Exhibit 99.T3C
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FORM OF
FLAG TELECOM GROUP LIMITED,
THE GUARANTORS NAMED HEREIN
AND
THE BANK OF NEW YORK,
TRUSTEE
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Indenture
Dated as of October__, 2002
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Providing for the Issuance of
Debt Securities
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This Cross Reference Sheet, showing the location in the Indenture of the
provisions inserted pursuant to Section 310-318(a), inclusive, of the Trust
Indenture Act of 1939, is not to be considered a part of the Indenture.
TRUST INDENTURE ACT CROSS REFERENCE SHEET
Sections of Trust Sections of
Indenture Act Indenture
------------------ ------------
310(a)(1)....................................................................................12.07
310(a)(2)....................................................................................12.07
310(a)(3)....................................................................................12.13
310(a)(4)....................................................................................Not applicable
310(b).......................................................................................12.14
311..........................................................................................12.15
312(a).......................................................................................11.01
312(b).......................................................................................11.01
313(a).......................................................................................11.03
313(b).......................................................................................11.03 and 16.04
314(a)(1), (2) and (3).......................................................................11.04
314(a)(4)....................................................................................8.07
314(b).......................................................................................16.03
314(c).......................................................................................18.03
314(d).......................................................................................16.04 and 16.05
314(e).......................................................................................18.03
315..........................................................................................6.01 and 18.08
315(a).......................................................................................12.02, 12.02
315(b).......................................................................................12.12
315(c).......................................................................................12.02
315(d).......................................................................................12.02
315(e)........................................................................................9.08
316(a)........................................................................................9.06 and 9.10
316(b)........................................................................................9.07
317(a)........................................................................................9.03
317(b)........................................................................................8.03
318(a).......................................................................................18.05
i
TABLE OF CONTENTS
PAGE
RECITALS ........................................................................................................1
ARTICLE ONE DEFINITIONS ........................................................................................1
SECTION 1.01. TERMS .......................................................................................1
SECTION 1.02. DEFINITIONS .................................................................................2
ARTICLE TWO FORM, EXECUTION, DELIVERY, TRANSFER AND EXCHANGE OF SECURITIES.....................................8
SECTION 2.01. FORMS GENERALLY; RECORD DATES; PLACE OF PAYMENT, DENOMINATIONS AND NUMBERING OF
SECURITIES........................................................................8
SECTION 2.02. TERMS OF SERIES..............................................................................9
SECTION 2.03. CERTIFICATE OF AUTHENTICATION NECESSARY TO MAKE SECURITIES VALID............................11
SECTION 2.04. FORM OF CERTIFICATE OF AUTHENTICATION.......................................................12
SECTION 2.05. REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES...........................................12
SECTION 2.06. REPLACING SECURITIES MUTILATED, DESTROYED, LOST OR STOLEN...................................15
SECTION 2.07. RIGHTS TO INTEREST..........................................................................15
SECTION 2.08. TEMPORARY SECURITIES........................................................................16
ARTICLE THREE PROVISIONS FOR THE SERIES A NOTES................................................................16
SECTION 3.01. GENERAL TITLE...............................................................................16
SECTION 3.02. GLOBAL FORM.................................................................................16
SECTION 3.03. REGISTERED OWNER............................................................................17
SECTION 3.04. MATURITY DATE AND INTEREST..................................................................17
SECTION 3.05. OPTIONAL REDEMPTION BY THE COMPANY..........................................................17
SECTION 3.06. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL...............................................18
SECTION 3.07. LIQUIDATION AMOUNT..........................................................................18
ARTICLE FOUR PROVISIONS FOR THE SERIES B NOTES.................................................................19
SECTION 4.01. GENERAL TITLE...............................................................................19
SECTION 4.02. MATURITY AND INTEREST.......................................................................19
SECTION 4.03. OPTIONAL REDEMPTION BY THE COMPANY..........................................................19
SECTION 4.04. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL...............................................20
SECTION 4.05. LIQUIDATION AMOUNT..........................................................................20
ARTICLE FIVE PROVISIONS FOR THE SERIES C NOTES.................................................................20
SECTION 5.01. GENERAL TITLE...............................................................................20
SECTION 5.02. MATURITY AND INTEREST.......................................................................20
ii
SECTION 5.03. OPTIONAL REDEMPTION BY THE COMPANY..........................................................20
SECTION 5.04. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL...............................................21
SECTION 5.05. LIQUIDATION AMOUNT..........................................................................21
ARTICLE SIX ISSUE OF SECURITIES................................................................................22
SECTION 6.01. AUTHENTICATION, DELIVERY AND DATING.........................................................22
ARTICLE SEVEN REDEMPTION OF SECURITIES.........................................................................23
SECTION 7.01. APPLICABILITY OF RIGHT OF REDEMPTION........................................................23
SECTION 7.02. NOTICE OF REDEMPTION........................................................................23
SECTION 7.03. SECURITIES OF ANY SERIES TO BE CANCELLED AND DISCHARGED ON SPECIFIC CONDITIONS..............24
SECTION 7.04. PRO RATA REDEMPTION OF SERIES A NOTES.......................................................25
SECTION 7.05. PROHIBITION ON OPTIONAL REDEMPTION.........................................................25
ARTICLE EIGHT PARTICULAR COVENANTS OF THE COMPANY..............................................................25
SECTION 8.01. TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.............................................25
SECTION 8.02. TO MAINTAIN OFFICE OR AGENCY IN NEW YORK....................................................25
SECTION 8.03. THE COMPANY, OR PAYING AGENT, TO HOLD IN TRUST MONEYS FOR PAYMENT OF PRINCIPAL
AND INTEREST.....................................................................25
SECTION 8.04. RESTRICTIONS UPON LIENS UPON PROPERTY OF THE COMPANY AND GUARANTORS.........................26
SECTION 8.05. MAINTENANCE OF CORPORATE EXISTENCE..........................................................28
SECTION 8.06. RESTRICTIONS ON CONSOLIDATION, MERGER, SALE, ETC............................................29
SECTION 8.07. ANNUAL STATEMENT CONCERNING COMPLIANCE WITH COVENANTS.......................................29
SECTION 8.08. COMPLIANCE WITH COVENANTS AND CONDITIONS MAY BE WAIVED BY HOLDERS OF SECURITIES.............30
SECTION 8.09. ANNUAL TAX NOTICE...........................................................................30
SECTION 8.10. ADDITIONAL SUBSIDIARY GUARANTEE.............................................................30
SECTION 8.11. ASSET SALES.................................................................................30
SECTION 8.12. REPORTS TO HOLDERS..........................................................................31
SECTION 8.13. ADDITIONAL AMOUNTS..........................................................................31
SECTION 8.14. COMPLIANCE WITH GUARANTY....................................................................33
SECTION 8.15. INCURRENCE OF INDEBTEDNESS..................................................................33
SECTION 8.16. TRANSACTIONS WITH AFFILIATES................................................................34
SECTION 8.17. TAXES ......................................................................................34
SECTION 8.18. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM GUARANTORS.................................35
SECTION 8.19. MAINTENANCE OF PROPERTIES; INSURANCE; BOOKS AND RECORDS; COMPLIANCE WITH LAW................35
SECTION 8.20. WAIVER OF STAY, EXTENSION AND USURY LAWS....................................................35
SECTION 8.21. LIMITATION ON RESTRICTED PAYMENTS...........................................................36
iii
ARTICLE NINE REMEDIES OF TRUSTEE AND SECURITYHOLDERS...........................................................36
SECTION 9.01. EVENTS OF DEFAULT...........................................................................36
SECTION 9.02. ACCELERATION OF MATURITY OF PRINCIPAL ON DEFAULT............................................38
SECTION 9.03. TRUSTEE APPOINTED ATTORNEY-IN-FACT FOR SECURITYHOLDERS TO FILE CLAIMS.......................40
SECTION 9.04. APPLICATION OF MONEYS COLLECTED BY TRUSTEE..................................................40
SECTION 9.05. SECURITYHOLDERS MAY DIRECT PROCEEDINGS AND WAIVE DEFAULTS...................................41
SECTION 9.06. LIMITATIONS ON RIGHTS OF SECURITYHOLDERS TO INSTITUTE PROCEEDINGS...........................41
SECTION 9.07. ASSESSMENT OF COSTS AND ATTORNEYS' FEES IN LEGAL PROCEEDINGS................................42
SECTION 9.08. REMEDIES CUMULATIVE.........................................................................42
SECTION 9.09. CONTROL BY SECURITYHOLDERS..................................................................43
ARTICLE TEN CONCERNING THE SECURITYHOLDERS.....................................................................43
SECTION 10.01. EVIDENCE OF ACTION BY SECURITYHOLDERS......................................................43
SECTION 10.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF SECURITIES.............................44
SECTION 10.03. SECURITIES OWNED BY THE COMPANY OR OTHER OBLIGOR ON THE SECURITIES TO BE
DISREGARDED IN CERTAIN CASES.....................................................44
SECTION 10.04. REVOCATION BY SECURITYHOLDERS OF CONSENTS TO ACTION........................................44
ARTICLE ELEVEN REPORTS BY THE COMPANY AND THE TRUSTEE AND SECURITYHOLDERS' LISTS...............................45
SECTION 11.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS..................................45
SECTION 11.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.....................................45
SECTION 11.03. REPORTS BY TRUSTEE.........................................................................45
SECTION 11.04. REPORTS BY COMPANY.........................................................................46
ARTICLE TWELVE CONCERNING THE TRUSTEE..........................................................................46
SECTION 12.01. CERTAIN DUTIES AND RESPONSIBILITIES........................................................46
SECTION 12.02. CERTAIN RIGHTS OF TRUSTEE..................................................................47
SECTION 12.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.....................................49
SECTION 12.04. MAY HOLD SECURITIES........................................................................50
SECTION 12.05. MONEY HELD IN TRUST........................................................................50
SECTION 12.06. COMPENSATION AND REIMBURSEMENT.............................................................50
SECTION 12.07. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY....................................................52
SECTION 12.08. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR..........................................52
SECTION 12.09. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.....................................................53
SECTION 12.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS................................54
SECTION 12.11. APPOINTMENT OF AUTHENTICATING AGENT........................................................55
SECTION 12.12. NOTICE OF DEFAULTS.........................................................................56
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SECTION 12.13. COLLATERAL TRUSTEE AND AUTHENTICATING AGENT GET BENEFIT OF ARTICLE TWELVE..................56
ARTICLE THIRTEEN DEFEASANCE ...................................................................................56
SECTION 13.01. DISCHARGE OF INDENTURE UPON PAYMENT OF SECURITIES..........................................56
SECTION 13.02. DISCHARGE OF SECURITIES OF ANY SERIES UPON DEPOSIT OF MONEYS...............................56
SECTION 13.03. INTEREST ON MONEYS DEPOSITED...............................................................57
SECTION 13.04. REPAYMENT TO COMPANY.......................................................................58
SECTION 13.05. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS..................................................58
SECTION 13.06. REINSTATEMENT..............................................................................58
ARTICLE FOURTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES....................58
SECTION 14.01. LIABILITY SOLELY CORPORATE.................................................................58
ARTICLE FIFTEEN SUPPLEMENTAL INDENTURES........................................................................59
SECTION 15.01. WITHOUT CONSENT OF SECURITYHOLDERS, THE COMPANY[, THE GUARANTORS] AND TRUSTEE
MAY ENTER INTO SUPPLEMENTAL INDENTURES FOR SPECIFIED PURPOSES....................59
SECTION 15.02. MODIFICATION OF INDENTURE BY SUPPLEMENTAL INDENTURE WITH CONSENT OF
SECURITYHOLDERS..................................................................60
SECTION 15.03. UPON REQUEST OF THE COMPANY, TRUSTEE TO JOIN IN EXECUTION OF SUPPLEMENTAL
INDENTURE........................................................................61
SECTION 15.04. EFFECT OF SUPPLEMENTAL INDENTURE...........................................................61
SECTION 15.05. MATTERS PROVIDED FOR IN SUPPLEMENTAL INDENTURE MAY BE NOTED ON SECURITIES, OR
NEW SECURITIES APPROPRIATELY MODIFIED MAY BE ISSUED IN EXCHANGE FOR
OUTSTANDING SECURITIES...........................................................62
SECTION 15.06. SUPPLEMENTAL INDENTURES TO CONFORM TO TRUST INDENTURE ACT OF 1939..........................62
ARTICLE SIXTEEN COLLATERAL AND SECURITY........................................................................62
SECTION 16.02. SECURITY AGREEMENTS........................................................................62
SECTION 16.03. RECORDING AND OPINIONS.....................................................................64
SECTION 16.04. RELEASE OF PLEDGED ASSETS AND COLLATERAL...................................................64
SECTION 16.05. CERTIFICATES OF THE COMPANY................................................................66
SECTION 16.06. CERTIFICATES OF THE TRUSTEE................................................................66
SECTION 16.07. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE AND THE COLLATERAL TRUSTEE
UNDER THE SECURITY AGREEMENTS....................................................66
SECTION 16.08. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE UNDER THE SECURITY AGREEMENTS.............66
ARTICLE SEVENTEEN SUBSIDIARY GUARANTEES........................................................................67
SECTION 17.01. GUARANTEE..................................................................................67
SECTION 17.02. LIMITATION ON GUARANTOR LIABILITY..........................................................68
SECTION 17.03. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTY..............................................69
SECTION 17.04. SUCCESSORS AND ASSIGNS.....................................................................69
SECTION 17.05. NO WAIVER..................................................................................69
SECTION 17.06. MODIFICATION...............................................................................69
SECTION 17.07. RELEASE OF GUARANTOR.......................................................................69
SECTION 17.08. NO SUBROGATION.............................................................................69
ARTICLE EIGHTEEN MISCELLANEOUS PROVISIONS......................................................................70
SECTION 18.01. CONSOLIDATION, MERGER, SALE OR LEASE.......................................................70
SECTION 18.02. RIGHTS UNDER INDENTURE CONFINED TO PARTIES AND HOLDERS OF SECURITIES.......................70
SECTION 18.03. EVIDENCE OF COMPLIANCE.....................................................................71
SECTION 18.04. CANCELLATION OF SECURITIES.................................................................71
SECTION 18.05. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF 1939 TO CONTROL..............................72
SECTION 18.06. ACTION OF AUTHORIZED COMMITTEE DEEMED TO BE ACTION OF BOARD OF DIRECTORS...................72
SECTION 18.07. NOTICES ...................................................................................72
SECTION 18.08. ACT OF HOLDERS.............................................................................73
SECTION 18.09. PAYMENTS DUE ON NON-BUSINESS DAYS..........................................................74
SECTION 18.10. EXECUTION IN COUNTERPARTS..................................................................74
SECTION 18.11. INDENTURE DEEMED A NEW YORK CONTRACT; VENUE; WAIVER OF TRIAL BY JURY.......................74
SECTION 18.12. CURRENCY OF PAYMENTS.......................................................................74
SECTION 18.13. SUCCESSORS AND ASSIGNS.....................................................................75
SECTION 18.14. SEVERABILITY...............................................................................75
SECTION 18.15. CONSENT TO SERVICE OF PROCESS..............................................................75
SECTION 18.16. EFFECT OF HEADINGS AND TABLE OF CONTENTS...................................................75
SECTION 18.17. BENEFITS OF INDENTURE......................................................................75
v
INDENTURE, dated as of October __, 2002, between FLAG Telecom
Group Limited, a corporation organized under the laws of Bermuda, party of the
first part, and The Bank of
New York, a
New York banking corporation, as trustee
(the "TRUSTEE"), party of the second part.
RECITALS
The Company is authorized and empowered to borrow money for
its corporate purposes and to issue its bonds, debentures, notes and other
obligations for money so borrowed.
The Company has duly authorized the issue, in one or more
series as in this Indenture provided, from time to time of its debt securities
(hereinafter called the "SECURITIES") and, to provide the general terms and
conditions upon which the Securities are to be authenticated, issued and
delivered, the Company has duly authorized the execution and delivery of this
Indenture.
The Trustee has the corporate power to enter into this
Indenture and to accept and execute the trusts herein created.
The Company represents that all acts and things necessary to
make the Securities, when executed by the Company and authenticated and
delivered by the Trustee as in this Indenture provided and issued, the valid,
binding and legal obligations of the Company, will, at the time of such
execution, authentication and delivery, have been done and performed; that all
acts and things necessary to constitute these presents a valid indenture and
agreement according to its terms have been done and performed; that the
execution of this Indenture has in all respects been duly authorized and the
issue hereunder of the Securities will, at the time of the issue thereof, have
in all respects been duly authorized; and that the Company, in the exercise of
each and every legal right and power in it vested, executes this Indenture and
proposes to make, execute, issue and deliver the Securities.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That, in consideration of the premises and of the acceptance
and purchase of the Securities by the holders thereof, the Company covenants and
agrees with the Trustee, for the equal benefit of all the holders from time to
time of the Securities, without preference, priority or distinction of any
thereof over any other thereof by reason of priority in time of issuance or
negotiation, or otherwise, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. TERMS. Unless otherwise defined in this
Indenture or the context otherwise requires, all terms used herein shall have
the meanings assigned to them in the Trust Indenture Act of 1939.
The words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
SECTION 1.02. DEFINITIONS. Unless the context otherwise
requires, the terms defined in this Section 1.02 shall for all purposes of this
Indenture have the meanings hereinafter set forth, the following definitions to
be equally applicable to both the singular and the plural forms of any of the
terms herein defined:
"ACCOUNTS" shall mean "accounts" as such term is defined in
Section 9-102(a)(2) of the UCC.
"ACT," when used with respect to any holders, has the meaning
specified in Section 18.08.
"ADDITIONAL AMOUNTS" shall have the meaning set forth in
Section 8.13.
"AFFILIATE" with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with, such specified person.
"APPROVED JURISDICTION" means any state of the United States
or the District of Columbia, Bermuda, [the United Kingdom [and Ireland]].
"AUTHENTICATING AGENT" means the Trustee and/or the
authenticating agent, if any, appointed by the Trustee and acting pursuant to
Section 12.11.
"BANKRUPTCY CODE" means Chapter 11 of Title 11 of the United
States Code, as amended from time to time, or any similar Federal, State or
foreign law for relief of debtors.
"BANKRUPTCY PLAN" means the Third Amended and Restated Joint
Plan of Reorganization of FLAG Telecom Holdings Limited, a company organized
under the laws of Bermuda, FLAG Limited, FLAG Pacific USA Limited, FLAG Telecom
Group Services Limited, FLAG Telecom Limited, FLAG Telecom USA Ltd., FLAG Asia
Limited, FLAG Atlantic Holdings Limited, FLAG Atlantic Limited, and FLAG
Atlantic USA Limited as amended or supplemented from time to time.
