by the Board of
Directors of the Company in good faith) of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary; and
(2) any property transferred to or from an Unrestricted Subsidiary
will be valued at its fair market value at the time of such transfer, in each
case as determined in good faith by the Board of Directors of the Company. If
the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Voting Stock of any Restricted Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such entity is no
longer a Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the
-16-
date of any such sale or disposition equal to the fair market value (as
conclusively determined by the Board of Directors of the Company in good faith)
of the Capital Stock of such Subsidiary not sold or disposed of.
"IPO" means the initial public offering of common stock of the
Company completed on September 24, 1997.
"Issue Date" means the date on which the Original Securities are
originally issued.
"IT Agreement" means an information technology agreement between PHH
Vehicle Management Services LLC and Cendant for continued access to Cendant's
main frame and information technology resources.
"Legal Holiday" has the meaning ascribed to it in Section 12.8.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Master License Agreement" means the Master License Agreement, dated
July 30, 1997, among HFS Car Rental, Inc., Avis Rent A Car System, Inc. and
Wizard Co., Inc.
"Merger Agreement" means the Agreement and Plan of Merger and
Reorganization by and among PHH Corporation, PHH Holdings Corporation, Avis Rent
A Car, Inc. and Avis Fleet Leasing and Management Corporation dated as of May
22, 1999, as the same may be amended, supplemented or otherwise modified from
time to time.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of:
(1) all legal, accounting, investment banking, title and recording
tax expenses, commissions and other fees and expenses incurred, and all
Federal, state, provincial, foreign and local taxes required to be paid or
accrued as a liability under GAAP (after taking into account any available
tax credits or deductions and any tax sharing agreements), as a
consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law
be repaid out of the proceeds from such Asset Disposition;
-17-
(3) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of
such Asset Disposition; and
(4) the deduction of appropriate amounts to be provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, listing fees,
discounts or commissions and brokerage, consultant and other fees and charges
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result of such issuance or sale (after taking into account any
available tax credit or deductions and any tax sharing arrangements).
"Non-Recourse Indebtedness" means Indebtedness:
(1) as to which neither the Company nor any Restricted Subsidiary
(a) provides any Guarantee or credit support of any kind (including any
undertaking, guarantee, indemnity, agreement or instrument that would
constitute Indebtedness) or (b) is directly or indirectly liable (as a
guarantor or otherwise);
(2) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or both)
any holder of any other Indebtedness of the Company or any Restricted
Subsidiary to declare a default under such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity;
and
(3) the explicit terms of which provide there is no recourse against
any of the assets of the Company or its Restricted Subsidiaries.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Note Register" means the register of Securities, maintained by the
Trustee, pursuant to Section 2.3.
"Obligations" has the meaning ascribed to it in Section 11.1.
"Officer" means the Chairman of the Board, the Chief Operating
Officer, the President, any Vice President, the Treasurer or the Secretary of
the Company.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company.
"Opinion of Counsel" means a written opinion from legal counsel
delivered to the Trustee. The counsel may be an employee of or counsel to the
Company.
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"Original Securities" means the Company's 11% Senior Subordinated
Notes due 2009 originally issued on the Issue Date.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) a Restricted Subsidiary (other than a Securitization Entity) or
a Person which will, upon the making of such Investment, become a
Restricted Subsidiary (other than a Securitization Entity); provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary
(other than a Securitization Entity); provided, however, that such
Person's primary business is a Related Business;
(3) cash and Cash Equivalents;
(4) receivables owing to the Company or any Restricted Subsidiary
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of
business;
(6) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary;
(7) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments or pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of a debtor;
(8) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 3.6;
(9) Investments in existence on the Issue Date;
(10) Currency Agreements, Interest Rate Agreements and related
Hedging Obligations, which transactions or obligations are Incurred in
compliance with Section 3.3;
(11) Investments by the Company or any of its Restricted
Subsidiaries, together with all other Investments pursuant to this clause
(11), in an aggregate amount at the time of such Investment not to exceed
$40.0 million outstanding at any one time;
-19-
(12) Guarantees issued in accordance with Section 3.3; and
(13) Investments by the Company or a Restricted Subsidiary in a
Securitization Entity or any Investment by a Securitization Entity in any
other Person, in each case, in connection with a Qualified Securitization
Transaction, provided, however, that any Investment in any such Person is
in the form of a Purchase Money Note, or any equity interest or interests
in Permitted Vehicle Collateral generated by the Company or a Restricted
Subsidiary and transferred to any Person in connection with a Qualified
Securitization Transaction.
"Permitted Liens" means, with respect to any Person:
(1) Liens securing Indebtedness and other obligations under the
Senior Credit Facilities and related Interest Rate Agreements and other
Senior Indebtedness and liens on assets of Restricted Subsidiaries
securing Guarantees of Indebtedness and other obligations under a Senior
Credit Facilities and other Guarantor Senior Indebtedness permitted to be
incurred under this Indenture;
(2) pledges or deposits by such Person under workmen's compensation
laws, unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public or statutory obligations of such Person or
deposits or cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as security for
contested taxes or import or customs duties or for the payment of rent, in
each case Incurred in the ordinary course of business;
(3) Liens imposed by law, including carriers', warehousemen's and
mechanics' Liens, in each case for sums not yet due or being contested in
good faith by appropriate proceedings if a reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made in
respect thereof;
(4) Liens for taxes, assessments or other governmental charges not
yet subject to penalties for non-payment or which are being contested in
good faith by appropriate proceedings provided appropriate reserves
required pursuant to GAAP have been made in respect thereof;
(5) Liens in favor of issuers of surety or performance bonds or
letters of credit or bankers' acceptances issued pursuant to the request
of and for the account of such Person in the ordinary course of its
business; provided, however, that such letters of credit do not constitute
Indebtedness;
(6) Liens on any airport concession agreements or permits to secure
loans extended to finance tenant improvements used in connection with the
concession agreement or permit subject to such Lien;
-20-
(7) encumbrances, easements or reservations of, or rights of others
for, licenses, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens incidental to the
conduct of the business of such Person or to the ownership of its
properties which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation
of the business of such Person;
(8) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under this Indenture, secured by a
Lien on the same property securing such Hedging Obligation;
(9) leases and subleases of real property which do not materially
interfere with the ordinary conduct of the business of the Company or any
of its Restricted Subsidiaries;
(10) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment have
not been finally terminated or the period within which such proceedings
may be initiated has not expired;
(11) Liens for the purpose of securing the payment of all or a part
of the purchase price of, or Capitalized Lease Obligations with respect
to, assets or property acquired or constructed in the ordinary course of
business; provided that:
(a) the aggregate principal amount of Indebtedness secured by
such Liens is otherwise permitted to be Incurred under this
Indenture and does not exceed the cost of the assets or property so
acquired or constructed; and
(b) such Liens are created within 180 days of construction or
acquisition of such assets or property and do not encumber any other
assets or property of the Company or any Restricted Subsidiary other
than such assets or property and assets affixed or appurtenant
thereto;
(12) Liens arising solely by virtue of any statutory or common law
provisions relating to banker's Liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
depositary institution; provided that:
(a) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board; and
(b) such deposit account is not intended by the Company or any
Restricted Subsidiary to provide collateral to the depository
institution;
(13) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business;
-21-
(14) Liens existing on the Issue Date;
(15) Liens on property or shares of stock of a Person at the time
such Person becomes a Restricted Subsidiary; provided, however, that such
Liens are not created, incurred or assumed in connection with, or in
contemplation of, such other Person becoming a Restricted Subsidiary;
provided further, however, that any such Lien may not extend to any other
property owned by the Company or any Restricted Subsidiary;
(16) Liens on property at the time the Company or a Restricted
Subsidiary acquired the property, including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that such Liens are not created, incurred
or assumed in connection with, or in contemplation of, such acquisition;
provided further, however, that such Liens may not extend to any other
property owned by the Company or any Restricted Subsidiary;
(17) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or a Wholly-Owned Subsidiary
(other than a Securitization Entity);
(18) Liens securing the Securities and Subsidiary Guarantees;
(19) Liens securing Refinancing Indebtedness incurred to refinance
Indebtedness that was previously so secured, provided that any such Lien
is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or, under the written arrangements under
which the original Lien arose, could secure) the Indebtedness being
refinanced or is in respect of property that is the security for a
Permitted Lien hereunder;
(20) Liens on assets transferred to a Securitization Entity or on
assets of a Securitization Entity, in either case incurred in connection
with a Qualified Securitization Transaction; and
(21) Liens securing Customer Lease Financing Loans incurred without
violation of this Indenture.
"Permitted Vehicle Collateral" means, as of any Determination Date:
(1) the collateral securing Permitted Vehicle Indebtedness and
consisting of Eligible Vehicles and receivables, or a beneficial interest
therein, arising from the disposition of Eligible Vehicles and the
proceeds thereof;
(2) Eligible Leases and Fleet Receivables, or a beneficial interest
therein, transferred to a Securitization Entity in connection with a
Qualified Securitization Transaction and the proceeds thereof;
(3) any related assets which are customarily transferred, or in
respect of which security interests are customarily granted, in connection
with asset securitizations involving Eligible Vehicles or Eligible Leases;
and
-22-
(4) any proceeds of any of the foregoing.
"Permitted Vehicle Indebtedness" means (1) Indebtedness Incurred to
finance or refinance Eligible Vehicles (but only to the extent actually used to
finance or refinance Eligible Vehicles) and (2) Indebtedness secured by
Permitted Vehicle Collateral; provided, however, that any Indebtedness
redesignated pursuant to Section 3.13(2)(C) shall not constitute Permitted
Vehicle Indebtedness; and provided, further, that the Securities shall be deemed
not to constitute Permitted Vehicle Indebtedness when issued.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, government or any agency or political subdivision
hereof or any other entity.
"PHH Sub Preferred Stock" is a collective reference to the Series A
Cumulative Participating Redeemable Convertible Preferred Stock, Series B
Cumulative PIK Preferred Stock and Series C Cumulative Redeemable Preferred
Stock of Acquisition Subsidiary and the related Certificates of Designations in
effect on the Issue Date, as each of the same may be amended, supplemented or
otherwise modified from time to time; provided that any such amendment,
supplement or modification is not disadvantageous to the Holders in any material
respect.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Private Exchange Securities" shall have the meaning set forth in
the Exchange and Registration Rights Agreement or a similar agreement relating
to Initial Securities.
"Public Equity Offering" means an offering for cash by the Company
of its common stock, or options, warrants or rights with respect to its common
stock.
A "Public Market" exists at any time with respect to the common
stock of the Company, if:
(1) the common stock of the Company is then registered with the
Securities Exchange Commission pursuant to Section 12(b) or 12(g) of the
Exchange Act and traded either on a national securities exchange or in the
National Association of Securities Dealers Automated Quotation System; and
(2) at least 15% of the total issued and outstanding common stock of
the Company has been and remains distributed prior to such time by means
of an effective registration statement under the Securities Act of 1933,
as amended.
"Purchase Money Note" means a promissory note of a Securitization
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Restricted Subsidiary of the Company to a Securitization Entity or
representing the deferred purchase price
-23-
for the purchase of assets by such Securitization Entity from the Company or a
Restricted Subsidiary, in each case in connection with a Qualified
Securitization Transaction, to a Securitization Entity, which note is repayable
from cash available to the Securitization Entity, other than amounts required to
be established as reserves pursuant to agreements, amounts paid to investors in
respect of interest, principal and other amounts owing to such investors and
amounts paid in connection with the purchase of Eligible Vehicles, Eligible
Leases, Fleet Receivables or a beneficial interest therein.
"Purchasing Services Agreement" means the purchasing services
agreement dated as of August 1, 1999, between ARACS and Cendant Corporation.
"Qualified Securitization Transaction" means any transaction or
series of transactions that may be entered into by the Company or any of its
Restricted Subsidiaries pursuant to which the Company or any of its Restricted
Subsidiaries may sell, convey or otherwise transfer to (1) a Securitization
Entity (in the case of a transfer by the Company or any of its Restricted
Subsidiaries) and (2) any other Person (in the case of a transfer by a
Securitization Entity), or may grant a security interest in, any Permitted
Vehicle Collateral (whether now existing or arising in the future) of the
Company or any of its Restricted Subsidiaries, and any assets related thereto
including, without limitation, the proceeds of such Permitted Vehicle
Collateral.
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A under the Securities Act).
"Redemption Date" means, with respect to any redemption of
Securities, the date of redemption with respect thereto.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinance", "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
date of this Indenture or Incurred in compliance with this Indenture (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness, provided, however, that:
(1) (a) if the Stated Maturity of the Indebtedness being refinanced
is earlier than the Stated Maturity of the Securities, the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of
the Indebtedness being refinanced or (b) if the Stated Maturity of the
Indebtedness being refinanced is later than the Stated Maturity of the
Securities, the Refinancing Indebtedness has a Stated Maturity at least 91
days later than the Stated Maturity of the Securities;
(2) the Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being refinanced;
-24-
(3) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate
issue price) that is equal to or less than the sum of the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding (plus, without duplication, accrued
interest, fees and expenses, including any premium and defeasance costs)
of the Indebtedness being refinanced; and
(4) if the Indebtedness being refinanced is subordinated in right of
payment to the Securities or the Subsidiary Guarantee, such Refinancing
Indebtedness is subordinated in right of payment to the Securities or the
Subsidiary Guarantee on terms at least as favorable to the Holders as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Registered Exchange Offer" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
"Registration Rights Agreement" means the registration rights
agreement between Avis Rent A Car and the Franchisor entered into in connection
with the IPO.
"Related Business" means any business which is the same as or
related, ancillary or complementary to any of the businesses of the Company and
its Restricted Subsidiaries on the date of this Indenture after giving effect to
the acquisition of VMS on such date (including WEX Financial).
"Related Business Assets" means assets used or useful in a Related
Business.
"Representative" means any trustee, agent or representative (if any)
of an issue of Senior Indebtedness.
"Reservation Services Agreement" means the reservation service
agreement between Cendant Corporation and ARACS entered into in connection with
the IPO.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Period" means the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Securities are offered
to persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement Legend
set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set forth
in clause (B) of Section 2.1(c), as applicable.
"Restricted Subsidiary" means (i) any Subsidiary of the Company
other than an Unrestricted Subsidiary and (ii) any Securitization Entity.
-25-
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Securities" means the collective reference to the Initial
Securities, Exchange Securities and Private Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by DTC), or any successor Person thereto and shall
initially be the Trustee.
