===============================================================================
____________________
SPINNAKER INDUSTRIES, INC.
as Issuer,
CENTRAL PRODUCTS COMPANY
XXXXX-BRIDGE INDUSTRIES, INC.
and
ENTOLETER, INC.,
as Guarantors
and
THE CHASE MANHATTAN BANK
as Trustee
$115,000,000
10 3/4% SENIOR SECURED NOTES DUE 2006, SERIES A
10 3/4% SENIOR SECURED NOTES DUE 2006, SERIES B
_________________________________
____________________
INDENTURE
Dated as of October 23, 1996
____________________
===============================================================================
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
313(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;12.02
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;12.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.13
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.13
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.05
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05;7.01
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . N.A.
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.19
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
i
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
_______________________
*This Cross-Reference Table is not part of the Indenture.
N.A. means not applicable.
ii
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY
REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 18
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT . . . . . 18
SECTION 1.04. RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . 19
ARTICLE 2 THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.01. FORM AND DATING.. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.02. EXECUTION AND AUTHENTICATION. . . . . . . . . . . . . . . . 21
SECTION 2.03. REGISTRAR AND PAYING AGENT. . . . . . . . . . . . . . . . . 21
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST . . . . . . . . . . . . 22
SECTION 2.05. SECURITYHOLDER LISTS. . . . . . . . . . . . . . . . . . . . 22
SECTION 2.06. TRANSFER AND EXCHANGE.. . . . . . . . . . . . . . . . . . . 22
SECTION 2.07. REPLACEMENT SECURITIES. . . . . . . . . . . . . . . . . . . 23
SECTION 2.08. OUTSTANDING SECURITIES. . . . . . . . . . . . . . . . . . . 24
SECTION 2.09. TREASURY SECURITIES.. . . . . . . . . . . . . . . . . . . . 24
SECTION 2.10. TEMPORARY SECURITIES. . . . . . . . . . . . . . . . . . . . 24
SECTION 2.11. CANCELLATION. . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.12. DEFAULTED INTEREST. . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.13. CUSIP NUMBER. . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.14. DEPOSIT OF MONEYS . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.15. RESTRICTIVE LEGENDS . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY . . . . . . . . . 28
SECTION 2.17. SPECIAL TRANSFER PROVISIONS . . . . . . . . . . . . . . . . 29
SECTION 2.18. PERSONS DEEMED OWNERS.. . . . . . . . . . . . . . . . . . . 31
SECTION 2.19. RECORD DATE . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 3 REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.01. NOTICES TO TRUSTEE. . . . . . . . . . . . . . . . . . . . . 32
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. . . . . . . . . . . 32
SECTION 3.03. NOTICE OF REDEMPTION. . . . . . . . . . . . . . . . . . . . 33
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. . . . . . . . . . . . . . . 34
i
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.. . . . . . . . . . . . . . . . 34
SECTION 3.06. SECURITIES REDEEMED IN PART.. . . . . . . . . . . . . . . . 34
SECTION 3.07. OPTIONAL REDEMPTION.. . . . . . . . . . . . . . . . . . . . 35
SECTION 3.08. MANDATORY REDEMPTION. . . . . . . . . . . . . . . . . . . . 35
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS . . . . 35
ARTICLE 4 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.01. PAYMENT OF SECURITIES.. . . . . . . . . . . . . . . . . . . 38
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.. . . . . . . . . . . . . . 38
SECTION 4.03. SEC REPORTS.. . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.04. COMPLIANCE CERTIFICATES.. . . . . . . . . . . . . . . . . . 39
SECTION 4.05. TAXES.. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.06. STAY, EXTENSION AND USURY LAWS. . . . . . . . . . . . . . . 41
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS . . . . . . . . . . . . . 41
SECTION 4.08. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. . . . . . . . . . . . . . . . . . . 43
SECTION 4.09. LIMITATION ON INCURRENCE OF INDEBTEDNESS. . . . . . . . . . 44
SECTION 4.10. PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT . . . 46
SECTION 4.11. LIMITATION ON ASSET SALES . . . . . . . . . . . . . . . . . 46
SECTION 4.12. LIMITATION ON TRANSACTIONS WITH AFFILIATES. . . . . . . . . 47
SECTION 4.13. LIMITATION ON LIENS . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.14. CORPORATE EXISTENCE . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.15. CHANGE OF CONTROL . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.16. LIMITATION ON PREFERRED STOCK OF SUBSIDIARIES . . . . . . . 50
SECTION 4.17. COMPANY TO CAUSE CERTAIN SUBSIDIARIES TO BECOME GUARANTORS. 50
SECTION 4.18. LIMITATION ON BUSINESS. . . . . . . . . . . . . . . . . . . 50
SECTION 4.19. FURTHER INSTRUMENTS AND ACTS. . . . . . . . . . . . . . . . 51
ARTICLE 5 SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS. . . 51
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED . . . . . . . . . . . . . 52
ARTICLE 6 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . 52
SECTION 6.01. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.02. ACCELERATION. . . . . . . . . . . . . . . . . . . . . . . . 55
ii
SECTION 6.03. OTHER REMEDIES. . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.04. WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . . . . . . 56
SECTION 6.05. CONTROL BY MAJORITY . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.06. LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT . . . . . . . 57
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. . . . . . . . . . . . . . . . . 57
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. . . . . . . . . . . . . . 57
SECTION 6.10. PRIORITIES. . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.11. UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . . . . . 59
ARTICLE 7 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.01. DUTIES OF TRUSTEE.. . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.02. RIGHTS OF TRUSTEE.. . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . 61
SECTION 7.04. TRUSTEE'S DISCLAIMER. . . . . . . . . . . . . . . . . . . . 61
SECTION 7.05. NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS . . . . . . . . . . . 62
SECTION 7.07. COMPENSATION AND INDEMNITY. . . . . . . . . . . . . . . . . 62
SECTION 7.08. REPLACEMENT OF TRUSTEE. . . . . . . . . . . . . . . . . . . 63
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. . . . . . . . . . . . . . 64
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . . . . . 65
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY . . . 65
ARTICLE 8 DISCHARGE OF INDENTURE. . . . . . . . . . . . . . . . . . . 65
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. . . . . . 65
SECTION 8.02. CONDITIONS TO DEFEASANCE. . . . . . . . . . . . . . . . . . 66
SECTION 8.03. APPLICATION OF TRUST MONEY. . . . . . . . . . . . . . . . . 68
SECTION 8.04. REPAYMENT TO THE COMPANY. . . . . . . . . . . . . . . . . . 68
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. . . . . . . . . . . . 69
SECTION 8.06. REINSTATEMENT . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE 9 AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS. . . . . . . . . . . . . 69
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS . . . . . . . . . . . . . . 71
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT . . . . . . . . . . . . 72
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . . . . . 72
iii
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES . . . . . . . . . . . 73
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. . . . . . . . . . . . . . 73
ARTICLE 10 GUARANTEE OF SECURITIES . . . . . . . . . . . . . . . . . . 73
SECTION 10.01. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE . . . . . . . . . . . . 75
SECTION 10.03. GUARANTEE UNCONDITIONAL, ETC. . . . . . . . . . . . . . . . 75
SECTION 10.04. LIMITATION OF GUARANTOR'S LIABILITY . . . . . . . . . . . . 76
SECTION 10.05. CONTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.06. RELEASE . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 10.07. ADDITIONAL GUARANTORS . . . . . . . . . . . . . . . . . . . 77
SECTION 10.08. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. . . . . 78
SECTION 10.09. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . 78
SECTION 10.10. WAIVER OF STAY, EXTENSION OR USURY LAWS . . . . . . . . . . 79
ARTICLE 11 SECURITY AND PLEDGE OF COLLATERAL . . . . . . . . . . . . . 79
SECTION 11.01. GRANT OF SECURITY INTEREST. . . . . . . . . . . . . . . . . 79
SECTION 11.02. DELIVERY OF COLLATERAL. . . . . . . . . . . . . . . . . . . 80
SECTION 11.03. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. . . . . . . . . 80
SECTION 11.04. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . 82
SECTION 11.05. VOTING RIGHTS; DIVIDENDS; ETC. . . . . . . . . . . . . . . 82
SECTION 11.06. TRUSTEE APPOINTED ATTORNEY-IN-FACT. . . . . . . . . . . . . 83
SECTION 11.07. TRUSTEE MAY PERFORM.. . . . . . . . . . . . . . . . . . . . 83
SECTION 11.08. TRUSTEE'S DUTIES. . . . . . . . . . . . . . . . . . . . . . 84
SECTION 11.09. REMEDIES UPON EVENT OF DEFAULT. . . . . . . . . . . . . . . 84
SECTION 11.10. APPLICATION OF PROCEEDS . . . . . . . . . . . . . . . . . . 85
SECTION 11.11. PLEDGORS' OBLIGATIONS ABSOLUTE. . . . . . . . . . . . . . . 85
SECTION 11.12. CONTINUING LIEN . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 11.13. SPECIFIED RELEASES OF COLLATERAL; PLEDGORS. . . . . . . . . 86
SECTION 11.14. CERTIFICATES AND OPINIONS . . . . . . . . . . . . . . . . . 87
ARTICLE 12 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 12.01. TRUST INDENTURE ACT CONTROLS. . . . . . . . . . . . . . . . 87
SECTION 12.02. NOTICES.. . . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER
SECURITYHOLDERS . . . . . . . . . . . . . . . . . . . . . . 88
iv
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. . . . . 89
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION . . . . . . . 89
SECTION 12.06. RULES BY TRUSTEE AND AGENTS . . . . . . . . . . . . . . . . 90
SECTION 12.07. LEGAL HOLIDAYS. . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.08. NO RECOURSE AGAINST OTHERS. . . . . . . . . . . . . . . . . 90
SECTION 12.09. DUPLICATE ORIGINALS . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.10. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS . . . . . . . 90
SECTION 12.12. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 12.13. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 12.14. COUNTERPART ORIGINALS . . . . . . . . . . . . . . . . . . . 91
SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC. . . . . . . . . . . . . . 91
SCHEDULE I - PLEDGED SHARES
EXHIBIT A - FORM OF INITIAL SECURITY WITH GUARANTEE
EXHIBIT B - FORM OF EXCHANGE SECURITY WITH GUARANTEE
EXHIBIT C - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
EXHIBIT D - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S
v
INDENTURE, dated as of October 23, 1996, among Spinnaker Industries,
Inc., a Delaware corporation (the "Company"), Central Products Company, a
Delaware corporation ("Central Products"), Xxxxx-Bridge Industries, Inc., a
Delaware corporation ("Xxxxx Bridge"), and Entoleter, Inc., a Delaware
corporation ("Entoleter"), each of Central Products, Xxxxx-Bridge and
Entoleter as Guarantors (as defined) of the Company's obligations hereunder,
and The Chase Manhattan Bank, a banking corporation organized and existing
under the laws of the State of New York, as Trustee (as defined).
The Company has duly authorized the creation of an issue of 10 3/4%
Senior Secured Notes due 2006, Series A (the "Initial Securities") and 10 3/4%
Senior Secured Notes due 2006, Series B (the "Exchange Securities,") and, to
provide therefor, the Company and the Guarantors have duly authorized the
execution and delivery of this Indenture. All things necessary to make the
Securities (as defined), when duly issued and executed by the Company, and
authenticated and delivered hereunder, the valid obligations of the Company
and the Guarantors, and to make this Indenture a valid and binding agreement
of the Company and the Guarantors, have been done.
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" of any specified Person means Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Restricted Subsidiary of such specified Person, but
excluding any Indebtedness incurred in connection with, or in contemplation
of, such merger or such other Person becoming a Restricted Subsidiary of such
specified Person.
"ADJUSTED NET ASSETS" of a Guarantor at any date shall mean the lesser
of the amount by which (x) the fair value of the property of such Guarantor
exceeds the total amount of liabilities, including, without limitation, the
probable liability of such Guarantor with respect to its contingent liabilities
(after giving effect to all other fixed and contingent liabilities incurred or
assumed on such date), but excluding liabilities under the Guarantee, of such
Guarantor at such date and (y) the present fair salable value of the assets of
such Guarantor at such date exceeds the amount that will be required to pay the
probable liability
of such Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving
effect to any collection from any Subsidiary by such Guarantor in respect of
the obligations of such Subsidiary under the Guarantee), excluding debt in
respect of the Guarantee, as they become absolute and matured.
"AFFILIATE" means, with respect to any Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such Person. The
definition of Affiliate as contained in the preceding sentence, and the term
"control" (including the terms "controlling," "controlled by" and "under
common control with") as used therein, shall be construed in a manner
consistent with the definitions of "affiliate" and "control" contained in
Rule 405 promulgated under the Securities Act, as such rule is in effect on
the Issuance Date. Without limiting the foregoing, for purposes of the
Indenture (other than in relation to the definitions of "Change of Control"
and "Permitted Holders"), the ownership of, or control of the votes with
respect to, 10% or more of the voting common equity (on a fully diluted
basis) of a Person will be deemed to be control of such Person.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET ACQUISITION" means (i) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Restricted Subsidiary of the Company or shall be
merged or consolidated with the Company or any Restricted Subsidiary of the
Company or (ii) the acquisition by the Company or any Restricted Subsidiary
of the Company of assets of any Person comprising a division or line of
business of such Person.
"ASSET SALE" means (i) the sale, lease, conveyance, transfer or
other disposition (whether in a single transaction or a series of related
transactions) of property or assets of the Company or any Restricted
Subsidiary thereof (each referred to in this definition as a "disposition")
or (ii) the issuance or sale of Equity Interests of (or by) any Restricted
Subsidiary of the Company, in each case, other than (a) a disposition of
inventory in the ordinary course of business, (b) the disposition of all or
substantially all of the assets of the Company and the Restricted
Subsidiaries thereof in a manner permitted pursuant to the provisions
described in Sections 5.01 or 4.15 hereof and (c) in the case of clause (i)
only, any single disposition, or related series of dispositions, of assets
with an aggregate fair market value of less than $500,000. Notwithstanding
anything to the contrary contained above, a Restricted Payment made in
compliance with Section 4.07 hereof shall not constitute an Asset Sale except
for purposes of determinations of the Fixed Charge Coverage Ratio.
"BANKRUPTCY CODE" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
2
"BOARD OF DIRECTORS" means, with respect to any Person, the Board
of Directors of such Person or any committee of the Board of Directors of
such Person duly authorized, with respect to any particular matter, to
exercise the power of the Board of Directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors of such Person and
to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"BORROWING BASE" means, as of any date with respect to any Person,
an amount equal to the sum of (a) 85% of the face amount of all accounts
receivable owned by such Person as of such date that are not more than 120
days past due, and (b) 65% of all inventory owned by such Person as of such
date, in each case valued at the lower of cost or market calculated on a
consolidated basis and in accordance with the Company's financial statements.
To the extent that information is not available as to the amount of accounts
receivable or inventory as of a specific date, such Person may utilize the
most recent available information for purposes of calculating the Borrowing
Base.
"XXXXX-BRIDGE" has the meaning set forth in the preamble to this
Indenture.
"XXXXX-BRIDGE ROLL-UP CONTINGENT PAYMENTS" shall mean all payments
made after the Issuance Date (excluding the cash payments to be made as part
of the Company's recapitalization plan on, or immediately after, the Issuance
Date in an aggregate amount not to exceed $2.5 million) to Persons other than
the Company who were shareholders of Xxxxx-Bridge prior to the Issuance Date,
including without limitation all payments of the Contingent Price under, and
as defined in, that certain Agreement and Plan of Merger (Xxxxx-Bridge
Minority Interest), dated as of October 1, 1996, by and among the Company,
BB Merger Corp. and Xxxxx-Bridge.
"BUSINESS DAY" means a day that is not a Legal Holiday.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is accounted for as a capital lease on the balance
sheet of such Person.
"CAPITAL LEASE OBLIGATION" means obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligations
will be the capitalized amount of such obligations determined in accordance
with GAAP.
3
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of
or interests in (however designated) the common or preferred equity of such
Person, including, without limitation, partnership interests.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition
thereof; (ii) marketable direct obligations issued by 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, having one of the two
highest ratings obtainable from either Standard & Poor's Ratings Services or
Xxxxx'x Investors Service, Inc.; (iii) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from Standard & Poor's Ratings Services or at
least P-1 from Xxxxx'x Investors Service, Inc.; (iv) certificates of deposit
or bankers' acceptances maturing within one year from the date of acquisition
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any
U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $500,000,000; (v) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (iv) above; and (vi) investments in
money market funds which invest substantially all their assets in securities
of the types described in clauses (i) through (v) above.
"CENTRAL PRODUCTS" has the meaning set forth in the preamble to
this Indenture.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the adoption of a plan relating to the liquidation or dissolution of the
Company, (ii) the sale, lease or transfer, in one or a series of transactions,
of all or substantially all of the assets of the Company or of the Company and
its Subsidiaries taken as a whole, to any Person or group (as such term is used
in Section 13(d)(3) of the Exchange Act), other than to any one or more of the
Permitted Holders, (iii) any Person or group, other than one or more of the
Permitted Holders, is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that (x) a Person shall be deemed
to have "beneficial ownership" of all shares that any such Person has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time and (y) in the case of a group which is not a Permitted Holder
but includes as members thereof one or more Permitted Holders, such group
(except to the extent provided in preceding clause (x)) shall not be considered
to be the "beneficial owner" of any capital stock of the Company beneficially
owned (other than
4
as a result of attribution to Permitted Holders by reason of their being
members of such group) by the Permitted Holders, if any, who are members of
such group), directly or indirectly, of shares of Voting Stock of the Company
representing more than 50% of the voting power of all of the Voting Stock of
the Company by way of merger or consolidation or otherwise; PROVIDED,
HOWEVER, that a Person which ceases to be a Permitted Holder by reason of
ceasing to be an Affiliate of, or a member of a group controlled by, a
Permitted Holder shall not be deemed to have acquired beneficial ownership of
any shares of Voting Stock of the Company unless and until a "Change of
Control" (as measured from the Issuance Date) shall have occurred with
respect to such Person (for purposes of determining whether such a "Change of
Control" has occurred, such Person shall be substituted for the Company) or
(iv) the first day within any two-year period on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors.
"COMMISSION" means the U.S. Securities and Exchange Commission or
its successor.
"COMPANY" means Spinnaker Industries, Inc., a Delaware corporation,
until a successor replaces it in accordance with Article 5 hereof and
thereafter means the successor.
"CONSOLIDATED EBITDA" of any Person with respect to any period
means Consolidated Net Income of such Person for such period (x) adjusted to
exclude (to the extent included in Consolidated Net Income for such period)
(i) gains and losses from Asset Sales (without regard to the $500,000
limitation set forth in the definition thereof) or abandonments or reserves
relating thereto and (ii) items classified as extraordinary gains and losses
and (y) increased (to the extent already deducted from Consolidated Net
Income for such period) by the sum (but without duplication), on a
consolidated basis, of (i) all income tax expense for such period, (ii) all
cash and non-cash interest expense (including interest with respect to
Capitalized Lease Obligations and interest rate protection agreements and net
of any interest income) paid or accrued for such period and (iii) all
consolidated depreciation and consolidated amortization and any other
consolidated non-cash charges (including with respect to writedowns or
writeoffs of assets) for such period, in each case determined in accordance
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of (a) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued, to the extent
such expense was deducted in computing Consolidated Net Income (including
amortization of original issue discount and original issuance costs, non-cash
interest payments, the interest component of Capital Leases, and net payments
(if any) pursuant to Hedging Obligations), (b) commissions, discounts and other
fees and charges paid or accrued with respect to letters of
5
credit and bankers' acceptance financing and (c) interest actually paid by
such Person or its Restricted Subsidiaries under a Guarantee of Indebtedness
of any other Person.
"CONSOLIDATED NET INCOME" means with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; PROVIDED that there shall be excluded therefrom,
without duplication, (a) the net income or loss of any Person acquired in a
pooling of interests transaction accrued prior to the date it becomes a
Restricted Subsidiary of such Person or is merged or consolidated with such
Person or any Restricted Subsidiary, (b) the net income of any Person, other
than a consolidated Restricted Subsidiary, in which such first referred to
Person or a consolidated Restricted Subsidiary has an interest shall be
included only to the extent of the lesser of (i) any dividends or
distributions actually paid to such first referred to Person and its
consolidated Restricted Subsidiaries during such period and (ii) the net
income of such Person (but in no event less than zero), and the net loss of
such Person shall be included only to the extent of the aggregate Investment
of the first referred to Person or a consolidated Restricted Subsidiary in
such Person, and (c) the net income or loss of any consolidated Restricted
Subsidiary of such Person shall be excluded to the extent such Restricted
Subsidiary is restricted by contract, operation of law or otherwise from
distributing its net income.