"BOARD OF DIRECTORS" means, as to any Person, the board of
directors, management committee or similar governing body of such Person or any
duly authorized committee thereof.
"BOARD RESOLUTION" means a copy of a resolution or resolutions
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors or any committee of the Board of
Directors (or committee of officers or other representatives of the Company, to
the extent that any such committee or committees have been authorized by the
Board of Directors to establish or approve the matters contemplated by Section
2.02 or any other provision hereof) and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"BUSINESS DAY" shall mean a day which in The City of
New York
and London is not a day on which banking institutions are authorized or
obligated by law or executive order to close.
2
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents (however
designated) of such Person, and any rights, warrants or options exchangeable or
exercisable for or convertible into such capital.
"CHANGE OF CONTROL", when used with respect to the Company,
means
(i) any "person" or "group" is or becomes the "beneficial
owner" (as such terms are used in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended from time to time, except
that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time or
the occurrence of a subsequent condition), directly or indirectly, of
more than 50% of the Voting Stock of the Company (measured by voting
power rather than number of shares); or
(ii) the Company consolidates or merges with or into any other
Person or sells, assigns, conveys, transfers, leases, licenses or
otherwise disposes of all or substantially all of its assets and the
assets of the Company's direct and indirect subsidiaries (on a
consolidated basis) to any other Person, in either in one transaction
or a series of related transactions, other than a consolidation or
merger or disposition of assets: (x) of or by the Company into or to a
100% owned subsidiary of the Company that is a Guarantor and is
organized under the laws of Bermuda or the United States, or (y)
pursuant to a transaction in which the outstanding Common Shares are
changed into or exchanged for securities or other property with the
effect that the beneficial owners of the outstanding Voting Stock of
the Company immediately prior to such transaction, beneficially own,
directly or indirectly, at least a 75% of the Voting Stock (measured by
voting power rather than number of shares) of the surviving corporation
or the Person to whom the Company's assets are transferred immediately
following such transaction.
"COLLATERAL" means all of the assets of the Company and
each Guarantor, other than the assets pledged pursuant to the Liens listed on
Schedule 8.04 hereto.
"COLLATERAL DOCUMENTS" means the Security Agreements together
with any and all other collateral assignment agreements providing for a grant of
security interest in and/or pledge of the Collateral to the Collateral Trustee
for the benefit of the Holders of the Securities.
"COLLATERAL TRUSTEE" shall have the meaning set forth in the
Security Agreements.
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created under the United States Securities
Exchange Act of 1934 or, if at any time after the execution of this Indenture
such Commission is not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such duties at such
time.
"COMMON SHARES" means the Common Shares, par value $1.00 per
share, of the Company.
"COMPANY" means FLAG Telecom Group Limited and, subject to the
provisions of Section 18.01, shall also include its successors and assigns.
3
"default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default under this Indenture.
"DEPOSITARY" means, with respect to Securities of any Series,
for which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company,
New York,
New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities Exchange Act of 1934, as amended from time to time, or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to Section 2.02.
"DOLLARS OR $" means the currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"EVENT OF DEFAULT" shall have the meaning specified in Section
9.01.
"FAIR MARKET VALUE" means the price that could be negotiated
in an arm's-length, free market transaction, for cash, between a willing seller
and a willing and able buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. Except as otherwise expressly provided
in this Indenture, "Fair Market Value" shall be determined by the Board of
Directors acting reasonably and in good faith.
"GLOBAL SECURITY" means, with respect to any series of
Securities, a Security executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
"GUARANTEED OBLIGATIONS" shall have the meaning specified in
Section 17.01.
"GUARANTOR" means, at any time of determination, any
Subsidiary that then has executed and delivered to the Trustee this Indenture or
a Subsidiary Guaranty in accordance with the provisions of this Indenture, and
its successors and assigns, unless previously released from such Subsidiary
Guaranty in accordance with the provisions of this Indenture, and initially
shall mean the Subsidiaries listed on Exhibit D attached hereto.
"INDENTURE" or "THIS INDENTURE" shall mean this instrument and
all indentures supplemental hereto.
"INDEBTEDNESS" means, with respect to any Person (without
duplication):
(1) any indebtedness of such Person, whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances or representing
capital lease obligations or the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense, trade payable or other current liability incurred in the ordinary
course of business which is not overdue by more than 90 days (unless the same
is being contested in good faith), if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would
appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP;
(2) all indebtedness under clause (1) of other Persons
secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person); and
(3) to the extent not otherwise included, the guaranty by
such Person of any indebtedness under clause (1) of any other Person.
The amount of any Debt outstanding as of any date shall be
the accreted value thereof, in the case of any Debt issued at a discount to
par, and the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Debt.
"INTEREST PAYMENT DATE" when used with respect to any Security
shall mean the Stated Maturity of an installment of interest on such Security.
"INVESTMENT" means any direct or indirect loan or other
extension of credit, including any advance, guarantee of indebtedness of or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of others)
or any purchase or acquisition by a Person of any Capital Stock (including
securities not consisting of cash or cash equivalents and received in connection
with an asset sale or other disposition of assets permitted hereunder), bonds,
notes, debentures or other securities or evidences of Indebtedness issued by
any other Person.
"ISSUE DATE" means October __, 2002.
4
"JUDICIAL LIEN" shall have the meaning specified in Section
16.01.
"LIEN" means any lien (statutory or otherwise), charge, claim,
security interest, pledge, mortgage, hypothecation, right of another under any
conditional sale or other title retention agreement, or any other encumbrance
affecting title to property and any agreement to give any security interest.
Without limiting the generality of the foregoing, the sale of property used or
useful in the business of the seller with the intention of retaining the use
thereof under a lease, or any other comparable arrangement commonly referred to
as a "sale and leaseback," shall be deemed to create a Lien on such property.
"MATURITY," with respect to any Security, shall mean the date
on which the principal of such Security shall become due and payable as therein
and herein provided, whether at Stated Maturity or by declaration, call for
redemption or otherwise.
"OFFICER" means, when used in connection with any action to be
taken by the Company, the Chairman of the Board, the Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer or the Treasurer of the
Company or any other officer of the Company authorized in a Board Resolution to
act on its behalf.
"OFFICERS' CERTIFICATE," when used with respect to the
Company, shall mean a certificate signed by two Officers of the Company and
delivered to the Trustee.
"OPINION OF COUNSEL" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel for the Company and who
shall be reasonably acceptable to the Trustee.
"OUTSTANDING," when used as of any particular time with
reference to Securities, shall mean, as of the date of determination and subject
to Section 10.03, all Securities theretofore authenticated and delivered by the
Trustee under this Indenture, except
(a) Securities or portions thereof for which (i) funds, or as
provided in Section 13.02 hereof, direct obligations of the United
States of America, sufficient to pay the principal thereof and all
unpaid interest thereon to Maturity or to the date fixed for the
redemption thereof shall have been deposited in trust for such purpose
as provided herein with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent), and
(ii) in case of redemption, notice of redemption thereof shall have
been duly given or provision satisfactory to the Trustee for the giving
of such notice shall have been made;
(b) Securities which shall have been cancelled or surrendered
to the Trustee for cancellation; and
5
(c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to
Section 2.05 or 2.06 and Securities paid pursuant to Section 2.06;
provided, however, that in determining whether the holders of the requisite
principal amount of outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any affiliate of the Company or of such
other obligor.
"PAYING AGENT" means any Person authorized by the Company to
pay the principal of or interest on any Security on behalf of the Company.
"PERFECTION COLLATERAL" means the assets of the Company
defined as Collateral in any of the Collateral Agreements.
"PERMITTED LIENS" shall have the meaning specified in Section
8.04.
"PERSON" shall mean an individual, a corporation, limited
liability company, a partnership, a joint venture, an association, a joint stock
company, a trust, an unincorporated organization or a government or an agency or
political subdivision thereof.
"PRINCIPAL OFFICE OF THE TRUSTEE," or other similar term,
shall mean the office of the Trustee at which at any particular time its
corporate trust business is principally administered. As of the date hereof, the
Principal Office of the Trustee is located at 000 Xxxxxxx Xxxxxx - 00X, Xxx
Xxxx, Xxx Xxxx 00000; Attention: Global Finance Unit or such other address as
the Trustee may designate from time to time by notice to the Holders and the
Company.
"RECORD DATE" shall mean, with respect to any interest payable
on any Security on any Interest Payment Date, the close of business on the date
15 days prior thereto or on such other date as is specified in such Security or,
in the case of defaulted interest, the close of business on any subsequent
Record Date established as provided in Section 2.01 (in each case whether or not
such day is a Business Day).
"REDEEMABLE CAPITAL STOCK" means any shares of any class or
series of Capital Stock that, either by the terms thereof, by the terms of any
security into which it is convertible, exchangeable or exercisable or by
contract or otherwise, is or upon the happening of an event or passage of time
would be required to be redeemed prior to the one year anniversary of Stated
Maturity of the principal of the Series A Notes or is redeemable at the option
of the holder thereof at any time prior to the one year anniversary of any such
Stated Maturity, or is convertible into or exchangeable for debt securities at
any time prior to the one-year anniversary of such Stated Maturity.
6
"REDEMPTION DATE" when used with respect to any Security to be
redeemed, in whole or in part, shall mean the date fixed for such redemption by
or pursuant to this Indenture and the terms of such Security.
"REDEMPTION PRICE" when used with respect to any Security to
be redeemed shall mean the price at which it is to be redeemed pursuant to this
Indenture and the terms of such Security.
"RESPONSIBLE OFFICERS" of the Trustee hereunder shall mean any
officer of the Trustee within the Corporate Trust Division - Global Finance Unit
of the Trustee (or the similar successor unit or department of the Trustee)
located at the Principal Trust Office of the Trustee who has direct
responsibility for the administration of this Indenture and, for the purposes of
Section 12.01(c)(2) and Section 12.12 shall also include any officer of the
Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"SECURITY" shall mean any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, authenticated and delivered under this Indenture; provided, however, that,
if at any time there is more than one Person acting as Trustee under this
Indenture, "Securities," with respect to any such Person, shall mean Securities
authenticated and delivered under this Indenture, exclusive, however, of
Securities of any series as to which such Person is not Trustee.
"SECURITY AGREEMENTS" means the
Security and Pledge
Agreement[s] dated as of the date of this Indenture and substantially in the
form[s] attached as Exhibit[s] F hereto, as such agreement[s] may be amended,
modified or supplemented from time to time and the Fixed and Floating Charge
Agreement[s] dated as of the date of this Indenture and substantially in the
form[s] attached as Exhibit[s] F hereto, as such agreement[s] may be amended,
modified or supplemented from time to time.
"SECURITY CO-REGISTRAR" has the meaning specified in Section
2.05.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the
respective meanings specified in Section 2.05.
"SECURITYHOLDER" or "HOLDER OF SECURITIES" or "HOLDER" or
"HOLDER" or "REGISTERED HOLDER," or "registered owner," with respect to a
Security, shall mean the Person in whose name such Security or Securities shall
be registered in the register kept for that purpose hereunder.
"SERIES A ISSUE DATE" means October ___, 2002.
"SERIES A NOTES" has the meaning specified in Section 3.01.
"SERIES B ISSUE DATE" means October ___, 2002.
"SERIES B NOTES" has the meaning specified in Section 4.01.
"SERIES C ISSUE DATE" means October ___, 2002.
7
"SERIES C NOTES" has the meaning specified in Section 5.01.
"STATED MATURITY" when used with respect to any Security or
any installment of interest thereon shall mean the date specified in such
Security as the fixed date on which the principal (or any portion thereof) of
such Security or such installment of interest is due and payable.
"SUBORDINATED DEBT" means, with respect to the Company or any
Guarantor, any indebtedness of the Company or such Guarantor (whether
outstanding on the Issue Date or thereafter incurred) that is subordinate or
junior in right of payment to the Securities or the respective Subsidiary
Guaranty pursuant to a written agreement.
"SUBSIDIARY" shall mean any Person at least a majority of the
Voting Stock of which shall at the time be owned, directly or indirectly, by the
Company.
"SUBSIDIARY GUARANTY" means a guaranty provided pursuant to
Section 17.01.
"TRUST INDENTURE ACT OF 1939" or "TRUST INDENTURE ACT" shall
mean such Act as amended from time to time except as otherwise required by law.
"TRUSTEE" shall mean the trustee hereunder for the time being,
whether original or successor, and if at any time there is more than one such
trustee, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to Securities of that series.
"UCC" shall mean the Uniform Commercial Code as in effect
from time to time in the State of
New York.
"VOTING STOCK" means stock of any class or classes (however
designated) having ordinary voting power for the election of a majority of the
members of the board of directors (or any governing body) of such corporation,
other than stock having such power only by reason of the happening of a
contingency.
Certain other terms, relating principally to provisions
included in this Indenture in compliance with the Trust Indenture Act of 1939,
are defined in Article Twelve.
ARTICLE TWO
FORM, EXECUTION, DELIVERY, TRANSFER AND
EXCHANGE OF SECURITIES
SECTION 2.01. FORMS GENERALLY; RECORD DATES; PLACE OF PAYMENT,
DENOMINATIONS AND NUMBERING OF SECURITIES. The Securities of each series shall
be issuable in registered form and, except the Series A Notes, Series B Notes
and Series C Notes established under Articles Three, Four and Five of this
Indenture, respectively, which are in the forms therein specified, shall be in
substantially such form as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the
8
officers of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Securities may be listed, or to conform to
usage. The Securities shall be issued, except as otherwise provided with respect
to any series of Securities pursuant to Section 2.02, in the denomination of
$1,000 and any larger denomination which is an integral multiple of $1,000
approved by the Company, such approval to be evidenced by the execution thereof.
If Securities of a series are issuable in whole or in part in
global form, any such Security may provide that it shall represent the aggregate
amount of outstanding Securities from time to time endorsed thereon and may also
provide that the aggregate amount of outstanding Securities represented thereby
may from time to time be reduced to reflect exchanges or increased to reflect
the issuance of additional Securities. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
outstanding Securities represented thereby shall be made in such manner and by
such Person or Persons, as shall be specified therein or in the Company order of
authentication delivered to the Trustee pursuant to Section 6.01.
The Person in whose name any Security is registered at the
close of business on any Record Date with respect to any Interest Payment Date
shall be entitled to receive the interest payable on such Interest Payment Date
notwithstanding the cancellation of such Security upon any transfer or exchange
thereof subsequent to such Record Date and prior to such Interest Payment Date;
provided, however, that, if and to the extent the Company shall default in the
payment of the interest due on such Interest Payment Date, the defaulted
interest shall be paid to the Persons in whose names the outstanding Securities
are registered on a subsequent Record Date, such Record Date to be not less than
5 days prior to the date of payment of such defaulted interest, established by
notice given by mail by or on behalf of the Company to the holders of Securities
not less than 15 days preceding such subsequent Record Date.
The principal of and interest and premium, if any, on the
Securities shall be payable at each office or agency of the Company designated
pursuant to Section 8.02 for such purpose; provided, however, that interest may
at the option of the Company be paid by wire transfer and if no wire
instructions are specified, then by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register
(including the records of any Security Co-Registrar). Such payments will be made
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts. On
each Interest Payment Date the Trustee shall pay to the registered holder
interest accrued in respect of such Securities. Payment of principal on the
Securities shall be paid to the registered holder or upon such holder's order
only upon presentation and surrender for payment of such Securities on or after
the payment date at the office or agency of the Company designated pursuant to
Section 8.02 for such purpose.
SECTION 2.02. TERMS OF SERIES. The aggregate principal amount
of Securities which may be authenticated and delivered under this Indenture is
unlimited, provided, however, that no Securities other than the Series A Notes,
Series B Notes and Series C Notes shall be authenticated and delivered under
this Indenture unless (i) no default or Event of Default exists
9
with respect to any series of Securities, (ii) the Company has paid or redeemed
at least $15,000,000 of the principal amount of the Series A Notes and (iii)
such Securities are issued in accordance with Section 8.15(c). All series of
Securities shall be secured by the Collateral, equally and ratably. Unless
otherwise provided, all Securities authenticated and delivered hereunder shall
rank PARI PASSU with the Series A Notes, Series B Notes, Series C Notes and all
other series of Securities issued hereunder in priority and right of payment.
The Securities may be issued in one or more series. Except
with respect to the Series A Notes, Series B Notes and Series C Notes
established under Articles Three, Four and Five of this Indenture, respectively,
there shall be established by or pursuant to a Board Resolution, and set forth
in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series:
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from the Securities of all
other series, except to the extent that additional Securities of an
existing series are being issued);
(b) any limit upon the aggregate principal amount of the
Securities of the series which may be outstanding under this Indenture
(except as otherwise provided in Section 2.06, 2.08, 7.02 or 15.05);
(c) the date or dates on which the principal of the
Securities of the series is payable;
(d) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method by which such rate or rates
shall be determined, the date or dates from which such interest shall
accrue, or the method by which such date or dates shall be determined,
the interest payment dates on which such interest shall be payable and
the Record Dates for the determination of holders to whom interest is
payable;
(e) the place or places where the principal of, premium, if
any, and interest on Securities of the series shall be payable if other
than as specified in Section 2.01;
(f) the price or prices at which, the period or periods within
which and the terms and conditions upon which Securities of the series
may be redeemed, in whole or in part, at the option of the Company, if
the Company is to have that option;
(g) the obligation, if any, of the Company to redeem, purchase
or repay Securities of the series at the option of a holder thereof and
the price or prices at which the period or periods within which and the
terms and conditions upon which Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(h) if other than denominations of $1,000 or any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
10
(i) if other than the entire principal amount thereof, the
portion of the principal amount of the Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 9.02;
(j) the issuance of the Securities of such series in whole or
in part in global form and, if so, the identity of the Depositary for
such Securities in global form, and the terms and conditions, if any,
upon which interests in such Securities in global form may be
exchanged, in whole or in part, for the individual Securities
represented thereby;
(k) any deletions from, modifications of or additions to the
events of default or covenants of the Company with respect to any of
such Securities, whether or not such events of default or covenants are
consistent with the events of default or covenants set forth herein;
(l) the terms and conditions, if any, upon which the payment
of Securities of such series shall be subordinated to other series of
Securities of the Company (including, without limitation, the series or
series which rank senior to such Securities; restrictions on payments
to holders of such Securities while a default with respect to such
senior Securities is continuing; restrictions, if any, on payments to
the holders of such Securities following an Event of Default; and any
requirements for holders of such Securities to remit certain payments
to the holders of such senior Securities);
(m) if there is more than one Trustee, the identity of the
Trustee and, if not the Trustee, the identity of each Security
Registrar, paying agent or Authenticating Agent with respect to such
Securities; and
(n) any other terms of the Securities of the series (which
terms shall not be inconsistent with the provisions of this
Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided by
or pursuant to such Board Resolution, and set forth in such Officers'
Certificate, or in any such indenture supplemental hereto. If any of the terms
of a series of Securities are established by action taken pursuant to a Board
Resolution, such Board Resolution shall be delivered to the Trustee at or prior
to the delivery of the Officers' Certificate setting forth the terms of such
series. All Securities of any one series need not be issued at the same time
and, subject to Section 2.02 unless otherwise so provided by the Company, a
series may be reopened for issuances of additional Securities of such series or
to establish additional terms of such series of Securities.