"Securitization Entity" means a Restricted Subsidiary of the Company
(or another Person in which the Company or any Restricted Subsidiary of the
Company makes an Investment and to which the Company or any Restricted
Subsidiary of the Company transfers Permitted Vehicle Collateral or an interest
in Permitted Vehicle Collateral) which engages in no activities other than in
connection with the ownership, leasing, operation and financing of Eligible
Vehicles and other Permitted Vehicle Collateral and which is designated by the
Board of Directors of the Company (as provided below) as a Securitization Entity
and as to which:
(1) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which:
(a) is guaranteed by the Company or any Restricted Subsidiary
of the Company (excluding guarantees of Obligations (other than the
principal of, and interest on, Indebtedness) pursuant to Standard
Securitization Undertakings);
(b) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to Standard
Securitization Undertakings; or
(c) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings;
(2) neither the Company nor any Restricted Subsidiary of the Company
has any material contract, agreement, arrangement or understanding (except
in connection with a Purchase Money Note or Qualified Securitization
Transaction) other than on terms no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from
Persons that are not Affiliates of the Company, other than fees payable in
the ordinary course of business in connection with servicing Permitted
Vehicle Collateral; and
-26-
(3) neither the Company nor any Restricted Subsidiary of the Company
has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating
results.
Any such designation by the Board of Directors of the Company shall
be evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"Senior Credit Agreement" means the Credit Agreement, dated as of
the Issue Date among Avis Rent A Car, Inc., the several banks and other
financial institutions and entities from time to time parties thereto, The Chase
Manhattan Bank, as administrative agent for the lenders and Xxxxxx Commercial
Paper Inc., as syndication agent, including any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof and any
credit facilities or agreements that replace, refund or refinance any part of
the loans with other Senior Indebtedness of Avis Rent A Car, Inc.
"Senior Credit Facilities" means, with respect to the Company, one
or more debt facilities (including, with limitation, the Senior Credit Agreement
to be entered into among the Company, The Chase Manhattan Bank, as
Administrative Agent, and the lenders parties thereto from time to time) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time (and whether or not with the original
administrative agent and lenders or another administrative agent or agents or
other lenders and whether provided under the original Revolving Credit Facility
and the Term Loan Facilities or any other credit or other agreement or
indenture).
"Senior Indebtedness" means, whether outstanding on the Issue Date
or thereafter issued, created, Incurred or assumed, the Bank Indebtedness and
all other Indebtedness of the Company, including accrued and unpaid interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company at the rate specified
in the documentation with respect thereto whether or not a claim for post filing
interest is allowed in such proceeding) and fees relating thereto; provided,
however, that Senior Indebtedness will not include:
(1) any Indebtedness which, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is provided that
the obligations in respect of such Indebtedness are not superior in right
of, or are subordinate to, payment of the Securities and the Subsidiary
Guarantees;
(2) any obligation of the Company to any Subsidiary;
(3) any liability for Federal, state, foreign, local or other taxes
owed or owing by the Company;
-27-
(4) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof
or instruments evidencing such liabilities);
(5) any Indebtedness, Guarantee or obligation of the Company that is
expressly subordinate or junior in right of payment to any other
Indebtedness, Guarantee or obligation of the Company, including, without
limitation, any Senior Subordinated Indebtedness and any Subordinated
Obligations; or
(6) any Capital Stock.
"Senior Subordinated Indebtedness" means the Securities and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank equally with the Securities in right of payment and is
not subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.
"Separation Agreement" means the Separation Agreement dated as of
June 30, 1997 between HFS Car Rental, Inc. and Avis Rent A Car, Inc.
"Series C Preferred Stock" means the Series C Cumulative Redeemable
Preferred Stock of Acquisition Subsidiary and the related Certificate of
Designation in effect on the Issue Date.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Specified Financing Subsidiary" means a direct wholly-owned
subsidiary of Acquisition Subsidiary (into which Acquisition Subsidiary has
contributed only nominal equity) that is solely engaged in the business of
acquiring vehicles for and then leasing such vehicles to, a specified customer
(the "Customer"); provided that (i) such vehicles are purchased solely with the
proceeds of loans made by the Customer to such Specified Financing Subsidiary
(the "Customer Lease Financing Loans"), (ii) neither the Company nor any
Restricted Subsidiary provides the Specified Financing Subsidiary any guarantee
or credit support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness) or is directly or
indirectly liable (as a guarantor or otherwise) for such Customer Lease
Financing Loans and (iii) the explicit terms of such Customer Lease Financing
Loans provide that there shall be no recourse against any of the assets of the
Company or its Restricted Subsidiaries.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably customary in
securitizations of vehicles and vehicle leases.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision, but shall not include any contingent
-28-
obligations to repay, redeem or repurchase any such principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, trust,
association, partnership, joint venture, limited liability company or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership and joint venture
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (1) such Person, (2) such Person
and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of
such Person. Unless otherwise specified herein, each reference to a Subsidiary
will refer to a Subsidiary of the Company.
"Subsidiary Guarantee" means, individually, any Guarantee of payment
of the Securities by a Subsidiary Guarantor pursuant to the terms of this
Indenture and any supplemental indenture thereto, and, collectively, all such
Guarantees. Each such Subsidiary Guarantee will be in the form prescribed by
this Indenture.
"Subsidiary Guarantor" means each Restricted Subsidiary of the
Company in existence on the Issue Date and any Restricted Subsidiary created or
acquired by the Company after the Issue Date other than in each case an Excluded
Subsidiary.
"Tax Disaffiliation Agreement" means the Tax Disaffiliation
Agreement by and among Cendant Corporation and Avis Rent A Car entered into in
connection with the IPO .
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. xx.xx. 77aaa-77bbbb), as in effect on the date of this Indenture.
"Total Capital Ratio" has the meaning ascribed to it in Section
3.3(b)(15) of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.
"Unrestricted Subsidiary" means:
-29-
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors
of the Company in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary or a
Person becoming a Subsidiary through merger or consolidation or Investment
therein) to be an Unrestricted Subsidiary only if:
(1) such Subsidiary or any of its Subsidiaries does not own any
Capital Stock or Indebtedness of or have any Investment in, or own or hold
any Lien on any property of, any other Subsidiary of the Company which is
not a Subsidiary of the Subsidiary to be so designated or otherwise an
Unrestricted Subsidiary;
(2) all the Indebtedness of such Subsidiary and its Subsidiaries
shall, at the date of designation, and will at all times thereafter,
consist of Non-Recourse Indebtedness;
(3) such designation and the Investment of the Company in such
Subsidiary complies with Section 3.4;
(4) such Subsidiary, either alone or in the aggregate with all other
Unrestricted Subsidiaries, does not operate, directly or indirectly, all or
substantially all of the business of the Company and its Subsidiaries;
(5) such Subsidiary is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation:
(a) to subscribe for additional Capital Stock of such Person;
or
(b) to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified levels of operating
results; and
(6) on the date such Subsidiary is designated an Unrestricted
Subsidiary, such Subsidiary is not a party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary
with terms substantially less favorable to the Company than those that
might have been obtained from Persons who are not Affiliates of the
Company.
Any such designation by the Board of Directors of the Company shall
be evidenced to the Trustee by filing with the Trustee a resolution of the Board
of Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complies with the foregoing
conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.
-30-
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and the Company could
incur at least $1.00 of additional Indebtedness under Section 3.3(a) on a pro
forma basis taking into account such designation.
"VMS Acquisition" means the acquisition of the vehicle management
and fuel card businesses of Cendant pursuant to the Merger Agreement.
"VMS Agreements" means the IT Agreement and any transition service
agreement entered into by Cendant or its affiliates in connection with the VMS
Acquisition.
"Voting Stock" of a Person means all classes of Capital Stock of
such Person then outstanding and normally entitled to vote in the election of
directors or Persons discharging comparable functions.
"WEX Financial" means Xxxxxx Express Financial Services Corporation,
a licensed industrial loan corporation and any successor thereto.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares and PHH Sub Preferred Stock) is owned by the Company or another
Wholly-Owned Subsidiary.
SECTION 1.2. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"............................................. 3.7
"Agent Member"...................................................... 2.1(d)
"Authenticating Agent".............................................. 2.2
"Bankruptcy Law".................................................... 6.1
"Change of Control"................................................. 3.8
"Change of Control Offer"........................................... 3.8
"Change of Control Payment"......................................... 3.8
"Change of Control Payment Date".................................... 3.8
"Company Order"..................................................... 2.2
"covenant defeasance option"........................................ 8.1(b)
"Custodian"......................................................... 6.1
"Definitive Securities"............................................. 2.1(e)
"Determination Date"................................................ 3.13
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"Event of Default".................................................. 6.1
"Excess Proceeds"................................................... 3.6
"Exchange Global Note".............................................. 2.1
"Global Securities"................................................. 2.1(a)
"IAI"............................................................... 2.1
"Institutional Accredited Investor Global Note"..................... 2.1
"legal defeasance option"........................................... 8.1(b)
"Offer"............................................................. 3.6
"Offer Amount"...................................................... 3.6
"Offer Period"...................................................... 3.6
"Paying Agent"...................................................... 2.3
"Private Placement Legend".......................................... 2.1(c)
"Purchase Date"..................................................... 3.6
"Registrar"......................................................... 2.3
"Regulation S"...................................................... 2.1(a)
"Regulation S Certificate".......................................... 2.1
"Regulation S Global Note".......................................... 2.1
"Regulation S Legend"............................................... 2.1
"Regulation S Note"................................................. 2.1
"Regulation S Global Note".......................................... 2.1
"Release Date"...................................................... 2.1
"Resale Restriction Termination Date"............................... 2.6
"Restricted Payment"................................................ 3.4
"Rule 144A"......................................................... 2.1(b)
"Rule 144A Global Note"............................................. 2.1
"Rule 144A Note".................................................... 2.1
"Special Interest Payment Date"..................................... 2.13
"Special Record Date"............................................... 2.13
"Successor Company"................................................. 4.1
"Total Capital Ratio"............................................... 3.3(b)
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SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared
in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
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ARTICLE II
The Securities
SECTION 2.1. Form, Dating and Terms. (a) The Original Securities are
being offered and sold by the Company pursuant to a Purchase Agreement, dated
June __, 1999, among the Company, the Subsidiary Guarantors and Chase Securities
Inc. and Xxxxxx Brothers Inc. The Original Securities will be resold initially
only to (A) qualified institutional buyers (as defined in Rule 144A under the
Securities Act ("Rule 144A")) in reliance on Rule 144A ("QIBs") and (B) Persons
other than U.S. Persons (as defined in Regulation S under the Securities Act
("Regulation S")) in reliance on Regulation S. Such Original Securities may
thereafter be transferred to among others, QIBs, purchasers in reliance on
Regulation S and IAIs in accordance with Rule 501 of the Securities Act in
accordance with the procedure described herein.
Initial Securities offered and sold to qualified institutional
buyers in the United States of America in reliance on Rule 144A (the "Rule 144A
Note") will be issued on the Issue Date in the form of a permanent global
Security, without interest coupons, substantially in the form of Exhibit A,
which is hereby incorporated by reference and made a part of this Indenture,
including appropriate legends as set forth in Section 2.1(c) (the "Rule 144A
Global Note"), deposited with the Trustee, as custodian for DTC, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. The
Rule 144A Global Note may be represented by more than one certificate, if so
required by DTC's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Rule 144A Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for DTC or its nominee, as hereinafter
provided.
Initial Notes offered and sold outside the United States of America
(the "Regulation S Note") in reliance on Regulation S under the Securities Act
("Regulation S") shall be issued in the form of a permanent global Security
substantially in the form of Exhibit A (the "Regulation S Global Note")
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
Regulation S Global Note may be represented by more than one certificate, if so
required by the Depositary's rules regarding the maximum principal amount to be
represented by a single certificate. The aggregate principal amount of the
Regulation S Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Initial Securities resold to institutional "accredited investors"
(as defined in Rules 501(a)(1), (2), (3) and (7) under the Securities Act) who
are not QIBs ("IAIs") in the United States of America will be issued in the form
of a fully registered global security, without interest coupons, substantially
in the form set forth in Exhibit A, which is hereby incorporated by reference
and made a part of this Indenture, including appropriate legends as set forth in
Section 2.1(c), duly executed by the Company and authenticated by the Trustee as
hereinafter provided (each, an "Institutional Accredited Investor Global Note").
Upon such issuance, the Trustee shall register such Institutional Accredited
Investor Global Note in the name of the beneficial owner or owners of such note
(or the nominee of such beneficial owner or owners) and deliver the
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certificates for such Institutional Accredited Investor Global Note to the
respective beneficial owner or owners. Upon transfer of such Institutional
Accredited Investor Global Note to a QIB or to a Non-U.S. Person, such
Institutional Accredited Investor Global Note will, unless the Rule 144A Global
Note, in the case of a transfer to a QIB, or the Regulation S Global Note, in
the case of a transfer to a Non-U.S. Person, has previously been exchanged for
Definitive Securities pursuant to Section 2.1(e), be exchanged for an interest
in a Global Security pursuant to the provisions of Section 2.6.
Exchange Securities exchanged for interests in the Rule 144A Note,
the Regulation S Note and the Institutional Accredited Investor Global Note will
be issued in the form of a permanent global Security substantially in the form
of Exhibit B, which is hereby incorporated by reference and made a part of this
Indenture, deposited with the Trustee as hereinafter provided, including the
appropriate legend set forth in Section 2.1(c) (the "Exchange Global Note"). The
Exchange Global Note may be represented by more than one certificate, if so
required by DTC's rules regarding the maximum principal amount to be represented
by a single certificate.
The Rule 144A Global Note, the Regulation S Global Note and the
Exchange Global Note are sometimes collectively herein referred to as the
"Global Securities."
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to Section 2.3;
provided, however, that, at the option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
thereto as such addresses shall appear on the Note Register or (ii) wire
transfer to an account located in the United States maintained by the payee.
Payments in respect of Securities represented by a Global Note (including
principal, premium and interest) will be made by wire transfer of immediately
available funds to the accounts specified by DTC.
The Private Exchange Securities shall be in the form of Exhibit A.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage, in addition to those set forth on Exhibits A and B
and in Section 2.1(c). The Company and the Trustee shall approve the forms of
the Securities and any notation, endorsement or legend on them. Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to be bound by such terms.
(b) Denominations. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial Security is
sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement or a
similar agreement,
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(A) the Rule 144A Global Note and the Institutional Accredited
Investor Global Note shall bear the following legend (the "Private Placement
Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. 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 UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS
OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, 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) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF
SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE
IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) AND (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."; and
(B) the Regulation S Global Note shall bear the following legend
(the "Regulation S Legend") on the face thereof:
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"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT
PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT
("REGULATION S"), (2) BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY
WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A)
TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, 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) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S,
(E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND IN THE
CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40
CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON WHICH
THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN
REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
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(C) The Global Securities, whether or not an Initial Security, shall
bear the following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(D) Each Institutional Accredited Investor Global Note shall also
bear the following additional legend on the face thereof:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIED WITH
THE FOREGOING RESTRICTIONS.