"CONSOLIDATED NET WORTH" with respect to any Person means the
consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries (or, in the case of the Company, the Restricted
Subsidiaries), less, to the extent included in the foregoing, amounts
attributable to Disqualified Stock, each item determined on a consolidated
basis and in accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Issuance Date or (ii) was nominated for election or
elected to such Board of Directors with, or whose election to such Board of
Directors was approved by, the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors at the time
of such nomination or election or (iii) is a representative of one or more of
the Permitted Holders or was nominated by one or more of the Permitted
Holders or any representative of the Permitted Holders on the Board of
Directors.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of
the Trustee specified in Section 12.02 or such other address as to which the
Trustee may give notice to the Company.
"DEFAULT" means any event that is or with the passing of time or
giving of notice or both would be an Event of Default.
6
"DEPOSITORY" means The Depository Trust Company, its nominees and
successors.
"DISQUALIFIED STOCK" means any Capital Stock 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 other than an event
which would constitute a Change of Control, (i) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control), in whole or in part, on or prior
to the first anniversary of the final stated maturity of the Notes, or (ii)
is convertible into or exchangeable for (whether at the option of the issuer
or the holder thereof) (a) debt securities or (b) any Capital Stock referred
to in (i) above, in each case at any time prior to the first anniversary of
the final stated maturity of the Securities.
"ENTOLETER" has the meaning set forth in the preamble to this
Indenture.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"EXCHANGE OFFER" means the registration by the Company and the
Guarantors under the Securities Act pursuant to a registration statement of
the offer by the Company and the Guarantors to each Securityholder of the
Initial Securities to exchange all the Initial Securities held by such
Securityholder for the Exchange Securities in an aggregate principal amount
equal to the aggregate principal amount of the Initial Securities held by
such Securityholder, all in accordance with the terms and conditions of the
Registration Rights Agreement.
"EXCHANGE SECURITIES" has the meaning set forth in the preamble to
this Indenture.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the New Credit
Facility) in existence on the Issuance Date.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for
any period, the ratio of the Consolidated EBITDA of such Person for such period
to the sum of (i) the Consolidated Interest Expense of such Person for such
period and (ii) dividend
7
requirements on Disqualified Stock of such Person and Disqualified Stock and
any Preferred Stock of its Restricted Subsidiaries (whether in cash or
otherwise (except dividends payable (x) by the Company in shares of Capital
Stock which is not Disqualified Stock and (y) by any Restricted Subsidiary of
the Company to the Company or a Wholly Owned Restricted Subsidiary of the
Company)) paid, accrued or scheduled to be paid or accrued during such period
(except to the extent accrued in a prior period) and excluding items
eliminated in consolidation; PROVIDED that (a) in the event that the Company
or any of its Restricted Subsidiaries incurs, assumes, guarantees or redeems
any Indebtedness or issues Capital Stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the event for which the calculation of the Fixed Charge Coverage
Ratio is made, then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee or
redemption of Indebtedness, or such issuance or redemption of Capital Stock,
as if the same had occurred at the beginning of the applicable four-quarter
period, (b) in making such computation, the Consolidated Interest Expense of
such Person attributable to interest on any Indebtedness bearing a floating
interest rate shall be computed on a pro forma basis as if the rate in effect
on the date of computation had been the applicable rate for the entire
period, (c) in making such computation, the Consolidated Interest Expense of
such Person attributable to interest on any Indebtedness incurred for working
capital purposes under a revolving credit facility (but not including
Indebtedness incurred in connection with Asset Sales and/or Asset
Acquisitions covered by clause (f) below) which facility was in effect during
the respective period shall be computed on a pro forma basis based upon the
average daily balance of such Indebtedness outstanding during the applicable
period (or, if shorter, the portion of the period during which such revolving
credit facility was in effect), (d) in making such computation, for purposes
of clause (ii) above, dividend requirements will be increased to an amount
representing the pretax earnings that would be required to cover such
dividend requirements; accordingly, the increased amount will be equal to
such dividend requirements multiplied by a fraction, the numerator of which
is one and the denominator of which is one minus the applicable actual
combined Federal, state, local and foreign income tax rate of such Person and
its Restricted Subsidiaries (expressed as a decimal), on a consolidated
basis, for the fiscal year immediately preceding the date of the transaction
giving rise to the need to calculate the Fixed Charge Coverage Ratio, (e) in
making such computation, Consolidated Interest Expense will be increased or
reduced by the net cost (including amortization of discount) or benefit
(after giving effect to amortization of discount) associated with Hedging
Obligations attributable to such period and (f) in the event that the Company
or any of its Restricted Subsidiaries consummates any Asset Sales or Asset
Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of the Company or one
of its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Indebtedness) at any time subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated but prior to the event for which the calculation of the Fixed
Charge Coverage Ratio is made, then the Fixed Charge Coverage
8
Ratio shall be calculated giving pro forma effect (calculated on a basis
consistent with Regulation S-X under the Securities Act) to such Asset Sale
and Asset Acquisition as if such Asset Sale or Asset Acquisition (including
the incurrence, assumption or liability for any such Indebtedness and also
including (or excluding, as the case may be) any Consolidated EBITDA
associated with such Asset Sale or Asset Acquisition) occurred on the first
day of the applicable four-quarter period. If such Person or any of its
Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the incurrence of
such guaranteed Indebtedness as if such Person or any Restricted Subsidiary
of such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession of the United States, which were used by the
Company in the preparation of its audited financial statements as of and for
the period ended December 31, 1995, included in the final Offering Memorandum.
"GLOBAL NOTE" has the meaning provided in Section 2.01.
"GUARANTEE" means each of the guarantees of the respective
Guarantors pursuant to Article 10 hereof, and shall include each guarantee
substantially in the form contained in Exhibits A and B hereto, as such
guarantee may be amended, modified or supplemented from time to time.
"GUARANTOR" means (i) each of Central Products, Xxxxx-Bridge and
Entoleter, and (ii) each of the Company's Restricted Subsidiaries which,
after the Issuance Date, becomes a Guarantor by executing a supplemental
Indenture in which such Subsidiary agrees to be bound by the terms of the
Indenture as a Guarantor and executes a Guarantee; PROVIDED that any Person
constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the
terms thereof.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements in respect thereof, of all or any part of any
Indebtedness.
"INDEBTEDNESS" means with respect to any Person, without duplication,
(i) all liabilities, contingent or otherwise, of such Person (a) for borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), (b) evidenced by bonds, notes,
debentures, drafts accepted or similar instruments
9
or letters of credit or representing the balance deferred and unpaid of the
purchase price of any property (other than any such balance that represents
an account payable or any other monetary obligation to a trade creditor
(whether or not an Affiliate)) created, incurred, assumed or guaranteed by
such Person in the ordinary course of business of such Person in connection
with obtaining goods, materials or services and due within 12 months (or such
longer period for payment as is customarily extended by such trade creditor)
of the incurrence thereof, which account is not overdue by more than 90 days,
according to the original terms of sale, unless such account payable is being
contested in good faith, or (c) for the payment of money relating to a
Capital Lease Obligation, (ii) the maximum fixed repurchase price of all
Disqualified Stock of such Person, (iii) reimbursement obligations of such
Person with respect to letters of credit, (iv) obligations of such Person
with respect to Hedging Obligations, (v) all liabilities of others of the
kind described in the preceding clause (i), (ii), (iii) or (iv) that such
Person has guaranteed or that is otherwise its legal liability, and (vi) all
obligations of others secured by a Lien to which any of the properties or
assets (including, without limitation, leasehold interests and any other
tangible or intangible property rights) of such Person are subject, whether
or not the obligations secured thereby will have been assumed by such Person
or will otherwise be such Person's legal liability (PROVIDED, that if the
obligations so secured have not been assumed by such Person or are not
otherwise such Person's legal liability, such obligations will be deemed to
be in an amount equal to the fair market value of such properties or assets,
as determined in good faith by the Board of Directors of such Person, which
determination will be evidenced by a Board Resolution).
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INITIAL PURCHASER" means BT Securities Corporation.
"INITIAL SECURITIES" has the meaning set forth in the preamble to
this Indenture.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"INTEREST PAYMENT DATE" means the stated maturity of an installment
of interest on the Securities.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of loans,
guarantees, advances or capital contributions (excluding commission, travel
and similar advances to directors, officers and employees made in the
ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
10
"ISSUANCE DATE" means the date of original issuance of the
Securities.
"LIEN" means any lien, security interest, charge or encumbrance of
any kind (including any conditional sale or other title retention agreement,
any lease in the nature thereof, and any agreement to give any security
interest).
"MATURITY DATE" means October 15, 2006.
"NET PROCEEDS" from an Asset Sale means cash payments received
(including any cash payments received by way of conversion into cash of any
note or other obligation received in connection with such Asset Sale or by
way of deferred payment of principal pursuant to, or liquidation of, any note
or installment receivable or otherwise, but only as and when received
therefrom) in each case net of all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all taxes required to
be accrued as a liability under GAAP, as a consequence of such Asset Sale and
the amount of Indebtedness that is secured by the assets subject to an Asset
Sale and is repaid with the proceeds thereof.
"NEW CREDIT FACILITY" means the credit facility, dated as of
October 23, 1996, among the Company, the Guarantors, BT Commercial
Corporation, as agent, TransAmerica Business Credit Corporation, as
collateral agent, and any other financial institutions from time to time
party thereto, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring (including by way of adding Subsidiaries of the
Company as additional borrowers or guarantors thereunder) all or any portion
of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"NON-U.S. PERSON" means a Person who is not a U.S. person, as
defined in Regulation S of the Securities Act.
"OBLIGATIONS" means any principal, premium, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities payable
under the documentation governing any Indebtedness.
"OFFERING MEMORANDUM" means the Offering Memorandum dated October
18, 1996, pursuant to which the Initial Securities were offered, and any
supplements thereto.
"OFFICER" means the Chairman of the Board, the President, any
Senior Vice President, any Vice President, the Treasurer or the Secretary of
the Company or, in the case
11
of a reference to Officers of any of the Guarantors or to an Officers'
Certificate to be delivered by or on behalf of any of the Guarantors, of such
Guarantor.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers
of the Company or a Guarantor, as the case may be, and which complies with
the provisions of Section 12.04 hereof.
"OFFSHORE PHYSICAL SECURITIES" has the meaning provided in Section
2.01.
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is acceptable to the Trustee, and which complies, if applicable, with the
provisions of Section 12.04 hereof. The counsel may be an employee of or
counsel to the Company or the Trustee.
"PERMITTED BUSINESSES" means the businesses within the industries
engaged in by Central Products and Xxxxx-Bridge on the Issuance Date and
reasonable extensions thereof.
"PERMITTED HOLDERS" means and includes (x) Xxxxx Xxxxxxx; Xxxxxxx
X. Xxxxx; Xxx X. Xxxxxxx, III; each Affiliate of any of the foregoing natural
persons (so long as it remains such an Affiliate); each member of the
immediate family of any of the foregoing natural persons and any trust or
similar device created for the benefit of any one or more of the foregoing
and each Person which acquires a direct or indirect beneficial ownership
interest in shares of stock of the Company as an executor or administrator
for or by way of inheritance or bequest from one or more of the natural
persons described in the preceding clause (x) following the death of such
Person; and (y) each group (as such term is used in Section 13(d)(3) of the
Exchange Act) which is controlled by (with the term "controlled by" as used
herein to be determined in a manner consistent with the phrase "controlled
by" as used in the definition of Affiliate contained herein) one or more of
the Permitted Holders described in preceding clause (x), but only so long as
the respective such group is so controlled.
"PERMITTED INVESTMENTS" means (a) any Investments in the Company;
(b) any Investments in Cash Equivalents; (c) Investments by the Company in a
Person, if as a result of, or immediately after, such Investment (i) such
Person is or becomes a Wholly Owned Restricted Subsidiary which is a
Guarantor or (ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into the Company or a Person which is a Wholly Owned Restricted
Subsidiary and a Guarantor after giving effect thereto; (d) Investments by a
Guarantor in other Guarantors and Investments by Wholly Owned Restricted
Subsidiaries which are not Guarantors in other Wholly Owned Restricted
Subsidiaries which are not Guarantors; (e) Investments received by the
Company or a Restricted Subsidiary as consideration for asset sales,
including Asset
12
Sales; PROVIDED, in the case of an Asset Sale, such Asset Sale is effected in
compliance with Section 4.11 hereof; and (f) additional Investments having an
aggregate fair market value, taken together with all other Investments made
pursuant to this clause (f) that are at that time outstanding, not to exceed
$10 million (with the fair market value of each Investment being measured at
the time made and without giving effect to subsequent changes in value).
"PERMITTED LIENS" means (a) Liens granted by the Company and the
Guarantors which secure Indebtedness to the extent the Indebtedness is
incurred pursuant to Section 4.09(b)(i); (b) Liens in favor of the Company;
(c) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Company or any Restricted Subsidiary thereof;
provided that such Liens were in existence prior to the contemplation of such
acquisition and do not extend to any assets of the Company or its Restricted
Subsidiaries other than those acquired in connection with such merger or
consolidation; (d) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like
nature incurred in the ordinary course of business; (e) Liens existing on the
Issuance Date; (f) Liens in respect of extensions, renewals, refundings or
refinancings of any Indebtedness secured by the Liens referred to in clauses
(a), (b), (c) and (e) above and (h) below; provided that the Liens in
connection with such renewal, extension, refunding or refinancing shall be
limited to all or part of the specific property which was subject to the
original Lien; (g) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as shall be required
in conformity with GAAP shall have been made therefore; (h) any Lien securing
purchase money obligations incurred in connection with the purchase of real
or personal property; provided that (A) at the time such Lien attaches to the
real or personal property of the Company or Guarantor, the Company shall be
permitted to incur at least $1.00 of additional Indebtedness pursuant to
Section 4.09(a) hereof and (B) such Liens do not extend to any property
(other than the property so purchase) owned by the Company or its Restricted
Subsidiaries and is not incurred more than 30 days after the incurrence of
such Indebtedness secured by such Liens; (i) Liens to secure Capitalized
Lease Obligations (except in respect of Sale and Leaseback Transactions) on
real or personal property of the Company to the extent consummated in
compliance with the Indenture; provided that (A) at the time such Lien
attaches to the real or personal property of the Company or Guarantor, the
Company shall be permitted to incur at least $1.00 of additional Indebtedness
pursuant to Section 4.09(a) hereof and (B) such Liens do not extend to or
cover any property of the Company of any of its Subsidiaries other than the
property subject to such Capitalized Lease Obligation; and (j) Liens incurred
in the ordinary course of business of the Company or any Restricted
Subsidiary thereof with respect to obligations that do not exceed $2 million
at any one time outstanding and that (A) are not incurred in connection with
the borrowing of money or the obtaining of advances or credit (other than
trade credit in the ordinary course of business) and (B) do not in the
aggregate
13
materially detract from the value of the property or materially impair the
use thereof in the operation of the business by the Company or such
Restricted Subsidiary.
"PERSON" shall mean any individual, partnership, joint venture,
firm, corporation, association, limited liability company, trust or other
enterprise or any government or political subdivisions or any agency,
department or instrumentality thereof.
"PHYSICAL SECURITIES" has the meaning provided in Section 2.01.
"PREFERRED STOCK" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"PRIVATE PLACEMENT LEGEND" has the meaning provided in Section 2.15.
"PROPERTY" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included on the most recent consolidated balance sheet of such Person in
accordance with GAAP.
"PUBLIC EQUITY OFFERING" means an underwritten primary public
offering of Qualified Capital Stock of the Company pursuant to a registration
statement filed with the Commission in accordance with the Securities Act.
"QUALIFIED CAPITAL STOCK" shall mean any Capital Stock which is not
Disqualified Stock.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"RECORD DATE" means the record dates specified in the Securities,
whether or not a Legal Holiday.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated October 18, 1996 among the Company, the Guarantors and the
Initial Purchaser for the benefit of themselves and the Securityholders, as
the same may be amended or modified from time to time in accordance with the
terms thereof.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means
any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
14
"RESTRICTED INVESTMENT" means any Investment other than a Permitted
Investment.
"RESTRICTED PAYMENT" means (i) any dividend or distribution on or
in respect of any shares of Capital Stock of the Company or any Restricted
Subsidiary of the Company or to the direct or indirect holders (in their
capacities as such) of Capital Stock of the Company or such Restricted
Subsidiary (except dividends or distributions (x) by any Restricted
Subsidiary which is not a Wholly Owned Restricted Subsidiary to its
shareholders generally, so long as the Company and/or its Restricted
Subsidiaries receive at least their proportionate share thereof (based on
their equity interests in the respective Restricted Subsidiary), (y) to the
Company or any Wholly Owned Restricted Subsidiary or (z) payable solely in
Qualified Capital Stock of the Company), (ii) the redemption, repurchase,
retirement or other acquisition for value of any Capital Stock of the Company
or any Restricted Subsidiary of the Company (excluding payments made to the
Company or a Wholly Owned Restricted Subsidiary), (iii) any redemption,
repurchase, prepayment, defeasance (including, but not limited to, in
substance or legal defeasance) or any other acquisition or retirement for
value by either the Company or any Restricted Subsidiary of the Company prior
to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Debt, (iv) any Restricted Investment by the
Company or any Restricted Subsidiary of the Company and (v) any Xxxxx-Bridge
Roll-up Contingent Payments made by the Company or any Restricted Subsidiary
of the Company (except to the extent paid through the issuance of Qualified
Capital Stock of the Company).
"RESTRICTED SECURITY" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
"RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Subsidiary of the Company of any
property, whether owned by the Company or any Subsidiary of the Company at
the Issue Date or later acquired, which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person from whom funds have been or are to be advanced by such Person on the
security of such property.
"SECURITIES" means the Initial Securities and the Exchange
Securities treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
15
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"SECURITYHOLDER" or "HOLDER" means a registered holder of one or
more Securities.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary of the
Company which would be a "Significant Subsidiary" within the meaning ascribed
to such term in Rule 1-02 of Regulation S-X adopted by the Commission.
"SUBORDINATED DEBT" means Indebtedness of the Company that is
subordinate or junior in right of payment to the Securities.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 9.03 hereof; PROVIDED, HOWEVER,
that, in the event the Trust Indenture Act of 1939 is amended after such
date, "TIA" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"TRUSTEE" means The Chase Manhattan Bank, a banking corporation
organized and existing under the laws of the State of New York, until a
successor replaces it in accordance with Article 5 and thereafter means the
successor serving hereunder.
"UNIFORM COMMERCIAL CODE" means the New York State Uniform
Commercial Code as in effect from time to time.
"UNRESTRICTED SUBSIDIARY" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such
Person in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; PROVIDED that (x) the Company certifies to the Trustee that such
designation complies with Section 4.07 hereof and (y) each Subsidiary
16
to be so designated and each of its Subsidiaries has not at the time of
designation, and does not thereafter, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to any
Indebtedness pursuant to which the lender has recourse to any of the assets
of the Company or any of its Restricted Subsidiaries. The Board of Directors
of the Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if (x) immediately after giving effect to such designation,
the Company is able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.09 hereof and (y)
immediately before and immediately after giving effect to such designation,
no Default or Event of Default shall have occurred and be continuing. Any
such designation by the Board of Directors of the Company shall be evidenced
to the Trustee by promptly filing with the Trustee a copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
that such designation complied with the foregoing provisions.
"U.S. PHYSICAL SECURITIES" has the meaning provided in Section 2.01.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the issuer's option.
"VOTING STOCK" with respect to any Person means all classes of
Capital Stock of such Person then outstanding and normally entitled to vote
in elections of directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the
then outstanding principal amount of such Indebtedness into (b) the total of
the product obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payments.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding Voting
Stock (other than directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law), are
owned by such Person or any Wholly Owned Restricted Subsidiary of such Person.