SECTION 2.03. CERTIFICATE OF AUTHENTICATION NECESSARY TO MAKE
SECURITIES VALID. The Securities shall be signed in the name and on behalf of
the Company by the manual or facsimile signature of its Chairman of the Board of
Directors, its President or one of its Vice Presidents and by its Secretary or
an Assistant Secretary and may have the corporate seal of the Company affixed
thereto or reproduced thereon attested by the Secretary or Assistant Secretary
of the Company. The Securities shall then be delivered to the Trustee or the
Authenticating Agent for authentication by it, and thereupon, as provided
herein, the Trustee or the Authenticating Agent shall authenticate and deliver
such Securities. In case any officer of the
11
Company who shall have signed any of the Securities shall cease to be such
officer of the Company before the Securities so signed shall have been actually
authenticated and delivered by the Trustee or the Authenticating Agent, such
Securities may nevertheless be issued, authenticated and delivered as though the
person who signed such Securities had not ceased to be such officer of the
Company; and also any of the Securities may be signed on behalf of the Company
by any person who at the time of the execution of such Securities shall be the
proper officer of the Company, even though at the date of the execution of this
Indenture such person may not have been such officer of the Company.
SECTION 2.04. FORM OF CERTIFICATE OF AUTHENTICATION. Only such
of the Securities as shall bear thereon a certificate substantially in the form
of the Trustee's certificate of authentication hereinafter recited, executed by
the Trustee or the Authenticating Agent, shall be valid or become obligatory for
any purpose or entitle the holder thereof to any right or benefit under this
Indenture, and the certificate of authentication by the Trustee or the
Authenticating Agent upon any such Security executed on behalf of the Company as
aforesaid shall be conclusive evidence, and the only evidence, that the Security
so authenticated has been duly authenticated and delivered hereunder and that
the holder thereof is entitled to the benefits of this Indenture.
The Trustee's certificate of authentication on all Securities
shall be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF
NEW YORK
---------------------------------------------
as Trustee
By:
----------------------------------------
Authorized Signatory
or (if an Authenticating Agent is appointed pursuant to Section 12.11)
By: (Name of Agent)
as Authenticating Agent
By:
-------------------------------
Authorized Signatory
SECTION 2.05. REGISTRATION, TRANSFER AND EXCHANGE OF
SECURITIES. The Company shall cause to be kept a register (herein sometimes
referred to as the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. Unless and until otherwise
determined by the Company, by Board Resolution, the Security Register initially
shall be kept at the Principal Office of the Trustee. The Trustee is hereby
appointed "SECURITY REGISTRAR" for the purpose of registering Securities and
transfers of Securities as herein provided and shall be considered an agent of
the Company for this purpose. The Company may appoint one or more
12
"Security Co-Registrars" for such purpose. The Security Registrar and any
Security Co-Registrars are herein sometimes referred to, and are appointed as,
the "SECURITY REGISTRAR."
Upon surrender for registration of transfer of any Security of
any series at any office or agency of the Company designated pursuant to Section
8.02 for such purpose or at the office of any Security Co-Registrar, the Company
shall execute and the Trustee or the Authenticating Agent shall authenticate and
deliver a Security or Securities of such series for a like aggregate principal
amount, in such authorized denomination or denominations and registered in such
name or names as may be requested. The transfer of any security shall not be
valid as against the Company or the Trustee unless registered at such offices or
agency by the registered holder, or by his attorney duly authorized in writing,
and recorded in the Security Register. There shall be only one Security Register
with respect to each series of Securities.
Securities of any series in their several authorized
denominations are exchangeable for a Security or Securities of such series in
authorized denominations and of a like aggregate principal amount. Securities to
be exchanged as aforesaid shall be surrendered for that purpose by the
registered holder thereof at such offices or agency, and the Company shall
execute and the Trustee or the Authenticating Agent shall authenticate and
deliver in exchange therefor the Security or Securities in such authorized
denomination or denominations as the Securityholder making the exchange shall
have requested and shall be entitled to receive. The Company shall not be
required to make any exchange or effect registration of transfer of (i) any
Security which shall have been designated for redemption in whole or in part
except, in the case of any Security to be redeemed in part, the portion thereof
not so to be redeemed, or (ii) any Security for a period of 15 days next
preceding any selection of Securities for redemption.
Notwithstanding any other provision of this Section, unless
and until it is exchanged in whole or in part for the individual Securities
represented thereby, in definitive form, a Security in global form representing
all or a portion of the Securities of a series may not be transferred except as
a whole by the Depositary for such series to a nominee of such Depositary or by
a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.
All Securities presented or surrendered for registration of
transfer, exchange or payment shall (if so required by the Company or the
Trustee or any Security Registrar or Security Co-Registrar or any Authenticating
Agent) be duly endorsed by, or accompanied by a written instrument or
instruments of transfer (in form reasonably satisfactory to the Company and the
Security Registrar or any Security Co-Registrar) duly executed by, the
registered holder or by his attorney duly authorized in writing.
If at any time the Depositary for the Securities of a series
represented by one or more Securities in global form notifies the Company that
it is unwilling or unable to continue as Depositary for the Securities of such
series or if at any time the Depositary for the Securities of such series shall
no longer be eligible under Section 2.01, the Company shall appoint a successor
Depositary with respect to the Securities of such series. If a successor
Depositary for the Securities of such series is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company's election pursuant to
13
Section 2.02 that such Securities be represented by one or more Securities in
global form shall no longer be effective with respect to the Securities of such
series and the Company will execute, and the Trustee, upon receipt of a Company
order for the authentication and delivery of definitive Securities of such
series, will authenticate and deliver, Securities of such series in definitive
form, in authorized denominations, in an aggregate principal amount and like
terms and tenor equal to the principal amount of the Security or Securities in
global form representing such series in exchange for such Security or Securities
in global form.
The Company may at any time and in its sole discretion
determine that individual Securities of any series issued in global form shall
no longer be represented by such Security or Securities in global form. In such
event the Company will execute, and the Trustee, upon receipt of a Company order
for the authentication and delivery of definitive Securities of such series and
of the same terms and tenor, will authenticate and deliver Securities of such
series in definitive form, in authorized denominations, and in aggregate
principal amount equal to the principal amount of the Security or Securities in
global form representing such series in exchange for such Security or Securities
in global form.
If specified by the Company pursuant to Section 2.02 with
respect to a series of Securities issued in global form, the Depositary for such
series of Securities may surrender a Security in global form for such series of
Securities in exchange in whole or in part for Securities of such series in
definitive form and of like terms and tenor on such terms as are acceptable to
the Company and such Depositary. Thereupon, the Company shall execute, and the
Trustee upon receipt of a Company order for the authentication and delivery of
definitive Securities of such series, shall authenticate and deliver, without
service charge to the holders:
(a) to each Person specified by such Depositary a new
definitive Security or Securities of the same series and of the same
tenor, in authorized denominations, in aggregate principal amount equal
to and in exchange for such Person's beneficial interest in the
Security in global form; and
(b) to such Depositary a new Security in global form in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Security in global form and the aggregate
principal amount of the definitive Securities delivered to holders
pursuant to clause (a) above.
Upon the exchange of a Security in global form for Securities
in definitive form, such Security in global form shall be cancelled by the
Trustee or an agent of the Company or the Trustee. Securities issued in
definitive form in exchange for a Security in global form pursuant to this
Section 2.05 shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Company or the Trustee in writing. The
Trustee or such agent shall deliver such Securities to or as directed by the
Persons in whose names such Securities are so registered or to the Depositary.
Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the holder making the exchange is entitled to receive.
14
No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any applicable tax or other governmental charge payable in connection
therewith.
The Company and the Trustee, and the agents of either, may
deem and treat the Person in whose name any Security is registered as the
absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for all
purposes whatsoever (subject to the provisions set forth herein relating to
Record Dates and record dates for the payment of any defaulted interest), and
the Company and the Trustee, and the agents of either, shall not be affected by
any notice to the contrary.
None of the Company, the Trustee, any Authenticating Agent,
any paying agent or the Security Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Security in global form or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interest and each of them may act or refrain from acting without
liability on any information relating to such records provided by the
Depositary.
SECTION 2.06. REPLACING SECURITIES MUTILATED, DESTROYED, LOST
OR STOLEN. In case any temporary or definitive Security of a particular series
shall become mutilated or be destroyed, lost or stolen, then upon the conditions
hereinafter set forth the Company in its discretion may execute, and thereupon
the Trustee or the Authenticating Agent shall authenticate and deliver, a new
Security of the same series of like tenor and principal amount and bearing a
different number, in exchange and substitution for and upon cancellation of the
mutilated Security or in lieu of and substitution for the Security so destroyed,
lost or stolen; provided, however, that if any such mutilated, destroyed, lost
or stolen Security shall have become payable upon the maturity thereof, the
Company may, instead of issuing a substitute Security, pay such Security without
requiring the surrender thereof. The applicant for any substitute Security or
for payment of any such mutilated, destroyed, lost or stolen Security shall
furnish to the Company and to the Trustee evidence satisfactory to them, in
their discretion, of the ownership of and the destruction, loss or theft of such
Security and shall furnish to the Company and to the Trustee indemnity
satisfactory to them, in their discretion, and, if required, shall reimburse the
Company and the Trustee for all expenses (including counsel fees and any tax or
other governmental charge that may be imposed in relation thereto) in connection
with the preparation, issue and authentication of such substitute Security or
the payment of such mutilated, destroyed, lost or stolen Security, and shall
comply with such other reasonable regulations as the Company and the Trustee, or
either of them, may prescribe. Any such new Security delivered pursuant to this
Section 2.06 shall constitute an additional contractual obligation on the part
of the Company, whether or not the allegedly destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefit of this Indenture with all other
Securities of the same series issued hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities and shall preclude any and all
other rights or remedies.
SECTION 2.07. RIGHTS TO INTEREST. Subject to the provisions
set forth herein relating to Record Dates and record dates for the payment of
any defaulted interest, each Security
15
delivered pursuant to any provision of this Indenture in exchange or
substitution for, or upon registration of transfer of, any other Security shall
carry all the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
SECTION 2.08. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities of any series the Company may execute and the Trustee or
the Authenticating Agent shall authenticate and deliver temporary Securities of
such series (printed or lithographed). Temporary Securities shall be issuable in
any authorized denomination, and substantially in the form of the definitive
Securities but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Company.
In the case of Securities of any series, such temporary Securities may be in
global form, representing all of the outstanding Securities of such series and
tenor. Every such temporary Security of a particular series shall be
authenticated by the Trustee or the Authenticating Agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Securities of such series. Without unreasonable delay, and except
in the case of temporary Securities in global form which shall be exchanged in
accordance with the provisions thereof, the Company will execute and deliver to
the Trustee definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in exchange for
definitive Securities of the same series, at the Principal Trust Office of the
Trustee or any office or agency of the Company designated pursuant to Section
8.02 for such purpose or at the office of any Security Co-Registrar, and the
Trustee or the Authenticating Agent shall authenticate and deliver in exchange
for such temporary Securities an equal aggregate principal amount of definitive
Securities of the same series. Such exchange shall be made by the Company at its
own expense and without any charge therefor except that the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto. Until so exchanged, the temporary Securities
of a particular series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series authenticated
and delivered hereunder.
ARTICLE THREE
PROVISIONS FOR THE SERIES A NOTES
SECTION 3.01. GENERAL TITLE. There shall be a series of
Securities entitled Series A Notes Due 2005 (the "SERIES A NOTES"). The Series A
Notes shall be in substantially the form as set forth in Exhibit A hereto and
shall be executed, authenticated and delivered in accordance with the provisions
of, and shall in all respects be subject to, all of the terms, conditions and
covenants of this Indenture, including, but not limited to, the provisions of
the Indenture with respect to the transfer, exchange and replacement thereof.
The aggregate principal amount of the Series A Notes that may be executed by the
Company and authenticated by the Trustee hereunder shall be limited to
forty-five million dollars ($45,000,000); PROVIDED, HOWEVER, any exchanges or
replacements of the Series A Notes made pursuant to this Indenture following the
original issuance thereof, shall not be counted against this limit.
[SECTION 3.02. GLOBAL FORM. The Series A Notes shall be
represented initially in the form of a Global Security. Each Global Security
shall be registered in the name of a nominee of the Depositary and deposited on
behalf of the Holders of the Series A Notes represented thereby with a custodian
for the Depositary for credit to the respective accounts of
16
the Holders (or to such other accounts as they may direct). Except as set forth
below, each Global Security shall be in the form of the Series A Notes attached
hereto as Exhibit A and may be transferred, in whole and not in part, only to
another nominee of the Depositary or to a successor of the Depositary or its
nominee.]
[SECTION 3.03. REGISTERED OWNER.
(a) So long as a nominee of the Depositary is the registered
owner of any Global Security, such nominee shall be considered the sole owner
and holder of the Series A Notes represented by such Global Security under the
Indenture. Except as herein provided, owners of beneficial interests in any
Global Security shall not be entitled to have Series A Notes represented by the
such Global Security registered in their names, shall not receive or be entitled
to receive physical delivery of Series A Notes in certificated form and shall
not be considered the owners or holders thereof for any purpose under the
Indenture.
(b) The registered owner of a Global Security representing the
Series A Notes may grant proxies and otherwise authorize any Person, including
owners of any beneficial interests in the Global Security and persons that may
hold interests through such beneficial owners, to take any action that a holder
is entitled to take under this Indenture or the Series A Notes.
(c) None of the Company, the Guarantor or the Trustee shall
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in any Global
Security, or for maintaining, supervising or reviewing any records relating to
such beneficial interests.]
SECTION 3.04. MATURITY DATE AND INTEREST. The Series A Notes
shall mature on October __, 2005 and shall bear interest at the rate of (i) six
point sixty-seven percent (6.67%) per annum for the first twelve (12) months
after the Issue Date; (ii) seven point thirty-three percent (7.33%) per annum
for months thirteen (13) through twenty-four (24) after the Issue Date; and
(iii) eight percent (8%) per annum for months twenty-five (25) through
thirty-six (36) after the Issue Date until payment of the principal amount shall
have been made or duly provided for. The Interest Payment Dates for the Series A
Notes shall be April __ and October __, in each year, commencing April __, 2003.
SECTION 3.05. OPTIONAL REDEMPTION BY THE COMPANY.
(a) So long as no default or Event of Default has occurred, at
any time during the first eighteen (18) months after the Issue Date (commencing
on the Issue Date), and on the day that is the first date after the expiration
of the eighteenth (18) month after the Issue Date and on the corresponding day
of each month thereafter, the Series A Notes will be redeemable at the Company's
option in accordance with Article 7 of this Indenture, including Section 7.05.
During the first eighteen (18) months after the Issue Date, the Redemption Price
for the Series A Notes shall be two-thirds of the face amount thereof plus
accrued but unpaid interest as of the Redemption Date. On the day is the first
date after the expiration of the eighteenth (18) month after the Issue Date and
on the corresponding day of each month thereafter, the Redemption Price shall
increase each month by 1.85185184444% of the original principal amount thereof
to
17
the Stated Maturity, in all instances in addition to accrued but unpaid interest
as of the date of such payment.
(b) The Series A Notes will be subject to redemption at the option of
the Company or a successor corporation at any time, in whole but not in part,
upon not less than 30 nor more than 60 days' notice, at a redemption price equal
to the principal amount thereof plus accrued and unpaid interest to the
redemption date if, as a result of any change in or amendment to the laws or any
regulations or rulings promulgated thereunder of:
(i) Bermuda or any political subdivision or governmental
authority thereof or therein having power to tax,
(ii) any jurisdiction, other than the United States, the
United Kingdom or Luxembourg, from or through which payment on the
Series A Notes is made by the Company or a successor corporation, or
its paying agent in its capacity as such, or any political subdivision
or governmental authority thereof or therein having the power to tax,
or
(iii) any other jurisdiction, other than the United States, in
which the Company or a successor corporation is organized, or any political
subdivision or governmental authority thereof or therein having the power to
tax, or any change of law, which becomes effective on or after the Issue Date,
the Company or a successor corporation is or would be required on the next
succeeding Interest Payment Date to pay Additional Amounts with respect to the
Series A Notes, and the payment of such Additional Amounts cannot be avoided by
the use of any reasonable measures available to the Company or the successor
corporation.
SECTION 3.06. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL.
In the event of a Change of Control, the principal of and interest on all Series
A Notes shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder, and the
Company shall be required to redeem the Series A Notes in accordance with
Article Seven of this Indenture. Notwithstanding Section 3.05, upon a Change of
Control, the Series A Notes shall be redeemed at a Redemption Price equal to
forty-five million dollars ($45,000,000) plus all accrued and unpaid interest
thereon to the Redemption Date, less any principal amount prepaid by the
Company.
SECTION 3.07. LIQUIDATION AMOUNT. Notwithstanding Section
3.05, in the event of any liquidation, dissolution or winding up of the Company,
either voluntary or involuntary, the holders of Series A Notes shall be entitled
to receive, prior and in preference to any distribution of any of the assets of
the Company to the holders of Common Shares, preferred stock, indebtedness
issued upon the conversion of any preferred stock or Subordinated Debt of the
Company by reason of their ownership thereof, an amount equal to forty-five
million dollars ($45,000,000) plus all accrued and unpaid interest thereon to
the date of liquidation, less any principal amount prepaid by the Company.
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ARTICLE FOUR
PROVISIONS FOR THE SERIES B NOTES
SECTION 4.01. GENERAL TITLE. There shall be a series of
Securities entitled Series B Notes Due 2004 (the "SERIES B NOTES"). The form of
the Series B Notes shall be as set forth in Exhibit B hereto and shall be
executed, authenticated and delivered in accordance with the provisions of, and
shall in all respects be subject to, all of the terms, conditions and covenants
of this Indenture, including, but not limited to, the provisions of the
Indenture with respect to the transfer, exchange and replacement thereof. The
aggregate principal amount of the Series B Notes that may be executed by the
Company and authenticated by the Trustee hereunder shall be limited to four
million dollars ($4,000,000); PROVIDED, HOWEVER, any exchanges or replacements
of the Series B Notes made pursuant to this Indenture following the original
issuance thereof, shall not be counted against this limit.