(d) Book-Entry Provisions. (i) This Section 2.1(d) shall apply only
to Global Securities deposited with the Trustee, as custodian for DTC.
(ii) Each Global Security initially shall (x) be registered in the
name of DTC for such Global Security or the nominee of DTC, (y) be delivered to
the Trustee as custodian for DTC and (z) bear legends as set forth in Section
2.1(c).
(iii) Members of, or participants in, DTC ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by DTC or by the Trustee as the custodian of DTC or under such
Global Security, and DTC may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by DTC or impair, as
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between DTC and its Agent Members, the operation of customary practices of DTC
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (e) of this Section to
beneficial owners who are required to hold Definitive Securities, the Securities
Custodian shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount.
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (e) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by DTC in exchange for its beneficial interest
in such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.
(vi) The registered holder of a Global Security 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 Securities.
(e) Definitive Securities. (i) Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
Definitive Securities. If required to do so pursuant to any applicable law or
regulation, beneficial owners may obtain Definitive Securities in exchange for
their beneficial interests in a Global Security upon written request in
accordance with DTC's and the Registrar's procedures. In addition, Definitive
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if (a) DTC notifies the Company that
it is unwilling or unable to continue as depositary for such Global Security or
DTC ceases to be a clearing agency registered under the Exchange Act, at a time
when DTC is required to be so registered in order to act as depositary, and in
each case a successor depositary is not appointed by the Company within 90 days
of such notice or, (b) the Company executes and delivers to the Trustee and
Registrar an Officers' Certificate stating that such Global Security shall be so
exchangeable or (c) an Event of Default has occurred and is continuing and the
Registrar has received a request from DTC.
(ii) Any Definitive Security delivered in exchange for an interest
in a Global Security pursuant to Section 2.1(d)(iv) or (v) shall, except as
otherwise provided by Section 2.6(c), bear the applicable legend regarding
transfer restrictions applicable to the Definitive Security set forth in Section
2.1(c).
(iii) In connection with the exchange of a portion of a Definitive
Security for a beneficial interest in a Global Security, the Trustee shall
cancel such Definitive Security, and the Company shall execute, and the Trustee
shall authenticate and deliver, to the transferring Holder a new Definitive
Security representing the principal amount not so transferred.
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SECTION 2.2. Execution and Authentication. One Officer shall sign
the Securities for the Company by manual or facsimile signature. If an Officer
whose signature is on a Security no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless,
after giving effect to any exchange of Initial Securities for Exchange
Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture. A Security shall be dated
the date of its authentication.
At any time and from time to time after the execution and delivery
of this Indenture, the Trustee shall authenticate and make available for
delivery: (1) Original Securities for original issue on the Issue Date in an
aggregate principal amount of $500.0 million and (2) Exchange Securities for
issue only in a Registered Exchange Offer pursuant to the Registration Rights
Agreement, and only in exchange for Initial Securities of an equal principal
amount, in each case upon a written order of the Company signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company (the "Company Order"). Such Company Order shall specify the amount
of the Securities to be authenticated and the date on which the original issue
of Securities is to be authenticated and whether the Securities are to be
Initial Securities or Exchange Securities. The aggregate principal amount of
notes which may be authenticated and delivered under this Indenture is limited
to $500.0 million outstanding, except for Securities authenticated and delivered
upon registration or transfer of, or in exchange for, or in lieu of, other
Securities of the same class pursuant to Section 2.6, Section 2.9, Section 2.11,
Section 5.8, Section 9.5 and except for transactions similar to the Registered
Exchange Offer. All Securities issued on the Issue Date shall be identical in
all respects other than issue dates, the date from which interest accrues and
any changes relating thereto. Notwithstanding anything to the contrary contained
in this Indenture, all notes issued under this Indenture shall vote and consent
together on all matters as one 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 agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company or any Subsidiary Guarantor, pursuant to Article
IV, shall be consolidated or merged with or into any other Person or shall
convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
any Subsidiary Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article IV, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities
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executed in the name of the successor Person with such changes in phraseology
and form as may be appropriate, but otherwise in substance of like tenor as the
Securities surrendered for such exchange and of like principal amount; and the
Trustee, upon Company Order of the successor Person, shall authenticate and
deliver Securities as specified in such order for the purpose of such exchange.
If Securities shall at any time be authenticated and delivered in any new name
of a successor Person pursuant to this Section 2.2 in exchange or substitution
for or upon registration of transfer of any Securities, such successor Person,
at the option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time outstanding for Securities authenticated
and delivered in such new name.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Note
Register"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated Wholly-Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at least 10:00
a.m (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Subsidiary Guarantor in making any such payment.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent (other than the Trustee) to pay
all money held by it to the Trustee and to account for any funds disbursed by
such Paying Agent. Upon complying with this Section, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Company, the Trustee shall serve as Paying Agent
for the Securities.
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SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Note or an Institutional Accredited Investor
Global Note prior to the date which is two years after the later of the date of
its original issue and the last date on which the Company or any affiliate of
the Company was the owner of such Securities (or any predecessor thereto) (the
"Resale Restriction Termination Date"):
(i) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Global Note or a beneficial interest therein to a QIB shall be
made upon the representation of the transferee in the form as set forth on
the reverse of the Security that it is purchasing 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, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A;
(ii) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Global Note or a beneficial interest therein to an IAI shall be
made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.7 from the proposed
transferee and, if requested by the Company or the Trustee, the delivery
of an opinion of counsel, certification and/or other information
satisfactory to each of them; and
(iii) a transfer of a Rule 144A Note or an Institutional Accredited
Investor Global Note or a beneficial interest therein to a Non-U.S. Person
shall be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.8 from the proposed
transferee and, if requested by the Company or the Trustee, the delivery
of an opinion of counsel, certification and/or other information
satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
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(i) a transfer of a Regulation S Note or a beneficial interest
therein to a QIB shall be made upon the representation of the transferee,
in the form of assignment on the reverse of the certificate, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a "qualified institutional buyer" within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial interest
therein to an IAI shall be made upon receipt by the Trustee or its agent
of a certificate substantially in the form set forth in Section 2.7 from
the proposed transferee and, if requested by the Company or the Trustee,
the delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and
(iii) transfer of a Regulation S Note or a beneficial interest
therein to a Non-U.S. Person shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in Section
2.8 hereof from the proposed transferee and, if requested by the Company
or the Trustee, receipt by the Trustee or its agent of an opinion of
counsel, certification and/or other information satisfactory to each of
them.
After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred without requiring certification set forth
in Section 2.7, Section 2.8 or any additional certification.
(c) Restricted Securities Legend. Upon the transfer, exchange or
replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing a
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear a Restricted Securities Legend unless there is delivered to the Registrar
an Opinion of Counsel 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.
(d) The Restricted Period will end on the date that is forty days
after the Closing Date.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.1 or this Section 2.6. 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.
(e) Obligations with Respect to Transfers and Exchanges of
Securities.
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(i) To permit registrations of transfers and exchanges, the Company
shall, subject to the other terms and conditions of this Article II,
execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to Sections 3.6, 3.8 or 9.5).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning (1) 15 days before the mailing of a notice of an offer to
repurchase or redeem Securities and ending at the close of business on the
day of such mailing or (2) 15 days before an interest payment date and
ending on such interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for
all other purposes whatsoever, whether or not such Security is overdue,
and none of the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an interest in
a Global Security pursuant to Section 2.1(d) shall, except as otherwise
provided by Section 2.6(c), bear the applicable legend regarding transfer
restrictions applicable to the Definitive Security set forth in Section
2.1(c).
(vi) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee. (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, DTC or other Person with respect to the accuracy
of the records of DTC or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect to the
delivery to any participant, member, beneficial owner or other Person (other
than DTC) of any notice (including any notice of redemption) or the payment of
any amount or delivery of any Securities (or other security or property) under
or with respect to such Securities. All notices and communications to be given
to the Holders and all payments to be made to Holders in respect of the
Securities shall be given or made only to or upon the order of the registered
Holders (which shall be DTC or its nominee in the case of a Global Security).
The rights of beneficial owners in any Global Security shall be exercised only
through DTC subject to the applicable rules and procedures of DTC. The Trustee
may rely and shall be fully protected in
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relying upon information furnished by DTC with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors.
[Date]
Avis Rent A Car, Inc.
x/x
Xxx Xxxx xx Xxx Xxxx
Attention: Corporate Trust Administration
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the 11% Senior Subordinated Notes due 2009 (the
"Securities") of Avis Rent A Car, Inc. (the "Company").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Securities
and we invest in or purchase
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securities similar to the Securities in the normal course of our business. We
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
2. We understand that the Securities have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Securities of $250,000 or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Termination
Date of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
3. One or more of the following statements is accurate as to each
source of funds (each, a "Source") to be used by us to purchase the Securities
as of the date hereof:
(i) we are not acquiring the Securities with the assets of any
employee benefit plan which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any
"plan" which is subject to Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code");
(ii) we are an insurance company and the Source is an "insurance
company general account", as such term is defined in U.S. Department of
Labor Prohibited
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Transaction Class Exemption ("PTCE") 95-60 (issued July 12, 1995), and the
purchase and holding of the Securities is exempt under PTCE 95-60; or
(iii) the Source constitutes plan assets that are included in an
"investment fund" (within the meaning of Part V of PTCE 81-1) (issued
March 13, 1984) (the "QPAM Exemption") managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), and the purchase and holding of the Securities is exempt
under PTCE 84-14; or
(iv) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTCE 90-1 (issued January 29, 1990), or
(ii) a bank collective investment fund, within the meaning of PTCE 91-38
(issued July 12, 1991), and the purchase and holding of the Securities is
exempt under either PTCE 90-2 or PTCE 91-38; or
(v) the Source is the assets of one or more employee benefit plans
which are managed by an "in-house asset manager" as that term is defined
in PTCE 96-23 (issued April 10, 1996), and such purchase and holding of
the Securities is exempt under PTCE 96-23.
As used herein, the term "employee benefit plan" shall have the
meaning assigned to such term in Section 3 of ERISA and "plan" shall have the
meaning assigned to such term in Section 4975 of the Code.
TRANSFEREE:______________________
BY:______________________________
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S.
[Date]
The Bank of New York
Attention: Corporate Trust Services Division
Re: Avis Rent A Car, Inc.
11% 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 United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Securities was not made to a person in the
United States;
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(b) either (i) at the time the buy order 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 (ii) 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;
(c) 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; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
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
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities. If a
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced, and, in the absence of notice to the Company, any Subsidiary Guarantor
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and upon Company Order the Trustee shall authenticate
and make available for delivery, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities, whether or not the
mutilated, destroyed, lost or stolen Security 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 Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security ceases to be outstanding in the event the
Company or a Subsidiary of the Company holds the Security, provided, however,
that (i) for purposes of determining which are outstanding for consent or voting
purposes hereunder, Securities shall cease to be outstanding in the event the
Company or an Affiliate of the Company holds the Security and (ii) in
determining whether the Trustee shall be protected in making a determination
whether the holders of the requisite principal amount of outstanding Securities
are present at a meeting of holders of Securities for quorum purposes or have
consented to or voted in favor of any request, demand, authorization, direction,
notice, consent, waiver, amendment or modification hereunder, or relying upon
any such quorum, consent or vote, only Securities which a Trust Officer of the
Trustee actually knows to be held by the Company or an Affiliate of the Company
shall not be considered outstanding.
If a Security is replaced pursuant to Section 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
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SECTION 2.11. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
return to the Company all Securities surrendered for registration of transfer,
exchange, payment or cancellation. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.
SECTION 2.13. Payment of Interest; Defaulted Interest. Interest on
any Security 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 such
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) 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 Security and the date (not less than 30 days after such
notice) of the proposed payment (the "Special Interest Payment Date"), and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed
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payment, such money when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a record date (the "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 Special
Interest Payment Date 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 of such Special Record Date, and in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest
Payment Date therefor to be given in the manner provided for in Section
13.2, 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 and Special Interest Payment Date therefor having been so given, such
Defaulted Interest shall be paid on the Special Interest Payment Date to
the Persons in whose names the Securities (or their respective predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (b).
(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 Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of, transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such CUSIP
numbers. The Company shall promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE III
Covenants
SECTION 3.1. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such
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date the Trustee or the Paying Agent holds in accordance with this Indenture
money sufficient to pay all principal and interest then due and the Trustee or
the Paying Agent, as the case may be, is not prohibited from paying such money
to the Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 3.2. SEC Reports and Available Information. Notwithstanding
that the Company may not be subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act, the
Company will file with the Commission, and provide the Trustee and the Holders
of the Securities with, the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that are specified in
Sections 13 and 15(d) of the Exchange Act within the time periods specified
therein. In the event that the Company is not permitted to file such reports,
documents and information with the Commission pursuant to the Exchange Act, the
Company will nevertheless provide such Exchange Act information to the Trustee
and the holders of the Securities as if the Company were subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act within the
time periods specified therein. The Company shall also comply with the other
provisions of TIA ss. 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 3.3. Limitation on Indebtedness. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness; provided, however, that the Company may Incur Indebtedness if on
the date thereof: (1) the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries is at least 2.25 to 1.00; and (2) no Default or Event of
Default will have occurred or be continuing or would occur as a consequence
thereof.