17
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"actual knowledge". . . . . . . . . . . . . . . . . . . . . . . . . . .7.02
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . . . . . . .4.12
"Agent Members" . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.16
"Asset Sale Offer". . . . . . . . . . . . . . . . . . . . . . . . . . .3.09
"Bankruptcy Law". . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Collateral". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
"covenant defeasance option". . . . . . . . . . . . . . . . . . . . . .8.01
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Declaration" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.02
"Default Amount". . . . . . . . . . . . . . . . . . . . . . . . . . . .6.02
"Event of Default". . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . .4.11
"Funding Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
"Guaranteed Obligations". . . . . . . . . . . . . . . . . . . . . . . 10.01
"legal defeasance option" . . . . . . . . . . . . . . . . . . . . . . .8.01
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.07
"Notice of Default" . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Offer Amount". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09
"Offer Period". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09
"Paying Agent". . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.03
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Permitted Indebtedness". . . . . . . . . . . . . . . . . . . . . . . .4.09
"Pledged Shares". . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
"Pledgor" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09
"Refinancing Indebtedness". . . . . . . . . . . . . . . . . . . . . . .4.09
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.03
"Required Premiums" . . . . . . . . . . . . . . . . . . . . . . . . . .4.09
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Securities and the Guarantees;
18
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Securities means the Company, the Guarantors and
any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the plural
include the singular; and
(v) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Initial Securities, the notation thereon relating to the
Guarantees and the Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit A hereto. The Exchange Securities, the
notation thereon relating to the Guarantees and the Trustee's certificate of
authentication thereon shall be substantially in the form of Exhibit B
hereto. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or Depository rule or usage. The Company, the
Guarantors and the Trustee
19
shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the forms of the Securities
and the Guarantees, annexed hereto as Exhibits A and B, shall constitute, and
are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company, the Guarantors and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions
and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global notes in registered
form, in substantially the form set forth in Exhibit A (the "Global Note"),
deposited with the Trustee, as custodian for the Depository, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Securities
in registered form in substantially the form set forth in Exhibit A (the
"Offshore Physical Securities"). Securities offered and sold in reliance on
any other exemption from registration under the Securities Act other than as
described in the preceding paragraph shall be issued, and Securities offered
and sold in reliance on Rule 144A may be issued, in the form of permanent
certificated Securities in registered form, in substantially the form set
forth in Exhibit A (the "U.S. Physical Securities"). The Offshore Physical
Securities and the U.S. Physical Securities are sometimes collectively herein
referred to as the "Physical Securities".
SECTION 2.02. EXECUTION AND AUTHENTICATION.
(a) Two Officers of the Company (each of whom shall, in each case,
have been duly authorized by all requisite corporate actions) shall sign the
Securities for the Company by manual or facsimile signature. The Company's
seal shall be reproduced on the Securities. If an Officer whose signature is
on a Security no longer holds that office at the time the Security is
authenticated, the Security shall nevertheless be valid. Each Guarantor
shall execute a Guarantee in the manner set forth in Section 10.02.
(b) A Security shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be conclusive
evidence that the Security has been authenticated under this Indenture.
(c) The Trustee shall authenticate (i) Initial Securities for
original issue in the aggregate principal amount not to exceed $115,000,000, and
(ii) Exchange Securities from
20
time to time for issue only in exchange for a like principal amount of
Initial Securities, in each case upon receipt of a written order of the
Company.
(d) The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
(a) The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New
York) where (i) Securities may be presented for registration of transfer or
for exchange ("Registrar"), (ii) Securities may be presented for payment
("Paying Agent") and (iii) notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Registrar
shall keep a register of the Securities and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent, Registrar or co-registrar without
prior notice to any Securityholder. The Company shall notify the Trustee and
the Trustee shall notify the Securityholders of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act
as such. The Company or any Guarantor may act as Paying Agent, Registrar or
co-registrar. The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which shall incorporate the
provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such, and shall be entitled to appropriate compensation in
accordance with Section 7.07 hereof.
(b) The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the
Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company, the Guarantors or any other obligor on the Securities
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent shall hold in trust for the benefit of the Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of,
premium, if any, and interest on the Securities, and shall notify the Trustee of
any Default by the Company, any of the Guarantors or any
21
other obligor on the Securities in making any such payment. While any such
Default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company, the Guarantors or any other obligor
on the Securities at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company) shall have no further liability for the
money delivered to the Trustee. If the Company, the Guarantors or any other
obligor on the Securities acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Securityholders all money
held by it as Paying Agent.
SECTION 2.05. 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 and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company, the Guarantors or any other
obligor on the Securities shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as
the Trustee may request in writing a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of
Securityholders, including the aggregate principal amount of the Securities
held by each thereof, and the Company, the Guarantors or any other obligor on
the Securities shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Where Securities are presented to the Registrar or a
co-registrar with a request to register the transfer thereof or exchange them
for an equal principal amount of Securities of other denominations, the
Registrar shall register the transfer or make the exchange if its
requirements for such transactions are met; PROVIDED, that any Security
presented or surrendered for registration of transfer or exchange shall be
duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Trustee duly executed by the
Securityholder thereof or his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall issue and the
Trustee shall authenticate Securities at the Registrar's request.
(b) The Company shall not be required (i) to issue, to register the
transfer of or to exchange Securities during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection
of Securities for redemption under Section 3.02 hereof and ending at the
close of business on the day of selection, (ii) to register the transfer of
or exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part or (iii)
to register the transfer or exchange of a Security between the Record Date
and the next succeeding Interest Payment Date.
22
(c) No service charge shall be made for any registration of a
transfer or exchange (except as otherwise expressly permitted herein), but the
Company may require payment by the Securityholder of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Section 2.10, 3.06 or 9.05 hereof).
(d) Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
SECTION 2.07. REPLACEMENT SECURITIES.
(a) If any mutilated Security is surrendered to the Trustee, or the
Company and the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Security, the Company shall issue and the
Trustee, upon receipt by it of the written order of the Company signed by two
Officers of the Company, shall authenticate a replacement Security if the
Trustee's requirements for replacements of Securities are met. If required by
the Trustee or the Company, an indemnity bond must be supplied by the Holder
that is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Guarantors, the Trustee, any Agent or any authenticating agent from
any loss which any of them may suffer if a Security is replaced. The Company
and the Trustee may charge a Securityholder for reasonable out-of-pocket
expenses in replacing a Security.
(b) Every replacement Security is an obligation of the Company and
each of the Guarantors.
SECTION 2.08. OUTSTANDING SECURITIES.
(a) The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by the Company or by the
Trustee, those delivered to the Trustee for cancellation and those described in
this Section as not outstanding.
(b) If a Security is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser.
(c) If the principal amount of any Security is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
23
(d) Subject to Section 2.09 hereof, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company or a Guarantor
holds the Security.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Guarantors, or any of their respective Affiliates shall be
considered as though not outstanding, except that for purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which a Responsible Officer knows to be so owned
shall be so considered.
SECTION 2.10. 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, the Guarantors and the Trustee consider
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee, upon receipt of the written order of the Company
signed by two Officers of the Company, shall authenticate definitive Securities
in exchange for temporary Securities. Until such exchange, temporary Securities
shall be entitled to the same rights, benefits and privileges as definitive
Securities.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities, if not already cancelled,
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Securities (subject to the record
retention requirement of the Exchange Act), and deliver certification of their
destruction to the Company, unless by a written order, signed by two Officers of
the Company, the Company shall direct that cancelled Securities be returned to
it. The Company may not issue new Securities to replace Securities that it has
redeemed or paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Securityholders on a subsequent special record
24
date, which date shall be at the earliest practicable date but in all events
at least five Business Days prior to the payment date, in each case at the
rate provided in the Securities and in Section 4.01 hereof. The Company
shall, with the consent of the Trustee, fix or cause to be fixed each such
special record date and payment date. At least 15 days before the special
record date, the Company (or the Trustee, in the name of and at the expense
of the Company) shall mail to Securityholders a notice that states the
special record date, the related payment date and the amount of such interest
to be paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Securityholders; PROVIDED that no representation shall be
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities. The
Company shall promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 11:00 a.m. New York City time on each Interest Payment Date
and Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Securityholders on
such Interest Payment Date or Maturity Date, as the case may be.
SECTION 2.15. RESTRICTIVE LEGENDS.
Each Global Note and Physical Security that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") unless
otherwise agreed by the Company and the Securityholder thereof:
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 BELOW. BY ITS
ACQUISITION HEREOF, THE SECURITYHOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS
25
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1),
(2), (3) or (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE
THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER
THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INVESTOR, THE SECURITYHOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" "UNITED
STATES" AND "U.S. PERSON" HAVE THE
26
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH
NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH
SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF CEDE & CO. 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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON 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.
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) The Global Note initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.15.
27
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interest of beneficial owners in the Global Note may be transferred
or exchanged for Physical Securities in accordance with the rules and procedures
of the Depository and the provisions of Section 2.17. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Note if (i) the Depository notifies the
Company that it is unwilling or unable to continue as Depository for the Global
Note and a successor depository is not appointed by the Company within 90 days
of such notice or (ii) an Event of Default has occurred and is continuing and
the Registrar has received a written request from the Depository to issue
Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b) above, the Registrar shall (if one or more Physical Securities are
to be issued) reflect on its books and records the date and a decrease in the
principal amount of the beneficial interest in the Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Note, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in the Global Note pursuant to paragraph
(b) or (c) above shall, except as otherwise provided by paragraphs (a)(i)(x) and
(c) of Section 2.17, bear the legend regarding transfer restrictions applicable
to the Physical Securities set forth in Section 2.15.
28
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Securityholder is
entitled to take under this Indenture or the Securities.
SECTION 2.17. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS AND
NON-U.S. PERSONS. The following provisions shall apply with respect to the
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to
any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears
the Private Placement Legend, if (x) the requested transfer is after
October 22, 1999 or (y) (1) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB (excluding
Non-U.S.Persons), the proposed transferee has delivered to the Registrar
a certificate substantially in the form of Exhibit C hereto or (2) in
the case of a transfer to a Non-U.S. Person, the proposed transferor has
delivered to the Registrar a certificate substantially in the form of
Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar
of (x) the certificate, if any, required by paragraph (i) above and
(y) instructions given in accordance with the Depository's and the
Registrar's procedures, whereupon (a) the Registrar shall reflect on
its books and records the date and (if the transfer does not involve a
transfer of outstanding Physical Securities) a decrease in the
principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Securities of like tenor
and amount.
(b) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box
29
provided for on the form of Security stating, or has otherwise advised
the Company and the Registrar in writing, that the sale has been
effected in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form
of Security stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole
investment discretion and that any such account is a QIB within the
meaning of Rule 144A, and it is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member and the
Securities to be transferred consist of Physical Securities which
after transfer are to be evidenced by an interest in the Global Note,
upon receipt by the Registrar of instructions given in accordance with
the Depository's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount of the Global Note in an amount equal to principal
amount of the Physical Securities to be transferred, and the Trustee
shall cancel the Physical Securities so transferred.
(c) PRIVATE PLACEMENT LEGEND. Upon the registration of the transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of the transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar shall deliver
only Securities that bear the Private Placement Legend unless (i) the
circumstance contemplated by paragraph (a)(i)(x) of this Section 2.17 exists or
(ii) there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(d) GENERAL. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
30
The Registrar shall retain for at least two years copies of all
letters, notices and other written communications received pursuant to Section
2.16 or this Section 2.17. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
SECTION 2.18. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer
and subject to Section 2.12, the Company, the Trustee, any Paying Agent, any
Registrar and any co-registrar may deem and treat the Person in whose name
any Security shall be registered upon the register of Securities kept by the
Registrar as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of the ownership
or other writing thereon made by anyone other than the Company, any Registrar
or any co-registrar) for the purpose of receiving payments of principal of or
interest on such Security and for all other purposes; and none of the
Company, the Trustee, any Paying Agent, any Registrar or any co-registrar
shall be affected by any notice to the contrary.
SECTION 2.19. RECORD DATE.
The record date for purposes of determining the identity of
Securityholders entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be the later of (i) 30
days prior to the first solicitation of such consent or (ii) the date of the
most recent list of Holders furnished to the Trustee, if applicable, pursuant
to Section 2.05 hereto.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
(a) If the Company elects to redeem Securities pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall furnish to the
Trustee, at least 45 days (unless a shorter period is acceptable to the Trustee)
but not more than 60 days before a redemption date, an Officers' Certificate
setting forth (i) the Section of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Securities
to be redeemed and (iv) the redemption price.
(b) If the Company is required to make an offer to redeem Securities
pursuant to the provisions of Sections 3.09 or 4.15 hereof, it shall furnish to
the Trustee at least 45
31
days (unless a shorter period is acceptable to the Trustee) but not more than
60 days before a redemption date, an Officers' Certificate setting forth (i)
the Section of this Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Securities to be
redeemed, (iv) the redemption price and (v) further setting forth a statement
to the effect that (a) the Company or one of its Subsidiaries has effected an
Asset Sale and the conditions set forth in Section 4.11 have been satisfied
or (b) a Change of Control has occurred and the conditions set forth in
Section 4.15 have been satisfied, as applicable.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
(a) If less than all of the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed among the Securityholders on
a PRO RATA basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate (and in such manner as complies with applicable
legal and stock exchange requirements, if any); PROVIDED, HOWEVER, that if a
partial redemption is made with the proceeds of a Public Equity Offering,
selection of the Notes or portion thereof for redemption shall be made by the
Trustee only on a PRO RATA basis, unless such method is otherwise prohibited.
In the event of partial redemption by lot, the particular Securities to be
redeemed shall be selected, unless otherwise provided herein, not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Securities not previously called for redemption.
(b) The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be redeemed. Securities may
be redeemed in part in multiples of $1,000 principal amount only. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
(c) In the event the Company is required to make an offer to redeem
Securities pursuant to Sections 3.09 and 4.11 hereof and the amount of the
Excess Proceeds from the Asset Sale are not evenly divisible by $1,000, the
Trustee shall promptly refund to the Company any remaining Excess Proceeds.
SECTION 3.03. NOTICE OF REDEMPTION.
(a) Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
a notice of redemption by first class mail, postage prepaid to each Holder whose
Securities are to be redeemed at the last address for such Holder then shown on
the registry books.
The notice shall identify the Securities to be redeemed and shall
state:
32
(i) the redemption date;
(ii) the redemption price;
(iii) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
redemption date upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion shall be
issued;
(iv) the name and address of the Paying Agent;
(v) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the redemption date;
(vii) the paragraph of the Securities and/or Section of this
Indenture pursuant to which the Securities called for redemption are being
redeemed; and
(viii) if fewer than all the 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.
(b) At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; PROVIDED,
HOWEVER, that the Company shall have delivered to the Trustee at least 45 days
(unless a shorter period is acceptable to the Trustee) prior to the proposed
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 preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Securities called for redemption become due and payable on the
redemption date at the redemption price plus accrued and unpaid interest, if
any.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
33
(a) Prior to 11:00 a.m., New York City time, on the redemption date,
the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all Securities
to be redeemed on that date. The Trustee or the Paying Agent shall promptly
return to the Company any money deposited with the Trustee or the Paying Agent
by the Company in excess of the amounts necessary to pay the redemption price
of, and accrued interest on, all Securities to be redeemed.
(b) On and after the redemption date, interest ceases to accrue on
the Securities or the portions of Securities called for redemption. If a
Security is redeemed on or after an interest Record Date but on or prior to the
related Interest Payment Date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Security was registered at the close of
business on such record date. If any Security called for redemption shall not
be so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid and, to the
extent lawful, on any interest not paid on such unpaid principal, in each case
at the rate provided in the Securities and in Section 4.01 hereof.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Securityholder at the
expense of the Company a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as provided in Section 3.07(b), the Company may redeem all
or any portion of the Securities at any time on or after October 15, 2001, at a
redemption price equal to a percentage of the principal amount thereof, as set
forth in the immediately succeeding sentence, plus accrued and unpaid interest
to the redemption date. The redemption price as a percentage of the principal
amount shall be as follows, if the Securities are redeemed during the 12-month
period commencing on October 15 of the year set forth below, plus in each case,
accrued and unpaid interest to the date of redemption:
ANNUAL PERIOD BEGINNING PERCENTAGE
----------------------- ----------
2001 105.375%
2002 104.031
2003 102.688
2004 101.344
2005 and thereafter 100.000
34
(b) At any time, or from time to time, on or prior to October 15,
1999, the Company may, at its option, use the net cash proceeds of one or more
Public Equity Offerings to redeem up to 33 1/3% of the aggregate principal
amount of Securities originally issued at a redemption price equal to 110.750%
of the principal amount thereof, plus, in each case, accrued and unpaid interest
to the date of redemption; PROVIDED that at least 66 2/3% of the aggregate
principal amount of Securities originally issued remains outstanding after any
such redemption. In order to effect the foregoing redemption with the proceeds
of any Public Equity Offering, the Company shall make such redemption not more
than 120 days after the consummation of any such Public Equity Offering.
SECTION 3.08. MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Securities.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.11 hereof, the Company
shall commence an offer to all Securityholders to purchase Securities (an "Asset
Sale Offer"), it shall follow the procedures specified below:
(i) The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the "Offer
Period"). No later than five Business Days after the termination of the
Offer Period (the "Purchase Date"), the Company shall purchase the
principal amount of Securities required to be purchased pursuant to Section
4.11 hereof (the "Offer Amount") or, if less than the Offer Amount has been
tendered, all Securities tendered in response to the Asset Sale Offer.
(ii) If the Purchase Date is on or after a Record Date and on or
before the related Interest Payment Date, any accrued interest shall be
paid to the Person under whose name a Security is registered at the close
of business on such Record Date, and no additional interest shall be
payable to holders who tender Securities pursuant to the Asset Sale Offer.
(iii) Upon the commencement of any Asset Sale Offer, the Company
shall send, by first class mail, a notice to each Securityholder, with a
copy to the Trustee. The notice shall contain all instructions and
materials necessary to enable such holders to tender Securities pursuant to
the Asset Sale Offer. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
35
(1) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.11 hereof and the length of time the Asset
Sale Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Security not tendered or accepted for payment shall
continue to accrue interest;
(4) that any Security accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Security purchased pursuant
to any Asset Sale Offer shall be required to surrender the Security,
with the form entitled "Option of Securityholder to Elect Purchase" on
the reverse of the Security completed, to the Company, a depositary,
if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(6) that Holders shall be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Security the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have
the Security purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the Company shall
select the Securities to be purchased on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(8) that Holders whose Securities were purchased only in part
shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(iv) On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a PRO RATA basis to the extent necessary,
the Offer Amount of Securities or portions thereof tendered pursuant to the
Asset Sale Offer or, if less than the Offer Amount has been tendered, all
Securities or portions thereof tendered, and deliver to the Trustee an
Officers' Certificate stating that such
36
Securities or portions thereof were accepted for payment by the Company
in accordance with the terms of this Section 3.09. The Company,
depositary or Paying Agent, as the case may be, shall promptly (but in
any case not later than five days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price
of the Security tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Security, and the
Trustee shall authenticate and mail or deliver such new Security to such
Holder equal in principal amount to any unpurchased portion of the
Security surrendered. Any Security not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Offer on the Purchase
Date.
(b) Other than as specifically provided in this Section 3.09, any
redemption pursuant to this Section 3.09 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
(a) The Company shall pay the principal of, premium, if any, and
interest on the Securities on the dates and in the manner provided in the
Securities and in this Indenture. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Guarantor, holds as of 11:00 a.m. New York City Time on the due
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the Company, no later than
five days following the date of payment, any money (including accrued interest
paid by the Company) that exceeds such amount of principal, premium, if any, and
interest paid on the Securities.
(b) The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 2% per annum in excess of the then applicable interest rate on the
Securities to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace period) at the same rate to the
extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
37
(a) The Company shall maintain in the Borough of Manhattan, in the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where 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 Company shall give prior written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
(b) The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, in the City of New York for such purposes. The
Company shall give prior written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
(c) The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03. SEC REPORTS.
(a) Upon consummation of the Exchange Offer and the issuance of the
Exchange Securities, each of the Company and each Guarantor (at its own expense)
shall file with the Commission and shall furnish to the Trustee and each
Securityholder within 15 days after it files them with the Commission copies of
the quarterly and annual reports and of 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) to be filed pursuant to Section 13 or
15(d) of the Exchange Act (without regard to whether the Company is subject to
the requirements of such Section 13 or 15(d) of the Exchange Act); PROVIDED,
that prior to the consummation of the Exchange Offer and the issuance of the
Exchange Securities, the Company (at its own expense), will mail to the Trustee
and the Securityholders in accordance with paragraph (b) of this Section 4.03
substantially the same information that would have been required by the
foregoing documents within 15 days of when any such document would otherwise
have been required to be filed with the Commission. Upon qualification of this
Indenture under the TIA, the Company and each of the Guarantors shall also
comply with the provisions of TIA Section 314(a).
(b) At the Company's expense, the Company and each of the Guarantors,
as applicable, shall cause an annual report if furnished by it to stockholders
generally and each
38
quarterly or other financial report if furnished by it to stockholders
generally to be filed with the Trustee and mailed to the Securityholders
at their addresses appearing in the register of Securities maintained by
the Registrar at the time of such mailing or furnishing to stockholders.
(c) The Company and each of the Guarantors shall provide to any
Securityholder any information reasonably requested by such Securityholder
concerning the Company and the Guarantors (including financial statements)
necessary in order to permit such Securityholder to sell or transfer Securities
in compliance with Rule 144A under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATES.