SECTION 4.02. MATURITY AND INTEREST. The Series B Notes shall
mature on October __, 2004 and shall bear interest at the rate of (i) ten
percent (10%) per annum for the first twelve (12) months after the Issue Date;
and (ii) eleven percent (11%) per annum for months thirteen (13) through
twenty-four (24) after the Issue Date until payment of the principal amount
shall have been made or duly provided for. The Interest Payment Dates for the
Series B Notes shall be April __ and October __, in each year, commencing April
__, 2003.
SECTION 4.03. OPTIONAL REDEMPTION BY THE COMPANY.
(a) So long as no default of Event of Default has occurred,
the Series B Notes will be redeemable at the Company's option in whole at any
time in accordance with Article Seven of this Indenture. The Redemption Price
for the Series B Notes shall be four million dollars ($4,000,000) plus accrued
but unpaid interest as of the Redemption Date.
(b) The Series B Notes will be subject to redemption at the
option of the Company or a successor corporation at any time, in whole but not
in part, upon not less than 30 nor more than 60 days' notice, at a redemption
price equal to the principal amount thereof plus accrued and unpaid interest to
the redemption date if, as a result of any change in or amendment to the laws or
any regulations or rulings promulgated thereunder of:
(i) Bermuda or any political subdivision or
governmental authority thereof or therein having power to tax,
(ii) any jurisdiction, other than the United States,
the United Kingdom or Luxembourg, from or through which payment on the
Series B Notes is made by the Company or a successor corporation, or
its paying agent in its capacity as such, or any political subdivision
or governmental authority thereof or therein having the power to tax,
or
(iii) any other jurisdiction, other than the United
States, in which the Company or a successor corporation is organized, or any
political subdivision or governmental authority thereof or therein having the
power to tax, or any change of law, which becomes effective on or after the
Issue Date,
19
the Company or a successor corporation is or would be required on the next
succeeding Interest Payment Date to pay Additional Amounts with respect to the
Series B Notes, and the payment of such Additional Amounts cannot be avoided by
the use of any reasonable measures available to the Company or the successor
corporation.
SECTION 4.04. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL.
In the event of a Change of Control, the principal of and interest on all Series
B Notes shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder, and the
Company shall be required to redeem the Series B Notes in accordance with
Article Seven of this Indenture. Notwithstanding Section 4.05, upon a Change of
Control, the Series B Notes shall be redeemed at a Redemption Price equal to
four million dollars ($4,000,000) plus all accrued and unpaid interest thereon
to the Redemption Date, less any principal amount prepaid by the Company.
SECTION 4.05. LIQUIDATION AMOUNT. In the event of any
liquidation, dissolution or winding up of the Company, either voluntary or
involuntary, the holders of Series B Notes shall be entitled to receive, prior
and in preference to any distribution of any of the assets of the Company to the
holders of Common Shares, preferred stock, indebtedness issued upon the
conversion of any preferred stock or Subordinated Debt of the Company by reason
of their ownership thereof, an amount equal to six million ($6,000,000) plus all
accrued and unpaid interest thereon to the date of liquidation, less any
principal amount prepaid by the Company.
ARTICLE FIVE
PROVISIONS FOR THE SERIES C NOTES
SECTION 5.01. GENERAL TITLE. There shall be a series of
Securities entitled Series C Notes Due 2004 (the "SERIES C NOTES"). The form of
the Series C Notes shall be as set forth in Exhibit C hereto and shall be
executed, authenticated and delivered in accordance with the provisions of, and
shall in all respects be subject to, all of the terms, conditions and covenants
of this Indenture, including, but not limited to, the provisions of the
Indenture with respect to the transfer, exchange and replacement thereof. The
aggregate principal amount of the Series C Notes that may be executed by the
Company and authenticated by the Trustee hereunder shall be limited to one
million two hundred fifty thousand dollars ($1,250,000); PROVIDED, HOWEVER, any
exchanges or replacements of the Series C Notes made pursuant to this Indenture
following the original issuance thereof, shall not be counted against this
limit.
SECTION 5.02. MATURITY AND INTEREST. The Series C Notes shall
mature on October __, 2004 and shall bear interest at the rate of (i) ten
percent (10%) per annum for the first twelve (12) months after the Issue Date;
and (ii) eleven percent (11%) per annum for months thirteen (13) through
twenty-four (24) after the Issue Date until payment of the principal amount
shall have been made or duly provided for. The Interest Payment Dates for the
Series C Notes shall be April __ and October __, in each year, commencing April
__, 2003.
SECTION 5.03. OPTIONAL REDEMPTION BY THE COMPANY.
(a) So long as no default of Event of Default has occurred,
the Series C Notes will be redeemable at the Company's option in whole at any
time in accordance with Article
20
Seven of this Indenture. The Redemption Price for the Series C Notes shall be
one million two hundred fifty thousand dollars ($1,250,000) plus accrued but
unpaid interest as of the Redemption Date.
(b) The Series C Notes will be subject to redemption at the
option of the Company or a successor corporation at any time, in whole but not
in part, upon not less than 30 nor more than 60 days' notice, at a redemption
price equal to the principal amount thereof plus accrued and unpaid interest to
the redemption date if, as a result of any change in or amendment to the laws or
any regulations or rulings promulgated thereunder of:
(i) Bermuda or any political subdivision or
governmental authority thereof or therein having power to tax,
(ii) any jurisdiction, other than the United States,
the United Kingdom or Luxembourg, from or through which payment on the
Series C Notes is made by the Company or a successor corporation, or
its paying agent in its capacity as such, or any political subdivision
or governmental authority thereof or therein having the power to tax,
or
(iii) any other jurisdiction, other than the United
States, in which the Company or a successor corporation is organized, or any
political subdivision or governmental authority thereof or therein having the
power to tax, or any change of law, which becomes effective on or after the
Issue Date,
the Company or a successor corporation is or would be required on the next
succeeding Interest Payment Date to pay Additional Amounts with respect to the
Series C Notes, and the payment of such Additional Amounts cannot be avoided by
the use of any reasonable measures available to the Company or the successor
corporation.
SECTION 5.04. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL.
In the event of a Change of Control, the principal of and interest on all Series
C Notes shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder, and the
Company shall be required to redeem the Series C Notes in accordance with
Article Seven of this Indenture. Notwithstanding Section 5.05, upon a Change of
Control, the Series C Notes shall be redeemed at a Redemption Price equal to one
million two hundred fifty thousand dollars ($1,250,000) plus all accrued and
unpaid interest thereon to the Redemption Date, less any principal amount
prepaid by the Company.
SECTION 5.05. LIQUIDATION AMOUNT. In the event of any
liquidation, dissolution or winding up of the Company, either voluntary or
involuntary, the holders of Series C Notes shall be entitled to receive, prior
and in preference to any distribution of any of the assets of the Company to the
holders of Common Share, preferred stock, indebtedness issued upon the
conversion of any preferred stock or Subordinated Debt of the Company by reason
of their ownership thereof, an amount equal to one million eight hundred
seventy-five thousand dollars ($1,875,000) plus all accrued and unpaid interest
thereon to the date of liquidation, less any principal amount prepaid by the
Company.
21
ARTICLE SIX
ISSUE OF SECURITIES
SECTION 6.01. AUTHENTICATION, DELIVERY AND DATING. At any time
and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the
Trustee or the Authenticating Agent for authentication. The Trustee or the
Authenticating Agent shall thereupon authenticate and deliver such Securities to
or upon the written order of the Company, signed by its Chairman of the Board of
Directors, its President or a Vice President, without any further action by the
Company. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 315 of the Trust
Indenture Act) shall be fully protected in relying upon:
(a) a Board Resolution relating thereto and, if applicable, an
appropriate record of any action taken pursuant to such resolution,
certified by the Secretary or an Assistant Secretary of the Company;
(b) an executed supplemental indenture pursuant to
Section 2.02, if applicable;
(c) an Officers' Certificate containing the
statements required by Section 18.03 and, if applicable, Section 2.02;
and
(d) an Opinion of Counsel containing the statements
required by Section 18.03, which opinion shall also state
(1) that the form and terms of such Securities have
been established by or pursuant to this Indenture (in the case
of the Series A Notes, Series B Notes and Series C Notes), or
by one or more Board Resolutions, by a supplemental indenture
as permitted by Section 15.01(h), or by both such resolution
or resolutions and such supplemental indenture, in the case of
all other series of Securities, in conformity with the
provisions of this Indenture;
(2) that this Indenture (if such series is the first
series of Securities issued hereunder) and the applicable
supplemental indenture, if any, when executed and delivered by
the Company and the Trustee, will constitute a valid and
legally binding obligation of the Company; and
(3) that such Securities, when authenticated and
delivered by the Trustee or the Authenticating Agent and
issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, and will
be entitled to the benefits of this Indenture, subject to
the effect of applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws of general
application affecting the rights and remedies of creditors
generally, equally and ratably with all of the other
Securities then outstanding under this Indenture.
If the Company shall establish pursuant to Section 2.02 [or
Section 3.02] that Securities of a series may be issued in whole or in part in
global form, then the Company shall execute and the Trustee shall, in accordance
with this Section and the Company order of
22
authentication with respect to such series, authenticate and deliver one or more
Securities in global form that (i) shall represent and shall be denominated in
an aggregate amount equal to the aggregate principal amount of the outstanding
Securities of such series and tenor to be represented by one or more Securities
in global form, (ii) shall be registered, in the name of the Depositary for such
Security or Securities in global form or the nominee of such Depositary, (iii)
shall be delivered to such Depositary or pursuant to such Depositary's
instruction, and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC") to Issuer or its agent
for transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein." Each Depositary designated pursuant to Section 2.02 [or Section 3.02]
for a Security in global form must, at the time of its designation and at all
times while it serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and any other applicable statute or
regulation.
The Trustee shall have the right to decline to authenticate
and deliver any Securities under this Section if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
ARTICLE SEVEN
REDEMPTION OF SECURITIES
SECTION 7.01. APPLICABILITY OF RIGHT OF REDEMPTION. Redemption
of Securities permitted by the terms of any series of Securities shall be made
in accordance with such terms and Sections 7.02 and 7.03; provided, however,
that if any such terms of a series of Securities shall conflict with any
provision of this Article, the terms of such series shall govern.
SECTION 7.02. NOTICE OF REDEMPTION. The election of the
Company to redeem any Securities of any series shall be evidenced by or pursuant
to a Board Resolution. If the Company shall elect to redeem the Securities of
any series in whole or in part as aforesaid, it shall fix a date for redemption
and give notice of its election so to redeem by mailing or causing to be mailed
written notice, by first-class mail, postage prepaid, at least 30 days prior to
the Redemption Date, to all holders of Securities to be redeemed as a whole or
in part, addressed to them at their respective addresses as the same shall then
appear on the Security Register of the Company. Any notice which shall be mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the holder shall receive such notice. Failure to mail such
notice, or any defect in the notice mailed, to the holder of any Security
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Security.
23
Each notice of redemption shall identify the Securities to be
redeemed (including CUSIP number) and shall state such election on the part of
the Company, the Redemption Date and place of payment of the Securities to be
redeemed and the Redemption Price and that the Securities designated in such
notice for redemption are required to be presented on or after such Redemption
Date and at such place for payment and that interest to the Redemption Date on
the Securities and portions of Securities called for redemption will be paid as
specified in said notice and shall cease to accrue thereon on such date. If less
than all the outstanding Securities of a series are to be redeemed, the notice
shall also designate the Securities or portions of Securities that are to be
redeemed. If any Security is to be redeemed in part only, the notice shall also
state that upon presentation of such Security on or after the redemption date at
said place, such Security will be cancelled and a new Security or Securities of
the same series, in an aggregate principal amount equal to the unredeemed
portion of such Security will be issued and delivered without charge to the
holder.
Notice having been so given, the Securities and portions of
Securities to be redeemed shall on the Redemption Date specified in such notice
become due and payable at the applicable Redemption Price, together with
interest accrued thereon to the Redemption Date, and from and after the
Redemption Date so specified (unless the Company shall default in the payment of
the Redemption Price of such Securities or any such accrued interest) interest
on such Securities and portions of Securities shall cease to accrue, and upon
presentation of such Securities at said place of payment and redemption in
accordance with said notice, such Securities and portions of Securities shall be
paid by the Company at the applicable Redemption Price, together with interest
accrued to the Redemption Date (except that, if the Redemption Date shall be an
Interest Payment Date, the interest payable on such date shall be paid to the
registered holders of such Securities at the close of business on the applicable
Record Date, subject to the provisions of Section 2.01).
If the Company shall at any time elect to redeem less than all
the Securities of a series then outstanding, it shall at least 15 days prior to
the mailing of any notice of redemption hereunder (unless a shorter notice shall
be satisfactory to the Trustee) notify the Trustee of the principal amount of
Securities to be redeemed, and thereupon the Trustee shall select, in such
manner as the Trustee shall deem appropriate and fair (which may be by lot), the
Securities (or portions thereof) of such series to be redeemed. No Security of
authorized denomination shall be redeemed in part and Securities may be redeemed
in part only in integral multiples of such authorized denomination. The Trustee
shall promptly notify the Company in writing of the Securities and portions of
Securities so selected.
SECTION 7.03. SECURITIES OF ANY SERIES TO BE CANCELLED AND
DISCHARGED ON SPECIFIC CONDITIONS. If Securities of any Series at the time
outstanding are to be redeemed under circumstances to which Section 13.02 is
applicable, the Company shall deliver to the Trustee (1) proof satisfactory to
the Trustee that notice of redemption thereof on a specified Redemption Date has
been given as hereinbefore provided, or (2) proof satisfactory to the Trustee
that arrangements have been made insuring to the satisfaction of the Trustee
that such notice will be so given, or (3) a written instrument in form and
substance satisfactory to the Trustee executed by the Company, and expressed to
be irrevocable, authorizing the Trustee to give such notice for and on behalf of
the Company.
24
SECTION 7.04. PRO RATA REDEMPTION OF SERIES A NOTES. In the
event that the Company shall elect to redeem any series of Securities other than
the Series A Notes at any time any Series A Notes are outstanding, the Company
shall be required to redeem a pro rata portion, based on outstanding principal
amount, of the Series A Notes.
SECTION 7.05. PROHIBITION ON OPTIONAL REDEMPTION. In the event
of a Change of Control, the Company shall be prohibited from exercising an
optional redemption rights with respect to any series of Securities which are
required to be redeemed upon a Change of Control.
ARTICLE EIGHT
PARTICULAR COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
SECTION 8.01. TO PAY PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company will duly and punctually pay the principal of and premium, if any,
on each of the Securities, and the interest which shall have accrued thereon, at
the date and place and in the manner provided in the Securities and in this
Indenture.
SECTION 8.02. TO MAINTAIN OFFICE OR AGENCY IN NEW YORK. The
Company will choose a Trustee or paying agent with an office in The City of New
York and may maintain in London, England or elsewhere, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for 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 will give prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any time the Company
shall fail to maintain 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 Principal Office of the Trustee. The
Company hereby initially appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands and the Principal Office of the
Trustee as the place of receipt therefor.
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 of such purposes and may from time to time rescind such
designations; provided, however, that no such designation shall in any manner
result in the creation of a Security Register or Security Co-Registrar in
addition to the Security Register required to be kept pursuant to Section 2.05
and any Security Co-Registrar appointed pursuant to Section 2.05. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such other office or agency.
SECTION 8.03. THE COMPANY, OR PAYING AGENT, TO HOLD IN TRUST
MONEYS FOR PAYMENT OF PRINCIPAL AND INTEREST. If the Company shall at any time
act as its own paying agent with respect to any series of Securities, then, on
or before the date on which the principal of and premium, if any, or interest on
any of the Securities of that series by their terms or as a result of the
calling thereof for redemption shall become payable, the Company will set apart
and segregate and hold in trust for the benefit of the holders of such
Securities a sum sufficient to pay
25
such principal and premium, if any, or interest which shall have so become
payable and will notify the Trustee of its failure to act in that regard and of
any failure by the Company or any other obligor upon the Securities of that
series to make any such payment. If the Company shall appoint, and at the time
have, a paying agent for the payment of the principal of and premium, if any, or
interest on any series of Securities, then, on or before the date on which the
principal of and premium, if any, or interest on any of the Securities of that
series shall become payable as aforesaid, whether by their terms or as a result
of the calling thereof for redemption, the Company will pay to such paying agent
a sum sufficient to pay such principal and premium, if any, or interest, to be
held in trust for the benefit of the holders of such Securities. If such paying
agent shall be other than the Trustee, the Company will cause such paying agent
to execute and deliver to the Trustee an instrument in which such paying agent
shall agree with the Trustee, subject to the provisions of this Section 8.03 and
of Section 15.03, (1) that such paying agent shall hold all sums held by such
paying agent for the payment of the principal of and premium, if any, or
interest on the Securities of that series in trust for the benefit of the
holders of such Securities; (2) that such paying agent shall give to the Trustee
notice of any default by the Company or any other obligor upon the Securities of
that series in the making of any payment of the principal of and premium, if
any, or interest on the Securities of that series when the same shall have
become due and payable; and (3) that such paying agent shall, at any time during
the continuance of any such default, upon the written request of the Trustee,
deliver to the Trustee all sums so held in trust by it. The Company hereby
appoints The Bank of New York to act as its paying agent hereunder.
Anything in this Section 8.03 to the contrary notwithstanding,
the Company may at any time, for the purpose of obtaining a release or
satisfaction of this Indenture or for any other reason, pay or cause to be paid
to the Trustee all sums held in trust by it or by any paying agent other than
the Trustee as required by this Section 8.03, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such paying agent.