(b) Section 3.3(a) will not prohibit the incurrence of the following
Indebtedness: (1) Indebtedness Incurred by the Company pursuant to the Senior
Credit Facilities in an aggregate principal amount up to $1,500,000,000 less the
aggregate principal amount of all scheduled principal repayments when made
unless refinanced on or prior to the date of such repayment under this clause
(1) and all mandatory prepayments of principal thereof permanently reducing the
commitments thereunder; (2) the Subsidiary Guarantees and other Guarantees by
the Subsidiary Guarantors of Indebtedness Incurred in accordance with the
provisions of this Indenture; provided that in the event such Indebtedness that
is being Guaranteed is (a) Senior Subordinated Indebtedness or Guarantor Senior
Subordinated Indebtedness, then the related Guarantee shall
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rank equally in right of payment to the Subsidiary Guarantee or (b) a
Subordinated Obligation or a Guarantor Subordinated Obligation, then the related
Guarantee shall be subordinated in right of payment to the Subsidiary Guarantee;
(3) Indebtedness of the Company owing to and held by any Wholly-Owned Subsidiary
(other than a Securitization Entity) or Indebtedness of a Restricted Subsidiary
owing to and held by the Company or any Wholly-Owned Subsidiary (other than a
Securitization Entity); provided, however, (a) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations with respect to the Securities; and
(b) (i) any subsequent issuance or transfer of Capital Stock or any other event
which results in any such Indebtedness being beneficially held by a Person other
than the Company or a Wholly-Owned Subsidiary (other than a Securitization
Entity) of the Company; and (ii) any sale or other transfer of any such
Indebtedness to a Person other than the Company or a Wholly-Owned Subsidiary
(other than a Securitization Entity) of the Company shall be deemed, in each
case, to constitute an Incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be; (4) Indebtedness of Foreign Subsidiaries in an
aggregate principal amount that, when taken together with the principal amount
of all other Indebtedness Incurred pursuant to this clause (4) (and any
Indebtedness Incurred by Foreign Subsidiaries prior to the Issue Date to finance
working capital) and then outstanding, does not exceed $125.0 million; (5)
Indebtedness represented by (a) the Securities, (b) any Indebtedness (other than
the Indebtedness described in clauses (1), (2), (3), (4), (7), (8), (9), (10),
(11), (12) and (13)) outstanding on the Issue Date and (c) any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this clause
(5) or clause (6) or Incurred pursuant to paragraph (a) above; (6) Indebtedness
of a Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred (a) to provide all or any portion of the funds utilized to consummate
the transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired
by the Company or (b) otherwise in connection with, or in contemplation of, such
acquisition); provided, however, that at the time such Restricted Subsidiary
(other than WEX Financial) is acquired by the Company, the Company would have
been able to Incur $1.00 of additional Indebtedness pursuant to Section 3.3(a)
after giving effect to the Incurrence of such Indebtedness pursuant to this
clause (6); (7) Indebtedness under Currency Agreements and Interest Rate
Agreements; provided, that in the case of Currency Agreements, such Currency
Agreements are related to business transactions of the Company or its Restricted
Subsidiaries entered into in the ordinary course of business (including in
connection with the incurrence of Permitted Vehicle Indebtedness) or in the case
of Currency Agreements and Interest Rate Agreements, such Currency Agreements
and Interest Rate Agreements are entered into for bona fide hedging purposes of
the Company or its Restricted Subsidiaries or in the case of Permitted Vehicle
Indebtedness corresponding to indebtedness of Restricted Subsidiaries (as
determined in good faith by the Board of Directors or senior management of the
Company) and corresponding to such Indebtedness of the Company or its Restricted
Subsidiaries or in the case of Permitted Vehicle Indebtedness corresponding to
Indebtedness of Restricted Subsidiaries (but not exceeding the notional amount
thereof) Incurred without violation of this Indenture; (8) Permitted Vehicle
Indebtedness and Customer Lease Financing Loans; (9) Indebtedness represented by
Guarantees issued to airports and airport and other governmental authorities for
the construction of airport rental or related facilities to be used by the
Company or any Restricted Subsidiary in the ordinary course of business that do
not exceed for the Company and all Restricted Subsidiaries in the
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aggregate $75.0 million at any time outstanding; (10) the incurrence by the
Company or any of its Restricted Subsidiaries of Indebtedness represented by
Capitalized Lease Obligations, mortgage financings or purchase money obligations
with respect to assets other than Capital Stock or other Investments, in each
case incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvements of property used in the business of the
Company or such Restricted Subsidiary, in an aggregate principal amount not to
exceed $25.0 million at any time outstanding; (11) Indebtedness incurred in
respect of workers' compensation claims, self-insurance obligations,
performance, surety and similar bonds and completion guarantees provided by the
Company or a Restricted Subsidiary in the ordinary course of business; (12)
Indebtedness arising from agreements of the Company or a Restricted Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or Capital Stock of a Restricted Subsidiary
or incurred in connection with a sale of Capital Stock of the Company, provided
that the maximum aggregate liability in respect of all such Indebtedness shall
at no time exceed the gross proceeds actually received by the Company and its
Restricted Subsidiaries in connection with such disposition or sale; (13)
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business,
provided, however, that such Indebtedness is extinguished within five business
days of Incurrence; (14) PHH Sub Preferred Stock with an aggregate liquidation
preference not to exceed $362.0 million; (15) Indebtedness Incurred by WEX
Financial to fund WEX Financial's credit card payables in the ordinary course of
business, in an aggregate principal amount not to exceed $20.0 million; provided
that the total capital ratio determined in accordance with regulations
promulgated by the Board of Governors of the Federal Reserve System (the "Total
Capital Ratio") of WEX Financial on the date of any such Incurrence shall equal
or exceed the Total Capital Ratio of WEX Financial on June 30, 1999 determined
on the equivalent basis; and (16) in addition to the items referred to in
clauses (1) through (15) above, Indebtedness of the Company and its Subsidiary
Guarantors in an aggregate outstanding principal amount which, when taken
together with the principal amount of all other Indebtedness Incurred pursuant
to this clause (16) and then outstanding, will not exceed $50.0 million.
(c) The Company will not Incur any Indebtedness under Section 3.3(b)
if the proceeds thereof are used, directly or indirectly, to refinance any
Subordinated Obligations of the Company unless such Indebtedness will be
subordinated to the Securities to at least the same extent as such Subordinated
Obligations. No Subsidiary Guarantor will incur any indebtedness under Section
3.3(b) if the proceeds thereof are used, directly or indirectly, to refinance
any Guarantor Subordinated Obligations of such Subsidiary Guarantor unless such
Indebtedness will be subordinated to the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee to at least the same extent as such
refinanced Guarantor Subordinated Obligations. No Subsidiary Guarantor will
incur any Indebtedness under Section 3.3(b) if the proceeds thereof are used,
directly or indirectly, to refinance any Guarantor Senior Subordinated
Indebtedness unless such refinancing Indebtedness is either Guarantor Senior
Subordinated Indebtedness or Guarantor Subordinated Obligations. No Restricted
Subsidiary may directly Incur any Indebtedness under Section 3.3(b) if the
proceeds are used to refinance Indebtedness of the Company.
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(d) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness incurred pursuant to and in
compliance with, this Section 3.3: (1) in the event that Indebtedness meets the
criteria of more than one of the types of Indebtedness described in Section
3.3(a) or (b), the Company, in its sole discretion, will classify such item of
Indebtedness on the date of Incurrence and only be required to include the
amount and type of such Indebtedness in one of such clauses; and (2) the amount
of Indebtedness issued at a price that is less than the principal amount thereof
will be equal to the amount of the liability in respect thereof determined in
accordance with GAAP. Accrual of interest, accrual of dividends, the accretion
of accreted value, the payment of interest in the form of additional
Indebtedness and the payment of dividends in the form of additional shares of
Preferred Stock will not be deemed to be an incurrence of Indebtedness for
purposes of this Section 3.3. The amount of any Indebtedness outstanding as of
any date shall be the accreted value thereof in the case of any Indebtedness
issued with original issue discount. For purposes of determining compliance with
any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the
U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was Incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided that if such Indebtedness is Incurred to refinance other Indebtedness
denominated in a foreign currency, and such refinancing would cause the
applicable U.S. dollar-dominated restriction to be exceeded if calculated at the
relevant currency exchange rate in effect on the date of such refinancing, such
U.S. dollardominated restriction shall be deemed not to have been exceeded so
long as the principal amount of such refinancing Indebtedness does not exceed
the principal amount of such Indebtedness being refinanced. The principal amount
of any Indebtedness incurred to refinance other Indebtedness, if Incurred in a
different currency from the Indebtedness being refinanced, shall be calculated
based on the currency exchange rate applicable to the currencies in which such
Refinancing Indebtedness is denominated that is in effect on the date of such
refinancing.
(e) The Company will not permit any of its Unrestricted Subsidiaries
to incur any Indebtedness or issue any shares of Disqualified Stock, other than
Non-Recourse Indebtedness. If at any time an Unrestricted Subsidiary becomes a
Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be
Incurred by a Restricted Subsidiary of the Company as of such date (and, if such
Indebtedness is not permitted to be Incurred as of such date under this Section
3.3, the Company shall be in Default of this Section 3.3).
SECTION 3.4. Limitation on Restricted Payments. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) except (A) dividends or distributions payable in Capital Stock of
the Company (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock of the Company and (B) dividends or
distributions payable to the Company or a Restricted Subsidiary of the Company
(and if such Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its
other holders of common Capital Stock on a pro rata basis); (ii) purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Company
or any direct or indirect parent of the Company held by Persons other than the
Company or a Restricted Subsidiary of the Company
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(other than in exchange for Capital Stock of the Company (other than
Disqualified Stock)); (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Obligations or Guarantor
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations or Guarantor Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
purchase, repurchase or acquisition) or (iv) make any Restricted Investment in
any Person; (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Restricted Investment referred to
in clauses (i) through (iv) shall be referred to herein as a "Restricted
Payment"), if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom); or
(2) the Company is not able to incur an additional $1.00 of
Indebtedness pursuant to Section 3.3(a) after giving effect to such
Restricted Payment; or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made subsequent to the Issue Date would
exceed the sum of: (A) 50% of Consolidated Net Income for the period
(treated as one accounting period) from January 1, 2000 to the end of the
most recent fiscal quarter ending prior to the date of such Restricted
Payment for which financial statements are in existence (or, in case such
Consolidated Net Income is a deficit, minus 100% of such deficit); (B) 75%
of the aggregate Net Cash Proceeds received by the Company from the issue
or sale of its Capital Stock (other than Disqualified Stock) or other
capital contributions subsequent to the Issue Date (other than Net Cash
Proceeds received from an issuance or sale of such Capital Stock to a
Subsidiary of the Company or an employee stock ownership plan or similar
trust to the extent such sale to an employee stock ownership plan or
similar trust is financed by loans from or guaranteed by the Company or
any Restricted Subsidiary unless such loans have been repaid with cash on
or prior to the date of determination; provided that 100% of such Net Cash
Proceeds shall be included in the calculation of this clause (3)(B) to the
extent applied to repurchase Securities pursuant to the Equity Clawback);
(C) the amount by which Indebtedness of the Company is reduced on the
Company's balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of any
Indebtedness of the Company (other than PHH Sub Preferred Stock)
convertible or exchangeable for Capital Stock (other than Disqualified
Stock) of the Company (less the amount of any cash, or other property,
distributed by the Company upon such conversion or exchange); and (D) the
amount equal to the net reduction in Restricted Investments made by the
Company or any of its Restricted Subsidiaries in any Person resulting
from: (x) repurchases or redemptions of such Restricted Investments by
such Person, proceeds realized upon the sale of such Restricted Investment
to an unaffiliated purchaser, repayments of loans or advances or other
transfers of assets (including by way of dividend or distribution) by such
Person to the Company or any Restricted Subsidiary of the Company; or (y)
the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investment") not to
exceed, in the case of any Unrestricted Subsidiary, the
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amount of Investments previously made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary, which amount in each case
under this clause (D) was included in the calculation of the amount of
Restricted Payments; provided, however, that no amount will be included
under this clause (D) to the extent it is already included in Consolidated
Net Income.
(b) The provisions of Section 3.4(a) will not prohibit: (1) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary or an employee stock
ownership plan or similar trust to the extent such sale to an employee stock
ownership plan or similar trust is financed by loans from or guaranteed by the
Company or any Restricted Subsidiary unless such loans have been repaid with
cash on or prior to the date of determination); provided, however, that (a) such
purchase or redemption will be excluded in subsequent calculations of the amount
of Restricted Payments and (b) the Net Cash Proceeds from such sale will be
excluded from Section 3.4(a)(3)(B); (2) any purchase or redemption of
Subordinated Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations of
the Company that qualifies as Refinancing Indebtedness; provided, however, that
such purchase or redemption will be excluded in subsequent calculations of the
amount of Restricted Payments; (3) so long as no Default or Event of Default has
occurred and is continuing, any purchase or redemption of Subordinated
Obligations from Net Available Cash to the extent permitted in Section 3.6;
provided, however, that such purchase or redemption will be excluded in
subsequent calculations of the amount of Restricted Payments; (4) dividends paid
within 60 days after the date of declaration if at such date of declaration such
dividend would have complied with this Section 3.4; provided, however, that such
dividends will be included in subsequent calculations of the amount of
Restricted Payments; (5) so long as no Default or Event of Default has occurred
and is continuing, the declaration and payment of dividends to holders of any
class or series of Disqualified Stock of the Company issued in accordance with
the terms of this Indenture to the extent such dividends are included in the
definition of "Consolidated Interest Expense"; provided that the payment of such
dividends will be excluded from the calculation of the amount of Restricted
Payments; (6) so long as no Default or Event of Default has occurred and is
continuing, the declaration and payment of dividends to holders of the PHH Sub
Preferred Stock issued in accordance with the terms of this Indenture to the
extent such dividends are included in the definition of "Consolidated Interest
Expense"; provided that the payment of such dividends will be excluded from the
calculation of the amount of Restricted Payments; (7) repurchases of Capital
Stock deemed to occur upon the exercise of stock options if such Capital Stock
represents a portion of the exercise price thereof; provided, however, that such
repurchases will be excluded from subsequent calculations of the amount of
Restricted Payments; (8) Restricted Payments in an amount not to exceed $35.0
million; provided that the amount of such Restricted Payments will be included
in the calculation of the amount of Restricted Payments; (9) the redemption of
Series C Preferred Stock issued on the Issue Date in accordance with its terms
but not to exceed $2.0 million; provided that the amount of such Restricted
Payment will be included in the calculation of the amount of Restricted
Payments; and (10) any Restricted Payments made by a Securitization Entity to
holders of its Capital Stock.
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The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of such Restricted Payment of the asset(s) or
securities proposed to be paid, transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any cash Restricted Payment shall be its face amount
and any non-cash Restricted Payment shall be determined conclusively by the
Board of Directors acting in good faith whose resolution with respect thereto
shall be delivered to the Trustee, such determination to be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if such fair market value is estimated to exceed $10.0
million. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the covenant "Restricted Payments" were computed,
together with a copy of any fairness opinion or appraisal required by this
Indenture.