(a) Each of the Company and each Guarantor shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate signed by its principal executive officer, principal financial
officer or principal accounting officer stating that a review of the activities
of the Company and its Subsidiaries or such Guarantor, as the case may be,
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether each has kept, observed,
performed and fulfilled its Obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge each has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action each is taking or proposes to take with respect thereto).
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of (x) the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements nothing has come to
their attention which would lead them to believe that the Company has violated
any provisions of Article 4, 5 or 6 of this Indenture insofar as they relate to
accounting matters or, if any such violation has occurred, specifying the nature
and period of existence thereof, it being understood that such accountants shall
not be liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation and (y) if any Restricted Subsidiary's or
Guarantor's financial statements are not prepared on a consolidated basis with
the Company's, such Restricted Subsidiary's or Guarantor's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements
nothing has come to their attention which would lead them to believe that any of
the Restricted
39
Subsidiaries or Guarantors is in Default under this Indenture or, if any such
Default has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company and each of the Guarantors shall, so long as any of
the Securities are outstanding, deliver to the Trustee, forthwith upon any
Officer becoming aware of (i) any Default or Event of Default or (ii) any event
of default under any other mortgage, indenture or instrument as that term is
used in Section 6.01(a)(v) hereof, an Officers' Certificate specifying such
Default, Event of Default or event of default and what action the Company or
such Guarantor, as the case may be, is taking or proposes to take with respect
thereto.
(d) The Company and each of the Guarantors shall also comply with TIA
Section 314(a)(4).
SECTION 4.05. TAXES.
The Company and each of the Guarantors shall pay, and shall cause each
of their respective Subsidiaries to pay, prior to delinquency, all material
taxes, assessments, and governmental levies except as contested in good faith
and by appropriate proceedings.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture (including,
but not limited to, the payment of the principal of or interest on the
Securities); and the Company and each Guarantor (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and covenant that they shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly make any Restricted Payment at any time;
PROVIDED, HOWEVER, that the Company and its Restricted Subsidiaries may make
Restricted Payments so long as at the time of the making of such Restricted
Payment, and immediately after giving effect thereto:
40
(i) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence of such Restricted Payment;
(ii) immediately after giving effect to such Restricted Payment (on a
pro forma basis as if such Restricted Payment had been made at the
beginning of the four-quarter period immediately preceding such Restricted
Payment), the Company would have been permitted to incur $1.00 of
additional Indebtedness pursuant to Section 4.09(a) hereof; and
(iii) such Restricted Payment, together with the aggregate of all
Restricted Payments made after the Issuance Date (including all Restricted
Payments permitted by Section 4.07(b)(i) and (ii) hereof) is less than the
sum of (w) 50% of the Consolidated Net Income of the Company for the period
(taken as one accounting period) from the beginning of the first fiscal
quarter that begins after the Issuance Date to the end of the Company's
most recently ended fiscal quarter (or, in the case such Consolidated Net
Income for such period is a deficit, minus 100% of such deficit), plus (x)
100% of the aggregate net proceeds received by the Company (including the
fair market value of property other than cash) from any Person since the
Issuance Date from the issue or sale of Equity Interests of the Company or
from equity contributions received by the Company from a holder of the
Company's Capital Stock (but in each case excluding (i) proceeds received
from the issuance of Disqualified Stock of the Company, (ii) proceeds
received from Subsidiaries of the Company and (iii) proceeds to the extent
the same have been utilized (A) to redeem, repurchase, defease, retire or
acquire any Indebtedness (including the Securities) of the Company or any
Subsidiary of the Company or (B) in the manner permitted pursuant to clause
(ii) in the next succeeding paragraph), plus (y) 100% of the aggregate net
proceeds (including the fair market value of property other than cash) of
any (i) sale or other disposition of Restricted Investments made by the
Company and its Restricted Subsidiaries or (ii) dividend from, or the sale
of the stock of, an Unrestricted Subsidiary.
(b) The foregoing provisions shall not prevent:
(i) the payment of any dividend within 60 days after the date of
declaration if the dividend would have been permitted on the date of
declaration;
(ii) so long as no Default or Event of Default shall have occurred or
be continuing or shall occur as a consequence thereof, the acquisition of
Subordinated Debt or Preferred Stock in exchange for or out of the proceeds
of a substantially concurrent sale (other than to the Company or any of its
Subsidiaries) of Equity Interests of the Company (other than Disqualified
Stock of the Company); and
41
(iii) so long as no Default or Event of Default shall have
occurred or be continuing or shall occur as a consequence thereof, the
exchange, refinancing or refunding of Subordinated Debt through the
substantially concurrent issuance of new Subordinated Debt so long as (x)
the principal amount of the new Subordinated Debt to be issued does not
exceed the principal amount of the Subordinated Debt so exchanged,
refinanced or refunded, (y) the Subordinated Debt to be issued does not (A)
mature prior to the stated maturity of the Subordinated Debt being so
exchanged, refinanced or refunded or (B) contain any sinking fund or
mandatory redemption or prepayment requirements which might have the effect
of requiring payments to be made, in excess of, or earlier than, the
payments required to be made pursuant to the terms of the Subordinated Debt
being so exchanged, refinanced or refunded and (z) the Subordinated Debt to
be issued is subordinated in right of payment to the Securities at least to
the same extent as the Subordinated Debt being so exchanged, refinanced or
refunded.
For purposes of determining compliance with the foregoing covenant,
Restricted Payments may be made with cash or non-cash assets, PROVIDED that any
Restricted Payment made other than in cash shall be valued at the fair market
value (determined, subject to the additional requirements of the immediately
succeeding proviso, in good faith by the Company) of the assets so utilized in
making such Restricted Payment PROVIDED FURTHER that (i) in the case of any
Restricted Payment made with capital stock or indebtedness, such Restricted
Payment shall be deemed to be made in an amount equal to the greater of the fair
market value thereof and the liquidation preference (if any) or principal amount
of the capital stock or indebtedness, as the case may be, so utilized, (ii) in
the case of any Restricted Payment in an aggregate amount in excess of $500,000
(as determined above), the fair market value thereof shall be established by a
Board Resolution adopted by a majority of the Board of Directors of the Company
and (iii) in the case of any Restricted Payment involving consideration
determined (as described above) to be in excess of $1 million, a written opinion
as to the fairness of the valuation thereof (as determined by the Board
Resolution as referenced in preceding clause (ii)) for purposes of determining
compliance with Section 4.07 hereof, shall be issued by an investment banking,
appraisal or accounting firm of national standing; and, PROVIDED FURTHER, that
no Restricted Payment shall be made in capital stock of a Subsidiary of the
Company unless, after giving effect thereto, 100% of the Equity Interests of the
Company and its Restricted Subsidiaries in the respective Subsidiary are
distributed to Persons other than the Company and its Restricted Subsidiaries
pursuant to the respective Restricted Payment.
42
SECTION 4.08. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
such Restricted Subsidiary to (i) pay dividends or make any other distributions
to the Company or any Restricted Subsidiary (A) on its Capital Stock or (B) with
respect to any other interest or participation in, or measured by, its profits,
(ii) pay any Indebtedness owed to the Company or any Restricted Subsidiary
thereof, (iii) make loans or advances to the Company or any Restricted
Subsidiary thereof or (iv) sell, lease, or transfer any of its properties or
assets to the Company or any Restricted Subsidiary thereof, except (in each
case) for such encumbrances or restrictions existing under or by reason of (A)
Existing Indebtedness as in effect on the Issuance Date, (B) the New Credit
Facility, and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof; PROVIDED that the
New Credit Facility and any such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are
no more restrictive with respect to the restrictions described in clauses (i)
through (iv) above than those contained in the New Credit Facility on the
Issuance Date, (C) this Indenture and the Securities, (D) applicable law, (E)
customary non-assignment provisions in leases or other contracts (providing for
the non-assignability of such contracts) entered into in the ordinary course of
business and consistent with past practices, (F) any instrument governing or
evidencing Indebtedness of a Person acquired by the Company or any Restricted
Subsidiary of the Company at the time of such acquisition, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person so acquired; PROVIDED, HOWEVER, that such
Indebtedness is not incurred in connection with or in contemplation of, such
acquisition, (G) any agreements evidencing Permitted Liens which may restrict
the transfer of the assets subject to such Permitted Liens and (H) permitted
Refinancing Indebtedness, PROVIDED that the restrictions contained in the
agreements governing such Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being extended,
refinanced, renewed, replaced or refunded.
SECTION 4.09. LIMITATION ON INCURRENCE OF INDEBTEDNESS.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries, directly or indirectly to create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to or become
responsible for (collectively, "incur") any Indebtedness; PROVIDED, HOWEVER,
that the Company may incur (and Guarantors may guarantee on substantially the
same terms as their Guarantees of the Securities) Indebtedness if:
43
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Fixed Charge Coverage Ratio of the Company for the four
fiscal quarters ending with the fiscal quarter ended immediately preceding
such incurrence would have been at least 2.0 to 1.0, determined on a pro
forma basis (including a pro forma application of the net proceeds
therefrom), as if such incurrence and application of proceeds had occurred
at the beginning of such period.
(b) Notwithstanding the foregoing, the limitations set forth in the
immediately preceding clause (a) will not apply to the incurrence of any of the
following (collectively, the "Permitted Indebtedness"):
(i) the incurrence by the Company and/or the Guarantors of revolving
credit Indebtedness and letters of credit (whether pursuant to the New
Credit Facility or otherwise) in an aggregate consolidated principal amount
at any one time outstanding not to exceed the greater of (x) $40 million
and (y) the Borrowing Base of the Company and the Subsidiary Guarantors at
such time less, in either case, the aggregate amount of proceeds of Asset
Sales applied to permanently reduce outstanding Indebtedness pursuant to
this clause (i);
(ii) Existing Indebtedness, which shall be permitted to remain
outstanding;
(iii) the incurrence by the Company of Indebtedness represented by
the Securities and the Guarantee by any Guarantor of the Securities;
(iv) Acquired Indebtedness to the extent the Company could have
incurred such Indebtedness in accordance with the first paragraph of this
covenant on the date such Indebtedness became Acquired Indebtedness;
(v) the incurrence by the Company of Indebtedness, and the incurrence
by the Company's Subsidiaries of guarantees of such Indebtedness (the
"Refinancing Indebtedness"), issued in exchange for, or the proceeds of
which are used to extend, refinance, renew, replace, or refund Indebtedness
referred to in clause (ii), (iii) or (iv) above or incurred pursuant to the
proviso of Section 4.09(a) (but without regard to the definition of
Permitted Indebtedness); PROVIDED, HOWEVER, that (A) the aggregate
principal amount or liquidation preference of such Refinancing Indebtedness
(or if such Refinancing Indebtedness is issued at a price less than the
principal amount thereof, the original issue price) shall not exceed the
principal amount or liquidation preference of Indebtedness so extended,
refinanced, renewed, replaced, or refunded (plus accrued interest or
premiums required by the instruments governing such existing or future
Indebtedness as in effect at the time of issuance
44
thereof ("Required Premiums") and the amount of reasonable expenses
incurred in connection therewith), (B) the Refinancing Indebtedness
shall rank PARI PASSU with or be subordinate in right and priority of
payment at least to the same extent as the Indebtedness so extended,
refinanced, renewed, replaced, substituted or refunded, (C) the
Refinancing Indebtedness shall have a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being extended, refinanced, renewed, replaced, substituted
or refunded, (D) the Refinancing Indebtedness shall have the same
obligor(s) and guarantor(s) (except to the extent that guarantees are
being dropped in connection with the extension of the Refinancing
Indebtedness) as the Indebtedness being refinanced, and (E) immediately
after the incurrence of such Refinancing Indebtedness no Default or
Event of Default shall have occurred and be continuing;
(vi) Indebtedness of the Company or any Restricted Subsidiary of the
Company to the Company or any Wholly Owned Restricted Subsidiary which is a
Guarantor;
(vii) Hedging Obligations incurred for the purpose of fixing or
hedging interest rate risk with respect to any floating rate Indebtedness
that is permitted by the terms of this Indenture to be outstanding; and
(viii) the Company and/or the Guarantors may incur Indebtedness
(and each such Person may guaranty such Indebtedness) not otherwise
permitted under the Indenture in an aggregate principal amount outstanding
under this clause (viii) not to exceed $10 million at any one time less the
aggregate amount of proceeds of Asset Sales applied to repay permanently
Indebtedness outstanding pursuant to this clause (viii) as provided in
Section 4.11 hereof.
SECTION 4.10. PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT.
Neither the Company nor any Guarantor shall incur or suffer to exist
any Indebtedness that is expressly subordinate in right of payment to any other
Indebtedness of the Company or the respective Guarantor, unless such
Indebtedness is subordinated on substantially the same terms to the Securities.
SECTION 4.11. LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, conduct any Asset Sale unless:
(i) no Default or Event of Default exists or is continuing
immediately prior to and after giving effect to such Asset Sale;
45
(ii) in the case of any sale of Equity Interests in, or issuance of
any Equity Interests by, a Guarantor, 100% of the Equity Interests of the
Company and its Restricted Subsidiaries in the respective Guarantor must be
sold pursuant to the respective Asset Sale;
(iii) in each case, the Company or such Restricted Subsidiary, as
the case may be, receives consideration at the time of each such Asset Sale
at least equal to the fair market value of the assets sold or otherwise
disposed of; and
(iv) in each case at least 80% of the consideration therefor received
by the Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents.
(b) Within 270 days after consummation of any Asset Sale, the Company
or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale:
(i) to an investment in any business, capital expenditure or other
tangible asset in the Permitted Businesses; or
(ii) prepay Indebtedness (other than Subordinated Debt) of the Company
and the Guarantors which results in a permanent reduction thereof (and its
commitments thereunder).
Pending the final application of any such Net Proceeds, the Company or such
Restricted Subsidiary may invest such Net Proceeds in Cash Equivalents or apply
such Net Proceeds to temporarily reduce borrowings outstanding under the New
Credit Facility if, within such 270-day period, the Company or the Restricted
Subsidiary withdraws from the New Credit Facility such Net Proceeds (to the
extent not used to permanently reduce borrowings and commitments available
thereunder) and applies such Net Proceeds in accordance with clause (i) of this
Section 4.11(b). Any Net Proceeds from the Asset Sale that are not applied or
invested as provided in clauses (i) or (ii) will be deemed to constitute "Excess
Proceeds."
(c) (i) In the event the Company or any Restricted Subsidiary shall
receive any Excess Proceeds, the Company shall make an Asset Sale Offer to
purchase the maximum principal amount of Securities, that is in an integral
multiple of $1,000, that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the outstanding principal
amount thereof, plus accrued and unpaid interest, if any, to the date fixed for
the closing of such offer, in accordance with the procedures set forth in
Section 3.09 hereof. If the aggregate principal amount of Securities
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Securities to be purchased on a PRO RATA basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
46
(ii) Notwithstanding the requirements contained in the preceding
clause (i), in the event that such Excess Proceeds are less than $5 million, the
application of such Excess Proceeds to repurchase Securities may be deferred
until such time as such Excess Proceeds are at least equal to $5 million, at
which time the Company or such Restricted Subsidiary shall apply all Excess
Proceeds to repurchase Securities.
(e) In the event the repurchase of Securities with Excess Proceeds
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at the time it is required, the Company will comply with Rule 14e-1 as then in
effect with respect to such repurchase.
SECTION 4.12. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (a) such Affiliate Transaction is on terms that
are fair and reasonable and no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that would have been obtained in a
comparable transaction made on an arms-length basis by the Company or such
Restricted Subsidiary, as the case may be, with an unrelated Person and (b) the
Company shall have delivered to the Trustee (i) with respect to any Affiliate
Transaction involving aggregate payments in excess of $500,000, (x) a Board
Resolution adopted by a majority of the Board of Directors (including a majority
of its disinterested members) approving such Affiliate Transaction and (y) an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (a) above, and (ii) with respect to any Affiliate Transaction involving
aggregate payments in excess of $1 million, a written opinion as to the fairness
of such Affiliate Transaction to the Company from a financial point of view
issued by an investment banking, appraisal or accounting firm of national
standing; PROVIDED, HOWEVER, that (i) any employment agreement entered into by
the Company or any Wholly Owned Restricted Subsidiary in the ordinary course of
business and consistent with the past practice of the Company or such Restricted
Subsidiary, (ii) transactions between or among the Company and/or any Wholly
Owned Restricted Subsidiary thereof which is a Guarantor, (iii) agreements or
contracts with, or for the benefit of, any Affiliate which exist on the Issuance
Date and which are described in the Offering Memorandum and (iv) transactions
permitted by Section 4.07, in each case, shall not be deemed Affiliate
Transactions.
47
SECTION 4.13. LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Liens
except for Permitted Liens.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, and the corporate, partnership or other existence of each Subsidiary,
in accordance with the respective organizational documents (as the same may be
amended from time to time) of each Subsidiary and the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any Subsidiary, 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 its Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Securityholders.
SECTION 4.15. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Securityholder
shall have the right to require the Company to repurchase all or any part of
such Securityholder's Securities at a repurchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant Interest Payment Date).
(b) Within 30 days following any Change of Control, the Company will
mail a notice to each Securityholder, with a copy to the Trustee, stating:
(i) that a Change of Control has occurred and that such
Securityholder has the right to require the Company to repurchase all or
any part of such Securityholder's Securities at a repurchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of
Holders of record on the relevant Record Date to receive interest due on
the relevant Interest Payment Date);
(ii) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization after giving effect to such Change of
Control);
48
(iii) the repurchase date (which will be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(iv) the instructions, determined by the Company consistent with this
Indenture, that a Securityholder must follow in order to have its
Securities repurchased.
(c) Securityholders electing to have a Security repurchased will be
required to surrender the Security, with the form entitled "Option of
Securityholder to Elect Purchase" on the reverse of the Security completed, to
the Company at the address specified in the notice at least 10 Business Days
prior to the repurchase date. Securityholders will be entitled to withdraw
their election if the Trustee or the Company receives not later than three
Business Days prior to the repurchase date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Securityholder, the
principal amount of the Security which was delivered for repurchase by the
Securityholder and a statement that such Securityholder is withdrawing his
election to have such Security purchased.
(d) On the repurchase date, all Securities repurchased by the Company
under this Section 4.15 shall be delivered by the Trustee for cancellation, and
the Company shall pay the repurchase price plus accrued and unpaid interest, if
any, to the Securityholders entitled thereto.
(e) The Company will comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with any offer required to be made by the Company to repurchase the Securities
as a result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the Indenture
relative to the Company's obligation to make an offer to repurchase the
Securities as a result of a Change of Control, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under such provisions of the Indenture by virtue
thereof.
SECTION 4.16. LIMITATION ON PREFERRED STOCK OF SUBSIDIARIES.
The Company shall not permit any of its Restricted Subsidiaries to
issue any Preferred Stock (other than to the Company or to a Wholly Owned
Restricted Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company) to own any
Preferred Stock of any Restricted Subsidiary of the Company.
49
SECTION 4.17. COMPANY TO CAUSE CERTAIN SUBSIDIARIES TO BECOME GUARANTORS.
The Company shall not (i) permit any of its Restricted Subsidiaries to
incur, guarantee or secure through the granting of Liens any Indebtedness
(excluding Acquired Indebtedness to the extent incurred as permitted pursuant to
clause (iv) of Section 4.09(b) hereof and secured, if secured, by Permitted
Liens of the type described in clause (c) of the definition thereof which were
in existence prior to the acquisition of the respective Restricted Subsidiary)
or (ii) pledge any intercompany notes representing obligations of any of its
Restricted Subsidiaries to secure the payment of any Indebtedness, in either
case unless such Restricted Subsidiary is a Wholly Owned Restricted Subsidiary
which is a Guarantor or at such time becomes a Guarantor by executing a
supplemental indenture in which such Restricted Subsidiary agrees to be bound by
the terms of this Indenture as a Guarantor and executes a Guarantee.
SECTION 4.18. LIMITATION ON BUSINESS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage substantially in any business other than the Permitted
Businesses.
SECTION 4.19. FURTHER INSTRUMENTS AND ACTS.
The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company, except as otherwise set forth herein, but the Trustee may
require of the Company full information and advice as to the performance of the
covenants, conditions and agreements contained herein, and 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 purposes of this Indenture.