Subject to applicable escheat and abandoned property laws, any
money deposited with the Trustee or any paying agent, or then held by the
Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security and remaining unclaimed for three years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company request, or (if then held by the Company) shall be
discharged from such trust; and the holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such paying agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such paying agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.04. RESTRICTIONS UPON LIENS UPON PROPERTY OF THE
COMPANY AND GUARANTORS. The Company will not at any time directly or indirectly,
and will not permit any
26
Subsidiary to, create, assume, incur or suffer to be created, assumed or
incurred or to exist any Lien upon any of the properties of any character of the
Company or any Subsidiary; except, however, that, notwithstanding the foregoing,
the Company or any Subsidiary may
(1) lease property to others in the ordinary course of the
business of the Company or any Subsidiary or lease or sublease any
property if the property subject thereto is not needed by the Company
or any Subsidiary in the operation of its business;
(2) create, assume and incur such Liens or permit such Liens
to be created, assumed, incurred or to exist provided, in each case,
the Lien secures indebtedness for borrowed money, including purchase
money indebtedness, which is incurred to finance the acquisition of the
property subject to such Lien and in respect of which the creditor has
recourse only to such property or to the proceeds of any sale or lease
of such property or both;
(3) (A) make any deposit with or give any form of security to
any governmental agency or other body created or approved by law or
governmental regulation in order to enable the Company or such
Subsidiary to maintain self-insurance, or to participate in any fund in
connection with workmen's compensation, unemployment insurance, old-age
pensions, or other social security, or (B) if such judgment or decree
does not give rise to an Event of Default, deposit assets of the
Company or such Subsidiary with any surety company or clerk of any
court, or in escrow, as collateral in connection with, or in lieu of,
any bond on appeal by the Company or such Subsidiary from any judgment
or decree against it, or in connection with any other proceedings in
actions at law or suits in equity by or against the Company or such
Subsidiary;
(4) incur or suffer to be incurred or to exist upon any of its
property or assets (a) Liens for taxes, assessments or other
governmental charges or levies which are not yet due or are payable
without penalty or of which the amount, applicability or validity is
being contested by the Company or such Subsidiary in good faith by
appropriate proceedings and the Company or such Subsidiary shall have
set aside on its books reserves which it deems to be adequate with
respect thereto (segregated to the extent required by generally
accepted accounting principles), provided that foreclosure, distraint,
sale or similar proceedings have not been commenced, (b) if such
judgment or decree does not give rise to an Event of Default, the Liens
of any judgment, if such judgment shall not have remained undischarged,
or unstayed on appeal or otherwise, for more than thirty (30) days, (c)
materialmen's, mechanics', workmen's, repairmen's or other like Liens
arising in the ordinary course of business in respect of obligations
which are as yet undetermined or are not overdue or which are being
contested by the Company or such Subsidiary in good faith by
appropriate proceedings, or deposits to obtain the release of such
Liens, or (d) any encumbrances consisting of zoning restrictions,
licenses, easements and restrictions on the use of real property and
minor defects and irregularities in the title thereto, which do not
materially impair the use of such property by the Company or such
Subsidiary in the operation of its business or the value of such
property for the purpose of such business, which Liens shall not to
exceed in the aggregate [$____________];
27
(5) create other Liens incidental to the conduct in the
ordinary course of its business or the ownership of its property and
assets which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit, and which do not in the
aggregate materially detract from the value of its property or assets
or materially impair the use thereof in the operation of its business;
(6) create or suffer to be created or to exist in favor of any
lender of moneys or holder of commercial paper of the Company or a
Subsidiary in the ordinary course of business a banker's lien or right
of offset in the holder of such indebtedness or moneys of the Company
or a Subsidiary deposited with such lender or holder in the ordinary
course of business;
(7) assume any Lien in an amount not to exceed
[$____________]or permit any such Lien to be assumed or exist if any
such Lien is on property or shares of stock of a corporation at the
time the corporation becomes a Subsidiary or merges into or
consolidates with the Company or a Subsidiary; provided, however, that
any such Lien may not be assumed or permitted to exist if such Lien is
incurred in anticipation of such corporation becoming a Subsidiary or
in anticipation of such merger or consolidation;
(8) assume any Lien not to exceed [$____________]or permit any
such Lien to be assumed or exist if any such Lien is on property at the
time the Company or a Subsidiary acquires the property; provided,
however, that any such Lien may not extend to any other property owned
by the Company or a Subsidiary at the time such Lien is assumed;
(9) create or suffer to be created or to exist with respect to
any of its property leasehold or purchase rights, exercisable for a
fair consideration, in favor of any Person which arise in transactions
entered into in the ordinary course of business;
(10) create or suffer to be created or to exist the Liens
listed on Schedule 8.04 hereto[FLAG, please list all liens that will
exist after the effective date];
(11) create or suffer to be created or to exist Liens on the
Company and the Guarantor's Accounts upon the release of the Security
Interest and Lien in such Accounts in accordance with the terms of this
Security Agreement and the Indenture.
(12) assume, create or suffer to be created or to exist, such
Liens in an amount not to exceed in the aggregate $1,000,000 at any one
time outstanding, excluding Liens covered by other provisions of
clauses (1) through (11) above;
(13) create or suffer to be created or to exist any Lien
incurred to replace any of the Liens listed on Schedule 8.04 hereto
upon the expiration or termination of any such Lien; and
(14) issue additional series of Securities issued and secured
hereunder as permitted by Section 2.02 (collectively, "PERMITTED
LIENS").
SECTION 8.05. MAINTENANCE OF CORPORATE EXISTENCE. Subject to
Section 8.06, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and that of
each Subsidiary and the rights and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to
preserve the corporate existence of any Subsidiary or any such right or
franchise if pursuant to a Board Resolution, the Company shall reasonably
determine that the preservation thereof is no
28
longer desirable in the conduct of the business of the Company and the other
Subsidiaries taken as a whole and that the loss thereof is not on balance
materially disadvantageous to the holders or the ability of the Company to
otherwise satisfy the obligations hereunder.
SECTION 8.06. RESTRICTIONS ON CONSOLIDATION, MERGER, SALE,
ETC. The Company will not consolidate with any other Person or permit a merger
of any other Person with or into the Company or permit the Company to be merged
into any other Person, or sell or lease all or substantially all its assets to
another Person, or purchase all or substantially all the assets of another
Person, unless (i) either the Company shall be the continuing corporation, or
the successor, transferee or lessee corporation (if other than the Company)
shall be organized under the laws of an Approved Jurisdiction and shall
expressly assume, by indenture supplemental hereto, executed and delivered by
such Person prior to or simultaneously with such consolidation, merger, sale or
lease, the due and punctual payment of the principal of and interest on all the
Securities (other than such series of Securities required to be redeemed upon a
Change of Control), according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
to be performed or observed by the Company; (ii) the Company shall have redeemed
any series of Securities required to be redeemed upon a Change of Control, if
such consolidation, merger, sale lease or purchase constitutes a Change of
Control; (iii) immediately after such consolidation, merger, sale, lease or
purchase no default or Event of Default will exist under this Indenture and (iv)
the Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with this Indenture. A purchase by a
Subsidiary of all or substantially all of the assets of another Person shall not
be deemed to be a purchase of such assets by the Company.
SECTION 8.07. ANNUAL STATEMENT CONCERNING COMPLIANCE WITH
COVENANTS. The Company will deliver to the Trustee, within 90 days after the end
of each fiscal year, a written statement signed by the principal executive
officer, the principal financial officer or principal accounting officer of the
Company, stating that
(a) a review of the activities of the Company during
such year with regard to its compliance with this Indenture has been
made under his supervision, and
(b) to the best of his knowledge, based on such review, the
Company has fulfilled all its obligations under this Indenture
throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to him and the nature and status thereof.
(c) The Company shall deliver to the Trustee within 90 days
after the end of each fiscal year a written statement by the Company's
independent public accountants stating (i) that their audit
examination has included a review of the terms of this Indenture and
the Securities issued hereunder as they relate to accounting matters,
and (ii) whether, in connection with their audit examination, any
default or Event of Default under this Indenture or an event that,
with notice or lapse of time or both, would constitute a default under
any other indebtedness, has come to their attention and, if such a
default hereunder, Event of Default or a default under any other
indebtedness has come to their attention, specifying the nature and
period of existence thereof; provided, however, that, without any
restriction as to the scope of the audit
29
examination, such independent certified public accountants shall not be liable
by reason of any failure to obtain knowledge of any such default hereunder,
Event of Default or a default under any other indebtedness that would not be
disclosed in the course of an audit examination conducted in accordance with
generally accepted audit standards.
SECTION 8.08. COMPLIANCE WITH COVENANTS AND CONDITIONS MAY BE
WAIVED BY HOLDERS OF Securities. Anything in this Indenture to the contrary
notwithstanding, the Company or any Subsidiary may fail or omit in any
particular instance to comply with a covenant or condition set forth in Section
8.04 or 8.06 with respect to any series of Securities if the Company shall have
obtained and filed with the Trustee, prior to the time of such failure or
omission, evidence of the consent of the holders of at least one dollar ($1.00)
more than 50% in aggregate principal amount of the Securities of such series at
the time outstanding, either waiving such compliance in such instance or
generally waiving compliance with such covenant or condition, but no such waiver
shall extend to or affect any obligation not waived by the terms of such waiver
or impair any right consequent thereon.
SECTION 8.09. ANNUAL TAX NOTICE. The Company shall file with
the Trustee promptly at the end of each calendar year (i) a written notice
specifying the amount of original issue discount for United States federal
income tax purposes (including daily portions and accrual periods) accrued on
outstanding Securities as of the end of such year, calculated using such
reasonable assumptions as the Company determines and sets forth in such notice,
and (ii) such other specific information relating to such original issue
discount as may then be required under the Internal Revenue Code of 1986, as
amended from time to time, and the Treasury regulations promulgated thereunder.
SECTION 8.10. ADDITIONAL SUBSIDIARY GUARANTY. If the
Company or any of its Subsidiaries transfers or causes to be transferred, in
one transaction or a series of related transactions, any property to any
Subsidiary that is not a Guarantor, or if the Company or any of its
Subsidiaries organizes, acquires or otherwise invests in another Subsidiary,
then such transferee or acquired or other Subsidiary shall (i) execute and
deliver to the Trustee a supplemental indenture substantially in the form
attached hereto as Exhibit F pursuant to which such Subsidiary shall fully
and unconditionally guarantee all of the Company's obligations under the
Securities and this Indenture on the terms set forth in this Indenture, and
(ii) deliver to the Trustee an Opinion of Counsel that such supplemental
indenture has been duly authorized, executed and delivered by such Subsidiary
and constitutes a legal, valid, binding and enforceable obligation of such
Subsidiary, subject to the effect of applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws of general application affecting the
rights and remedies of creditors generally. Thereafter, such Subsidiary shall
be a Guarantor for all purposes of this Indenture.
SECTION 8.11. ASSET SALES. The Company shall not, and shall
not permit any of its Subsidiaries to, sell, issue, convey, transfer, lease or
otherwise dispose of, to any Person other than the Company or any Guarantor,
directly or indirectly, any assets or property of any kind unless such
conveyance complies with the terms of Article 16, and all of the net cash
proceeds of such conveyance are used (i) to purchase additional assets or
property that will be used or useful to the Company or any Subsidiary's business
or operations within sixty (60) days of such conveyance, which assets or
property shall be pledged as Collateral under this Security Agreement or (ii) in
the event that the net cash proceeds are not used to purchase additional
30
assets or property that are pledged as Collateral under this Security Agreement
within sixty (60) days, to redeem Series A Notes in accordance with the terms of
this Indenture.
SECTION 8.12. REPORTS TO HOLDERS. So long as the Company is
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 and any Securities remain outstanding, the Company will
provide the Trustee and the Holders with the annual reports and information,
documents and other reports, with respect to the Company, as are specified in
Sections 13 and 15(d) of the Exchange Act subject to such Sections within [15
days after the times specified for the filing of the information], documents and
reports under such Sections.
SECTION 8.13. ADDITIONAL AMOUNTS.
(a) If any deduction or withholding for any present or future
taxes, assessments or other governmental charges of:
(1) Bermuda or any political subdivision or
governmental authority thereof or therein having power to tax,
(2) any jurisdiction, other than the United
States, the United Kingdom or Luxembourg, from or through which payment
on the Securities is made by the Company or a successor corporation, or
its paying agent in its capacity as such, or any political subdivision
or governmental authority thereof or therein having the power to tax,
or
(3) any other jurisdiction, other than the
United States, in which the Company or a successor corporation is
organized, or any political subdivision or governmental authority
thereof or therein having the power to tax
shall at any time be required by such jurisdiction (or any such political
subdivision or taxing authority) in respect of any amounts to be paid by the
Company or a successor corporation under the Securities, the Company or a
successor corporation will pay each holder of such a Security as additional
interest, such additional amounts ("Additional Amounts") as may be necessary in
order that the net amounts paid to such Holder who, with respect to any such
tax, assessment or other governmental charge, is not resident in, or a citizen
of, such jurisdiction, after deduction or withholding, shall be not less than
the amount specified in such Security to which such Holder is entitled;
provided, however, the Company or a successor corporation shall not be required
to make any payment of Additional Amounts for or on account of:
(i) any tax, assessment or other governmental
charge which would not have been imposed but for:
(x) the existence of any present or former
connection between such Holder (or between a fiduciary,
settlor, beneficiary, member or shareholder of, or possessor
of a power over, such Holder, if such Holder is an estate,
trust, partnership, limited liability company or corporation)
and the taxing jurisdiction or any political subdivision or
territory or possession thereof or area subject to its
jurisdiction (other than the mere receipt of such payment or
the ownership or
31
holding of such Note), including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged in
trade or business therein or having or having had a permanent
establishment therein,
(y) the presentation of a Security (where
presentation is required) for payment on a date more than 30
days after (A) the date on which such payment became due and
payable or (B) the date on which payment thereof is duly
provided for, whichever occurs later, or
(z) the presentation of a Security for payment
in Bermuda or any political subdivision thereof or therein,
unless such Security could not have been presented for payment
elsewhere;
(ii) any estate, inheritance, gift, sales, transfer,
personal property or similar tax, assessment or other governmental
charge;
(iii) any tax, assessment or other governmental
charge which is payable otherwise than by withholding from a payment of
the principal of, premium, if any, or any interest on, the Securities;
(iv) any tax, assessment or other governmental charge
that is imposed or withheld by reason of the failure by the Holder or
the beneficial owner of the Security to comply with a request of the
Company addressed to the Holder:
(x) to provide information, documents or other
evidence concerning the nationality, residence or identity of
the Holder or such beneficial owner; or
(y) to make and deliver any declaration or
other similar claim (other than a claim for refund of a tax,
assessment or other governmental charge withheld by the
Company) or satisfy any information or reporting requirements,
which, in the case of (x) or (y), is required or imposed by a
statute, treaty, regulation or administrative practice of the
taxing jurisdiction as a precondition to exemption from all or
part of such tax, assessment or other governmental charge; or
(v) any combination of items (i), (ii), (iii) and
(iv) above, nor shall Additional Amounts be paid with respect to any
payment of the principal of, premium, if any, or interest on, any
Security to any Holder who is a fiduciary or partnership or limited
liability company or other than the sole beneficial owner of such
payment to the extent such payment would be required by the laws of:
(1) Bermuda or any political subdivision or
governmental authority thereof or therein having the power to
tax;
32
(2) any jurisdiction, other than the United
States, the United Kingdom or Luxembourg, from or through
which payment on the Securities is made by the Company or a
successor corporation, or its paying agent in its capacity as
such, or any political subdivision or governmental authority
thereof or therein having the power to tax; or
(3) any other jurisdiction, other than the
United States, in which the Company or a successor corporation
is organized, or any political subdivision or governmental
authority having the power to tax
to be included in the income for tax purposes of a beneficiary or
settlor with respect to such fiduciary or a member of such partnership
or limited liability company or a beneficial owner who would not have
been entitled to such Additional Amounts had it been the holder of such
Note.
(b) The Company shall provide the Trustee with the official
acknowledgment of the relevant taxing authority (or, if such acknowledgment is
not available, a certified copy thereof) evidencing the payment of the
withholding taxes, if any, by the Company. Copies of such documentation shall be
made available to the holders of the Securities or the Paying Agents, as
applicable, upon request therefor.
SECTION 8.14. COMPLIANCE WITH GUARANTY. The Company shall
cause each Guarantor to comply with the terms of its guarantee provided pursuant
to Article 17.
SECTION 8.15. INCURRENCE OF INDEBTEDNESS.
(a) The Company will not, or permit any Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "INCUR") any indebtedness; PROVIDED, HOWEVER, that the Company or
any Subsidiary may incur indebtedness if:
(i) such indebtedness is unsecured and subordinated
to the prior payment in full in cash of all Securities; and
(ii) the final maturity date of such indebtedness
is at least 91 days after the final maturity date of the Securities;
and
(b) The provisions of Section 8.15(a) will not apply to the
issuance or incurrence of any of the following indebtedness:
(i) the incurrence by the Company and any Guarantor
of the indebtedness listed on Schedule 8.15 hereto; and
(ii) the incurrence by the Company and any Guarantor
of the indebtedness pursuant to Section 8.04(2) and 8.04(13) and
8.04(13).
[(c) Notwithstanding the provisions of Section 8.15(a),
after the Company has paid or redeemed at least $15,000,000 of the principal
amount of the Series A Notes, the
33
Company may issue additional series of Securities under this Indenture provided
that any such additional series:
(i) shall rank pari passu in priority and right of
payment with the Series A Notes, the Series B Notes, the Series C Notes
and all other series of securities issued hereunder;
(ii) shall not contain terms more favorable in any
respect to the holders of such series than the terms of the Series A
Notes, including but not limited to earlier maturity date, liquidation
preference, redemption payment amount, frequency of interest payments
and security (except as permitted in (iii) below);
(iii) shall not accrue interest at a rate higher than
ten percent (10%) per annum, provided, however, that the Company may issue
additional series of Securities with an interest rate of higher than ten
percent (10%) per annum if the Company increases the interest rate payable on
the Series A Notes to such higher interest rate.]
SECTION 8.16. TRANSACTIONS WITH AFFILIATES. The Company will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into or suffer to exist any transaction or series of related transactions
(including, without limitation, the sale, transfer, disposition, purchase,
exchange or lease of assets, property or services) with, or for the benefit of,
any Affiliate of the Company or any "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act) of 5% or more of the Common Stock of the
Company at any time outstanding ("Interested Persons"), unless (a) such
transaction or series of related transactions are on terms that are no less
favorable to the Company or such Subsidiary, as the case may be, than those
which could have been obtained in a comparable transaction at such time on an
arm's length basis from Persons who are not Affiliates of the Company or
Interested Persons, and (b) with respect to a transaction or series of
transactions involving aggregate payments or transfers of property or services
with a Fair Market Value equal to or greater than $100,000 the Company has
obtained a written opinion from a duly qualified independent financial advisor
stating that the terms of such transaction or series of transactions are fair to
the Company or its Subsidiary, as the case may be, from a financial point of
view; PROVIDED, HOWEVER, that this covenant will not restrict the Company or any
Subsidiary from (i) paying reasonable and customary fees to directors of the
Company or any Subsidiary who are not otherwise employees of the Company or any
Subsidiary, (ii) entering into transactions with Guarantors or permitting
Guarantors to enter into transactions with the Company or other Guarantors,
(iii) making loans or advances to officers, employees or consultants of the
Company and its Subsidiaries permitted under the Xxxxxxxx-Xxxxx Act of 2002, or
(iv) engaging in any of the transactions required for the implementation of the
Plan of Reorganization as set forth therein.