SECTION 3.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to: (1) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any Restricted Subsidiary; (2) make any loans or advances to the
Company or any Restricted Subsidiary; or (3) transfer any of its property or
assets to the Company or any Restricted Subsidiary. The preceding provisions
will not prohibit: (i) any encumbrance or restriction pursuant to an agreement
or certificates of designation in effect at or entered into on the date of this
Indenture (including, without limitation, this Indenture, the Senior Credit
Facilities, and the PHH Sub Preferred Stock as in effect on such date); (ii) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Indebtedness Incurred by a Restricted Subsidiary on
or prior to the date on which such Restricted Subsidiary was acquired by the
Company (other than Indebtedness Incurred as consideration in, or to provide all
or any portion of the funds utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company or in contemplation
thereof) and outstanding on such date; (iii) any encumbrance or restriction with
respect to a Restricted Subsidiary pursuant to an agreement effecting a
refinancing of Indebtedness Incurred pursuant to an agreement referred to in
Section 3.5(i) or (ii) or this clause (iii) or contained in any amendment to an
agreement referred to in Section 3.5(i) or (ii) or this clause (iii); provided,
however, that the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such agreement or amendment are no less favorable in
any material respect to the Holders of the Securities than the encumbrances and
restrictions contained in such agreements referred to in Section 3.5(i) or (ii);
(iv) in the case of clause (3) of Section 3.5, any encumbrance or restriction:
(a) that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is subject to a lease, license or similar
contract, or the assignment or transfer of any such lease, license or other
contract; (b) contained in mortgages, pledges or other security agreements
permitted under this Indenture securing Indebtedness of the Company or a
Restricted Subsidiary to the extent such encumbrances or restrictions restrict
the transfer of the property subject to such mortgages, pledges or other
security agreements; or (c) pursuant to customary provisions restricting
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dispositions of real property interests set forth in any reciprocal easement
agreements of the Company or any Restricted Subsidiary; (v) purchase money
obligations for property acquired in the ordinary course of business that impose
encumbrances or restrictions of the nature described in clause (3) of this
Section 3.5 on the property so acquired; (vi) any Purchase Money Note or other
Indebtedness or contractual requirements incurred with respect to a Qualified
Securitization Transaction relating exclusively to a Securitization Entity that,
in the good faith determination of the Board of Directors, are necessary to
effect such Qualified Securitization Transaction; (vii) any restriction with
respect to a Restricted Subsidiary (or any of its property or assets) imposed
pursuant to an agreement entered into for the direct or indirect sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition; (viii)
restrictions on Foreign Subsidiaries pursuant to arrangements governing
Indebtedness of such Foreign Subsidiaries permitted pursuant to Section
3.3(b)(4); (ix) restrictions on any Specified Financing Subsidiary pursuant to
the terms of the Customer Lease Financing Loans under which it is obligated; and
(x) encumbrances or restrictions arising or existing by reason of applicable law
or any applicable rule, regulation or order, including, without limitation,
restrictions on the payment of dividends on the Company's insurance company
and/or banking Subsidiaries imposed by Federal or state government regulations.
SECTION 3.6. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company will not, and will not permit any of its Restricted Subsidiaries to,
make any Asset Disposition unless: (1) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Disposition at least equal to
the fair market value, as determined in good faith by the Board of Directors
(including as to the value of all non-cash consideration), of the shares and
assets subject to such Asset Disposition; (2) at least 75% of the consideration
thereof received by the Company or such Restricted Subsidiary, as the case may
be, is in the form of cash or Cash Equivalents; and (3) an amount equal to 100%
of the Net Available Cash from such Asset Disposition is applied by the Company
or such Restricted Subsidiary, as the case may be: (a) first, to the extent the
Company or any Restricted Subsidiary, as the case may be, elects (or is required
by the terms of any Senior Indebtedness), to prepay, repay or purchase Senior
Indebtedness or Indebtedness (other than any Preferred Stock or Guarantor
Subordinated Obligation) of a Restricted Subsidiary that is a Subsidiary
Guarantor (in each case other than Indebtedness owed to the Company or an
Affiliate of the Company) within 360 days from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash; provided, however,
that, in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to this clause (a), the Company or such Restricted Subsidiary will
retire such Indebtedness and will cause the related commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased; and (b) second, to the extent of the balance of such Net
Available Cash after application in accordance with clause (a), to the extent
the Company or such Restricted Subsidiary elects, to invest in Additional Assets
within 360 days from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash.
(b) Any Net Available Cash from Asset Sales that are not applied
or invested as provided in Section 3.6(a) will be deemed to constitute "Excess
Proceeds." On the 361st day after an Asset Disposition, if the aggregate amount
of Excess Proceeds exceeds $10.0 million, the Company will be required to make
an offer ("Asset Sale Offer") to all holders of Securities and to
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the extent required by the terms thereof, to all holders of other Senior
Subordinated Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Senior Subordinated Indebtedness with
the proceeds from any Asset Disposition ("Pari Passu Notes"), to purchase the
maximum principal amount of Securities and any such Pari Passu Notes to which
the Asset Sale Offer applies that may be purchased out of the Excess Proceeds,
at an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest to the date of purchase, in accordance
with the procedures set forth in this Indenture or the agreements governing the
Pari Passu Notes, as applicable. To the extent that the aggregate amount of
Securities and Pari Passu Notes so validly tendered and not properly withdrawn
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Securities surrendered by Holders thereof and
other Pari Passu Notes surrendered by holders or lenders thereof, collectively,
exceeds the amount of Excess Proceeds, the Trustee shall select the Securities
and Pari Passu Notes to be purchased on a pro rata basis on the basis of the
aggregate principal amount of tendered Securities and Pari Passu Notes. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
(c) (1) The Asset Sale Offer will remain open for a period of 20
Business Days following its commencement, except to the extent that a
longer period is required by applicable law (the "Asset Sale Offer
Period"). No later than five Business Days after the termination of the
Asset Sale Offer Period (the "Asset Sale Purchase Date"), the Company will
purchase the principal amount of Securities and Pari Passu Notes required
to be purchased pursuant to this Section 3.5 (the "Asset Sale Offer
Amount") or, if less than the Asset Sale Offer Amount has been so validly
tendered, all Securities and Pari Passu Notes validly tendered in response
to the Asset Sale Offer.
(2) If the Asset Sale Purchase Date is on or after an interest
record date and on or before the related interest payment date, any
accrued and unpaid interest will be paid to the Person in whose name is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Securities pursuant to the
Asset Sale Offer.
(3) On or before the Asset Sale Purchase Date, the Company will, to
the extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Asset Sale Offer Amount of Securities and Pari Passu Notes
or portions thereof so validly tendered and not properly withdrawn
pursuant to the Asset Sale Offer, or if less than the Asset Sale Offer
Amount has been validly tendered and not properly withdrawn, all
Securities and Pari Passu Notes so validly tendered and not properly
withdrawn. The Company will deliver to the Trustee an Officers'
Certificate stating that such Securities or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section
3.5 and, in addition, the Company will deliver all certificates and notes
required, if any, by the agreements governing the Pari Passu Notes. The
Company or the Paying Agent, as the case may be, will promptly (but in any
case not later than five Business Days after the Asset Sale Purchase Date)
mail or deliver to each tendering Holder of Securities or holder or lender
of Pari Passu Notes, as the case may be, an amount equal to the purchase
price of the Securities or Pari Passu Notes so validly tendered and not
properly
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withdrawn by such Holder or lender, as the case may be, and accepted by
the Company for purchase, and the Company will promptly issue a new
Security, and the Trustee, upon delivery of an Officers' Certificate from
the Company will authenticate and mail or deliver such new Security to
such Holder, in a principal amount equal to any unpurchased portion of the
Security surrendered. In addition, the Company will take any and all other
actions required by the agreements governing the Pari Passu Notes. Any
Security not so accepted will be promptly mailed or delivered by the
Company to the Holder thereof. The Company will publicly announce the
results of the Asset Sale Offer on the Asset Sale Purchase Date.
For the purposes of this Section 3.6, the following will be deemed
to be cash:
(1) the assumption by the transferee of Indebtedness (other than
Subordinated Obligations or Disqualified Stock) of the Company or
Indebtedness (other than Guarantor Subordinated Obligations or Preferred
Stock) of any Restricted Subsidiary of the Company and the release of the
Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition (in which case the
Company will, without further action, be deemed to have applied such
deemed cash to Indebtedness in accordance with clause (a) above); and
(2) securities, notes or other obligations received by the Company
or any Restricted Subsidiary of the Company from the transferee that are
promptly converted by the Company or such Restricted Subsidiary into cash.
(d) 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 in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.6, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
SECTION 3.7. Limitation on Affiliate Transactions. (a) The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless: (1) the terms of
such Affiliate Transaction are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained in
a comparable transaction at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate; (2) in the event such
Affiliate Transaction involves an aggregate amount in excess of $5 million, the
terms of such transaction have been approved by a majority of the members of the
Board of Directors of the Company having no personal stake in such transaction,
if any (and such majority determines that such Affiliate Transaction satisfies
the criteria in clause (1) above); and (3) in the event such Affiliate
Transaction involves an aggregate amount in excess of $10 million, the Company
has received a written opinion from an independent investment banking firm of
nationally recognized standing stating that such Affiliate Transaction is not
materially less favorable to the Company or such Restricted Subsidiary, as the
case may be, than those that might
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reasonably have been obtained in a comparable transaction at such time on an
arm's-length basis with a Person that is not an Affiliate.
(b) Section 3.7(a) will not apply to: (1) any Restricted Payment
(other than a Restricted Investment) permitted to be made pursuant to Section
3.4; (2) any issuance of securities, or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
arrangements, stock options and stock ownership plans and other reasonable fees,
compensation, benefits and indemnities paid or entered into by the Company or
its Restricted Subsidiaries in the ordinary course of business to or with
officers, directors or employees of the Company and its Restricted Subsidiaries;
(3) loans or advances to employees in the ordinary course of business of the
Company or any of its Restricted Subsidiaries; (4) any transaction between the
Company and a Restricted Subsidiary (other than a Securitization Entity) or
between Restricted Subsidiaries (other than a Securitization Entity); (5) sales
or other transfers or dispositions of Permitted Vehicle Collateral customarily
transferred in an asset securitization transaction to a Securitization Entity in
a Qualified Securitization Transaction, acquisitions of Permitted Investments in
connection with a Qualified Securitization Transaction and performance of
services in respect of Permitted Vehicle Collateral in connection with a
Qualified Securitization Transaction; (6) transactions under the Separation
Agreement, Master License Agreement, Registration Rights Agreement, Computer
Services Agreement, Reservation Services Agreement, Purchasing Services
Agreement, Tax Disaffiliation Agreement, lease agreements relating to facilities
in Virginia Beach, Virginia, Tulsa, Oklahoma and Garden City, New York and the
VMS Agreements, all as in effect on the Issue Date (including pursuant to any
amendment thereto or any replacement agreement thereof so long as any such
amendment or replacement agreement is not more disadvantageous to the holders of
the Securities in any material respect than the original agreement as in effect
on the Issue Date); or (7) the payment of dividends on the PHH Sub Preferred
Stock and the conversion of the PHH Sub Preferred Stock in accordance with its
terms as in existence on the Issue Date.
SECTION 3.8. Change of Control. Upon the occurrence of any of the
following events (each a "Change of Control"), unless the Company shall have
exercised its right to redeem the Securities as described in Section 5.1, each
Holder will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Securities at
a purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) (the "Change of Control Payment"):
(i) any "person" or "group" of related persons (as such terms are
used in Sections 13(d) and 14(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 such person or group shall be deemed to have "beneficial
ownership" of all shares that any such person or group has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company (or its successor by
merger, consolidation or purchase of all or substantially all of its
assets) (for the purposes of this clause, such person or group shall be
deemed to beneficially own any Voting Stock of the Company held by an
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entity, if such person or group "beneficially owns" (as defined above),
directly or indirectly, more than 35% of the voting power of the Voting
Stock of such entity);
(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 by such Board of
Directors or whose nomination for election by the shareholders of the
Company, as the case may be, was approved by a vote of at least a majority
of the directors of the Company 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 the Board of Directors of the Company then in office;
(iii) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act);
(iv) the adoption by the stockholders of the Company of a plan or
proposal for the liquidation or dissolution of the Company; or
(v) a Change of Control Event as defined under the Master License
Agreement.
Within 30 days following any Change of Control, unless the Company
has mailed a redemption notice with respect to all the outstanding Securities in
connection with such Change of Control as described in Section 5.1, the Company
shall mail a notice to each Holder with a copy to the Trustee stating: (i) that
a Change of Control has occurred and that such Holder has the right to require
the Company pursuant to this Section 3.8 to purchase such Holder's Securities
(the "Change of Control Offer") at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of Holders of record on a record date to
receive interest on the relevant interest payment date); (ii) the repurchase
date (which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed); (iii) that any Security not tendered shall continue
to accrue interest, if any; (iv) that, unless the Company defaults in the
payment of principal or interest, all Securities accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest, if any, after the
Change of Control Payment Date; (v) that Holders electing to have any Securities
purchased pursuant to a Change of Control Offer shall be required to surrender
the Securities to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the date of
purchase for the Change of Control Payment Date; (vi) that Holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Securities delivered for
purchase, and a statement that such Holder is withdrawing his election to have
the Securities purchased; and (vii) that Holders whose Securities are being
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased
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portion of the Securities surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof.
Prior to mailing a Change of Control Offer, and as a condition to
such mailing (i) all Senior Indebtedness must be repaid in full, or the Company
must offer to repay all Senior Indebtedness whose holders accept such offer or
(ii) the requisite holders of each issue of Senior Indebtedness shall have
consented to such Change of Control Offer being made. The Company will effect
such repayment or obtain such consent within 30 days following any Change of
Control, it being a default of this Section 3.8 if the Company fails to so
comply.
On a Business Day that is no earlier than 30 days nor later than 60
days from the date that the Company mails or causes to be mailed notice of the
Change of Control to the holders (the "Change of Control Payment Date"), the
Company shall, to the extent lawful, (i) accept for payment all Securities or
portions thereof properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount equal to the Change of Control Payment
in respect of all the Securities or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate stating the aggregate principal amount of
such Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each Holder of the Securities so tendered the
Change of Control Payment for such Securities, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book-entry) to each Holder
a new Security equal in principal amount to any unpurchased portion of the
Securities surrendered, if any; provided that each such new Security shall be in
a principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Section 3.8 applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
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 in connection with the repurchase of Securities pursuant to this
Section 3.8. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue thereof.
SECTION 3.9. Limitation on Sale of Capital Stock of Restricted
Subsidiaries. The Company will not, and will not permit any Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Voting Stock of any Restricted Subsidiary or to issue any Voting Stock of
any Restricted Subsidiary (other than, if necessary, shares of its Voting Stock
constituting directors' qualifying shares) to any Person except: (1) to the
Company or a Wholly-Owned Subsidiary other than a Securitization Entity; or (2)
in compliance with Section
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3.6 and immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would continue to be a Restricted Subsidiary.
Notwithstanding the preceding paragraph, the Company may sell all
the Voting Stock of a Restricted Subsidiary as long as the Company complies with
the terms of Section 3.6.