ARTICLE 5
SUCCESSORS
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company may not, in a single transaction or through a series of
related transactions, consolidate or merge with or into or sell, assign,
transfer, lease, convey or otherwise dispose of (or permit any of its Restricted
Subsidiaries to sell, assign, transfer, lease, convey or otherwise dispose of)
all or substantially all of the Company's and its
50
Restricted Subsidiaries' assets (determined on a consolidated basis for
the Company and its Restricted Subsidiaries taken as a whole) in one or
more related transactions to another Person unless:
(i) the Company is the surviving corporation, or the Person formed by
or surviving any such consolidation or merger (if other than the Company)
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized and existing
under the laws of the United States, any State thereof or the District of
Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been
made assumes, pursuant to a supplemental indenture, all the obligations of
the Company under the Securities and this Indenture;
(iii) immediately after such transaction (including any
Indebtedness incurred or anticipated to be incurred in connection with such
transaction), (A) no Default or Event of Default exists, (B) the
Consolidated Net Worth of the resulting, surviving or transferee
corporation is not less than that of the Company immediately prior to the
transaction and (C) the Company or any Person formed by or surviving any
such consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable period, shall
be permitted to incur at least $1.00 of additional Indebtedness pursuant to
Section 4.09(a) hereof; and
(iv) the Company shall have delivered to the Trustee an Officers'
Certificate (attaching calculations demonstrating compliance with clause
(iii) of this Section 5.01) and an Opinion of Counsel, each stating that
such consolidation, merger, sale, assignment, transfer, lease, conveyance
or disposition and such supplemental indenture comply with this Article 5
and that all conditions precedent provided for herein relating to such
transaction have been complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the Company's and its
Subsidiaries' assets (determined on a consolidated basis for the Company and its
Subsidiaries taken as a whole) in accordance with Section 5.01 hereof, the
successor corporation formed by such consolidation or into or with which the
Company is merged or to which such sale, lease, conveyance or other disposition
is made shall succeed to, and be substituted for, and may
51
exercise every right and power of the Company under this Indenture with
the same effect as if such successor Person had been named as the
Company herein; PROVIDED, HOWEVER, that neither the Company nor any of
the Guarantors, as the case may be, shall be released or discharged from
its obligation to pay (or its guarantee of the payment of) the principal
of, premium, if any, on and interest on the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
(a) An "Event of Default" occurs if:
(i) there is a failure to pay any interest on any Security when the
same becomes due and payable and the continuance of any such failure for a
period of 30 days;
(ii) there is a failure to pay any principal of or premium, if any, on
any Security when and as the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise;
(iii) the Company or any Guarantor fails to observe or perform any
covenant or agreement on the part of the Company to be observed or
performed pursuant to Section 4.07, 4.09, 4.11, 4.15 or 5.01 hereof;
(iv) the Company fails to comply with any of its other agreements or
covenants in, or provisions of, the Securities or this Indenture, or any
Guarantor fails to comply with any of its other agreements or covenants in,
or provisions of, this Indenture or the Guarantee, and in each case the
failure continues for the period and after the notice specified in clause
(c) below;
(v) the occurrence of a default or event of default by the Company or
any Restricted Subsidiary thereof under any mortgage, indenture or other
instrument under which there is issued or by which there is secured or
evidenced any Indebtedness of the Company or any Restricted Subsidiary
thereof or the payment of which is guaranteed by the Company or any
Subsidiary thereof, whether such Indebtedness or guarantee now exists or is
created after the Issuance Date, which default (A) is caused by a failure
to pay when due principal or interest on such Indebtedness (which failure
continues beyond any applicable grace period) (a "Payment Default") or (B)
results in the acceleration of such Indebtedness prior to
52
its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which a Payment Default then exists or with respect
to which the maturity thereof has been so accelerated, aggregates $1
million or more;
(vi) the failure by the Company or any Restricted Subsidiary thereof
to pay final judgments aggregating in excess of $1 million which are
entered by a court or courts of competent jurisdiction against the Company
or such Restricted Subsidiary, which final judgments remain unpaid,
undischarged and unstayed for a period of more than 60 days;
(vii) the provisions of Article 11 hereof shall cease to be in
full force and effect in any respect or shall cease to give the Trustee in
any respect the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security
interest in, and Lien on, all of the Collateral subject thereto, in favor
of the Trustee, subject to no other Liens) or any Collateral required to be
delivered to the Trustee for pledge thereunder shall not have been so
delivered;
(viii) the Company or any of its Significant Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(D) makes a general assignment for the benefit of its creditors,
(E) consents to or acquiesces in the institution of a bankruptcy
or an insolvency proceeding against it, or
(F) takes any corporate action to authorize or effect any of the
foregoing;
(ix) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case,
53
(B) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries, or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60 consecutive
days; or
(x) any of the Guarantees of the Guarantors that are also Significant
Subsidiaries of the Company ceases to be in full force and effect or any of
such Guarantees is declared to be null and void and unenforceable or any of
such Guarantees is found to be invalid or any such Guarantor denies its
liability under its Guarantee (other than by reason of release of a
Guarantor in accordance with the terms of this Indenture).
(b) The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
(c) A Default under clause (iv) of Section 6.01(a) hereof is not an
Event of Default until the Trustee notifies the Company or such Guarantor, as
the case may be, in writing, or the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities notify the Company or such
Guarantor, as the case may be, and the Trustee in writing of the Default and the
Company or such Guarantor, as the case may be, does not cure the Default within
30 days after receipt of the notice. The written notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default."
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (viii) or (ix) of Section 6.01(a) with respect to the Company or any
Guarantor) occurs and is continuing, the Trustee by notice to the Company, or
the Holders of not less than 25% in aggregate principal amount of the then
outstanding Securities by written notice to the Company and the Trustee, may
declare (a "Declaration") the unpaid principal of, and any accrued and unpaid
interest on, all the Securities to be due and payable (the "Default Amount").
Upon any such Declaration the Default Amount shall be due and payable
immediately. If an Event of Default specified in clause (viii) or (ix) of
Section 6.01(a) occurs with respect to the Company or any of the Guarantors, the
Default Amount shall IPSO FACTO become and be immediately due and payable
without any Declaration or other act on the part of the Trustee or any
Securityholder. The Holders of a majority in aggregate principal amount of the
then outstanding Securities by written notice to the Trustee may rescind any
54
Declaration if all Events of Default then continuing (other than any Events of
Default with respect to the nonpayment of principal of or interest on any
Security which has become due solely as a result of such Declaration) have been
cured, and may waive any Default other than a Default with respect to a covenant
or provision that cannot be modified or amended without the consent of each
Securityholder pursuant to Section 9.02 hereof.
SECTION 6.03. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the Trustee and
the Securityholders may pursue any available remedy to collect the payment of
principal, premium, if any, or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
(b) 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. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Securityholders of not less than a majority in aggregate principal
amount of the then outstanding Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences, except a continuing
Default or Event of Default in the payment of the principal, premium, if any, or
interest on any Security (other than principal, premium (if any) or interest
which has become due solely as a result of a Declaration) or a Default or Event
of Default that cannot be modified or amended without the consent of the Holder
of each outstanding Security affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Securityholders of a majority in principal amount of the Securities
then outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Securityholders or that may involve
the Trustee in personal liability.
55
SECTION 6.06. LIMITATION ON SUITS.
(a) A Securityholder may pursue a remedy with respect to this
Indenture or the Securities only if:
(i) the Securityholder has previously given to the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(iii) such Securityholder or Securityholders offer, and, if
requested, provide, to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(v) during such 45-day period the Holders of a majority in principal
amount of the then outstanding Securities do not give the Trustee a
direction inconsistent with the request.
(b) A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Securityholder to receive payment of principal, premium, if any, and
interest on the Security, on or after the respective due dates expressed in the
Security, 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
the Securityholder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) or an
acceleration pursuant to Section 6.02 occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company or any Guarantor or any other obligor on the
Securities for the whole amount of principal, premium, if any, and accrued
interest remaining unpaid on the Securities and interest on overdue principal,
premium, if any, and, to the extent lawful, interest on overdue installments of
interest and such further amount as shall be sufficient to cover the costs and
expenses of
56
collection, including any advances made by the Trustee and the reasonable
compensation, expenses and disbursements of the Trustee, its agents and
counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company or
any Guarantor (or any other obligor on the Securities), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each
Securityholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
To the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties which the Securityholders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Securityholder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any Securityholder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 6.10. PRIORITIES.
(a) If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
(i) First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
(ii) Second: if the Securityholders are forced to proceed against the
Company directly without the Trustee, to the Securityholders for their
collection costs;
57
(iii) Third: to the 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, premium, if any, and interest,
respectively; and
(iv) Fourth: to the Company or, to the extent the Trustee collects
any amount pursuant to Article 10 hereof from any Guarantor, to such
Guarantor, or to such party as a court of competent jurisdiction shall
direct.
(b) The Trustee may fix a record date and payment date for any
payment to Securityholders.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Securityholder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances and in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform only those duties as are
specifically set forth in this Indenture and the duties of the Trustee
shall be determined solely by the express provisions of this Indenture, the
Trustee need perform only those duties that are specifically set forth in
this Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
58
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture, but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
examine the same to determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liabilities for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
59
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document unless
the Trustee has reason to believe such fact or matter is not true.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through 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 conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or any Guarantor.
(f) The permissive rights of the Trustee to do certain things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or wilful default with
respect to such permissive rights.
(g) Except for (i) an Event of Default under 6.01(a)(i) or (ii)
hereof, or (ii) any other event of which the Trustee has "actual knowledge,"
which event, with the giving of notice or the passage of time or both, would
constitute an Event of Default, the Trustee shall not be deemed to have notice
of any Default or Event of Default unless specifically notified in writing of
such event by the Company or the Securityholders of not less than 25% in
aggregate principal amount of Securities outstanding; as used herein, the term
"actual knowledge" means the actual fact or statement of knowing, without any
duty to make any investigation with regard thereto.
60
SECTION 7.03. 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, any
Guarantor or any Affiliate of the Company or any Guarantor with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Securities or the
Guarantees, it shall not be accountable for the Company's use of the proceeds
from the Securities or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any statement in the Securities or the Guarantees or any other document in
connection with the sale of the Securities or pursuant to this Indenture other
than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Securityholder a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default in any payment of principal or interest on any Security, the
Trustee may withhold the notice if a committee of its officers in good faith
determines that withholding the notice is in the interest of the
Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall mail to the
Securityholders a brief report dated as of such reporting date that complies
with TIA Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA Section 313(b), (c)
and (d).
(b) A copy of each report at the time of its mailing to the
Securityholders shall be filed with the Commission and each stock exchange, if
any, on which the Securities are listed. The Company shall promptly notify the
Trustee if and when the Securities are listed on any stock exchange.
61
SECTION 7.07. COMPENSATION AND INDEMNITY.
(a) The Company and the each of the Guarantors, jointly and
severally, shall pay to the Trustee from time to time reasonable compensation
for its acceptance of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company and each of the Guarantors, jointly and severally,
shall reimburse the Trustee upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
(b) The Company and each of the Guarantors, jointly and severally,
shall indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except as
set forth below in subparagraph (d). The Trustee shall notify the Company and
each of the Guarantors promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company or any Guarantor shall not
relieve the Company or any of the Guarantors of their Obligations hereunder.
The Trustee may have separate counsel and the Company and each of the
Guarantors, jointly and severally, shall pay the reasonable fees and expenses of
such counsel. Neither the Company nor any Guarantor need pay for any settlement
made without its consent, which consent shall not be unreasonably withheld.
(c) The obligations of the Company and each of the Guarantors under
this Section 7.07 shall survive the resignation or removal of the Trustee and
the satisfaction and discharge or termination of this Indenture.
(d) Notwithstanding subparagraphs (a) or (b) above, neither the
Company nor any Guarantor need reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own negligence, bad faith
or willful misconduct.
(e) To secure the Company's and each of the Guarantor'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, except
that held in trust to pay principal, premium, if any, and interest on particular
Securities. Such Lien shall survive the resignation or removal of the Trustee
and the satisfaction and discharge of this Indenture.
(f) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(viii) or (ix) hereof occurs, the
expenses and the compensation for such services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
62
SECTION 7.08. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign at any time and be discharged from the
trust hereby created by so notifying the Company. The Securityholders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove the
Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(iii) a Custodian, receiver or other public officer takes charge
of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall notify each
Securityholder of such event and promptly appoint a successor Trustee. Within
one year after the successor Trustee takes office, the Holders of a majority in
principal amount of the then outstanding Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
any of the Guarantors or the Securityholders of at least 10% in principal amount
of the then outstanding Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee after written request by any Securityholder who
has been a Securityholder for at least six months fails to comply with Section
7.10, such Securityholder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a
63
notice of its succession to each Securityholder. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee, provided all sums owing to the Trustee hereunder have been paid and
subject to the Lien provided for in Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Company's and
each of the Guarantor's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; PROVIDED, that such
corporation shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
(a) There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or the District of Columbia authorized
under such laws to exercise corporate trustee power, shall be subject to
supervision or examination by Federal, State, Territorial, or District of
Columbia authority and shall have a combined capital and surplus of at least
$100 million as set forth in its most recent published annual report of
condition.
(b) This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall comply
with TIA Section 310(b).
The provisions of TIA Section 310 shall also apply to the Company and each of
the Guarantors, as obligor of the Securities.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company and each
of the Guarantors as obligor on the Securities.
64
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07 hereof)
canceled or for cancellation or (ii) all outstanding Securities have become due
and payable and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.07 hereof), and if
in either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Sections 8.01(e) and 8.06 hereof, cease to
be of further effect. 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 and at the cost and expense of the
Company.
(b) Subject to Sections 8.01(e), 8.02 and 8.06 hereof, the Company at
any time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) all obligations under Sections
4.04(a), (b) and (c), 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17
or 5.01(iii)(C) and the operation of Sections 6.01(a)(v), 6.01(a)(vi),
6.01(a)(vii), 6.01(a)(viii) hereof (except with respect to the Company or a
Significant Subsidiary which is a Guarantor) or 6.01(a)(ix) hereof (except with
respect to the Company or a Significant Subsidiary which is a Guarantor)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
(c) If the Company exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section
6.01(a)(v), 6.01(a)(vi), 6.01(a)(viii) (except with respect to the Company or a
Significant Subsidiary which is a Guarantor) or 6.01(a)(ix) hereof (except with
respect to the Company or a Significant Subsidiary which is a Guarantor), or
because of the failure of the Company or the Guarantors to comply with Sections
4.04(a), (b) and (c), 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17
or 5.01(iii)(C) hereof.
(d) 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.
65
(e) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.01(d), 8.04,
8.05 and 8.06 hereof and the obligations of each Guarantor under Article 10 in
respect thereof shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 hereof and
the obligations of Guarantors under Article 10 in respect thereof shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE.
(a) The Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(i) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations in amounts (including interest, but without
consideration of any reinvestment of such interest) and maturities
sufficient, but in the case of the legal defeasance option only, not more
than such amounts (as certified by a nationally recognized firm of
independent public accountants), to pay and discharge at their stated
maturity (or such earlier redemption date as the Company shall have
specified to the Trustee) the principal of, premium, if any, and interest
on all outstanding Securities to maturity or redemption, as the case may
be, and to pay all of the sums payable by it hereunder; PROVIDED, that the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of said
principal, premium, if any, and interest with respect to the Securities;
(ii) in the case of the legal defeasance option only, 123 days pass
after the deposit is made and during the 123 day period no Default
specified in Section 6.01(viii) or (ix) hereof with respect to the Company
or any Guarantor occurs which is continuing at the end of the period;
(iii) no Default has occurred and is continuing on the date of
such deposit and after giving effect thereto;
(iv) the deposit does not constitute a default under any other
agreement binding on the Company;
(v) the Company delivers to the Trustee an Opinion of Counsel 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, as amended;
66
(vi) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date 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 defeasance had not
occurred;
(vii) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such covenant
defeasance had not occurred; and
(viii) 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 as contemplated by this
Article 8 have been complied with.
(b) In order to have money available on a payment date to pay
principal, premium, if any, or interest on the Securities, the U.S. Government
Obligations deposited pursuant to preceding clause (a) shall be payable as to
principal or interest at least one Business Day before such payment date in such
amounts as shall provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
(c) Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3 hereof.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. 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, premium, if
any, and interest on the Securities.
67
SECTION 8.04. REPAYMENT TO THE COMPANY.
(a) The Trustee and the Paying Agent shall promptly pay to the
Company upon written request any excess money or securities held by them at any
time; PROVIDED, HOWEVER, that the Trustee shall not pay any such excess to the
Company unless the amount remaining on deposit with the Trustee, after giving
effect to such transfer are sufficient to pay principal, premium, if any, and
interest on the outstanding Securities, which amount shall be certified by
independent public accountants.
(b) The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal, premium, if
any, or interest that remains unclaimed for two years after the date upon which
such payment shall have become due; PROVIDED, HOWEVER, that the Company shall
have either caused notice of such payment to be mailed to each Securityholder
entitled thereto no less than 30 days prior to such repayment or within such
period shall have published such notice in a financial newspaper of widespread
circulation published in the City of New York. After payment to the Company,
Securityholders entitled to the money must look to the Company and the
Guarantors for payment as general creditors unless an applicable abandoned
property law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Company and the Guarantors, jointly and severally, 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 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and each of the Guarantor's Obligations under this Indenture and the
Securities and the Guarantees shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 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 8; PROVIDED, HOWEVER, that if the
Company or any Guarantor has made any payment of principal of, premium, if any,
or interest on any Securities because of the reinstatement of its Obligations,
the Company or any of the Guarantors, as the case may be, shall be subrogated to
the rights of the Securityholders
68
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS.
(a) Notwithstanding Section 9.02 of this Indenture, the Company and
the Trustee may amend or supplement this Indenture or the Securities without the
consent of any Securityholder:
(i) to cure any ambiguity, omission, defect or inconsistency;
PROVIDED, that such amendment or supplement does not, as evidenced by an
Opinion of Counsel delivered to the Trustee, adversely affect the rights of
any Securityholder in any respect;
(ii) to comply with Article 5 hereof;
(iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Internal Revenue Code of 1986, as amended, or in a
manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as amended;
(iv) to add guarantees with respect to the Securities;
(v) to add to the covenants of the Company or the Guarantors for the
benefit of the Securityholders or to surrender any right or power herein
conferred upon the Company or the Guarantors;
(vi) to evidence or to provide for a replacement Trustee under Section
7.08 hereof;
(vii) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA; or
(viii) to make any change that does not, as evidenced by an Opinion
of Counsel delivered to the Trustee, adversely affect the rights of any
Securityholder in any respect;
69
PROVIDED, that the Company has delivered to the Trustee an Opinion of Counsel
stating that any such amendment or supplement complies with the provisions of
this Section 9.01.
(b) Upon the request of the Company and the Guarantors accompanied by
Board Resolutions of their respective Boards of Directors authorizing the
execution of any such supplemental indenture, and upon receipt by the Trustee of
the documents described in Section 9.06 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into such supplemental indenture which
affects its own rights, duties or immunities under this Indenture or otherwise.
(c) After an amendment or supplement under this Section 9.01 becomes
effective, the Company shall mail to all Securityholders a notice briefly
describing such amendment or supplement. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment or supplement under this Section.
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS.
(a) The Company and the Trustee may amend or supplement this
Indenture or the Securities with the written consent of the Securityholders of
not less than a majority in aggregate principal amount of the Securities then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Securities) and any existing Default and its consequences
(including, without limitation, an acceleration of the Securities) or compliance
with any provision of this Indenture or the Securities may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Securities (including consents obtained in connection with a tender offer or
exchange offer for the Securities). Furthermore, subject to Sections 6.04 and
6.07 hereof, the Holders of a majority in aggregate principal amount of the
Securities then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Securities) may waive compliance in a
particular instance by the Company with any provision of this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment, supplement or waiver under this Section 9.02 may not (with respect to
any Securities held by a non-consenting Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the rate of or extend the time for payment of any interest
on any Security;
70
(iii) reduce the principal of or extend the fixed maturity of any
Security or alter the redemption provisions (including without limitation
Sections 3.07, 3.09, 4.11 and 4.15 hereof) with respect thereto;
(iv) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest on, or redemption payment with respect to,
any Security (excluding any principal or interest due solely as a result of
the occurrence of a Declaration);
(v) make any Security payable in money other than that stated in the
Security; or
(vi) make any change in Section 6.04 or 6.07 hereof or in this Section
9.02(a).
(b) Upon the request of the Company and the Guarantors accompanied by
Board Resolutions of their respective Boards of Directors authorizing the
execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence satisfactory to the Trustee of the consent of the
Securityholders as aforesaid, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company and
the Guarantors in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
(c) It shall not be necessary for the consent of the Securityholders
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
(d) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to all Securityholders a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities
shall comply with the TIA as then in effect.
71
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Securityholder is a continuing consent by the Securityholder
and every subsequent Securityholder or portion of a Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
is not made on any Security. However, any such Securityholder or subsequent
Securityholder may revoke the consent as to its Security if the Trustee receives
written notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Securityholder.