[SECTION 8.17. TAXES. The Company shall pay, and shall cause
each of its Subsidiaries to pay, prior to delinquency, (a) all material taxes,
assessments, and governmental levies levied or imposed upon the Company or any
of its Subsidiaries or upon the income, profits or property of the Company or
any of its Subsidiaries and (b) all lawful claims for labor, materials and
supplies that, in each case, if unpaid, might by law become a liability or Lien
upon the property of the Company or any Subsidiary, except such taxes,
assessments, levies or claims as are contested in good faith and by appropriate
proceedings and for which adequate provision has been made in accordance with
generally accepted accounting principals or where the failure to effect such
payment is not adverse in any material respect to the Holders of the Notes.]
34
SECTION 8.18. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS
FROM GUARANTORS. The Company shall not, and shall not permit any Subsidiary
to, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any such Subsidiary
to (i) pay dividends or make any other distributions on its Capital Stock or
pay any indebtedness or other obligations owed to the Company or any
Subsidiary, (ii) make any loans or advances to the Company or any Subsidiary
or (iii) transfer any of its property or assets to the Company or any
Subsidiary, except any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date listed on Schedule 8.18 hereto.
SECTION 8.19. MAINTENANCE OF PROPERTIES; INSURANCE; BOOKS AND
RECORDS; COMPLIANCE WITH LAW.
(a) The Company shall, and shall cause each of its
Subsidiaries to, cause all properties and assets to be maintained and kept in
good condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment, and cause to be made all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of its
business; provided, however, that nothing in this Section ________ shall prevent
the Company or any of its Subsidiaries from discontinuing the operation and
maintenance of any of its properties or assets if such discontinuance is, in the
reasonable judgment of the Company or such Subsidiary, desirable in the conduct
of its business and if such discontinuance is not materially adverse to either
the Company or its Subsidiaries or the ability of the Company to otherwise
satisfy its obligations hereunder.
(b) The Company shall, and shall cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers such
insurance as may be required by law and such other insurance to such extent and
against such hazards and liabilities, as is customarily maintained by companies
similarly situated (which may include self-insurance in the same form as is
customarily maintained by companies similarly situated).
(c) The Company shall, and shall cause each of its
Subsidiaries to, keep proper books of record and account, in which full and
correct entries shall be made of all business and financial transactions of the
Company and each of its Subsidiaries and reflect on its financial statements
adequate accruals and appropriations to reserves, all in accordance with
generally accepted accounting principals consistently applied to the Company and
its Subsidiaries taken as a whole.
(d) The Company shall, and shall cause each of its
Subsidiaries to, comply with all statutes, laws, ordinances, or government rules
and regulations to which it is subject, non-compliance with which would be
materially adverse to either the Company, any of its Subsidiaries, or to the
ability of the Company to otherwise satisfy its obligations hereunder.
SECTION 8.20. WAIVER OF STAY, EXTENSION AND USURY LAWS. The
Company and each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company or such
Guarantor from paying all or any portion of the principal of, premium, if any,
or interest
35
on the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or that may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company and each
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.
[SECTION 8.21. LIMITATION ON RESTRICTED PAYMENTS. The Company
will not, and will not permit any of its Subsidiaries to, directly or indirectly
take any of the following actions (each, a "Restricted Payment"):
(a) declare or pay any dividend or make any other distribution
or payment on or in respect of Capital Stock and any rights, warrants
or options exchangeable or exercisable for or convertible into Capital
Stock of the Company or any of its Subsidiaries or any payment made to
the direct or indirect holders (in their capacities as such) of Capital
Stock of the Company or any of its Subsidiaries (other than dividends
or distributions payable solely in Capital Stock of the Company (other
than Redeemable Capital Stock) or in options, warrants or other rights
to purchase Capital Stock of the Company (other than Redeemable Capital
Stock));
(b) purchase, redeem, defease or otherwise acquire or retire
for value any Capital Stock of the Company or any of its Subsidiaries;
(c) make any principal payment on, or purchase, defease,
repurchase, redeem or otherwise acquire or retire for value, prior to
any scheduled maturity, scheduled repayment, scheduled sinking fund
payment or other stated maturity, any indebtedness; or
(d) make any Investment in any Person, unless, at the time of
and immediately after giving effect to the proposed Restricted Payment
(the amount of any such Restricted Payment, if other than cash, shall
be the Fair Market Value on the date of such Restricted Payment of the
asset(s) proposed to be transferred by the Company or such Subsidiary,
as the case may be, pursuant to such Restricted Payment), (A) no
default or Event of Default shall have occurred and be continuing, and
(B) the aggregate amount of all Restricted Payments declared or made
from and after the Issue Date, including the proposed Restricted
Payments, would not exceed ________________.]
ARTICLE NINE
REMEDIES OF TRUSTEE AND SECURITYHOLDERS
SECTION 9.01. EVENTS OF DEFAULT. Except where otherwise
indicated by the context or where the term is otherwise defined for a specific
purpose, the term "EVENT OF DEFAULT" as used in this Indenture with respect to
Securities of any series shall mean one of the following described events unless
it is either inapplicable to a particular series or it is specifically deleted
or modified in the supplemental indenture, if any, under which such series of
Securities is issued:
36
(a) the failure of the Company to pay any installment of
interest on any Security of such series, when and as the same shall
become payable, which failure shall have continued unremedied for a
period of thirty (30) days;
(b) the failure of the Company to pay the principal of any
Security of such series, when and as the same shall become payable,
whether at maturity as therein expressed, by call for redemption, by
declaration as authorized by this Indenture, upon a Change of Control,
or otherwise;
(c) the failure of the Company, subject to the provisions of
Section 8.08, to observe and perform any other of the covenants or
agreements on the part of the Company contained in this Indenture
or the Collateral Documents (other than a covenant or agreement which
has been expressly included in this Indenture solely for the benefit
of a series of Securities other than that series), which failure shall
not have been remedied to the satisfaction of the Trustee for a period
of sixty (60) days after written notice shall have been given to the
Company by the Trustee or shall have been given to the Company and the
Trustee by holders of 25% or more in aggregate principal amount of the
Securities of such series then outstanding, specifying such failure and
requiring the Company to remedy the same;
(d) the entry by a court having jurisdiction in the premises
of a decree or order for relief in respect of the Company or any
Guarantor in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of the Company or any
Guarantor or for substantially all of its property, or ordering the
winding-up or liquidation of its affairs, which decree or order shall
have remained unstayed and in effect for a period of sixty (60)
consecutive days;
(e) the commencement by the Company or any Guarantor of a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Company
or any Guarantor to the entry of an order for relief in an
involuntary case under any such law, or the consent by the
Company or any Guarantor to the appointment of or taking possession by
a receiver, liquidator, assignee, trustee, custodian or sequestrator
(or similar official) of the Company or any Guarantor or for
substantially all of its property, or the making by it of an assignment
for the benefit of its creditors;
(f) default by the Company or any Guarantor under any
indebtedness which (i) is caused by a failure to pay principal of
or interest on such indebtedness when due within any applicable grace
period; or (ii) results in the acceleration of such indebtedness
prior to its Stated Maturity; and the principal amount of indebtedness
covered by (i) or (ii) at the relevant time, aggregates $1 million
or more;
(g) failure by the Company or any Guarantor to pay one or
more final judgments against any of them or any of their respective
properties (which are not covered by adequate insurance by a solvent
insurer of national or
37
international reputation which has acknowledged its obligations in
writing), aggregating $1 million or more, which judgment(s) are not
paid, discharged or stayed for a period of 60 days or more;
(h) except as permitted by the Indenture, any Subsidiary
Guaranty is held to be unenforceable or invalid in a judicial
proceeding or ceases for any reason to be in full force and effect or
the Company, any Guarantor, or any Person acting on behalf of any
Guarantor denies or disaffirms such Guarantor's obligations under
its Subsidiary Guaranty; or
(i) the occurrence of any other Event of Default with respect
to any other series of Securities.
The Company shall deliver to a Responsible Officer of the
Trustee upon becoming aware of any Event of Default specified in Section 9.01(d)
or (e) written notice of such Event of Default.
SECTION 9.02. ACCELERATION OF MATURITY OF PRINCIPAL ON
DEFAULT. If any one or more of the above-described Events of Default (other than
an Event of Default specified in clauses (d) and (e) above with respect to the
Company) shall happen with respect to Securities of any series at the time
outstanding, then, and in each and every such case, during the continuance of
any such Event of Default, the Trustee or the holders of 25% or more in
principal amount of the Securities of such series then outstanding may, and upon
the written request of the holders of a 25% in principal amount of any series of
Securities then outstanding the Trustee shall, declare the principal of all the
Securities of such series then outstanding, if not then due and payable, to be
due and payable, and upon any such declaration the same shall become and be
immediately due and payable, anything in this Indenture or in the Securities of
such series to the contrary notwithstanding; provided, however, (i) that if an
Event of Default specified in clauses (d) and (e) above occurs with respect to
the Company, then the unpaid principal of and accrued and unpaid interest on all
the Securities then outstanding shall become immediately due and payable without
any further act on the part of or notice from the Trustee and (ii) upon the
acceleration of any series of Securities pursuant to this Section 9.02, the
principal of all other series of Securities then outstanding shall become
immediately due and payable without any further act on the part of or notice
from the Trustee; provided further that, (1) with respect to the Series A Notes,
the principal amount shall be 100% of principal amount and Section 3.05 shall be
unavailable and (2) with respect to the Series B Notes or the Series C Notes,
Section 4.05 and 5.05 govern and 4.03, 4.04, 5.03 and 5.04 shall be unavailable,
or inapplicable, as appropriate. This provision, however, is subject to the
condition that, if at any time after the principal of all the Securities of such
series shall have been so declared to be due and payable, all arrears of
interest if any, upon all the Securities of such series (with interest, to the
extent that interest thereon shall be legally enforceable, on any overdue
installment of interest at the rate borne by the Securities of such series) and
the reasonable charges and expenses of the Trustee, its agents and attorneys,
and all other sums payable under this Indenture (except the principal of the
Securities of such series which would not be due and payable were it not for
such declaration), shall be paid by the Company, and every other default and
Event of Default under this Indenture shall have been cured to the reasonable
satisfaction of the Trustee or of the holders of a majority in principal amount
of the Securities of such series then outstanding, or provision deemed by the
Trustee or
38
by such holders to be adequate therefore shall have been made, then and in every
such case the holders of a majority in principal amount of the Securities of
such series then outstanding may, on behalf of the holders of all the Securities
of such series, waive the Event of Default by reason of which the principal of
the Securities of such series shall have been so declared to be due and payable
and may rescind and annul such declaration and its consequences; but no such
waiver, rescission or annulment shall extend to or affect any subsequent default
or Event of Default or impair any right consequent thereon. Any declaration by
the Trustee pursuant to this Section 9.02 shall be by written notice to the
Company, and any declaration or waiver by the holders of Securities of any
series pursuant to this Section 9.02 shall be by written notice to the Company
and the Trustee.
The Company and the Trustee may, to the extent provided in
Section 15.01, enter into one or more indentures supplemental hereto with
respect to any series of the Securities which may provide for additional or
different events of default with respect to such series of Securities.
39
SECTION 9.03. TRUSTEE APPOINTED ATTORNEY-IN-FACT FOR
SECURITYHOLDERS TO FILE CLAIMS. The Trustee is hereby appointed, and each and
every holder of the Securities, by receiving and holding the same, shall be
conclusively deemed to have appointed the Trustee, the true and lawful
attorney-in-fact of such holder, with authority to make or file (whether or not
the Company shall be in default in respect of the payment of the principal of,
or interest on, any of the Securities), in its own name and as trustee of an
express trust or otherwise as it shall deem advisable, in any receivership,
insolvency, liquidation, bankruptcy, reorganization or other judicial proceeding
relative to the Company or any other obligor upon the Securities or to their
respective creditors or property, any and all claims, proofs of claim, proofs of
debt, petitions, consents, other papers and documents and amendments of any
thereof, as may be necessary or advisable in order to have the claims of the
Trustee and of the holders of the Securities allowed in any such proceeding and
to collect and receive any moneys or other property payable or deliverable on
any such claim, and to execute and deliver any and all other papers and
documents and to do and perform any and all other acts and things, as it may
deem necessary or advisable in order to enforce in any such proceeding any of
the claims of the Trustee and of any of such holders in respect of any of the
Securities; and any receiver, assignee, trustee, custodian or debtor in any such
proceeding is hereby authorized, and each and every holder of the Securities, by
receiving and holding the same, shall be conclusively deemed to have authorized
any such receiver, assignee, trustee, custodian or debtor, to make any such
payment or delivery only to or on the order of the Trustee, and to pay to the
Trustee any amount due if for compensation and expenses, including counsel fees,
incurred by it to the date of such payment or delivery; provided, however, that
nothing herein contained shall be deemed to authorize or empower the Trustee to
consent to or accept or adopt, on behalf of any holder of Securities, any plan
of reorganization or readjustment of the Company affecting the Securities or the
rights of any holder thereof, or to authorize or empower the Trustee to vote in
respect of the claim of any holder of any Securities in any such proceeding;
provided, further, that notwithstanding this Section 9.03, the holders of [15]%
or more in principal amount of any series of Securities shall have the right to
make or file in its own name in any proceeding described in this Section 9.03 or
Section 9.06 any and all claims as may be necessary or advisable to have the
claims of such holders allowed in such proceeding.
SECTION 9.04. APPLICATION OF MONEYS COLLECTED BY TRUSTEE.
Any moneys or other property collected by the Trustee with respect to a
series of Securities under this Article Nine or pursuant to the Collateral
Documents or any money or other property otherwise distributable in receipt
of the Company's or any Guarantor's obligations under this Indenture, shall
be applied in the order following, at the date or dates fixed by the Trustee
for the distribution of such moneys, upon presentation of the several
Securities, and stamping thereon the payment, if only partially paid, and
upon surrender thereof if fully paid:
First: To the payment of all costs and expenses in connection
with the collection of such moneys and all amounts due to the Trustee
under Section 12.06.
Second: In case the principal of the outstanding Securities of
such series shall not have become due and be unpaid, to the payment of
interest on the Securities of such series, in the order of the maturity
of the installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments
40
of interest at the rate borne by such Securities, such payments to be
made ratably to the Persons entitled thereto.
Third: In case the principal of the outstanding Securities of
such series shall have become due, by declaration or otherwise, to the
payment of the whole amount then owing and unpaid upon the Securities
of such series for principal and interest, with interest on the overdue
principal and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of interest at the rate borne by
the Securities of such series, and in case such moneys shall be
insufficient to pay in full the whole amounts so due and unpaid upon
the Securities of such series, then to the payment of principal,
interest and with preference and priority of interest principal but
without preference or priority of any Security of such series over any
other Security of such series.
Any surplus then remaining shall be paid to the Company or to such other Persons
as shall be entitled to receive it.
SECTION 9.05. SECURITYHOLDERS MAY DIRECT PROCEEDINGS AND WAIVE
DEFAULTS. The holders of a majority in principal amount of the Securities of any
series at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee hereunder, or
of exercising any trust or power hereby conferred upon the Trustee with respect
to the Securities of such series, provided, however, that, subject to the
provisions of Section 12.03, the Trustee shall have the right to decline to
follow any such direction if the Trustee being advised by counsel determines
that the action so directed may not lawfully be taken. Prior to any declaration
accelerating the maturity of the Securities of any series, the holders of a
majority in aggregate principal amount of such series of Securities at the time
outstanding may on behalf of the holders of all of the Securities of such series
waive any past default or Event of Default hereunder and its consequences except
a default in the payment of interest or the principal of the Securities of such
series. Upon any such waiver the Company, the Trustee and the holders of the
Securities of such series shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Whenever any default or Event of Default hereunder shall have been waived as
permitted by this Section 9.05, said default or Event of Default shall for all
purposes of the Securities of such series and this Indenture be deemed to have
been cured and to be not continuing.
SECTION 9.06. LIMITATIONS ON RIGHTS OF SECURITYHOLDERS TO
INSTITUTE PROCEEDINGS. Except as provided in Section 9.03, no holder of any
Security of any series shall have any right to institute any action, suit or
proceeding at law or in equity for the execution of any trust hereunder or for
the appointment of a receiver or for any other remedy hereunder, in each case
with respect to an Event of Default with respect to such series of Securities,
unless such holder previously shall have given to the Trustee written notice of
the happening of one or more of the events of default herein specified with
respect to such series of Securities, and unless also the holders of [15]% in
principal amount of the Securities of such series then outstanding shall have
requested the Trustee in writing to take action in respect of the matter
complained of, and unless also there shall been offered to the Trustee security
and indemnity satisfactory to it against the costs, expenses and liabilities to
be incurred therein or thereby, and the Trustee, for 60 days after receipt of
such notification, request and offer of indemnity, shall have neglected or
41
refused to institute any such action, suit or proceeding; and such notification,
request and offer of indemnity are hereby declared in every such case to be
conditions precedent to any such action, suit or proceeding by any holder of any
Security of such series; it being understood and intended that no one or more of
the holders of Securities of such series shall have any right in any manner
whatsoever by his or their action to enforce any right hereunder, except in the
manner herein provided, and that every action, suit or proceeding at law or in
equity shall be instituted, had and maintained in the manner herein provided and
for the equal benefit of all holders of the outstanding Securities of such
series; provided, however, that nothing in this Indenture or in the Securities
of such series contained shall affect or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on the
Securities of such series to the respective holders of such Securities at the
respective due dates in such Securities stated, or affect or impair the right,
which is also absolute and unconditional, of such holders to institute suit to
enforce the payment thereof; provided, further, that in the event property or
assets are conveyed, transferred, assigned, mortgaged or pledged to the Trustee
as security for one or more series of Securities, no holder of Securities shall
be entitled to take any action or institute any suit to enforce the payment of
his Securities, whether for principal, interest to the extent that the taking of
such action or the institution or prosecution of any such suit or the entry of
judgment therein would under applicable law result in a surrender, impairment,
waiver or loss of the lien of this Indenture, if any, upon the trust estate so
created by such conveyance, transfer, assignment, mortgage or pledge, or any
part thereof, as security for Securities held by any other holder.