SECTION 3.10. Limitation on Liens. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur or suffer to exist any Lien (other than Permitted Liens) upon any
of its property or assets (including Capital Stock), whether owned on the date
of this Indenture or thereafter acquired, securing any Senior Subordinated
Indebtedness, Subordinated Obligations, Guarantor Senior Subordinated
Indebtedness or Guarantor Subordinated Obligations, unless contemporaneously
therewith effective provision is made to secure the Indebtedness due under this
Indenture and the Securities or, in respect of Liens on any Restricted
Subsidiary's property or assets, any Subsidiary Guarantee of such Restricted
Subsidiary, equally and ratably with (or prior to in the case of Liens with
respect to Subordinated Obligations or Guarantor Subordinated Obligations, as
the case may be) the Indebtedness secured by such Lien for so long as such
Indebtedness is so secured.
SECTION 3.11. Future Subsidiary Guarantors. After the Issue Date,
the Company will cause (i) each Restricted Subsidiary, other than an Excluded
Subsidiary, created or acquired by the Company or one or more of its Restricted
Subsidiaries and (ii) each Restricted Subsidiary, at any time such Restricted
Subsidiary ceases to be an Excluded Subsidiary, to execute and deliver to the
Trustee a Subsidiary Guarantee pursuant to which such Restricted Subsidiary will
unconditionally Guarantee, on a joint and several basis, the full and prompt
payment of the principal of, premium, if any and interest on the Securities on a
senior subordinated basis. In addition, a Subsidiary Guarantor will be released
from its obligations under this Indenture and the Subsidiary Guarantee if the
Company designates such Subsidiary as an Unrestricted Subsidiary in accordance
with this Indenture.
SECTION 3.12. Limitation on Lines of Business. The Company will not,
and will not permit any Restricted Subsidiary to, engage in any business other
than a Related Business.
SECTION 3.13. Limitation on Permitted Vehicle Indebtedness. The
aggregate principal amount of outstanding Permitted Vehicle Indebtedness held by
Persons other than the Company and its Restricted Subsidiaries as of the last
calendar day of each month (the "Determination Date") shall not exceed the net
book value of the Permitted Vehicle Collateral securing Permitted Vehicle
Indebtedness held by Persons other than the Company and its Restricted
Subsidiaries on such Determination Date. Notwithstanding the foregoing, if the
Company is not in compliance with the preceding sentence on any Determination
Date, the Company will not be in breach thereof so long as:
(1) within 25 days from the Determination Date (or if such day is
not a Business Day, on the next succeeding Business Day) the Company or
its Restricted Subsidiaries repay sufficient Permitted Vehicle
Indebtedness or deposits as collateral additional Permitted Vehicle
Collateral so that the Company would have been in
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compliance as of the Determination Date assuming such repayment or deposit
had been made on such date; or
(2) the Company delivers to the Trustee an Officers' Certificate
setting forth the amount of the shortfall within 25 days of such
Determination Date (or if such day is not a Business Day, on the next
succeeding Business Day) and within 50 days from the Determination Date
(or if such day is not a Business Day, on the next succeeding Business
Day) the Company (A) repays sufficient Permitted Vehicle Indebtedness, (B)
deposits as collateral additional Permitted Vehicle Collateral or (C)
redesignates sufficient Permitted Vehicle Indebtedness that is not secured
by an actual Lien on Permitted Vehicle Collateral to no longer constitute
Permitted Vehicle Indebtedness, in each case so that the Company would
have been in compliance as of the Determination Date assuming such
repayment, deposit or redesignation had been made on such date; provided,
however, that, in the case of a redesignation pursuant to clause (C)
above, on the date of such redesignation and after giving effect thereto
as if such redesignated Indebtedness were Incurred by the Company on such
date, the Company would have been able to Incur at least $1.00 of
additional Indebtedness pursuant to Section 3.3(a); provided further,
however, that in determining whether the Company would have been able to
Incur such $1.00 of additional Indebtedness, the Company shall be entitled
to exclude an amount of such redesignated Indebtedness equal to the amount
of Indebtedness the Company could have Incurred on such date pursuant to
Section 3.3(b)(16), and such excluded amount shall be deemed to have been
Incurred pursuant to Section 3.3(b)(16).
SECTION 3.14. Maintenance of Office or Agency. The Company will
maintain in The City of New York, an office or agency where the Securities may
be presented or surrendered for payment, where, if applicable, the Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The principal corporate trust office (the "Corporate
Trust Office") of the Trustee shall 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) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any 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 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.
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SECTION 3.15. Limitation on Layering. The Company will not Incur any
Indebtedness if such Indebtedness is subordinate or junior in ranking in any
respect to any Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of payment
to Senior Subordinated Indebtedness. No Subsidiary Guarantor will Incur any
Indebtedness if such Indebtedness is contractually subordinate or junior in
ranking in any respect to any Guarantor Senior Indebtedness of such Subsidiary
Guarantor unless such Indebtedness is Guarantor Senior Subordinated Indebtedness
of such Subsidiary Guarantor or is contractually subordinated in right of
payment to Guarantor Senior Subordinated Indebtedness of such Subsidiary
Guarantor.
SECTION 3.16. Corporate Existence. Subject to Article IV and Section
11.2, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and that of each
Restricted Subsidiary and the corporate rights (charter and statutory) licenses
and franchises of the Company and each Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve any such existence (except
the Company), 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 each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, disadvantageous in any material respect to the Holders, and provided,
further, the Company may merge in accordance with Sections 4.1 and 11.2.
SECTION 3.17. 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, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a material
liability or lien upon the property of the Company or any Restricted Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in the
good faith judgment of management of the Company), are being maintained in
accordance with GAAP or where the failure to effect such payment will not be
disadvantageous to the Holders.
SECTION 3.18. Payments for Consent. Neither the Company nor any of
its Restricted Subsidiaries will, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fees or otherwise, to any
Holder of any Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid or is paid to all Holders of the
Securities that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
SECTION 3.19. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each Fiscal Year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default or Event of Default and whether
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or not the signers know of any Default or Event of Default that occurred during
such period. If they do, the certificate shall describe the Default or Event of
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 3.20. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.21. Statement by Officers as to Default. The Company shall
deliver to the Trustee, as soon as possible and in any event within five days
after the Company becomes aware of the occurrence of any Event of Default or an
event which, with notice or the lapse of time or both, would constitute an Event
of Default, an Officers' Certificate setting forth the details of such Event of
Default or default and the action which the Company proposes to take with
respect thereto.
ARTICLE IV
Successor Company
SECTION 4.1. Merger and Consolidation. The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation, partnership, trust, limited liability
company or other similar entity organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall expressly
assume, by supplemental indenture, executed and delivered to the Trustee,
in form satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been Incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of
Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least an additional $1.00 of
Indebtedness pursuant to Section 3.3(a) of this Indenture;
(iv) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, in which case clause (i) and Section 11.2
shall apply, shall have by supplemental indenture confirmed that its
Subsidiary Guarantee shall apply for such Person's obligations in respect
of this Indenture and the Securities and its obligations under the
Exchange and Registration Rights Agreement; and
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(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture, if any,
comply with this Indenture.
For purposes of this Section 4.1, the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The Successor Company will succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, but, in
the case of a lease of all or substantially all its assets, the Company will not
be released from the obligation to pay the principal of and interest on the
Securities. Solely for the purpose of computing amounts described in clause 3(A)
of Section 3.4(a), the Successor Company shall only be deemed to have succeeded
and be substituted for the Company with respect to periods subsequent to the
effective time of such merger, consolidation, combination or transfer of assets.
Notwithstanding clause (iii) of the first sentence of this Section
4.1, (x) any Restricted Subsidiary of the Company (other than a Securitization
Entity or a Specified Financing Subsidiary) may consolidate with, merge into or
transfer all or part of its properties and assets to the Company, and (y) the
Company may merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another jurisdiction to realize tax or other
benefits.
ARTICLE V
Redemption of Securities
SECTION 5.1. Optional Redemption. The Securities may be redeemed, as
a whole or from time to time in part, subject to the conditions and at the
redemption prices specified in the form of Securities set forth in Exhibits A
and B hereto, which are hereby incorporated by reference and made a part of this
Indenture, together with accrued and unpaid interest to the Redemption Date.
SECTION 5.2. Applicability of Article. Redemption of Securities at
the election of the Company or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and
this Article.
SECTION 5.3. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company,
the Company shall, upon not less than 30 and not more than 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and shall deliver to the
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Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 5.4.
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities are to be redeemed at any time pursuant to an
optional redemption, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a pro rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements)
and which may provide for the selection for redemption of portions of the
principal of the Securities; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Security not redeemed to
less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
SECTION 5.5. Notice of Redemption. Notice of redemption shall be
given in the manner provided for in Section 13.2 not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed. The Trustee shall give notice of redemption in the Company's name and
at the Company's expense; provided, however, that the Company shall deliver to
the Trustee, at least 45 days prior to the Redemption Date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the redemption price and the amount of accrued interest to the
Redemption Date payable as provided in Section 5.7, if any,
(3) if less than all outstanding Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder will receive,
without charge, a new Security or Securities of authorized denominations
for the principal amount thereof remaining unredeemed,
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(5) that on the Redemption Date the redemption price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
5.7) will become due and payable upon each such Security, or the portion
thereof, to be redeemed, and, unless the Company defaults in making the
redemption payment, that interest on Securities called for redemption (or
the portion thereof) will cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to the
accuracy or correctness of the CUSIP number, if any, listed in such notice
or printed on the Securities, and
(10) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 5.6. Deposit of Redemption Price. Prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 2.4) an amount of money sufficient to pay the redemption
price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 5.7. Notes Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the redemption price therein
specified (together with accrued interest, if any, to the Redemption Date), and
from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the redemption price,
together with accrued interest, if any, to the Redemption Date (subject to the
rights of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date).
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 5.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to Section 3.14 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the
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Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such Security at
the expense of the Company, a new Security or Securities, of any authorized
denomination as requested by such Holder, in an aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Security
so surrendered, provided, that each such new Security will be in a principal
amount of $1,000 or integral multiple thereof.
ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest or liquidated
damages (as required by the Exchange and Registration Rights Agreement) on
any Security when the same becomes due and payable, and such default
continues for a period of 30 days (whether or not such payment is
prohibited by Article X);
(2) the Company defaults in the payment of the principal or premium,
if any, of any Security when the same becomes due and payable at its
Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise (whether or not such payment is prohibited by
Article X).
(3) the Company or any Subsidiary Guarantor fails to comply with
Article IV or Section 11.2 of this Indenture;
(4) the Company fails to comply with any of Sections 3.2, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17
and 3.18 (in each case other than a failure to repurchase Securities when
required pursuant to Sections 3.6 or 3.8, which failure shall constitute
an Event of Default under Section 6.1(2) and other than a failure to
comply with Article IV or Section 11.2 which failure shall constitute an
Event of Default under Section 6.1(3)) and such failure continues for 30
days after the notice specified below;
(5) the Company defaults in the performance of or a breach by the
Company of any other covenant or agreement in this Indenture or under the
Securities (other than those referred to in (1), (2), (3) or (4) above)
and such default continues for 60 days after the notice specified below;
(6) there is a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), other than Indebtedness
owed to the Company or a Restricted Subsidiary, whether such Indebtedness
or guarantee now exists, or is created after the date of this Indenture,
which default (a) is caused by a failure to pay principal of or premium,
if any, on such Indebtedness at final
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maturity after giving effect to any applicable grace periods ("Payment
Default") or (b) results in the acceleration of such Indebtedness prior to
its maturity (the "cross acceleration provision") and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $25.0
million or more or its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary or a group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary, pursuant to or
within the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian (as defined
below) of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary or any group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements
for the Company and its Restricted Subsidiaries) would constitute a
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or any group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements
for the Company and its Restricted Subsidiaries) would constitute a
Significant Subsidiary or for any substantial part of their
property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary or any group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order, decree or
relief remains unstayed and in effect for 60 days;
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(9) the Company or any Significant Subsidiary or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries)
would constitute a Significant Subsidiary fails to pay final judgments
aggregating in excess of $25.0 million or its foreign currency equivalent
at the time (net of any amounts with respect to which a reputable and
creditworthy insurance company has acknowledged liability in writing),
which judgments are not paid, discharged or stayed for a period of 60
days; or
(10) any Subsidiary Guarantee of a Significant Subsidiary or of any
group of Restricted Subsidiaries that, taken together (as of the latest
audited consolidated financial statements for the Company and its
Restricted Subsidiaries) would constitute a Significant Subsidiary ceases
to be in full force and effect (except as contemplated by the terms
hereof), or any Subsidiary Guarantee of a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together (as of the latest
audited consolidated financial statements for the Company and its
Restricted Subsidiaries) would constitute a Significant Subsidiary is
declared in a judicial proceeding to be null and void, or any Subsidiary
Guarantor denies or disaffirms its obligations under the terms of this
Indenture or its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or (5) of
this Section 6.1 will not constitute an Event of Default until the Trustee or
the Holders of more than 25% in principal amount of the outstanding Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified in said clause (4) or (5) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default under clauses (3), (4), (5), (6), (7), (8), (9)
or (10) of this Section 6.1.
SECTION 6.2. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.1(7) or (8)) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
outstanding principal amount of the Securities by notice to the Company and the
Trustee, may, and the Trustee at the request of such Holders shall, declare the
principal of, premium, if any, and accrued but unpaid interest, on all the
Securities to be due and payable. Upon such a declaration, such principal,
premium, if any, and accrued and unpaid interest shall be immediately due and
payable; provided, however that so long as any
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indebtedness permitted to be incurred under this Indenture as part of the Senior
Credit Facilities (if such Senior Credit Facilities constitute Senior
Indebtedness) shall be outstanding, no such acceleration shall be effective
until the earlier of (x) acceleration of any such Indebtedness under the Senior
Credit Facilities or (y) five business days after the giving of the acceleration
notice to the Company and the administrative agent under the Senior Credit
Facilities of such acceleration. In the event of a declaration of acceleration
because an Event of Default set forth in Section 6.1(6) above has occurred and
is continuing, such declaration of acceleration shall be automatically rescinded
and annulled if the event of default or payment default triggering such Event of
Default pursuant to Section 6.1(6) shall be remedied or cured by the Company
and/or the relevant Restricted Subsidiary or the holders of the relevant
Indebtedness have rescinded the declaration of acceleration in respect of such
Indebtedness within 20 days after the declaration of acceleration with respect
thereto and if (i) the annulment of the acceleration of the Securities would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, other than the nonpayment of principal,
premium or interest on the Securities that has become due solely because of such
acceleration, have been cured or waived. If an Event of Default specified in
Section 6.1(7) or (8) occurs, the principal of, premium and accrued and unpaid
interest on all the Securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.