(b) The Company may fix a record date for determining which
Securityholders must consent to such amendment, supplement or waiver. If the
Company fixes a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of Securityholders furnished to the Trustee prior to such
solicitation pursuant to Section 2.05 hereof, or (ii) such other date as the
Company shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
(a) Securities authenticated and delivered after the execution of any
supplemental indenture may bear a notation in form approved by the Trustee as to
any matter provided for in such amendment, supplement or waiver on any Security
thereafter authenticated. The Company in exchange for all Securities may issue
and the Trustee shall authenticate new Securities that reflect the amendment,
supplement or waiver.
(b) Failure to make the appropriate notation or issue a new Security
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, waiver or supplemental indenture
authorized pursuant to this Article 9 if the amendment, waiver or supplemental
indenture 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 or refusing to sign such amendment, waiver or supplemental indenture,
the Trustee shall be entitled to receive and, subject to Section 7.01, shall be
fully protected in relying upon, in addition to the documents required by
Section 12.04, an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that such amendment, waiver or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Company in accordance with its terms.
72
ARTICLE 10
GUARANTEE OF SECURITIES
SECTION 10.01. GUARANTEE
(a) Each Guarantor hereby jointly and severally irrevocably and
unconditionally guarantees, as a primary obligor and not a surety, to each
Securityholder of a Security now or hereafter authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Securities or the Obligations
of the Company hereunder or thereunder, (i) the due and punctual payment of the
principal, premium, if any, interest (including post-petition interest in any
proceeding under any Bankruptcy Law whether or not an allowed claim in such
proceeding) on overdue principal, premium, if any, and interest, if lawful on
such Security, and (ii) all other monetary Obligations payable by the Company
under this Indenture (including under Section 7.07 hereof) and the Securities
(all of the foregoing being hereinafter collectively called the "Guaranteed
Obligations"), when and as the same shall become due and payable, whether by
acceleration thereof, call for redemption or otherwise (including amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code), in accordance with the terms of any such
Security and of this Indenture, subject, however, in the case of (i) and (ii)
above, to the limitations set forth in Section 10.04 hereof. Each Guarantor
hereby agrees that its Obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any failure to
enforce the provisions of any such Security or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto, the
recovery of any judgment against the Company, any action to enforce the same, by
the Securityholders or the Trustee, the recovery of any judgment against the
Company, any action to enforce the same, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
Each Guarantor hereby waives diligence, presentment, filing of claims with a
court in the event of a merger or bankruptcy of the Company, any right to
require a proceeding first against the Company, the benefit of discussion,
protest or notice with respect to any such Security or the Indebtedness
evidenced thereby and all demands whatsoever, and covenants that this Guarantee
shall not be discharged as to any such Security except by payment in full of the
principal thereof, premium, if any, and all accrued interest thereon.
(b) Each Guarantor further agrees that this Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Securityholder or the Trustee to any Security held for payment of the
Guaranteed Obligations.
(c) Each Guarantor agrees that it shall not be entitled to, and
hereby irrevocably waives, any right of subrogation in relation to the
Securityholders or the Trustee
73
in respect of any Guaranteed Obligations. Each Guarantor further agrees
that, as between such Guarantor, on the one hand, and the Securityholders and
the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations may be accelerated as provided in Article 6 for the purposes of
such Guarantor's Guarantee herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Guaranteed
Obligations, and (y) in the event of any Declaration of acceleration of such
Guaranteed Obligations as provided in Article 6 hereof, such Guaranteed
Obligations (whether or not due and payable) shall forthwith become due and
payable by such Guarantor for the purpose of this Article 10.
(d) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any
Securityholder in enforcing any rights under this Article 10.
(e) The Guarantee set forth in this Article 10 shall not be valid or
become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been signed by or on
behalf of the Trustee.
SECTION 10.02. EXECUTION AND DELIVERY OF GUARANTEE.
(a) To evidence each Guarantor's Guarantee set forth in this Article
10, each Guarantor hereby agrees that a notation of such Guarantee shall be
placed on each Security authenticated and delivered by the Trustee.
(b) This Indenture shall be executed on behalf of each Guarantor, and
an Officer of each Guarantor shall sign the notation of the Guarantee on the
Securities by manual or facsimile signature. If an Officer whose signature is
on this Indenture or the notation of Guarantee no longer holds that office at
the time the Trustee authenticates the Security on which the Guarantee is
endorsed, the Guarantee shall be valid nevertheless. Each Guarantor hereby
agrees that the Guarantee set forth in Section 10.01 hereof shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
notation of the Guarantee.
(c) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Guarantee
set forth in this Indenture on behalf of each Guarantor.
SECTION 10.03. GUARANTEE UNCONDITIONAL, ETC.
Upon failure of payment when due of any Guaranteed Obligation for
whatever reason, each Guarantor will be obligated to pay the same immediately.
Each Guarantor hereby agrees that its obligations hereunder shall be continuing,
absolute and unconditional, irrespective of: the recovery of any judgment
against the Company or any Guarantor; any
74
extension, renewal, settlement, compromise, waiver or release in respect of
any obligation of the Company under this Indenture or any Security, by
operation of law or otherwise; any modification or amendment of or supplement
to this Indenture or any Security; any change in the corporate existence,
structure or ownership of the Company, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Company or its
assets or any resulting release or discharge of any obligation of the Company
contained in this Indenture or any Security; the existence of any claim,
set-off or other rights which any Guarantor may have at any time against the
Company, the Trustee, any Securityholder or any other Person, whether in
connection herewith or any unrelated transactions; PROVIDED, that nothing
herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim; any invalidity or unenforceability relating to or
against the Company for any reason of this Indenture or any Security, or any
provision of applicable law or regulation purporting to prohibit the payment
by the Company of the principal, premium, if any, or interest on any Security
or any other Guaranteed Obligation; or any other act or omission to act or
delay of any kind by the Company, the Trustee, any Securityholder or any
other Person or any other circumstance whatsoever which might, but for the
provisions of this paragraph, constitute a legal or equitable discharge of
the Guarantors' obligations hereunder. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demand
whatsoever and covenants that this Guarantee will not be discharged except by
the complete performance of the obligations contained in the Securities, this
Indenture and in this Article 10. Each Guarantor's obligations hereunder
shall remain in full force and effect until the Indenture shall have
terminated and the principal of and interest on the Securities and all other
Guaranteed Obligations shall have been paid in full. If at any time any
payment of the principal of or interest on any Security or any other payment
in respect of any Guaranteed Obligation is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, each Guarantor's obligations hereunder with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time, and this Article 10, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor irrevocably
waives any and all rights to which it may be entitled, by operation of law or
otherwise, upon making any payment hereunder to be subrogated to the rights
of the payee against the Company with respect to such payment or otherwise to
be reimbursed, indemnified or exonerated by the Company in respect thereof.
SECTION 10.04. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor and by its acceptance hereof each Securityholder hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of the Bankruptcy Law, Federal and state fraudulent
conveyance laws or other legal principles.
75
To effectuate the foregoing intention, the Securityholders and each Guarantor
hereby irrevocably agree that the obligations of such Guarantor under the
Guarantee shall be limited to the maximum amount as will, after giving effect
to all other contingent and fixed liabilities of such Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to Section 10.05 hereof, result in the obligations
of such Guarantor under the Guarantee not constituting such fraudulent
transfer or conveyance under federal or state law.
SECTION 10.05. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, INTER SE, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a PRO RATA amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Securities or any other Guarantor's obligations
with respect to the Guarantee.
SECTION 10.06. RELEASE.
Upon the sale or disposition of all of the Equity Interests of a
Guarantor to an entity which is not the Company or a Subsidiary of the Company,
which is otherwise in compliance with this Indenture, such Guarantor shall be
deemed released from all its obligations under the Indenture without any further
action required on the part of the Trustee or any Securityholder; PROVIDED,
HOWEVER, that any such termination shall occur if and only to the extent that
all Obligations of each Guarantor under all of its guarantees of, and under all
of its pledges of assets or other security interests which secure, Indebtedness
of the Company and the other Guarantors shall also terminate upon such release,
sale or transfer; PROVIDED FURTHER, that without limiting the foregoing, any
proceeds received by the Company or any Subsidiary of the Company from such
transaction shall be applied as provided in Section 4.11 and Section 3.09. The
Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 10.06. Any Guarantor not so
released remains liable for the full amount of principal, premium, if any, and
interest on the Securities as provided in this Article 10.
76
SECTION 10.07. ADDITIONAL GUARANTORS.
Any Person that was not a Guarantor on the date of this Indenture may
become a Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture in form and substance satisfactory to the Trustee, which subjects such
Person to the provisions (including, without limitation, the representations and
warranties in this Article 10 and Article 11) of this Indenture as a Guarantor
and (b) an Opinion of Counsel to the effect that such supplemental indenture has
been duly authorized and executed by such Person and constitutes the legal,
valid, binding and enforceable obligation of such Person (subject to such
customary exceptions concerning creditors' rights and equitable principles as
may be acceptable to the Trustee in its discretion). The Guarantee of each
Person described in this Section 10.07 shall apply to all Securities theretofore
executed and delivered, notwithstanding any failure of such Securities to
contain a notation of such Guarantee thereon.
SECTION 10.08. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor that is a Wholly Owned Restricted Subsidiary of the
Company or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety, to the Company or another
Guarantor that is a Wholly Owned Restricted Subsidiary of the Company. Upon any
such consolidation, merger, sale or conveyance, the Guarantee given by such
Guarantor shall no longer have any force or effect.
(b) Nothing contained in this Indenture or in any of the Securities
shall prevent any consolidation or merger of a Guarantor with or into a
corporation or corporations other than the Company or another Guarantor (whether
or not affiliated with the Guarantor), or successive consolidations or mergers
in which a Guarantor or its successor or successors shall be a party or parties,
or shall prevent any sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety, to a corporation other than the
Company or another Guarantor (whether or not affiliated with the Guarantor);
PROVIDED, HOWEVER, that, subject to Sections 10.06 and 10.08(a), (x) (i)
immediately after such transaction, and giving effect thereto, no Default or
Event of Default shall have occurred as a result of such transaction and be
continuing, or (ii) such transaction does not violate any covenants set forth in
this Indenture, and (y) (i) the respective transaction is treated as an Asset
Sale for purposes of Section 4.11 and Section 3.09 hereof or (ii) if the
surviving corporation is not the Guarantor, each Guarantor hereby covenants and
agrees that, upon any such consolidation, merger, sale or conveyance, the
Guarantee set forth in this Article 10, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by such Guarantor, shall be expressly assumed (in the event that the
Guarantor is not the surviving corporation in the merger), by supplemental
indenture satisfactory in form to the Trustee of the due and punctual
performance of all of the
77
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor corporation shall succeed to, and be substituted for, the
Guarantor with the same effect as if it had been named herein as a Guarantor.
SECTION 10.09. SUCCESSORS AND ASSIGNS.
This Article 10 shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Securityholders and, in the event of any transfer
or assignment of rights by any Securityholder or the Trustee, the rights and
privileges conferred upon that party in this Indenture and in the Securities
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 10.10. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive each such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each such
Guarantor hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE 11
SECURITY AND PLEDGE OF COLLATERAL
SECTION 11.01. GRANT OF SECURITY INTEREST.
To secure the full and punctual payment when due and the full and
punctual performance of the Guaranteed Obligations, the Company and the
Guarantors (in such capacity, each referred to herein as a "Pledgor" and,
collectively, as the "Pledgors") hereby grant to the Trustee, for the benefit of
the Trustee and the Securityholders, a security interest in all of its rights,
title and interest in and to the following (the "Collateral"):
(i) all of the shares of Capital Stock of any Guarantor, now
owned or hereafter acquired by the Company or any Guarantor
(collectively, the "Pledged Shares");
78
(ii) all certificates representing any of the Pledged Shares; and
(iii) subject to Section 11.05 hereof, all dividends, cash,
instruments and other property and proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any of the foregoing.
SECTION 11.02. DELIVERY OF COLLATERAL.
Any and all certificates or instruments representing or evidencing
Collateral (whether now owned or hereafter acquired by the Company or any
current or future Guarantor) shall be delivered to and held by or on behalf of
the Trustee pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Trustee. The
Trustee shall have the right (but not the obligation), at any time in its
discretion and without notice to the Company or any Guarantor, to transfer to or
to register in the name of the Trustee or any of its nominees any or all of the
Collateral. In addition, the Trustee shall have the right at any time to
exchange certificates or instruments representing or evidencing Collateral for
certificates or instruments of different denominations.
SECTION 11.03. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Each Pledgor hereby represents and warrants, and agrees, as follows:
(i) each such Pledgor is, and at the time of delivery of the
Collateral to the Trustee pursuant hereto will be, the record and
beneficial owner of the Pledged Shares owned by such Pledgor, free and
clear of any Liens, except for the Lien created by this Indenture;
(ii) as of the date of this Indenture, Schedule I hereto contains a
true and correct list of all Pledged Shares, and identifies the respective
Pledgor which is the owner thereof;
(iii) each time the Company or any other Pledgor (including without
limitation any new Guarantor) becomes the owner of any additional Pledged
Shares, same shall be promptly delivered to the Trustee for pledge
hereunder and, at such time, a supplement to Schedule I shall be furnished
which accurately describes the Pledged Shares, the issuer thereof and the
respective Pledgor which is the owner thereof;
(iv) each Pledgor has full corporate power, authority and legal right
to pledge all of the Pledged Shares described on Schedule I and any
supplement thereto
79
as being owned by such Pledgor and all Collateral pledged by such Pledgor
pursuant to this Indenture;
(v) this Indenture has been duly authorized, executed and delivered
by each Pledgor and constitutes the legal, valid and binding obligation of
each Pledgor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other similar
laws affecting the rights of creditors generally or by the application of
general equity principles;
(vi) no consent of any other party (including creditors of any
Pledgor), and no authorization, consent, approval, or other action by, and
no notice to or filing with, any governmental authority or agency by any
Pledgor is required either (x) for the pledge by the Pledgors of the
Collateral pursuant to this Indenture or for the execution, delivery or
performance of this Indenture by the Pledgors or (y) for the exercise by
the Trustee of the voting or other rights provided for in this Indenture or
the remedies in respect of the Collateral pursuant to this Indenture,
except as may be required in connection with the disposition of the
Collateral by laws affecting the offering and sale of securities generally;
(vii) the Pledged Shares described on Schedule I and any supplement
thereto as being owned by the Pledgors have been duly authorized and are
validly issued, fully paid and non-assessable;
(viii) the pledge in accordance with the terms of this Indenture of
the Pledged Shares described on Schedule I and any supplement thereto as
being owned by the various Pledgors creates a valid and perfected first
priority Lien on the Collateral, securing payment of the Guaranteed
Obligations;
(ix) Schedule I hereto and any supplement thereto sets forth a
description of all of the Pledged Shares owned by the Pledgors as of the
date hereof and as of the date of each supplement thereto;
(x) the respective Pledgor (as identified on Schedule I hereto or the
respective supplement thereto) is the sole owner of all of the issued and
outstanding shares of Capital Stock of the Guarantors listed on Schedule I
hereto and any supplement thereto, and there are no existing options,
warrants, calls or commitments of any character relating to any authorized
and unissued Capital Stock of the Guarantors; and
(xi) as of the Issuance Date, the shares of Capital Stock of the
Guarantors listed on Schedule I hereto constitute 100% of the issued and
outstanding Capital Stock of the Guarantors.
80
SECTION 11.04. FURTHER ASSURANCES.
Each Pledgor agrees that at any time and from time to time, at the
expense of such Pledgor, such Pledgor will promptly execute and deliver all
further instruments and documents and take all further action that may be
necessary or desirable or that the Trustee may reasonably request in order to
perfect and protect any Lien granted or purported to be granted hereby or to
enable the Trustee to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.
SECTION 11.05. VOTING RIGHTS; DIVIDENDS; ETC.
(a) Each Pledgor shall be entitled to receive and retain any and
all cash dividends paid in respect of the Pledged Shares owned by such
Pledgor, so long as no Event of Default shall have occurred and continuing.
Unless the Trustee receives written notice to the contrary from the Company
or the Holders of 25% in aggregate principal amount of the outstanding
Securities, or unless otherwise notified pursuant to Section 4.04, the
Trustee may assume, without investigation, that the Pledgors shall be
entitled to receive and retain any and all cash dividends.
(b) If an Event of Default shall have occurred and be continuing,
the Trustee shall be entitled to receive and retain as Collateral all
dividends paid and distributions made in respect of the Pledged Shares. Any
such dividends shall, if received by any Pledgor, be received in trust for
the benefit of the Trustee, be segregated from the other property or funds of
such Pledgor, and be forthwith delivered to the Trustee as Collateral in the
same form as so received (with any necessary endorsement).
(c) As long as no acceleration of the Default Amount shall have
occurred pursuant to Section 6.02 and until written notice thereof from the
Trustee or such Holders to the Company, the Pledgors shall be entitled to
exercise any and all voting and other consensual rights relating to the
Pledged Shares owned by the Pledgors or any part thereof for any purpose not
inconsistent with the terms of this Indenture. The Trustee shall execute and
deliver (or cause to be executed and delivered) to the Pledgors all such
proxies and other instruments as the Company may reasonably request for the
purpose of enabling the Pledgors to exercise the voting and other rights
which it is entitled to exercise pursuant to the preceding sentence.
(d) Upon the acceleration of the Default Amount pursuant to Section
6.02, all rights of the Pledgors to exercise the voting and other consensual
rights that it would otherwise be entitled to exercise pursuant to Section
11.05(c) hereof shall cease upon notice from the Trustee or the Holders of
not less than 25% of their outstanding Securities to the Company and upon the
giving of such notice all such rights shall thereupon be vested in the
81
Trustee who shall thereupon have the sole right to exercise such voting and
other consensual rights.
(e) In order to permit the Trustee to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to Section
11.05(d) hereof, and to receive all dividends and distributions which it may
be entitled to receive under Section 11.05(b) hereof, the Pledgors shall, if
necessary, upon written notice of the Trustee, from time to time execute and
deliver to the Trustee appropriate dividend payment orders and such other
instruments as the Trustee may reasonably request.
(f) If the Holders of a majority in aggregate principal amount of
the then outstanding Securities rescind a Declaration delivered pursuant to
Section 6.02, the Pledgors shall thereafter be entitled to exercise any and
all voting and consensual rights relating to Pledged Shares owned by the
Pledgors as set forth in subparagraph (c) hereof.
SECTION 11.06. TRUSTEE APPOINTED ATTORNEY-IN-FACT.
Each Pledgor hereby appoints the Trustee as its attorney-in-fact,
with full authority in the place and stead of such Pledgor and in the name of
such Pledgor or otherwise, from time to time in the Trustee's discretion, to
take any action and to execute any instrument which the Trustee may deem
necessary or advisable in order to accomplish the purposes of this Indenture,
including to receive, endorse and collect all instruments made payable to
such Pledgor representing any dividend, interest payment or other
distribution in respect of the Collateral or any part thereof and to give
full discharge for the same. This power, being coupled with an interest, is
irrevocable.
SECTION 11.07. TRUSTEE MAY PERFORM.
If any Pledgor fails to perform any agreement contained herein, the
Trustee may itself perform, or cause performance of, such agreement, and the
expenses of the Trustee incurred in connection therewith shall be payable by
the Pledgors under Section 7.07. Whenever in the administration of its
responsibilities with respect to the Collateral the Trustee shall deem it
necessary or desirable that a matter be proved or established by any Pledgor
or any other party in connection with the taking, suffering or omitting any
action by the Trustee, such matter may be conclusively proved or established
by an Officers' Certificate of any Pledgor, and such certificate shall be
full warranty to the Trustee for any action taken suffered or omitted in
reliance thereon.
82
SECTION 11.08. TRUSTEE'S DUTIES.
The powers conferred on the Trustee under this Article 11 are solely
to protect the interest of the Trustee and the Securityholders in the
Collateral and shall not impose any duty upon it to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Trustee shall
have no duty as to any Collateral or as to the taking of any necessary steps
to preserve rights against prior parties or any other rights pertaining to
any Collateral, including, without limitation, for the attachment, petition,
priority or enforceability of any Lien created or purported to be created
hereunder with respect to the Collateral, or the adequacy, sufficiency or
effectiveness of Section 11.01 hereof, or the value of the Collateral granted
pursuant to that Section.
SECTION 11.09. REMEDIES UPON EVENT OF DEFAULT.
(a) If any Event of Default shall have occurred and be continuing,
the Trustee may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the
rights and remedies provided a secured party upon the default of a debtor
under the Uniform Commercial Code at that time, and the Trustee may also,
without notice except as specified below or required by law, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker's board or at any of the Trustee's offices or
elsewhere, for cash, on credit or for future delivery, upon such terms as the
Trustee may determine to be commercially reasonable, and the Trustee or any
Securityholder may be the purchaser of any or all of the Collateral so sold
and thereafter hold the same, absolutely, free from any right or claim of
whatsoever kind. Each Pledgor agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to such Pledgor of the
time and place of any public sale or the time after which any private sale is
to be made shall constitute reasonable notification. The Trustee shall not
be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it
was so adjourned. The Trustee shall incur no liability as a result of the
sale of the Collateral, or any part thereof, at any private sale. Each
Pledgor hereby waives any claims against the Trustee arising by reason of the
fact that the price at which any Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a
public sale, even if the Trustee accepts the first offer received and does
not offer such Collateral to more than one offeree.