SECTION 9.07. ASSESSMENT OF COSTS AND ATTORNEYS' FEES IN LEGAL
PROCEEDINGS. All parties to this Indenture and the holders of the Securities
agree that the court may in its discretion require, in any action, suit or
proceeding for the enforcement of any right or remedy under this Indenture, or
in any action, suit or proceeding against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such action, suit
or proceeding of an undertaking to pay the costs of such action, suit or
proceeding, and that such court may in its discretion assess reasonable costs,
including reasonably attorney's fees, against any party litigant in such action,
suit or proceeding, having due regard to the merits and good faith of the claims
or defenses made by such party litigant; provided, however, that the provisions
of this Section 9.07 shall not apply to any action, suit or proceeding
instituted by the Trustee, to any action, suit or proceeding instituted by any
one or more holders of Securities holding in the aggregate more than 5% in
principal amount of the Securities of any series outstanding, or to any action,
suit or proceeding instituted by any holder of Securities of any series for the
enforcement of the payment of the principal of or the interest on, any of the
Securities of such series, on or after the respective due dates expressed in
such Securities.
SECTION 9.08. REMEDIES CUMULATIVE. No remedy herein conferred
upon or reserved to the Trustee or to the holders of Securities of any series is
intended to be exclusive of any other remedy or remedies, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. No
delay or omission of the Trustee or of any holder of the Securities of any
series to exercise any right or power accruing upon any default or Event of
Default shall impair any such right or power or shall be construed to be a
waiver of any such default or Event of Default or an acquiescence therein, and
every power and remedy given by this Article Nine to the Trustee and to the
holders of Securities of any series, respectively, may be exercised from time to
time and as often as may be deemed expedient by the Trustee or by the holders of
Securities of
42
such series, as the case may be. In case the Trustee or any holder of Securities
of any series shall have proceeded to enforce any right under this Indenture and
the proceedings for the enforcement thereof shall have been discontinued or
abandoned because of waiver or for any other reason or shall have been
adjudicated adversely to the Trustee or to such holder of Securities, then and
in every such case the Company, the Trustee and the holders of the Securities of
such series shall severally and respectively be restored to their former
positions and rights hereunder and thereafter all rights, remedies and powers of
the Trustee and the holders of the Securities of such series shall continue as
though no such proceedings had been taken, except as to any matters so waived or
adjudicated.
SECTION 9.09. CONTROL BY SECURITYHOLDERS. The Holders of 50%
in principal amount of the any series of Securities shall have the right, during
the continuance of an Event of Default:
(a) to require the Trustee to proceed to enforce this
Indenture, either by judicial proceedings for the enforcement of the
payment of the Securities and the foreclosure of this Indenture, the
sale of the Collateral or otherwise or, at the election of the Trustee,
by the exercise of the power of entry and/or sale hereby conferred; and
(b) to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee hereunder, provided that
(i) such direction shall not be in conflict with
any rule of law or this Indenture or may involve the Trustee
in personal liability unless the Trustee has received
indemnification satisfactory to it, in its sole determination,
against any loss or expense caused by its following such
direction, and
(ii) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
ARTICLE TEN
CONCERNING THE SECURITYHOLDERS
SECTION 10.01. EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever
in this Indenture it is provided that the holders of a specified percentage or a
majority in aggregate principal amount of the Securities or of any series of
Securities may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action),
the fact that at the time of taking any such action the holders of such
specified percentage or majority have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by
Securityholders in person or by agent or proxy appointed in writing.
43
SECTION 10.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF
HOLDING OF SECURITIES. Proof of the execution of any instrument by a
Securityholder or his agent or proxy and proof of the holding by any Person of
any of the Securities shall be sufficient if made in the following manner:
The fact and date of the execution by any person of any such
instrument may be proved (a) by the certificate of any notary public or other
officer in any jurisdiction who, by the laws thereof, has power to take
acknowledgements or proof of deeds to be recorded within such jurisdiction, that
the person who signed such instrument did acknowledge before such notary public
or other officer the execution thereof, or (b) by the affidavit of a witness of
such execution sworn to before any such notary or other officer. Where such
execution is by a person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
The ownership of Securities shall be proved by the Security
Register of such Securities or by a certificate of the Security Registrar
thereof.
The Trustee may accept such other proof or may require such
additional proof of any matter referred to in this Section 10.02 as it shall
deem appropriate or necessary.
SECTION 10.03. SECURITIES OWNED BY THE COMPANY OR OTHER
OBLIGOR ON THE SECURITIES TO BE DISREGARDED IN CERTAIN CASES. In determining
whether the holders of the requisite principal amount of the Securities have
concurred in any direction, request, waiver or consent under this Indenture,
Securities which are owned by the Company or by any other obligor on the
Securities or by any Person directly or indirectly controlling, or controlled
by, or under direct or indirect common control with, the Company or any such
other obligor shall be disregarded, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
request, waiver or consent, only Securities which a Responsible Offer of the
Trustee knows are so owned shall be disregarded. Securities so owned which have
been pledged in good faith may be regarded as outstanding for the purposes of
this Section 10.03 if the pledgee shall establish to the satisfaction of the
Trustee the pledgee's right to vote such Securities and that the pledgee is not
a Person directly or indirectly controlling, or controlled by, or under direct
or indirect common control with, the Company or any such other obligor. In case
of a dispute as to such right, any decision by the Trustee taken upon the advice
of counsel shall be full protection to the Trustee.
SECTION 10.04. REVOCATION BY SECURITYHOLDERS OF CONSENTS TO
ACTION. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities or of any series of
Securities specified in this Indenture in connection with such action, any
holder of a Security which is shown by the evidence to be included in the
Securities the holders of which have consented to such action may, by filing
written notice with the Trustee at its principal office and upon proof of
holding as provided in Section 10.02, revoke such action so far as concerns such
Security. Except as aforesaid, any such action taken by the holder of any
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Security, irrespective of whether or not any notation
in regard thereto is made upon such Security or any Security issued in exchange
or substitution therefore.
44
ARTICLE ELEVEN
REPORTS BY THE COMPANY AND THE TRUSTEE AND
SECURITYHOLDERS' LISTS
SECTION 11.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES
OF HOLDERS. In accordance with Section 312(a) of the Trust Indenture Act, the
Company shall furnish or cause to be furnished to the Trustee:
(a) semi-annually with respect to Securities of each series on
January 15 and July 15 of each year or upon such other dates as are set
forth in or pursuant to the Board Resolution or indenture supplemental
hereto authorizing such series, a list, in each case, in such form as
the Trustee may reasonably require, of the names and addresses of
holders as of the applicable date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar no such
list shall be required to be furnished.
SECTION 11.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
HOLDERS. The Trustee shall comply with the obligations imposed upon it pursuant
to Section 312 of the Trust Indenture Act.
Every holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any paying agent or any Security Registrar shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
holders of Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 11.03. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with
the first May 15 following the first issuance of Securities, if required by
Section 313(a) of the Trust Indenture Act, the Trustee shall transmit, pursuant
to Section 313(c) of the Trust Indenture Act, a brief report dated as of such
May 15 with respect to any of the events specified in said Section 313(a) which
may have occurred since the later of the immediately preceding May 15 and the
date of this Indenture.
(b) The Trustee shall transmit the reports required by Section
313(b) of the Trust Indenture Act and Section 12.12 hereof at the times
specified therein.
(c) Reports pursuant to this Section shall be transmitted in
the manner and to the Persons required by Sections 313(c) and 313(d) of the
Trust Indenture Act.
45
SECTION 11.04. REPORTS BY COMPANY. The Company, pursuant to
Section 314(a) of the Trust Indenture Act, shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of
1934 in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
(b) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(c) transmit to the holders within 30 days after the filing
thereof with the Trustee, in the manner and to the extent provided in
Section 313(c) of the Trust Indenture Act, such summaries of any
information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission.
(d) Delivery to the Trustee of such reports, information and
documents pursuant to any provision of this Section 11.04 [or of the
reports, information and document pursuant to Section 8.12 is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the
Company's compliance or noncompliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on
an Officers' Certificate).
ARTICLE TWELVE
CONCERNING THE TRUSTEE
SECTION 12.01. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
46
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit
the effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in principal
amount of the Outstanding Securities of any series, relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Securities
of such series.
(d) 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.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 12.02. CERTAIN RIGHTS OF TRUSTEE. Subject to Section
12.01:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon or other
47
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate and any
resolution of the Board of Directors or any committee thereof (or
committee of officers or other representatives of the Company, to the
extent any such committee or committees have been so authorized by the
Board of Directors) may be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence shall be herein specifically prescribed)
may, in the absence of bad faith on its part, conclusively rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by or pursuant to this Indenture
at the request or direction of any of the holders of Securities of any
series pursuant to this Indenture, unless such holders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, coupon or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine, during business hours and upon
reasonable notice, the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(i) the Trustee shall not be deemed to have or be charged with
knowledge of any default (within the meaning of Section 12.11) or Event
of Default with respect to the Securities of any series unless a
Responsible Officer of the Trustee has received at the Principal Office
of the Trustee written notice of such default or Event of Default from
the
48
Company, any Guarantor or any Holder of the Securities of such series,
and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian
and other Person employed to act hereunder,
(k) the Trustee may request that the Company deliver any
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed
by any persons authorized to sign an Officers' Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded; and
(l) the permissive right of the Trustee to take action under
this Indenture shall not be construed as a duty.
SECTION 12.03. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained herein and in the Securities, except those
referring or relating to the Trustee or any of its agents, and except for the
Trustee's certificate of authentication, shall be taken as the statements of the
Company and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder and
that the statements made by it in a Statement of Eligibility on Form T-1
supplied to the Company are and will be true and accurate, subject to the
qualifications set forth therein. Neither the Trustee nor any Authenticating
Agent shall be accountable for the use or application by the Company of the
Securities or the proceeds thereof.
Beyond the exercise of reasonable care in the custody thereof,
the Trustee shall have no duty as to any Collateral in its possession or control
or in the possession or control of any agent or bailee or any income thereon or
as to preservation of rights against prior parties or any other rights
pertaining thereto and the Trustee shall not be responsible for recording or
filing or re-recording or re-filing any mortgage or financing or continuation
statements or recording or re-recording any documents or instruments in any
public office at any time or times or otherwise perfecting or maintaining the
perfection of any lien or security interest in any of the Collateral. The
Trustee shall be deemed to have exercised reasonable care in the custody of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property and shall not be
liable or responsible for any loss or diminution in the value of any of the
Collateral by reason of the act or omission of any carrier, forwarding agency
agent or bailee selected by the Trustee in good faith.
The Trustee makes no representations as to and shall not be
responsible for the existence, genuineness, value or condition of any of the
Collateral or as to the security afforded or intended to be afforded thereby,
hereby or by any Security Agreement, or for the validity, perfection, priority
or enforceability of the Liens or security interests in any of the Collateral
49
created or intended to be created by any of the Security Agreements, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
gross negligence or willful misconduct on the part of the Trustee, for the
validity or sufficiency of the Collateral, any Security Agreement or any
agreement or assignment contained in any thereof, for the validity of the title
of the Company or any of its Subsidiaries to the Collateral, for insuring the
Collateral or for the payment of taxes, charges, assessments or Liens upon the
Collateral or otherwise as to the maintenance of the Collateral. The Trustee
shall have no duty to ascertain or inquire as to the performance or observance
of any of the terms of this Indenture or any Security Agreement by the Company
or any other Person that is a party thereto or bound thereby.
SECTION 12.04. MAY HOLD SECURITIES. The Trustee, any
Authenticating Agent, any Security Registrar or any other Person that may be an
agent of the Trustee or the Company, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to Sections 310(b)
and 311 of the Trust Indenture Act, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Security
Registrar or such other Person.
SECTION 12.05. MONEY HELD IN TRUST. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it or for losses on any investments made by it pursuant to
this Section 12.05 except as otherwise agreed with the Company.
SECTION 12.06. COMPENSATION AND REIMBURSEMENT. The Company
agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by the Trustee hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to the Trustee's gross negligence or willful
misconduct; and
(c) to indemnify the Trustee and its directors, employees and
agents for, and to hold them harmless against, any loss, liability or
expense incurred without gross negligence or willful misconduct on
their part arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the
reasonable costs and expenses of defending themselves against any claim
(whether asserted by the Company, or any Holder or any other Person) or
liability in connection with the exercise or performance of any of
their powers or duties hereunder, or in connection with enforcing the
provisions of this Section 12.06, except to the extent that any such
loss, liability or expense was due to the Trustee's gross negligence or
willful misconduct.
50
The Company shall defend, indemnify, and hold harmless the
Trustee from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs, or expenses of whatever kind or nature, known or
unknown, contingent or otherwise, arising out of, or in any way related to, (w)
the presence, disposal, release, or threatened release of any Hazardous
Materials which are on, from, or affecting the soil, water, vegetation,
buildings, personal property, persons, animals, or otherwise; (x) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Materials; (y) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Materials, and/or (z) any violation of laws, orders, regulations, requirements
or demands of government authorities, or any policies or requirements of the
Environmental Protection Agency, which are based upon or in any way related to
such Hazardous Materials including, without limitation, attorney and consultant
fees and expenses, investigation and laboratory fees, court costs, and
litigation expenses. For purposes of this paragraph, "Hazardous Material"
includes, without limit; any flammable explosives, radioactive materials,
hazardous materials, hazardous wastes, hazardous or toxic substances, or related
materials defined in the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601, ET SEQ.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 5108, ET
SEQ.), the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Sections 6901, ET SEQ.), and in the regulations adopted and publications
promulgated pursuant thereto, or any other Federal, state or local environmental
law, ordinance, rule, or regulation. The provisions of this paragraph shall be
in addition to any and all other obligations and liabilities the Company may
have to the Trustee at common law.
As security for the performance of the obligations of the
Company under this Section 12.06, the Trustee shall have a lien prior to the
Notes upon the Collateral and all monies held or collected by the Trustee
hereunder or under any Security Agreement, in its capacity as Trustee; and for
the payment of such compensation, expenses, reimbursements and indemnity the
Trustee shall have the right to use and apply any Collateral trust monies held
by it hereunder or under any Security Agreement.
In addition to and without prejudice to the rights provided to
the Trustee under any of the provisions of this Indenture, when the Trustee (in
its capacity as Trustee and, if applicable, in its capacity as Notes Registrar
and Paying Agent) incurs expenses (including the reasonable charges and expenses
of counsel) or renders services after an Event of Default specified in Section
9.01(d) or 9.01(e) occurs, such expenses and the compensation for services are
intended to constitute expenses of administration under any applicable
Bankruptcy Law.
The Company's obligations under this Section 12.06 and the
lien referred to in this Section 12.06 shall survive the resignation or removal
of the Trustee, the discharge of the Company's obligations pursuant to any
provision of this Indenture and any rejection or termination of this Indenture
under any applicable Bankruptcy Law or other termination of this Indenture.
"Trustee" for purposes of this Section 12.06 shall include any
predecessor Trustee; provided, however, that the negligence or willful
misconduct of any Trustee hereunder shall not affect the rights of any other
Trustee hereunder.
51
SECTION 12.07. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There
shall at all times be a Trustee hereunder that is a corporation permitted by the
Trust Indenture Act to act as trustee under an indenture qualified under the
Trust Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$25,000,000. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 12.08. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee pursuant
to Section 12.09.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 12.09 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the holders of a majority in principal amount
of the outstanding Securities of such series, delivered to the Trustee and the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
obligations imposed upon it under Section 310(b) of the Trust Indenture
Act with respect to Securities of any series after written request
therefore by the Company or any holder of a Security of such series who
has been a bona fide holder of a Security of such series for at least
six months; or
(2) the Trustee shall cease to be eligible under
Section 12.07 and shall fail to resign after written request therefore
by the Company or any such holder; or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company, by or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any holder
of a Security who has been a bona fide holder of a Security of such series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities of such series and the appointment of a successor
Trustee or Trustees.
52
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Securities of one or more series which shall
occur only with the express prior written consent of the Company, the Company,
by or pursuant to a Board Resolution, shall promptly appoint a successor Trustee
or Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 12.09. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the holders of a majority in principal amount of the
outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
12.09, become the successor Trustee with respect to the Securities of such
series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the holders of Securities and
accepted appointment in the manner required by Section 12.09, any holder of a
Security who has been a bona fide holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series. If the instrument of
acceptance by a successor Trustee required by Section 12.09 shall not have been
delivered to the Trustee within 30 days after the effective date of any such
removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
related series of Securities
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the holders of Securities of such series as their names and addresses appear in
the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 12.09. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) Upon the appointment hereunder of any successor Trustee
with respect to all Securities, such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties hereunder of the retiring Trustee; but, on the
request of the Company or such successor Trustee, such retiring Trustee, upon
payment of its charges, shall execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and, subject to Section 8.03, shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its lien provided for in Section 12.06.
53
(b) Upon the appointment hereunder of any successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and such successor Trustee shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, such successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any notice given to, or received by, or any act
or failure to act on the part of any other Trustee hereunder, and, upon the
execution and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein, such retiring Trustee shall have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates other than as hereinafter expressly set forth, and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates; but, on request of the Company or such
successor Trustee, such retiring Trustee, upon payment of its charges with
respect to the Securities of that or those series to which the appointment of
such successor relates and subject to Section 8.03 shall duly assign, transfer
and deliver to such successor Trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, subject nevertheless to its lien
provided for in Section 12.06.
(c) Upon request of any Person appointed hereunder as a
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (a) or (b) of this Section,
as the case may be.
(d) No Person shall accept its appointment hereunder as a
successor Trustee unless at the time of such acceptance such successor Person
shall be qualified and eligible under this Article.
SECTION 12.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the
54
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated but not delivered by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 12.11. APPOINTMENT OF AUTHENTICATING AGENT. The
Trustee may appoint one or more Authenticating Agents acceptable to the Company
with respect to one or more series of Securities which shall be authorized to
act on behalf of the Trustee to authenticate Securities of that or those series
issued upon original issue, exchange, registration of transfer, partial
redemption or pursuant to Section 2.06, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company
and, except as provided in or pursuant to this Indenture, shall at all times be
a corporation that would be permitted by the Trust Indenture Act to act as
trustee under an indenture qualified under the Trust Indenture Act, is
authorized under applicable law and by its charter to act as an Authenticating
Agent and has a combined capital and surplus (computed in accordance with
Section 310(a)(2) of the Trust Indenture Act) of at least $5,000,000. If at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
be the successor of such Authenticating Agent hereunder, provided such
Corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all holders of
Securities of the series with respect to which such Authenticating Agent shall
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect
55
as if originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The provisions of Sections 2.04, 12.03 and 12.04 shall be
applicable to each Authenticating Agent.
If all of the Securities of any series may not be originally
issued at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a place of payment
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested in writing (which writing need
not be accompanied by or contained in an Officers' Certificate by the Company),
shall appoint in accordance with this Section an Authenticating Agent having an
office in a place of payment designated by the Company with respect to such
series of Securities.