No such rescission shall affect any subsequent Default or Event of Default or
impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of (or premium, if any) or interest on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may (a) waive, by
their consent (including, without limitation consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Securities), an
existing Default or Event of Default and its consequences except (i) a Default
or Event of Default in the payment of the principal of or interest on a Security
or (ii) a Default or Event of Default in respect of a provision that under
Section 9.2 cannot be amended without the consent of each Securityholder
affected and (b) rescind any such acceleration with respect to the Securities
and its consequences if (1) rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (2) all existing Events of
Default, other than the nonpayment of the principal of, premium, if any, and
interest on the Securities that have become due solely by such declaration of
acceleration, have been cured or waived. When a Default or Event of Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any consequent right.
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SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Sections 7.1 and 7.2, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. Subject to Section 6.7, a
Securityholder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal amount of
the Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction that, in the opinion of the Trustee,
is inconsistent with such request during such 60-day period.
Subject to certain restrictions, the Holders of a majority in
principal amount of the outstanding Securities are given the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that conflicts with law or
this Indenture or that the Trustee determines is unduly prejudicial to the
rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under this Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture (including, without limitation, Section
6.6), the right of any Holder to receive payment of principal of, premium (if
any) or interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
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SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in outstanding principal amount of the
Securities.
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SECTION 6.12. Additional Payments. In the case of any Event of
Default occurring by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding payment of
the premium that the Company would have had to pay if the Company then had
elected to redeem the Securities pursuant to the optional redemption provisions
of this Indenture or was required to repurchase the Securities, an equivalent
premium shall also become and be immediately due and payable to the extent
permitted by law upon the acceleration of the Securities. If an Event of Default
occurs prior to May 1, 2004 by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Securities prior to May 1, 2004, the premium
specified in this Indenture shall also become immediately due and payable to the
extent permitted by law upon the acceleration of the Securities.
ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs; provided that if an Event of
Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee
reasonable indemnity or security against loss, liability or expense.
(b) 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.
However, in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
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(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) 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 and to the provisions of the TIA.
(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
(including reasonable attorneys' fees and expenses) and liabilities that might
be incurred by it in compliance with such request or direction.
SECTION 7.2. Rights of Trustee. Subject to Section 7.1, (a) The
Trustee may conclusively rely on any document (whether in its original or
facsimile form) reasonably believed by it to be genuine and to have been signed
or presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
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(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Securityholder notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of Default in payment of principal of, premium (if any), or interest on any
Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, a committee of its board of
directors or a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15, following the date of
this Indenture, and in any event prior to August 31 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
The Trustee shall also transmit by mail all reports required by TIA ss. 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to
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Securityholders and reasonable costs of counsel retained by the Trustee in
connection with the delivery of an Opinion of Counsel or otherwise, in addition
to the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability or expense (including reasonable attorneys'
fees and expenses) incurred by it without negligence or bad faith on its part in
connection with the administration of this trust and the performance of its
duties hereunder, including the costs and expenses of enforcing this Indenture
(including this Section 7.7) and of defending itself against any claims (whether
asserted by any Securityholder, the Company or otherwise). The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
may have separate counsel and the Company shall pay the fees and expenses of
such counsel provided that the Company shall not be required to pay such fees
and expenses if it assumes the Trustee's defense, and, in the reasonable
judgment of outside counsel to the Trustee, there is no conflict of interest
between the Company and the Trustee in connection with such defense. The Company
need not reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee's own wilful misconduct,
negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or Indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of the Trustee for any reason (the
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Trustee in such event being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition, at the Company's
expense, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
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SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
SECTION 7.12. Trustee's Application for Instruction from the
Company. Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance. (a)
Subject to Section 8.1(c), when (i)(x) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section 2.9)
for cancellation or (y) all outstanding Securities not theretofore delivered for
cancellation have become due and payable, whether at maturity or upon redemption
or will become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name and at the expense
of the Company and the Company or any Subsidiary Guarantor irrevocably deposits
or causes to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders money in U.S. dollars, non-callable U.S. Government
Obligations, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation for principal, premium, if any, and accrued interest to the
date of maturity or redemption, (ii) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the Company or
any Subsidiary Guarantor is a party or by which the Company or any Guarantor is
bound; (iii) the Company or any Subsidiary Guarantor has paid or caused to be
paid all sums payable by it under this Indenture and the Securities; and (iv)
the Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of such Securities at
maturity or the Redemption Date, as the case may be, then the Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company (accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
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(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option"), and after giving effect to such legal defeasance,
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under Sections 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17,
3.18, 3.19, and 4.1(iii) and the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply with such covenants shall no longer constitute a Default or
an Event of Default under Section 6.1(3), 6.1(4) and 6.1(5) and the operation of
Sections 6.1(6), 6.1(7), 6.1(8), 6.1(9) and 6.1(10), and the events specified in
such Sections shall no longer constitute an Event of Default (clauses (ii) being
referred to as the "covenant defeasance option"), but except as specified above,
the remainder of this Indenture and the Securities shall be unaffected thereby.
The Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Company exercises its
covenant defeasance option, the Company may elect to have any Subsidiary
Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default, and the
Subsidiary Guarantees in effect at such time shall terminate. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in 6.1(4) (as such Section
relates to Sections 3.2 through 3.18), 6.1(5) (as such Section relates to
Section 3.19), 6.1(6), 6.1(7), 6.1(8), 6.1(9) or 6.1(10) or because of the
failure of the Company to comply with Section 4.1(iii).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and (b), the
Company's obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.11, 3.1,
6.7, 7.7, 7.8 and in this Article 8 shall survive until the Securities have been
paid in full. Thereafter, the Company's obligations in Sections 7.7, 8.4 and 8.5
shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee for
the benefit of the Holders money in U.S. dollars or U.S. Government
Obligations or a combination thereof for the payment of principal,
premium, if any, and interest on the Securities to maturity or redemption,
as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government
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Obligations plus any deposited money without investment will provide cash
at such times and in such amounts as will be sufficient to pay principal
and interest when due on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, with respect to certain
bankruptcy or insolvency Events of Default, on the 91st day after such
date of deposit;
(4) such legal 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 of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary assumptions and exclusions) to the effect
that (A) the Securities and (B) assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the deposit
and that no Holder of the Securities is an insider of the Company, 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' right generally;
(6) the deposit does not constitute a default under any other
agreement binding on the Company;
(7) the Company delivers to the Trustee an Opinion of Counsel
(subject to customary assumptions and exclusions) to the effect that the
trust resulting from the deposit does not constitute, or is qualified as,
a regulated investment company under the Investment Company Act of 1940;
(8) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or loss
for federal 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 legal defeasance had
not occurred;
(9) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States to the effect that the
Securityholders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and covenant defeasance and will
be subject to federal income tax on the same amount, in the
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same manner and at the same times as would have been the case if such
deposit and covenant defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to
the defeasance and discharge of the Securities and this Indenture as
contemplated by this Article VIII have been complied with.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by them
for the payment of principal of or interest on the Securities that remains
unclaimed for two years, and, thereafter, Securityholders entitled to the money
must look to the Company for payment as general creditors.
SECTION 8.5. Indemnity for U.S. Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided, however, that, if
the Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities or to secure
the Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to make any change that does not adversely affect the rights of
any Securityholder; or
(8) to provide for the issuance of the Exchange Securities, which
will have terms substantially identical in all material respects to the
Initial Securities (except that the transfer restrictions contained in the
Initial Securities will be modified or eliminated, as appropriate), and
which will be treated, together with any outstanding Initial Securities,
as a single issue of securities.
However, no amendment may be made to the provisions of Article X
that adversely affect the rights of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.2. With Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to any
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Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Securities). However, without the consent of each Securityholder
affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the stated rate of or extend the stated time for payment
of interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be
redeemed or repurchased as described above under Section 3.6, Section 3.8
(including an amendment to the definition of "Change of Control") or
Article V or any similar provision;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder to receive payment of principal
of premium, if any, and interest on such Holder's Securities on or after
the due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities; or
(7) make any change to the amendment provisions which require each
Holder's consent or to the waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes
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effective, it shall bind every Securityholder. An amendment or waiver shall
become effective upon receipt by the Trustee of the requisite number of written
consents under Section 9.1 or 9.2 as applicable.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become
valid or effective more than 120 days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
ARTICLE X
Subordination
SECTION 10.1. Agreement To Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by, and all other obligations in respect of, the Securities is subordinated in
right of payment, to the extent and in the manner provided in this Article X, to
the prior payment of all Senior Indebtedness and that the subordination is for
the benefit of and enforceable by the holders of Senior Indebtedness. The
Securities shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company and only Indebtedness of the Company
that is Senior Indebtedness will rank senior to the Securities in accordance
with the provisions set forth herein. All provisions of this Article X shall be
subject to Section 10.12.
SECTION 10.2. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in a
reorganization, bankruptcy, insolvency, receivership
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or similar proceeding relating to the Company or its properties or an assignment
for the benefit of creditors or marshalling of the Company's assets or
liabilities:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents of all Senior Indebtedness
before Securityholders shall be entitled to receive any payment of
principal of or interest on or other amounts with respect to the
Securities from the Company; and
(2) until the Senior Indebtedness is paid in full in cash or Cash
Equivalents, any payment or distribution to which Securityholders would be
entitled but for this Article X shall be made to holders of Senior
Indebtedness, as their respective interests may appear.
SECTION 10.3. Default on Senior Indebtedness. The Company shall not
pay the principal of, premium (if any) or interest on or other payment
obligations in respect of the Securities or make any deposit pursuant to Section
8.2 or repurchase or, redeem or otherwise retire any Securities (collectively,
"pay the Securities") if (i) any Senior Indebtedness is not paid when due in
cash or Cash Equivalents or (ii) any other default on Senior Indebtedness occurs
and the maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (x) the default has been cured or waived and
any such acceleration has been rescinded in writing or (y) such Senior
Indebtedness has been paid in full in cash or Cash Equivalents; provided,
however, that the Company may pay the Securities, without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of the Senior Indebtedness with respect to which
either of the events set forth in clause (i) or (ii) of this sentence has
occurred or is continuing. During the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding sentence) with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Securities (except in (i) Capital Stock
(other than Disqualified Stock) issued by the Company to pay interest on the
Securities or issued in exchange for the Securities, (ii) in securities
substantially identical to the Securities issued by the Company in payment of
interest thereon or (iii) in securities issued by the Company which are
subordinated to Senior Indebtedness at least to the same extent as the
Securities and having an Average Life at least equal to the remaining Average
Life of the Securities) for a period (a "Payment Blockage Period") commencing
upon the receipt by the Trustee (with a copy to the Company) of written notice
(a "Blockage Notice") of such default from the Representative(s) of the holders
of such Designated Senior Indebtedness specifying an election to effect a
Payment Blockage Period and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Trustee and
the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because such Designated Senior Indebtedness has been repaid in full in
cash or Cash Equivalents). Notwithstanding the provisions of the immediately
preceding sentence, unless the holders of such Designated Senior Indebtedness or
the Representative(s) of such holders shall have accelerated the maturity of
such Designated Senior Indebtedness, the Company may resume payments on the
Securities after the end of such Payment Blockage Period. Not more than one
Blockage Notice may be given, and
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not more than one Payment Blockage may occur, in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period.
SECTION 10.4. Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representatives) of the acceleration; provided, however, that the
Company and the Trustee shall be obligated to notify such a Representative only
if such Representative has delivered or caused to be delivered to the Company or
the Trustee an address for service of such a notice (and the Company and the
Trustee shall only be obligated to deliver the notice to the address so
specified). If any Designated Senior Indebtedness is outstanding, the Company
shall not pay the Securities until five Business Days after the holders or
Representative(s) of such Designated Senior Indebtedness receives notice of such
acceleration and, thereafter, may pay the Securities, only if this Article X
otherwise permits payments at that time.
SECTION 10.5. When Distribution Must Be Paid Over. If a distribution
is made to Securityholders that because of this Article X should not have been
made to them, the Securityholders who receive the distribution shall hold it in
trust for holders of Senior Indebtedness and promptly pay it over to them as
their respective interests may appear.
SECTION 10.6. Subrogation. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article X to holders of Senior Indebtedness which otherwise would have been made
to Securityholders is not, as between the Company and Securityholders, a payment
by the Company of Senior Indebtedness.
SECTION 10.7. Relative Rights. This Article X defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company which is absolute and unconditional, to pay principal
of and interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
SECTION 10.8. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by the failure of any of them to comply with this
Indenture.
SECTION 10.9. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such
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payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice in writing satisfactory
to it that payments may not be made under this Article X. The Company, the
Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness may give the notice; provided, however, that, if an issue of
Senior Indebtedness has a Representative, only the Representative may give the
notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. Article X Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment in respect of the Securities,
by reason of any provision in this Article X, shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article X shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of premium, if any, and interest on the Securities
shall not be subordinated to the prior payment of any Senior Indebtedness or
subject to the restrictions set forth in this Article X, and none of the
Securityholders shall be obligated to pay over any such amount to the Company,
any holder of Senior Indebtedness, or any other creditor of the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article X. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution
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and other facts pertinent to the rights of such Person under this Article X,
and, if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Sections 7.1 and 7.2 shall be applicable
to all actions or omissions of actions by the Trustee pursuant to this Article
X.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article X or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Indebtedness on Subordination Provisions. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness, whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XI
Guarantee
SECTION 11.1. Guarantee. Each Subsidiary Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and the Trustee the full and punctual payment when due,
whether at maturity, by acceleration, by redemption or otherwise, of the
principal of, premium, if any, and interest on the Securities and all other
obligations of the Company under this Indenture (all the foregoing being
hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor
further agrees (to the extent permitted by law) that the Obligations may be
extended or renewed, in whole or in part, without notice or further assent from
it, and that it will remain bound under this Article XI notwithstanding any
extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder to assert any claim or demand or to enforce any right or remedy against
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the Company or any other person under this Indenture, the Securities or any
other agreement or otherwise; (b) any extension or renewal of any thereof; (c)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Obligations or
any of them; (e) the failure of any Holder to exercise any right or remedy
against any other Subsidiary Guarantor; or (f) any change in the ownership of
the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein constitutes a Guarantee of payment when due (and not a
Guarantee of collection) and waives any right to require that any resort be had
by any Holder to any security held for payment of the Obligations.
The obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand or
to enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any Subsidiary
Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor
as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or interest
on any of the Obligations is rescinded or must otherwise be restored by any
Holder upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Subsidiary Guarantor
by virtue hereof, upon the failure of the Company to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Subsidiary Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law).