(b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, the
Trustee may be compelled, with respect to any sale of all or any part of the
Collateral, to limit purchasers to those who will agree, among other things,
to acquire such securities for their own account, for investment,
83
and not with a view to the distribution or resale thereof. Each Pledgor
acknowledges and agrees that any such sale may result in prices and other
terms less favorable to the seller than if such sale were a public sale
without such restrictions and, notwithstanding such circumstances, agrees
that any such sale shall be deemed to have been made in a commercially
reasonable manner. The Trustee shall be under no obligation to delay the
sale of any of the Pledged Shares for the period of time necessary to permit
the respective Pledgor to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if such
Pledgor would agree to do so.
SECTION 11.10. APPLICATION OF PROCEEDS.
Any cash held by the Trustee as Collateral and all cash proceeds
received by the Trustee in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral, shall be applied by the
Trustee in the manner specified in Section 6.10 hereof.
SECTION 11.11. PLEDGORS' OBLIGATIONS ABSOLUTE.
The obligations of each Pledgor under this Indenture shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by:
(i) any renewal, extension, amendment or modification of or addition
or supplement to or deletion from this Indenture;
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of this Indenture;
(iii) any furnishing of any additional security to the Trustee or
its assignee or any acceptance thereof or any release of any security by
the Trustee or its assignee; or
(iv) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
any Pledgor or any Subsidiary of any Pledgor, or any action taken with
respect to this Indenture by any trustee or receiver, or by any court, in
any such proceeding, whether or not any Pledgor shall have notice or
knowledge of any of the foregoing.
SECTION 11.12. CONTINUING LIEN.
This Indenture shall create a continuing Lien on the Collateral that
shall (i) remain in full force and effect until payment in full of the
Securities or earlier defeasance
84
pursuant to Article 8 hereof, (ii) be binding upon the Pledgor and its
successors and assigns and (iii) inure to the benefit of the Trustee and its
successors, transferees and assigns. Upon satisfaction by the Company of the
conditions set forth in Article 8 hereof to its legal defeasance option or
its covenant defeasance option, the Trustee shall upon request of the Pledgor
return the Collateral to the Pledgor, and, in accordance with the provisions
of Section 11.13, shall acknowledge in writing the discharge of the Lien on
the Collateral created by this Article 11.
SECTION 11.13. SPECIFIED RELEASES OF COLLATERAL; PLEDGORS.
(a) The Company and the Guarantors shall be entitled to obtain a
full release of all of the Collateral from the pledge provided for in Section
11.01 upon compliance with the conditions precedent set forth in Section
8.01(a) for satisfaction and discharge of this Indenture or for legal or
covenant defeasance pursuant to Section 8.01(b). Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel,
each to the effect that such conditions precedent have been complied with
(and which may be the same Officers' Certificate and Opinion of Counsel
required by Article Eight), the Trustee shall forthwith take all necessary
action (at the request of and the expense of the Company) to release and
reconvey to the Company and the Guarantors all of the Collateral, and shall
deliver such Collateral in its possession to the Company and the Guarantors
including, without limitation, the execution and delivery of releases and
satisfactions wherever required.
(b) In the event that all of the capital stock of a Guarantor owned
by the Company and/or any of its Subsidiaries is sold or otherwise
transferred by the Company and/or any of its Subsidiaries to a Person or
Persons other than the Company and/or any of its Subsidiaries in a
transaction which is in compliance with all applicable provisions of this
Indenture (and which results in a release of the respective Guarantor
pursuant to Section 10.06), such Guarantor shall also cease to be a Pledgor
hereunder and the Company shall be entitled to obtain a release of the
capital stock of such Guarantor, and any Collateral at such time held by the
Trustee and owned by such Guarantor, from the pledge provided for in Section
11.01 upon delivery by the Company to the Trustee of (i) an Officers'
Certificate and, in the case of following clause (C) only, an Opinion of
Counsel stating that (A) no Default or Event of Default has occurred and is
continuing, (B) all obligations of such Guarantor under all of its guarantees
of, and under all of its pledges of assets or other security interests which
secure, Indebtedness of the Company and the other Guarantors shall also
terminate upon such release and (C) the release of such Equity Interests or
other Collateral complies with the provisions of this Indenture and the TIA
and (ii) all certificates, opinions and other documentation required by the
TIA. If a release pursuant to this Section 11.13(b) is made in connection
with an Asset Sale, the Net Proceeds from such Asset Sale shall be applied as
set forth in, and to the extent required by, Section 4.11.
SECTION 11.14. CERTIFICATES AND OPINIONS.
85
The Pledgor shall comply with (a) TIA Section 314(b), relating to
Opinions of Counsel regarding the Lien of this Indenture, and (b) TIA Section
314(d), relating to the release of Collateral from the Lien of this Indenture
and Officers' Certificates or other documents regarding fair value of the
Collateral, to the extent such provisions are applicable. Any certificate or
opinion required by TIA Section 314(d) may be executed and delivered by an
Officer of the Pledgor to the extent permitted by TIA Section 314(d).
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. 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 required provision shall control.
SECTION 12.02. NOTICES.
(a) Any notice or communication by the Company, any Guarantor or
the Trustee to the other is duly given if in writing and delivered in person
or mailed by first class mail (registered or certified, return receipt
requested), confirmed facsimile transmission or overnight air courier
guaranteeing next day delivery, to the other's address:
If to the Company or any of the Guarantors:
Spinnaker Industries, Inc.
000 X. Xxxxx Xx., Xxxxx #0000
Xxxxxx, XX 00000
Attention: Chief Financial Officer
If to the Trustee:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trustee Administration Department
(b) The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
86
(c) All notices and communications (other than those sent to
Securityholders) shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged,
if by facsimile transmission; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day
delivery.
(d) Any notice or communication to a Securityholder shall be mailed
by first class mail, postage prepaid, to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed
to any Person described in TIA Section 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders.
(e) If a notice or communication is mailed to any Person in the
manner provided above within the time prescribed, it is duly given, whether
or not the addressee receives it.
(f) If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the
same time.
SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER
SECURITYHOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Guarantors, the Trustee, the Registrar and
anyone else shall have the protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company and/or any of the
Guarantors to the Trustee to take any action under this Indenture, the
Company and/or any of the Guarantors, as the case may be, shall furnish to
the Trustee:
(i) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied (except with regard to
an authentication order pursuant to Section 2.02(c) hereof, which shall
require a certificate of two Officers); and
87
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall include:
(i) a statement that the person making such certificate or opinion
has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of such person, 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 satisfied; and
(iv) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 12.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York City, or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
88
SECTION 12.08. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, agent,
manager, stockholder or partner of the Company or its predecessors shall have
any liability for any Obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of, or by reason of such
Obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. This waiver and release are part of
the consideration for issuance of the Securities.
SECTION 12.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 12.10. GOVERNING LAW.
This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York but without
giving effect to applicable principles of conflicts of law to the extent that
the application of the laws of another jurisdiction would be required thereby.
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Guarantors, the Company or their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 12.12. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 12.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
89
SECTION 12.14. COUNTERPART ORIGINALS.
This Indenture may be executed in any number of counterparts, each
of which so executed shall be an original, but all of them together represent
the same agreement.
SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
90
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
SIGNATURES
SPINNAKER INDUSTRIES, INC.
Witness: By /s/ XXXXXXX X. XXXXX
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer and
Chairman of the Board
/s/ XXXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Secretary
CENTRAL PRODUCTS COMPANY
Witness: By /s/ XXX X. XXXXXXX, III
--------------------------
Name: Xxx X. Xxxxxxx, III
Title: Chief Operating Officer
/s/ XXXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Secretary
XXXXX-BRIDGE INDUSTRIES, INC.
Witness: By /s/ XXX X. XXXXXXX, III
--------------------------
Name: Xxx X. Xxxxxxx, III
Title: Vice President
/s/ XXXXXXX X. XXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Secretary
91
ENTOLETER, INC.
Witness: By /s/ XXXX X. XXXXXXXX
---------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
/s/ XXXXX X. XXXXX
--------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Secretary
THE CHASE MANHATTAN BANK,
as Trustee
Witness: By /s/ XXXXXX X. XXXX
---------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Trust Officer
/s/ XXXXXXX X. XXXXX
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
92
SCHEDULE I
----------
PLEDGED SHARES
Description Registered Owner
of Shares Issuer (and Pledgor)
----------- ------ ----------------
79,000 shares Central Products Company Spinnaker Industries, Inc.
of Common Stock
1,000 shares Xxxxx-Bridge Industries, Inc. Spinnaker Industries, Inc.
of Common Stock
1,000 shares Entoleter, Inc. Spinnaker Industries, Inc.
of Common Stock
EXHIBIT A
---------
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 BELOW. BY ITS ACQUISITION
HEREOF, THE SECURITYHOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2),
(3) or (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL
NOT WITHIN THREE YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO
AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER FURNISHES (OR HAS FURNISHED ON ITS
BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE
A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3)
EXHIBIT A
Page 2
AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE
OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS
AN ACCREDITED INVESTOR, THE SECURITYHOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS EITHER
OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. 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.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR SECURITIES IN DEFINITIVE FORM, THIS
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF
SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. 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.
EXHIBIT A
Page 3
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON 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.
EXHIBIT A
Page 4
CUSIP No:
(Front of Security)
No. 1 $___________
SPINNAKER INDUSTRIES, INC.
10 3/4% Senior Secured Note due 2006, Series A
SPINNAKER INDUSTRIES, INC., a Delaware corporation promises to pay to Cede &
Co., as nominee of the Depository Trust Company, or its registered assigns,
the principal sum of $115,000,000 on October 15, 2006.
Interest Payment Dates: April 15 and October 15, commencing April 15, 1997.
Record Dates: April 1 and October 1 (whether or not a Business Day).
Additional provisions of this Security are set forth on the other side of
this Security.
Dated:
SPINNAKER INDUSTRIES, INC.
By: ________________________
By: ________________________
(SEAL)
This is one of the Securities referred
to in the within-mentioned Indenture
THE CHASE MANHATTAN BANK, as Trustee
By:_________________________________
Authorized Officer
EXHIBIT A
Page 5
(Reverse of Security)
10 3/4% SENIOR SECURED NOTE DUE 2006, SERIES A
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Spinnaker Industries, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate and in the manner specified below. The Company shall
pay, in cash, interest on the principal amount of this Security at the rate
per annum of 10 3/4%. The Company will pay interest semiannually in arrears
on April 15 and October 15 of each year (each an "Interest Payment Date"),
commencing April 15, 1997, or if any such day is not a Business Day on the
next succeeding Business Day. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Interest shall accrue from
the most recent Interest Payment Date to which interest has been paid or, if
no interest has been paid, from the date of the original issuance of the
Securities. To the extent lawful, the Company shall pay interest on overdue
principal at the rate of 2% per annum in excess of the then applicable
interest rate on the Securities; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) at
the same rate to the extent lawful. The rate of interest payable on this
Security shall be subject to the assessment of additional interest (the
"Additional Interest") as follows:
(i) if the Exchange Offer Registration Statement (as defined
below) or Shelf Registration Statement (as defined below) is not filed within
90 days following the Issuance Date, Additional Interest shall accrue on the
Securities over and above the stated interest at a rate of 0.50% per annum
for the first 90 days commencing on the 91st day after the Issuance Date,
such Additional Interest rate increasing by an additional 0.50% per annum at
the beginning of each subsequent 90-day period;
(ii) if the Exchange Offer Registration Statement or Shelf
Registration Statement is not declared effective within 180 days following
the Issuance Date, Additional Interest shall accrue on the Securities over
and above the stated interest at a rate of 0.50% per annum for the first 90
days commencing on the 181st day after the Issuance Date, such Additional
Interest rate increasing by an additional 0.50% per annum at the beginning of
each subsequent 90-day period; or
(iii) if (A) the Company and the Guarantors have not exchanged all
Securities validly tendered in accordance with the terms of the Exchange
Offer on or prior to 225 days after the Issuance Date or (B) the Exchange
Offer Registration Statement ceases to be effective at any time prior to the
time that the Exchange Offer is consummated or (C) if
EXHIBIT A
Page 6
applicable, the Shelf Registration Statement has been declared effective and
such Shelf Registration Statement ceases to be effective at any time prior to
the third anniversary of the Issuance Date (unless all the Securities have
been sold thereunder), then Additional Interest shall accrue on the
Securities over and above the stated interest at a rate of 0.50% per annum
for the first 90 days commencing on (x) the 226th day after the Issuance Date
with respect to the Securities validly tendered and not exchanged by the
Company, in the case of (A) above, or (y) the day the Exchange Offer
Registration Statement ceases to be effective or usable for its intended
purpose in the case of (B) above, or (z) the day such Shelf Registration
Statement ceases to be effective in the case of (C) above, such Additional
Interest rate increasing by an additional 0.50% per annum at the beginning of
each subsequent 90-day period; PROVIDED, HOWEVER, that the Additional
Interest rate on the Securities may not exceed in the aggregate 2.0% per
annum; and PROVIDED FURTHER, that (1) upon the filing of the Exchange Offer
Registration Statement or Shelf Registration Statement (in the case of clause
(i) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or Shelf Registration Statement (in the case of (ii) above), or
(3) upon the exchange of Exchange Securities for all Securities tendered (in
the case of clause (iii)(A) above), or upon the effectiveness of the Exchange
Offer Registration Statement which had ceased to remain effective in the case
of clause (iii)(B) above, or upon the effectiveness of the Shelf Registration
Statement which had ceased to remain effective (in the case of clause
(iii)(C) above), Additional Interest on the Securities as a result of such
clause (or the relevant subclause thereof), as the case may be, shall cease
to accrue.
"EXCHANGE OFFER" shall mean the exchange offer by the Company of
Initial Securities for Exchange Securities pursuant to Section 2(a) of the
Registration Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such registration
statement, in each case including the Offering Memorandum or prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"RECORD DATE" shall have the meaning provided on the front of
this Security.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company and the Guarantors pursuant to the provisions of the
Registration Rights Agreement which covers all of the Initial Securities on
an appropriate form under Rule 415 under the Securities Act, or any similar
rule that may be adopted by the Commission, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Offering Memorandum contained therein,
all exhibits thereto and all material incorporated by reference therein.
EXHIBIT A
Page 7
2. METHOD OF PAYMENT. The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered
Holders of Securities at the close of business on the Record Date immediately
preceding the Interest Payment Date, even if such Securities are cancelled
after such Record Date and on or before such Interest Payment Date.
Securityholders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal, premium, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal, premium, if any, and interest by its
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Securityholder at the
Securityholder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without prior notice to any Securityholder. The
Company or any Guarantor of the Company may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of October 23, 1996 (the "Indenture"), among the Company,
the Guarantors and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the TIA as in effect on the date the Indenture is qualified. The Securities
are subject to all such terms, and Securityholders are referred to the
Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the
Securities. The Securities are senior secured Obligations of the Company
limited to $115,000,000 in aggregate principal amount.
5. (a) OPTIONAL REDEMPTION. Except as indicated in the next
succeeding paragraph, the Securities are not redeemable at the Company's
option prior to October 15, 2001. Thereafter, the Securities will be
redeemable, at the option of the Company, in whole or in part, at the
redemption prices (expressed as percentages of the principal amount of the
Securities) set forth below, plus accrued interest to the redemption date:
ANNUAL PERIOD BEGINNING REDEMPTION PRICE
----------------------- ----------------
2001 . . . . . . . . . . . . . . . . . . . . 105.375%
2002 . . . . . . . . . . . . . . . . . . . . 104.031
2003 . . . . . . . . . . . . . . . . . . . . 102.688
2004 . . . . . . . . . . . . . . . . . . . . 101.344
2005 and thereafter. . . . . . . . . . . . . 100.000
EXHIBIT A
Page 8
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERINGS. At any
time, or from time to time, on or prior to October 15, 1999, the Company may,
at its option, use the net cash proceeds of one or more Public Equity
Offerings to redeem up to 33 1/3% of the aggregate principal amount of
Securities originally issued at a redemption price equal to 110.750% of the
principal amount thereof, plus, in each case, accrued and unpaid interest to
the date of redemption; provided that at least 66 2/3% of the aggregate
principal amount of Securities originally issued remains outstanding after
any such redemption. In order to effect the foregoing redemption with the
proceeds of any Public Equity Offering, the Company shall make such
redemption not more than 120 days after the consummation of any such Public
Equity Offering.
6. MANDATORY REDEMPTION. The Securities are not subject to
mandatory redemption or sinking fund payments.
7. REPURCHASE AT OPTION OF SECURITYHOLDER. (a) If there is a
Change of Control, each Holder of Securities will have the right to require
the Company to repurchase all or any part of such Holder's Securities at a
repurchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of repurchase (subject to the right
of Holders of record on the relevant record date to receive interest due on
the relevant Interest Payment Date). Within 30 days following any Change of
Control, the Company will mail a notice to each Securityholder stating (i)
that a Change of Control has occurred and that such Securityholder has the
right to require the Company to repurchase all or any part of such
Securityholder's Securities at a repurchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date);
(ii) the circumstances and relevant facts regarding such Change of Control
(including information with respect to pro forma historical income, cash flow
and capitalization after giving effect to such Change of Control); (iii) the
repurchase date (which will be no earlier then 30 days nor later than 60 days
from the date such notice is mailed); and (iv) the instructions, determined
by the Company consistent with the Indenture, that a Securityholder must
follow in order to have its Securities repurchased. Securityholders that are
subject to an offer to repurchase may elect to have such Securities
repurchased by completing the form entitled "Option of Securityholder to
Elect Purchase" appearing below.
(b) If the Company or a Subsidiary consummates any Asset Sale, and
when the aggregate amount of Excess Proceeds from such an Asset Sale exceeds
$5 million, the Company shall be required to offer to purchase the maximum
principal amount of Securities, that is in an integral multiple of $1,000,
that may be purchased out of the Excess Proceeds at 100% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the date fixed
for the closing of such offer in accordance with the procedures set forth in
the
EXHIBIT A
Page 9
Indenture. If the aggregate principal amount of Securities surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Securities to be
redeemed shall be selected on a PRO RATA basis. Securityholders that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such
Securities purchased by completing the form entitled "Option of
Securityholder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address.
Securities may be redeemed in part but only in whole multiples of $1,000,
unless all of the Securities held by a Securityholder are to be redeemed. On
and after the redemption date, interest ceases to accrue on Securities or
portions of them called for redemption.
9. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement, and subject to certain terms and conditions stated therein, the
Company will be obligated to consummate an Exchange Offer pursuant to which
the Holders of the Initial Securities shall have the right to exchange this
Security for Exchange Securities, which have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respect to the Initial Security.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and
the Trustee may require a Securityholder among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption. Also, it need not exchange or register the transfer
of any Securities during a period beginning at the opening of business on a
Business Day 15 days before the day of any selection of Securities to be
redeemed and ending at the close of business on the day of selection or
during the period between a Record Date and the corresponding Interest
Payment Date.
11. PERSONS DEEMED OWNERS. Prior to due presentment to the
Trustee for registration of the transfer of this Security, the Trustee, any
Agent and the Company may deem and treat the Person in whose name this
Security is registered as its absolute owner for the purpose of receiving
payment of principal of, premium, if any, and interest on this Security and
for all other purposes whatsoever, whether or not this Security is overdue,
and neither the Trustee, any Agent nor the Company shall be affected by
notice to the contrary. The registered Securityholder shall be treated as its
owner for all purposes.
EXHIBIT A
Page 10
12. AMENDMENTS AND WAIVERS. Subject to certain exceptions provided
in the Indenture, the Indenture or the Securities may be amended with the
consent of the Holders of a majority in principal amount of the then outstanding
Securities, and any existing Default or Event of Default (except a payment
default) may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities. Without the consent of any
Securityholder the Indenture or the Securities may be amended to, among other
things, cure any ambiguity, defect or inconsistency, to comply with the
requirements of the Commission in order to effect or maintain qualification of
the Indenture under the TIA or to make any change that does not adversely affect
the rights of any Securityholder.
13. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities may declare the unpaid principal of, and any
accrued and unpaid interest on, all the Securities to be due and payable
immediately; PROVIDED, that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company or any
Guarantor, all outstanding Securities shall become due and payable
immediately without further action or notice. Securityholders may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Securities may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Securityholders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is
in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
14. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee under the
Indenture, in its individual or any other capacity may make loans to, accept
deposits from, and perform services for the Company, the Guarantors or any
Affiliate of the Company or the Guarantors, and may otherwise deal with the
Company, the Guarantors and their respective Affiliates as if it were not
Trustee.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions provided for in the Indenture. The Company must
annually report to the Trustee on compliance with such limitations.