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in this Indenture for the purposes of its Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby and (y) in the
event of any such declaration of acceleration of such Obligations, such
Obligations (whether or not due
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and payable) shall forthwith become due and payable by the Subsidiary Guarantor
for the purposes of this Subsidiary Guarantee.
Each Subsidiary Guarantor also agrees to pay any and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or the Holders in enforcing any rights under this Section.
SECTION 11.2. Limitation on Liability; Termination, Release and
Discharge. The obligations of each Subsidiary Guarantor hereunder will be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (including,
without limitation, any guarantees under the Senior Credit Agreement) and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under this Indenture, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
Each Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Subsidiary Guarantor without limitation.
Each Subsidiary Guarantor may consolidate with or merge into or sell all or
substantially all its assets to a corporation, partnership or trust other than
the Company or another Subsidiary Guarantor (whether or not affiliated with the
Subsidiary Guarantor), except that if the surviving corporation of any such
merger or consolidation is a Subsidiary of the Company, such merger,
consolidation or sale shall not be permitted unless (i) the Person formed by or
surviving any such consolidation or merger assumes all the obligations of such
Subsidiary under the Subsidiary Guarantee pursuant to a supplemental indenture
in form and substance reasonably satisfactory to the Trustee in respect of the
Securities, this Indenture and the Subsidiary Guarantee, (ii) immediately after
giving effect to such transaction, no Default or Event of Default exists; and
(iii) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel addressed to the Trustee with respect to the foregoing
matters. Upon the sale or disposition of a Subsidiary Guarantor (by merger,
consolidation, the sale of its Capital Stock or the sale of all or substantially
all of its assets) to a Person (whether or not an Affiliate of the Subsidiary
Guarantor) which is not a Subsidiary of the Company, which sale or disposition
is otherwise in compliance with this Indenture (including Section 3.6), such
Subsidiary Guarantor will be deemed released from all its obligations under this
Indenture and its Subsidiary Guarantee and such Subsidiary Guarantee will
terminate; provided, however, that any such termination will occur only to the
extent that all obligations of such Subsidiary Guarantor under the Senior Credit
Agreement and all of its guarantees of, and under all of its pledges of assets
or other security interests which secure, any other Indebtedness of the Company
will also terminate upon such release, sale or transfer.
A Subsidiary Guarantor will be deemed released and relieved of its
obligations under this Indenture and its Subsidiary Guarantee without any
further action required on the part of the Company or such Subsidiary Guarantor
upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary
in accordance with the terms of this Indenture.
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SECTION 11.3. Right of Contribution. Each Subsidiary Guarantor
hereby agrees that to the extent that any Subsidiary Guarantor shall have paid
more than its proportionate share of any payment made on the obligations under
the Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek
and receive contribution from and against the Company or any other Subsidiary
Guarantor who has not paid its proportionate share of such payment. Each
Subsidiary Guarantor's right of contribution shall be subject to the terms and
conditions of Section 3.5. The provisions of this Section 11.3 shall in no
respect limit the obligations and liabilities of each Subsidiary Guarantor to
the Trustee and the Holders and each Subsidiary Guarantor shall remain liable to
the Trustee and the Holders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.
SECTION 11.4. No Subrogation. Notwithstanding any payment or
payments made by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor
shall be entitled to be subrogated to any of the rights of the Trustee or any
Holder against the Company or any other Subsidiary Guarantor or any collateral
security or guarantee or right of offset held by the Trustee or any Holder for
the payment of the Obligations, nor shall any Subsidiary Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any other
Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor
hereunder, until all amounts owing to the Trustee and the Holders by the Company
on account of the Obligations are paid in full. If any amount shall be paid to
any Subsidiary Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by such Subsidiary Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Subsidiary Guarantor, and shall, forthwith
upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Trustee, if required), to be applied against the
Obligations.
ARTICLE XII
Subordination of Subsidiary Guarantees
SECTION 12.1. Agreement To Subordinate. Each Subsidiary Guarantor
agrees, and each Securityholder by accepting a Security agrees, that the
Indebtedness evidenced by, and all other obligations in respect of, the
Subsidiary Guarantees are subordinated in right of payment, to the extent and in
the manner provided in this Article XII, to the prior payment of all Guarantor
Senior Indebtedness of the applicable Subsidiary Guarantor and that the
subordination is for the benefit of and enforceable by the holders of Guarantor
Senior Indebtedness of the applicable Subsidiary Guarantor. The Subsidiary
Guarantees shall in all respects rank pari passu with all other Guarantor Senior
Subordinated Indebtedness of the Subsidiary Guarantor and only Indebtedness of
the Subsidiary Guarantor that is Guarantor Senior Indebtedness will rank senior
to the Subsidiary Guarantees in accordance with the provisions set forth herein.
All provisions of this Article XII shall be subject to Section 12.12.
SECTION 12.2. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets of any Subsidiary Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of any Subsidiary
Guarantor or in a bankruptcy,
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reorganization, insolvency, receivership or similar proceeding relating to any
Subsidiary Guarantor or its properties:
(1) holders of Guarantor Senior Indebtedness of such Subsidiary
Guarantor shall be entitled to receive payment in full in cash or Cash
Equivalents of all Guarantor Senior Indebtedness of such Subsidiary
Guarantor before Securityholders shall be entitled to receive any payment
of principal of or interest on or other amounts with respect to the
Subsidiary Guarantees from any Subsidiary Guarantor; and
(2) until the Guarantor Senior Indebtedness of such Subsidiary
Guarantor is paid in full in cash or Cash Equivalents, any payment or
distribution to which Securityholders would be entitled but for this
Article XII shall be made to holders of Guarantor Senior Indebtedness of
such Subsidiary Guarantor, as their respective interests may appear.
SECTION 12.3. Default on Guarantor Senior Indebtedness. A Subsidiary
Guarantor shall not pay the principal of, premium (if any) or interest on or
other payment obligations in respect of the Subsidiary Guarantees or make any
deposit pursuant to Section 8.2 or repurchase or, redeem otherwise retire the
Subsidiary Guarantee (collectively, "pay the Securities") if (i) any Senior
Indebtedness or Guarantor Senior Indebtedness of the applicable Subsidiary
Guarantor is not paid when due in cash or Cash Equivalents or (ii) any other
default on Senior Indebtedness or Guarantor Senior Indebtedness of the
applicable Subsidiary Guarantor occurs and the maturity of such Senior
Indebtedness or Guarantor Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (x) the default has been cured or waived and
any such acceleration has been rescinded in writing or (y) such Senior
Indebtedness or Guarantor Senior Indebtedness of the applicable Subsidiary
Guarantor has been paid in full in cash or Cash Equivalents; provided, however,
that each Subsidiary Guarantor may pay the Securities, without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of the Senior Indebtedness or Guarantor Senior
Indebtedness of the applicable Subsidiary Guarantor with respect to which either
of the events set forth in clause (i) or (ii) of this sentence has occurred or
is continuing. During the continuance of any default (other than a default
described in clause (i) or (ii) of the preceding sentence) with respect to any
Designated Senior Indebtedness or Guarantor Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, each Subsidiary Guarantor may not
pay the Securities for a period (a "Payment Blockage Period") commencing upon
the receipt by the Trustee (with a copy to the Company) of written notice (a
"Blockage Notice") of such default from the Representative(s) of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice is no longer continuing or (iii)
because such Designated Senior Indebtedness or Guarantor Senior Indebtedness has
been repaid in full in cash or Cash Equivalents). Notwithstanding the provisions
of the immediately preceding sentence, unless the holders of such Designated
Senior Indebtedness or Guarantor Senior Indebtedness of the applicable
Subsidiary Guarantor or the Representative(s) of such holders shall have
accelerated the maturity of such Designated Senior Indebtedness, such Subsidiary
Guarantor
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may resume payments on the Securities after the end of such Payment Blockage
Period. Not more than one Blockage Notice may be given, and not more than one
Payment Blockage may occur, in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness or
Guarantor Senior Indebtedness of the applicable Subsidiary Guarantor during such
period.
SECTION 12.4. Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, each Subsidiary
Guarantor and the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness or Guarantor Senior Indebtedness (or their Representatives)
of the acceleration; provided, however, that the Company and the Trustee shall
be obligated to notify such a Representative only if such Representative has
delivered or caused to be delivered to the Company and the Trustee an address
for service of such a notice (and the Company and the Trustee shall only be
obligated to deliver the notice to the address so specified). If any Designated
Senior Indebtedness or Guarantor Senior Indebtedness is outstanding, each
Subsidiary Guarantor shall not pay the Securities until five Business Days after
the holders or Representative(s) of such Designated Senior Indebtedness or
Guarantor Senior Indebtedness of the applicable Subsidiary Guarantor receives
notice of such acceleration and, thereafter, may pay the Securities, only if
this Article XII otherwise permits payments at that time.
SECTION 12.5. When Distribution Must Be Paid Over. If a distribution
is made to Securityholders that because of this Article XII should not have been
made to them, the Securityholders who receive the distribution shall hold it in
trust for holders of Guarantor Senior Indebtedness of the applicable Subsidiary
Guarantor and promptly pay it over to them as their respective interests may
appear.
SECTION 12.6. Subrogation. After all Guarantor Senior Indebtedness
is paid in full and until the Securities are paid in full, Securityholders shall
be subrogated to the rights of holders of Guarantor Senior Indebtedness to
receive distributions applicable to Guarantor Senior Indebtedness. A
distribution made under this Article XII to holders of Guarantor Senior
Indebtedness which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company of Guarantor
Senior Indebtedness.
SECTION 12.7. Relative Rights. This Article XII defines the relative
rights of Securityholders and holders of Guarantor Senior Indebtedness. Nothing
in this Indenture shall:
(1) impair, as between Subsidiary Guarantor and Securityholders, the
obligation of each Subsidiary Guarantor which is absolute and
unconditional, to guarantee the payment of principal of and interest on
the Securities in accordance with their terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Guarantor Senior Indebtedness to receive
distributions otherwise payable to Securityholders.
SECTION 12.8. Subordination May Not Be Impaired by Company. No right
of any holder of Guarantor Senior Indebtedness to enforce the subordination of
the Indebtedness
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evidenced by the Subsidiary Guarantees shall be impaired by any act or failure
to act by any Subsidiary Guarantor or by the failure of any of them to comply
with this Indenture.
SECTION 12.9. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice in writing satisfactory to it that payments may not be made
under this Article XII. Each Subsidiary Guarantor, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that, if an issue of
Guarantor Senior Indebtedness has a Representative, only the Representative may
give the notice.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article XII with respect to any Guarantor Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Guarantor
Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article XII shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.7.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Guarantor Senior
Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. Article XII Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment in respect of the Securities
and the Subsidiary Guarantees, by reason of any provision in this Article XII
shall not be construed as preventing the occurrence of a Default or Event of
Default. Nothing in this Article XII shall have any effect on the right of the
Securityholders or the Trustee to accelerate the maturity of the Securities.
SECTION 12.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Guarantor Senior Indebtedness or
subject to the restrictions set forth in this Article X, and none of the
Securityholders shall be obligated to pay over any such amount to the Company,
any holder of Guarantor Senior Indebtedness, or any other creditor of such
Subsidiary Guarantor.
SECTION 12.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Guarantor
Senior Indebtedness for the purpose of
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ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Guarantor Senior Indebtedness and other
Indebtedness of the each Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XII. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Guarantor Senior Indebtedness to participate in any
payment or distribution pursuant to this Article XII, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Guarantor Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this Article XII,
and, if such evidence is not furnished, the Trustee may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. The provisions of Sections 7.1 and 7.2 shall be applicable
to all actions or omissions of actions by the Trustee pursuant to this Article
XII.
SECTION 12.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Guarantor Senior Indebtedness as provided in this Article XII and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.15. Trustee Not Fiduciary for Holders of Guarantor Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Securityholders or any
Subsidiary Guarantor or any other Person, money or assets to which any holders
of Guarantor Senior Indebtedness shall be entitled by virtue of this Article XII
or otherwise.
SECTION 12.16. Reliance by Holders of Guarantor Senior Indebtedness
on Indebtedness on Subordination Provisions. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Guarantor Senior Indebtedness, whether such Guarantor Senior Indebtedness
was created or acquired before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such Guarantor Senior
Indebtedness and such holder of Guarantor Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE XIII
Miscellaneous
SECTION 13.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Subsidiary Guarantor in addition to performing its
obligations under its Subsidiary Guarantee shall perform such other obligations
as may be imposed upon it with respect to this Indenture under the TIA.
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SECTION 13.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Avis Rent A Car, Inc.
000 Xxx Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx,
Vice President and General Counsel
With a copy to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a registered Securityholder
shall be mailed to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 13.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
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(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
SECTION 13.6. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
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SECTION 13.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 13.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of each
of Holdings, the Company or any Subsidiary Guarantor shall not have any
liability for any obligations of the Company under the Securities, this
Indenture or the Subsidiary Guarantees or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 13.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Variable Provisions. The Company initially appoints
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.
SECTION 13.14. Qualification of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.15. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
AVIS RENT A CAR, INC.
By:______________________________________
Name:
Title:
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AVIS RENT A CAR SYSTEM, INC.
By:______________________________________
Name:
Title:
AVIS INTERNATIONAL, LTD.
By:______________________________________
Name:
Title:
AVIS MANAGEMENT SERVICES, LTD.
By:______________________________________
Name:
Title:
AVIS CARIBBEAN, LIMITED
By:______________________________________
Name:
Title:
AVIS ASIA AND PACIFIC, LIMITED
By:______________________________________
Name:
Title:
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AVIS ENTERPRISES, INC.
By:______________________________________
Name:
Title:
AVIS SERVICE, INC.
By:______________________________________
Name:
Title:
AVIS LUBE, INC.
By:______________________________________
Name:
Title:
AVIS LEASING CORPORATION
By:______________________________________
Name:
Title:
RENT-A-CAR COMPANY, INCORPORATED
By:______________________________________
Name:
Title:
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RESERVE CLAIMS MANAGEMENT CO.
By:______________________________________
Name:
Title:
AVIS FLEET LEASING AND MANAGEMENT CORPORATION
By:______________________________________
Name:
Title:
PHH VEHICLE MANAGEMENT SERVICES LLC
By:______________________________________
Name:
Title:
DEALERS HOLDINGS, INC.
By:______________________________________
Name:
Title:
WILLIAMSBURG MOTORS, INC.
By:______________________________________
Name:
Title:
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EDENTON MOTORS, INC.
By:______________________________________
Name:
Title:
XXXXXX EXPRESS LLC
By:______________________________________
Name:
Title:
PHH CANADIAN HOLDINGS, INC.
By:______________________________________
Name:
Title:
PHH DEUTSCHLAND, INC.
By:______________________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:______________________________________
Name:
Title:
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