EXHIBIT A
Page 11
16. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. GUARANTEE; SECURITY. Each Guarantor has jointly and severally
irrevocably and unconditionally guaranteed the payment of principal, premium, if
any, and interest (including interest on overdue principal and overdue interest,
if lawful) on the Securities; PROVIDED, HOWEVER, each Guarantor that makes a
payment or distribution under a Guarantee shall be entitled to a contribution
from each other Guarantor in a PRO RATA amount based on the Adjusted Net Assets
of each Guarantor. Pursuant to the Indenture, the Company will assign and
pledge to the Trustee, for its benefit and the benefit of the Securityholders, a
security interest in 100% of the issued and outstanding Capital Stock of each
Guarantor and certain proceeds from time to time received, receivable or
otherwise distributed in respect thereof (the "Collateral"). The Company and
each Guarantor will also agree to assign and pledge to the Trustee as part of
the Collateral all shares of Capital Stock of each Guarantor at any time
acquired by the Company or any Guarantor. The security interest in the
Collateral will be a first priority security interest. However, absent any
acceleration notice or bankruptcy default, the Company will be able to vote, as
it sees fit in its sole discretion, the Capital Stock of each Guarantor.
18. DEFEASANCE. Subject to certain conditions provided for in the
Indenture, the Company at any time may terminate some or all of its obligations
under the Securities and the Indenture if the Company deposits with the Trustee
money or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Securities to redemption or maturity, as the case may
be.
19. GOVERNING LAW. The Laws of the State of New York shall govern
this Security and the Indenture, without regard to principles of conflict of
laws.
20. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Securityholders.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
EXHIBIT A
Page 12
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Request may be made to:
Spinnaker Industries, Inc.
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Chief Financial Officer
EXHIBIT A
Page 13
FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE
GUARANTEE
The Guarantors (as defined in the Indenture (the "Indenture") referred
to in the Security upon which this notation is endorsed and each hereinafter
referred to as a "Guarantor," which term includes any successor Person under the
Indenture) (i) have jointly and severally irrevocably and unconditionally
guaranteed as a primary obligor and not a surety (such guarantee by each
Guarantor being referred to herein as the "Guarantee"), (a) the due and punctual
payment of the principal, premium, if any, and interest on the Securities,
whether at stated maturity or interest payment date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal of and interest, if any, on the Securities, to the extent
lawful, (c) the due and punctual performance of all other monetary Obligations
of the Company under the Indenture and the Securities to the Securityholders or
the Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture and (d) in case of any extension of time of payment or renewal of any
Securities or any such Obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity by acceleration or otherwise and (ii) have agreed to
pay any and all costs and expenses (including reasonable attorneys' fees)
incurred by the Trustee or any Securityholder in enforcing any rights under this
Guarantee.
The Obligations of each Guarantor to the Securityholders of Securities
and to the Trustee pursuant to this Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future of any Guarantor shall have any liability under this Guarantee
by reason of his or its status as such stockholder, officer, director or
incorporator.
This is a continuing Guarantee and, except as otherwise expressly
provided for in Section 10.06 of the Indenture, shall remain in full force and
effect and shall be binding upon the Guarantor and its successors and assigns
until full and final payment of all of the Company's Obligations under the
Securities and the Indenture and shall inure to the benefit of the successors
and assigns of the Trustee and the Securityholders and, in the event of any
transfer or assignment of rights by any Securityholder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof. This is a Guarantee of payment and not of
collectibility.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
EXHIBIT A
Page 14
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Guarantors:
CENTRAL PRODUCTS COMPANY
By
----------------------------------
Name:
Title:
XXXXX-BRIDGE INDUSTRIES, INC.
By
-----------------------------------
Name:
Title:
EXHIBIT A
Page 15
ENTOLETER, INC.
By
------------------------------------
Name:
Title:
EXHIBIT A
Page 16
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
---------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------
EXHIBIT A
Page 17
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date:______________
Your Signature:
---------------------------------------
(Sign exactly as your name appears on the face of this
Security)
Signature Guarantee:
---------------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements will
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Registrar
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of 1934,
as amended.)
EXHIBIT A
Page 18
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) October 22, 1999, the undersigned confirms that it has
not utilized any general solicitation or general advertising in connection with
the transfer and that this Security is being transferred:
CHECK ONE
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) ___ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) ___ outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
(6) ___ pursuant to an effective registration statement under the
Securities Act; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered Securityholder thereof; PROVIDED that if box (3), (4), (5)
or (7) is checked, the Company or the Trustee may require, prior to registering
any such transfer of the Securities, in its sole discretion, such legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act. If none of the foregoing boxes is checked, the Trustee or
Registrar shall not be obligated to register this Security in the name of any
person other than the Securityholder hereof unless and until the conditions
EXHIBIT A
Page 19
to any such transfer of registration set forth herein and in Section 2.17 of
the Indenture shall have been satisfied.
Dated:__________________________ Signed:_________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:_______________________ _____________________________________
NOTICE: To be executed by an
executive officer
EXHIBIT A
Page 20
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Company pursuant to Section 4.11 or Section 4.15 of the
Indenture check the appropriate box:
/ / Section 4.11 / / Section 4.15
If you want to have only part of the Security purchased by the Company
pursuant to Section 4.11 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$______________________
Date:_________________
Your Signature: ______________________________________
(Sign exactly as your name appears on the face of this
Security)
Signature Guarantee:
____________________________________
(Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements will
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Registrar
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of 1934,
as amended.)
EXHIBIT B
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH
NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH
SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON 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 CEDE & CO. 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 SECTION 2.17 OF THE INDENTURE.
EXHIBIT B
Page 2
CUSIP No:
(Front of Security)
No. 1 $___________
SPINNAKER INDUSTRIES, INC.
10 3/4% Senior Secured Note due 2006, Series B
SPINNAKER INDUSTRIES, INC., a Delaware corporation, promises to pay to Cede &
Co., as nominee of the Depository Trust Company, or its registered assigns, the
principal sum of $115,000,000 on October 15, 2006.
Interest Payment Dates: April 15 and October 15, commencing April 15, 1997.
Record Dates: April 1 and October 1 (whether or not a Business Day).
Additional provisions of this Security are set forth on the other side of this
Security.
Dated:
SPINNAKER INDUSTRIES, INC.
By:
--------------------------
Name:
Title:
By:
--------------------------
Name:
Title:
(SEAL)
This is one of the Securities referred
to in the within-mentioned Indenture
THE CHASE MANHATTAN BANK, as Trustee
By:
-------------------------------
Authorized Officer
EXHIBIT B
Page 3
(Reverse of Security)
10 3/4% SENIOR SECURED NOTE DUE 2006, SERIES B
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Spinnaker Industries, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate and in the manner specified below. The Company shall
pay, in cash, interest on the principal amount of this Security at the rate
per annum of 10 3/4%. The Company will pay interest semiannually in arrears
on April 15 and October 15 of each year (each an "Interest Payment Date"),
commencing April 15, 1997, or if any such day is not a Business Day on the
next succeeding Business Day. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Interest shall accrue from
the most recent Interest Payment Date to which interest has been paid or, if
no interest has been paid, from the date of the original issuance of the
Securities. To the extent lawful, the Company shall pay interest on overdue
principal at the rate of 2% per annum in excess of the then applicable
interest rate on the Securities; it shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) at
the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Securities (except defaulted interest) to the Persons who are registered
Securityholders at the close of business on the Record Date immediately
preceding the Interest Payment Date, even if such Securities are cancelled
after such Record Date and on or before such Interest Payment Date.
Securityholders must surrender Securities to a Paying Agent to collect
principal payments. The Company shall pay principal premium, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender").
However, the Company may pay principal and interest by its check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to
the Paying Agent or to a Securityholder at the Securityholder's registered
address.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-registrar without prior notice to any Securityholder. The
Company, or any Guarantor of the Company may act in any such capacity.
4. INDENTURE. The Company issued the Securities under an
Indenture, dated as of October 23, 1996 (the "Indenture"), among the Company,
the Guarantors and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part
EXHIBIT B
Page 4
of the Indenture by reference to the TIA as in effect on the date the
Indenture is qualified. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
such terms. The terms of the Indenture shall govern any inconsistencies
between the Indenture and the Securities. The Securities are senior secured
Obligations of the Company limited to $115,000,000 in aggregate principal
amount.
5. (a) OPTIONAL REDEMPTION. Except as indicated in the next
succeeding paragraph, the Securities are not redeemable at the Company's
option prior to October 15, 2001. Thereafter, the Securities will be
redeemable, at the option of the Company, in whole or in part, at the
redemption prices (expressed as percentages of the principal amount of the
Securities) set forth below, plus accrued interest to the redemption date:
ANNUAL PERIOD BEGINNING
REDEMPTION PRICE
----------------
2001 105.375%
2002 104.031
2003 102.688
2004 101.344
2005 and thereafter 100.000
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERINGS. At any time,
or from time to time, on or prior to October 15, 1999, the Company may, at
its option, use the net cash proceeds of one or more Public Equity Offerings
to redeem up to 33 1/3% of the aggregate principal amount of Securities
originally issued at a redemption price equal to 110.750% of the principal
amount thereof, plus, in each case, accrued and unpaid interest to the date
of redemption; provided that at least 66 2/3% of the aggregate principal
amount of Securities originally issued remains outstanding after any such
redemption. In order to effect the foregoing redemption with the proceeds of
any Public Equity Offering, the Company shall make such redemption not more
than 120 days after the consummation of any such Public Equity Offering.
6. MANDATORY REDEMPTION. The Securities are not subject to
mandatory redemption or sinking fund payments.
7. REPURCHASE AT OPTION OF SECURITYHOLDER. (a) If there is a
Change of Control, each Holder of Securities will have the right to require
the Company to repurchase all or any part of such Holder's Securities at a
repurchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of repurchase (subject to the right
of Holders of record on the relevant Record Date to receive interest due
EXHIBIT B
Page 5
on the relevant Interest Payment Date). Within 30 days following any Change
of Control, the Company will mail a notice to each Securityholder stating (i)
that a Change of Control has occurred and that such Securityholder has the
right to require the Company to repurchase all or any part of such
Securityholder's Securities at a repurchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date);
(ii) the circumstances and relevant facts regarding such Change of Control
(including information with respect to pro forma historical income, cash flow
and capitalization after giving effect to such Change of Control); (iii) the
repurchase date (which will be no earlier then 30 days nor later than 60 days
from the date such notice is mailed); and (iv) the instructions, determined
by the Company consistent with the Indenture, that a Securityholder must
follow in order to have its Securities repurchased. Securityholders that are
subject to an offer to repurchase may elect to have such Securities
repurchased by completing the form entitled "Option of Securityholder to
Elect Purchase" appearing below.
(b) If the Company or a Subsidiary consummates any Asset Sale, and
when the aggregate amount of Excess Proceeds from such an Asset Sale exceeds
$5 million, the Company shall be required to offer to purchase the maximum
principal amount of Securities, that is in an integral multiple of $1,000,
that may be purchased out of the Excess Proceeds, at an offer price in cash
in an amount equal to 100% of the outstanding principal amount thereof, plus
accrued and unpaid interest, if any, to the date fixed for the closing of
such offer in accordance with the procedures set forth in the Indenture. If
the aggregate principal amount of Securities surrendered by Holders thereof
exceeds the amount of Excess Proceeds, the Securities to be redeemed shall be
selected on a PRO RATA basis. Securityholders that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such Securities purchased by
completing the form entitled "Option of Securityholder to Elect Purchase"
appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Securities are to be redeemed at its registered address.
Securities may be redeemed in part but only in whole multiples of $1,000,
unless all of the Securities held by a Securityholder are to be redeemed. On
and after the redemption date, interest ceases to accrue on Securities or
portions of them called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and
the Trustee may require a Securityholder among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
EXHIBIT B
Page 6
required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption. Also, it need not exchange or register the transfer
of any Securities during a period beginning on the opening of business on a
Business Day 15 days before the day of any selection of Securities to be
redeemed and ending on the close of business on the day of selection or
during the period between a Record Date and the corresponding Interest
Payment Date.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee
for registration of the transfer of this Security, the Trustee, any Agent and
the Company may deem and treat the Person in whose name this Security is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all
other purposes whatsoever, whether or not this Security is overdue, and
neither the Trustee, any Agent nor the Company shall be affected by notice to
the contrary. The registered Securityholder shall be treated as its owner for
all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions provided
in the Indenture, the Indenture or the Securities may be amended with the
consent of the Holders of a majority in principal amount of the then
outstanding Securities, and any existing default or Event of Default (except
a payment default) may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Securities. Without the
consent of any Securityholder the Indenture or the Securities may be amended
to, among other things, cure any ambiguity, defect or inconsistency, to
comply with the requirements of the Commission in order to effect or maintain
qualification of the Indenture under the TIA Securityholders or to make any
change that does not adversely affect the rights of any Securityholder.
12. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities may declare the unpaid principal of, and any
accrued and unpaid interest on, all the Securities to be due and payable
immediately; PROVIDED, that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to the Company or any
Guarantor, all outstanding Securities shall become due and payable
immediately without further action or notice. Securityholders may not
enforce the Indenture or the Securities except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Securities may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Securityholders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is
in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
EXHIBIT B
Page 7
13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee under the
Indenture, in its individual or any other capacity may make loans to, accept
deposits from, and perform services for the Company, the Guarantor or any
Affiliate of the Company or the Guarantor, and may otherwise deal with the
Company, the Guarantor and their respective Affiliates as if it were not
Trustee.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect
of its Capital Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of
its assets or adopt a plan of liquidation. Such limitations are subject to a
number of important qualifications and exceptions provided for in the
Indenture. The Company must annually report to the Trustee on compliance
with such limitations.
15. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
16. GUARANTEE; SECURITY. Each Guarantor has jointly and severally
irrevocably and unconditionally guaranteed the payment of principal, premium,
if any, and interest (including interest on overdue principal and overdue
interest, if lawful) on the Securities; PROVIDED, HOWEVER, each Guarantor
that makes a payment or distribution under a Guarantee shall be entitled to a
contribution from each other Guarantor in a PRO RATA amount based on the
Adjusted Net Assets of each Guarantor. Pursuant to the Indenture, the
Company will assign and pledge to the Trustee, for its benefit and the
benefit of the Securityholders, a security interest in 100% of the issued and
outstanding Capital Stock of the Guarantor and certain proceeds from time to
time received, receivable or otherwise distributed in respect thereof (the
"Collateral"). The Company and each Guarantor will also agree to assign and
pledge to the Trustee as part of the Collateral all shares of Capital Stock
of each Guarantor at any time acquired by the Company or any Guarantor. The
security interest in the Collateral will be a first priority security
interest. However, absent any acceleration notice or bankruptcy default, the
Company will be able to vote, as it sees fit in its sole discretion, the
Capital Stock of each Guarantor.
17. DEFEASANCE. Subject to certain conditions provided for in the
Indenture, the Company at any time may terminate some or all of its
obligations under the Securities and the Indenture if the Company deposits
with the Trustee money or U.S. Government Obligations for the payment of
principal, premium (if any) and interest on the Securities to redemption or
maturity, as the case may be.
EXHIBIT B
Page 8
18. GOVERNING LAW. The Laws of the State of New York shall govern
this Security and the Indenture, without regard to principles of conflict of
laws.
19. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Request may be made to:
Spinnaker Industries Inc.
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Chief Financial Officer
EXHIBIT B
Page 9
FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE
GUARANTEE
The Guarantors (as defined in the Indenture (the "Indenture") referred
to in the Security upon which this notation is endorsed and each hereinafter
referred to as a "Guarantor," which term includes any successor person under the
Indenture) (i) have jointly and severally irrevocably and unconditionally
guaranteed as a primary obligor and not a surety, (such guarantee by each
Guarantor being referred to herein as the "Guarantee") (a) the due and punctual
payment of the principal, premium, if any, and interest on the Securities,
whether at stated maturity or interest payment date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal of and interest, if any, on the Securities, to the extent
lawful, (c) the due and punctual performance of all other monetary Obligations
of the Company under the Indenture and the Securities to the Securityholders or
the Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture and (d) in case of any extension of time of payment or renewal of any
Securities or any such Obligations, the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity by acceleration or otherwise and (ii) have agreed to
pay any and all costs and expenses (including reasonable attorneys' fees)
incurred by the Trustee or any Securityholder in enforcing any rights under this
Guarantee.
The Obligations of each Guarantor to the Securityholders of Securities
and to the Trustee pursuant to this Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future of any Guarantor shall have any liability under this Guarantee
by reason of his or its status as such stockholder, officer, director or
incorporator.
This is a continuing Guarantee and, except as otherwise expressly
provided for in Section 10.06 of the Indenture, shall remain in full force and
effect and shall be binding upon the Guarantor and its successors and assigns
until full and final payment of all of the Company's Obligations under the
Securities and the Indenture and shall inure to the benefit of the successors
and assigns of the Trustee and the Securityholders and, in the event of any
transfer or assignment of rights by any Securityholder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions hereof. This is a Guarantee of payment and not of
collectibility.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Security upon which this Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
EXHIBIT B
Page 10
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Guarantors:
CENTRAL PRODUCTS COMPANY
By
-------------------------------------
Name:
Title:
XXXXX-BRIDGE INDUSTRIES, INC.
By
-------------------------------------
Name:
Title:
EXHIBIT B
Page 11
ENTOLETER, INC.
By
-------------------------------------
Name:
Title:
EXHIBIT B
Page 12
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
-----------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-----------------------------------------------------
EXHIBIT B
Page 13
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date:
------------------------------
Your Signature:
--------------------------------------
Sign exactly as your name appears on the face of this
Security)
Signature Guarantee:
-----------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements will
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Registrar
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of 1934,
as amended.)
EXHIBIT B
Page 14
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Company pursuant to Section 4.11 or Section 4.15 of the
Indenture check the appropriate box:
/ / Section 4.11 / / Section 4.15
If you want to have only part of the Security purchased by the Company
pursuant to Section 4.11 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$
-----------------------
Date:
-------------------
Your Signature:
---------------------------------------
(Sign exactly as your name appears on the face of this
Security)
Signature Guarantee:
-----------------------------------
(Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements will
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP") or such
other "signature guarantee program"
as may be determined by the Registrar
in addition to, or in substitution
for, STAMP, all in accordance
EXHIBIT B
Page 15
with the Securities Exchange Act of 1934,
as amended.)
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trustee Administration Department
Re: Spinnaker Industries, Inc.
10 3/4% SENIOR SECURED NOTES DUE 2006
-------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of 10 3/4% Senior Secured
Notes due 2006 (the "Securities") of Spinnaker Industries, Inc. (the
"Company"), we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated October 18, 1996 relating to the Securities and
such other information as we deem necessary in order to make our investment
decision. We acknowledge that we have read and agreed to the matters stated
on pages (i) - (iii) of the Offering Memorandum and in the section entitled
"Transfer Restrictions" of the Offering Memorandum including the restrictions
on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Securities (as described in the Offering Memorandum) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell or otherwise transfer any
Securities prior to the date which is three years after the original issuance
of the
EXHIBIT C
Page 2
Securities, we will do so only (i) to the Company or any of its subsidiaries,
(ii) inside the United States in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act), (iii) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to the
Trustee (as defined in the Indenture relating to the Securities), a signed
letter containing certain representations and agreements relating to the
restrictions on transfer of the Securities, (iv) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (v)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (vi) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Securities from us a notice advising such
purchaser that resales of the Securities are restricted as stated herein.
4. We are not acquiring the Securities for or on behalf of, and
will not transfer the Securities to, any pension or welfare plan (as defined
in Section 3 of the Employee Retirement Income Security Act of 1974), except
as permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Company such
certification, legal opinions and other information as the Trustee and the
Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Securities
purchased by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
7. We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
EXHIBIT C
Page 3
By:
------------------------------
Name:
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
_______________, ____
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trustee Administration Department
Re: Spinnaker Industries, Inc.
(the "Company") 103/4% Senior Secured
Notes due 2006 (the "Securities")
---------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $_____________ aggregate
principal amount of the Securities, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
we represent that:
(1) the offer of the Securities was not made to a Person
in the United States;
(2) either (a) at the time the buy offer was originated,
the transferee was outside the United States or we and any
person acting on our behalf reasonably believed that the
transferee was outside the United States, or (b) the transaction
was executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person acting
on our behalf knows that the transaction has been pre-arranged
with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S, as applicable;
EXHIBIT D
Page 2
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
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