SECTION 12.12. NOTICE OF DEFAULTS. The Trustee shall, within
sixty (60) days after the occurrence of a default with respect to the Securities
of any series, mail to all holders of Securities of that series entitled to
receive reports pursuant to Section 11.03, notice of all defaults with respect
to that series known to the Trustee, unless such defaults shall have been cured
before the giving of such notice; provided, however, that, except in the case of
default in the payment of the principal of or interest on any of the Securities
of such series, the Trustee shall be protected in withholding such notice if and
so long as the board of directors or trustees, the executive committee, or a
trust committee of directors or trustees or Responsible Officers of the Trustee
in good faith determines that the withholding of such notice is in the interests
of the holders of Securities of such series.
SECTION 12.13 APPOINTMENT OF CO-TRUSTEE.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Collateral may at the time be located, the Trustee
shall have the power and may execute and deliver all instruments necessary to
appoint one or more Persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Collateral,
and to vest in such Person or Persons, in such capacity and for the benefit
of the Noteholders, such title to the Collateral, or any part hereof, and
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 12.08 and
no notice to Noteholders of the appointment of any co-trustee or separate
trustee shall be required under Section 12.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations
(including the holding of the Collateral or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture
and the conditions of this Article VI. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or
affording protection or rights (including the rights to compensation,
reimbursement and indemnification hereunder) to, the Trustee. Every such
instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 12.14 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee shall have or acquire any conflicting interest within
the meaning of the Trust Indenture Act, it shall either eliminate such
conflicting interest or resign to the extent, in the manner and with the
effect, and subject to the conditions, provided in the Trust Indenture Act
and this Indenture. For purposes of Section 310(b)(1) of the Trust Indenture
Act and to the extent permitted thereby, the Trustee, in its capacity as
trustee in respect of the Securities of any series, shall not be deemed to
have a conflicting interest arising from its capacity as trustee in respect
of the Securities of any other series.
SECTION 12.15 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If the Trustee shall be or become a creditor of the Company or any
other obligor upon the Securities (other than by reason of a relationship
described in Section 311(b) of the Trust Indenture Act), the Trustee shall be
subject to any and all applicable provisions of the Trust Indenture Act
regarding the collection of claims against the Company or such other obligor.
For purposes of Section 311(b) of the Trust Indenture Act:
(a) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks or bankers and payable upon
demand;
(b) the term "self-liquidating paper" means any draft, xxxx
of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of financing
the purchase, processing, manufacturing, shipment, storage or sale of
goods, wares or merchandise and which is secured by documents
evidencing title to, possession of,or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale
of the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company arising
from the making, drawing, negotiating or incurring of the draft, xxxx
of exchange, acceptance or obligation.
SECTION 12.16. COLLATERAL TRUSTEE AND AUTHENTICATING AGENT GET
BENEFIT OF ARTICLE TWELVE. The Collateral Trustee and Authenticating Agent shall
be entitled to the rights and the benefit of Article Twelve as if they were the
Trustee.
ARTICLE THIRTEEN
DEFEASANCE
SECTION 13.01. DISCHARGE OF INDENTURE UPON PAYMENT OF
SECURITIES. If and when the principal of and the interest on, all the
Securities outstanding hereunder and all other sums due hereunder shall have
been well and truly paid at the times and in the manner therein and herein
expressed, this Indenture shall cease and determine, and, at the written
request of the Company, accompanied by the Officers' Certificate and Opinion
of Counsel required by Section 18.03, and upon proof being given to the
reasonable satisfaction of the Trustee that all the Securities have been paid
or satisfied and upon payment of the costs, charges and expenses incurred or
to be incurred by the Trustee in relation thereto or in carrying out the
provisions of this Indenture, the Trustee shall cancel this Indenture and
execute and deliver to the Company such instruments as shall be requisite to
evidence the satisfaction hereof and shall instruct the Collateral Trustee to
release the Collateral in accordance with Section 16.04.
SECTION 13.02. DISCHARGE OF SECURITIES OF ANY SERIES UPON
DEPOSIT OF MONEYS. If, at any time after the date hereof, the Company shall
deposit with the Trustee, in
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trust for the benefit of the holders thereof, (i) funds sufficient to pay, or
(ii) such amount of direct obligations of the United States of America as will
or will together with the income thereon without consideration of any
reinvestment thereof be sufficient to pay, all sums due for principal of and
interest on the Securities of a particular series, as they shall become due from
time to time, and shall pay all costs, charges and expenses incurred or to be
incurred by the Trustee in relation thereto or in carrying out the provisions of
this Indenture in relation thereto, this Indenture shall cease to be of further
effect with respect to Securities of such series (except as to (i) rights of
registration of transfer, substitution and exchange of Securities of such
series, (ii) rights of holders to receive payments of principal of and interest
on the Securities of such series as they shall become due from time to time and
other rights, duties and obligations of Securityholders as beneficiaries hereof
with respect to the amounts so deposited with the Trustee, and (iii) the rights,
obligations and immunities of the Trustee hereunder (for which purposes the
Securities of such series shall be deemed outstanding)), and the Trustee, on the
written request of the Company, accompanied by the Officers' Certificate and
Opinion of Counsel required by Section 18.03, and an Opinion of Counsel to the
effect that holders of the Securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of the Company's action
under this Section 13.02 and will be subject to Federal income tax in the same
amount, in the same manner and at the same times as would have been the case if
such action had not been taken, shall execute and deliver to the Company such
instruments as shall be requisite to evidence the satisfaction thereof with
respect to Securities of such series. The Trustee shall apply the moneys so
deposited solely to the payment to the holders of the Securities of such series
of all sums due thereon for principal and interest, and the Trustee shall have
no claim for itself, for fees, expenses or otherwise, to such moneys so
deposited.
SECTION 13.03. INTEREST ON MONEYS DEPOSITED. Neither the
Trustee nor any other paying agent shall be required to pay interest on any
moneys deposited pursuant to the provisions of this Indenture, except such as it
shall agree with the Company to pay thereon. Any moneys so deposited for the
payment of the principal of and interest on the Securities of any series and
remaining unclaimed for three years after the date of the maturity of the
Securities of such series or the date fixed for the redemption of all the
Securities of such series at the time outstanding, as the case may be, shall be
repaid by the Trustee or such other paying agent to the Company upon its written
request and thereafter, anything in this Indenture to the contrary
notwithstanding, any rights of the holders of Securities of such series in
respect of which such moneys shall have been deposited shall be enforceable only
against the Company, and all liability of the Trustee or such other paying agent
with respect to such moneys shall thereafter cease.
Subject to the provisions of the foregoing paragraph, any
moneys which at any time shall be deposited by the Company or on its behalf with
the Trustee or any other paying agent for the purpose of paying the principal of
and interest on any of the Securities shall be and are hereby assigned,
transferred and set over to the Trustee or such other paying agent in trust for
the respective holders of the Securities for the purpose for which such moneys
shall have been deposited; but such moneys need not be segregated from other
funds except to the extent required by law.
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SECTION 13.04. REPAYMENT TO COMPANY.
(a) The Trustee and the paying agent shall promptly turn over
to the Company upon request any excess money or securities held by them upon
payment of all the obligations under this Indenture.
(b) Subject to any applicable abandoned property law, the
Trustee and the paying agent shall pay to the Company upon request any money
held by them for the payment of principal of or interest on the Securities that
remains unclaimed for two years, and, thereafter, Holders entitled to the money
must look to the Company for payment as general creditors.
SECTION 13.05. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited direct obligations of the United
States of America or the principal and interest received on such direct
obligations of the United States of America.
SECTION 13.06. REINSTATEMENT. If the Trustee or paying agent
is unable to apply funds or direct obligations of the United States of America
in accordance with this Article 13 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article 13 until such time as the Trustee or paying agent is permitted to apply
all such funds or direct obligations of the United States of America in
accordance with this Article 13; provided, however, that, if the Company has
made any payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the funds or
direct obligations of the United States of America held by the Trustee or paying
agent.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS,
DIRECTORS AND EMPLOYEES
SECTION 14.01. LIABILITY SOLELY CORPORATE. No recourse shall
be had for the paying of the principal of or interest on, any Security or for
any claim based thereon or otherwise in respect thereof or of the indebtedness
represented thereby, or upon any obligation, covenant or agreement of this
Indenture, against any incorporator, stockholder, officer, director or employee,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitutional provision, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Indenture and the Securities are
solely corporate obligations, and that no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, stockholder, officer, director
or employee, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, because of the incurring of the indebtedness hereby authorized or
under or by reason of any of the obligations, covenants, promises or agreements
contained in this Indenture or in any of the Securities or to be implied
herefrom or therefrom, and that all liability,
58
if any, of that character against every such incorporator, stockholder, officer,
director and employee is, by the acceptance of the Securities and as a condition
of, and as part of the consideration for, the execution of this Indenture and
the issue of the Securities expressly waived and released.
ARTICLE FIFTEEN
SUPPLEMENTAL INDENTURES
SECTION 15.01. WITHOUT CONSENT OF SECURITYHOLDERS, THE
COMPANY, THE GUARANTORS AND TRUSTEE MAY ENTER INTO SUPPLEMENTAL INDENTURES FOR
SPECIFIED PURPOSES. The Company, the Guarantors (when authorized by resolution
of its Board of Directors and permitted under the terms of the Indenture) and
the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any one
or more of the following purposes:
(a) to add to the covenants and agreements of the Company, to
be observed thereafter and during the period, if any, in such
supplemental indenture or indentures expressed, to surrender any right
or power hereunder conferred upon the Company, and to add events of
default, in each case for the protection or benefit of the holders of
all or any series of the Securities (and if such covenants, agreements,
surrender of rights or powers and events of default are to be for the
benefit of fewer than all series of Securities, stating that such
covenants, agreements, surrender of rights or powers and events of
default are expressly being included for the benefit of such series as
shall be identified therein);
(b) to change or eliminate any provisions of the Indenture
with respect to all or any series of the Securities not then
outstanding (and, if such change is applicable to fewer than all such
series of the Securities, specifying the series to which such change is
applicable), and to specify the rights and remedies of the Trustee and
the holders of such Securities in connection therewith;
(c) to evidence the succession of another corporation to the
Company, the Trustee, or successive successions, and the assumption by
a successor, transferee or lessee corporation of the covenants and
obligations of the Company or Trustee, as the case may be, contained in
the Securities of one or more series or in this Indenture;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any indenture supplemental hereto
which may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to make any other
provision in regard to matters or questions arising under this
Indenture which the Board of Directors of the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of the any series of Securities;
(e) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities any property or assets;
(f) to amend Exhibit D to evidence execution and delivery by
new Guarantors of Guarantees;
59
(g) to prohibit the authentication and delivery of additional
series of Securities;
(h) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal and with or without interest coupons; and
(i) to add Guarantors.
Subject to the provisions of Section 15.03, the Trustee is
authorized to join with the Company in the execution of any such supplemental
indenture, to make the further agreements and stipulations which may be therein
contained and to accept the conveyance, transfer, assignment, mortgage or pledge
of any property or assets thereunder.
Any supplemental indenture authorized by the provisions of
this Section 15.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Securities at the time outstanding,
notwithstanding any of the provisions of Section 15.02.
SECTION 15.02. MODIFICATION OF INDENTURE BY SUPPLEMENTAL
INDENTURE WITH CONSENT OF SECURITYHOLDERS. With the consent (evidenced as
provided in Article Ten) of the holders of not less than one dollar ($1.00) more
than 50% in aggregate principal amount of the Securities at the time outstanding
which are affected by such indenture supplemental hereto, the Company, when
authorized by a resolution of its Board of Directors, and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the holders of the Securities of any series to be affected;
provided, however, that no such supplemental indenture shall (i) extend the
Stated Maturity of any principal, interest or premium, if any, on any
Securities, or reduce the rate or extend the time of payment of interest
thereon, or reduce the amount of the principal thereof, or reduce any premium
payable upon the redemption thereof or upon any other circumstances, or make the
principal thereof or interest or premium thereon payable in any coin or currency
other than that provided in the Securities, or impair the right to institute
suit for the enforcement of any such payment on or after the maturity thereof as
provided in Section 9.06, or subordinate any Securities in right of payment
without the consent of the holder of each Security so affected, or (ii) reduce
the aforesaid percentage of Securities of any series, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all the Securities then outstanding, or (iii) modify, without the
written consent of the Trustee, the rights, duties or immunities of the Trustee.
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A supplemental indenture which changes or eliminates any
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the holders of Securities of such series with respect to such
provision, shall be deemed not to affect the rights under this Indenture of the
holders of Securities of any other series.
It shall not be necessary for the consent of the
Securityholders under this Section 15.02 to approve the particular form of any
proposed supplemental Indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section 15.02, the
Company shall mail a notice, setting forth in general terms the substance of
such supplemental indenture, to the holders of Securities affected by such
supplemental indenture at their addresses as the same shall then appear in the
register of the Company. 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 supplemental indenture.
SECTION 15.03. UPON REQUEST OF THE COMPANY, TRUSTEE TO JOIN IN
EXECUTION OF SUPPLEMENTAL INDENTURE. Upon the request of the Company,
accompanied by the Officers' Certificate and Opinion of Counsel required by
Section 18.03 and by
(a) a supplemental indenture duly executed on behalf of the
Company;
(b) a Board Resolution authorizing the execution of said
supplemental indenture;
(c) an Opinion of Counsel, stating that said supplemental
indenture complies with, and that the execution thereof is authorized
or permitted by, the provisions of this Indenture, and that such
supplemental indenture, and this Indenture as modified thereby, are
enforceable against the Company and the Guarantors, subject to the
effect of applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws of general application affecting the
rights and remedies of creditors generally; and
(d) if said supplemental indenture shall be executed pursuant
to Section 15.02, evidence (as provided in Article Ten) of the consent
thereto of the Securityholders required to consent thereto as in
Section 15.02 provided,
the Trustee shall join with the Company in the execution of said supplemental
indenture unless said 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 said
supplemental indenture.
SECTION 15.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the
execution of any supplemental indenture pursuant to the provisions of this
Article Fifteen, this Indenture shall be and be deemed to be modified and
amended in accordance therewith and, except as herein otherwise expressly
provided, the respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the holders of
all of the Securities or of the Securities of any series affected, as the case
may be, shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and
61
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
SECTION 15.05. MATTERS PROVIDED FOR IN SUPPLEMENTAL INDENTURE
MAY BE NOTED ON SECURITIES, OR NEW SECURITIES APPROPRIATELY MODIFIED MAY BE
ISSUED IN EXCHANGE FOR OUTSTANDING SECURITIES. Securities authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article Fifteen may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Board of Directors of the
Company, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the securities then outstanding in equal
aggregate principal amounts, and such exchange shall be made without cost to the
holders of the Securities.
SECTION 15.06. SUPPLEMENTAL INDENTURES TO CONFORM TO TRUST
INDENTURE ACT OF 1939. Every supplemental indenture executed pursuant to the
provisions of this Article Fifteen shall conform to the requirements of the
Trust Indenture Act of 1939 as then in effect.
ARTICLE SIXTEEN
COLLATERAL AND SECURITY
The due and punctual payment of the principal of and
interest on the Securities when and as the same shall be due and payable,
whether on an Interest Payment Date, at Stated Maturity, by acceleration,
repurchase, prepayment or otherwise, and interest on the overdue principal of
and interest (to the extent permitted by law) on the Securities and
performance of all other obligations of the Company and the Guarantors to the
Holders of Securities, the Trustee or the Collateral Trustee under this
Indenture, the Security Agreements and the Securities, according to the terms
hereunder or thereunder, shall be secured by a lien, pledge, mortgage and
security interest (the "JUDICIAL LIEN") on the Collateral. The Judicial Lien
shall be a valid and enforceable perfected security interest and Lien, in
favor of the Collateral Trustee for its benefit and the ratable benefit of
the Holders of Securities, superior to and prior to the rights of all third
Persons other than the Collateral Trustee and subject to no other Liens other
than the lien of the Trustee provided for in Section 12.06. The Trustee may,
but shall not be required to, file or serve financing statements, notice of
Lien or similar instruments which otherwise may be required under applicable
law in any jurisdiction, or take any action, including taking possession, to
validate and perfect such security interests and Lien. The confirmation order
of a bankruptcy court approving the Bankruptcy Plan pursuant to section 1129
of the Bankruptcy Code shall be deemed sufficient and conclusive evidence of
the Judicial Lien.
SECTION 16.02. SECURITY AGREEMENTS.
(a) Notwithstanding Section 16.01, with respect to the
Perfection Collateral, the security interests and Lien granted pursuant to
the Bankruptcy Plan shall be documented by the Security Agreements which the
Company and the Guarantors have entered into simultaneously with the
execution of this Indenture. Each Holder of Securities, by its acceptance
thereof, consents and agrees to the terms of the Security Agreements
(including, without limitation, the provisions
62
providing for foreclosure and release of Collateral) as the same may be in
effect or may be amended from time to time in accordance with its terms,
appoints the Collateral Trustee to act as the "Collateral Trustee" thereunder
and authorizes and directs the Collateral Trustee to enter into the Security
Agreements and to perform its obligations and exercise its rights thereunder in
accordance therewith.
(b) The Company shall and shall cause the Guarantors to do or
cause to be done all such acts and things as may be necessary or proper, or as
may be required by the provisions of the Security Agreements or as may be
requested by the Trustee to assure and confirm to the Trustee and the Collateral
Trustee the security interest in and lien on the Perfection Collateral
contemplated by the Security Agreements, as from time to time constituted, so
as to render the same available for the security and benefit of this
Indenture and of the Securities secured hereby, according to the intent and
purposes, and having the priority, herein expressed.
(c) Without limitation of the foregoing, the Company shall
take, and shall cause its Subsidiaries to take the following actions to cause
the Security Agreements to create and maintain, as security for the
obligations of the Company hereunder, a valid and enforceable perfected first
priority Lien in and on all the Prefection Collateral, in favor of the
Collateral Trustee for its benefit and the ratable benefit of the Holders of
Securities:
(1) Execute the Security Agreements;
(2) File UCC financing statements in
Washington D.C.;
(3) Give custody to the Trustee of all share
certificates of each Guarantor issued or issuable in certificate form;
(4) [Register the fixed and floating charge in
Bermuda];
(5) [Register the fixed and floating charge in
the United Kingdom]; and
(6) [Register the fixed and floating charge in
Ireland];
(d) Notwithstanding this Section 16.02, the failure of the
Company or the Guarantors to execute any documentation relating to the Lien
granted under the Bankruptcy Plan shall in no way affect the validity,
perfection or priority of such Lien. It shall not be a condition precedent to
the issuance of any series of Securities that any action be taken to make the
Lien effective.
(e) The Company shall and shall cause the Guarantors to, as
soon as practicable after the Issue Date (but in no event later than sixty
(60) days thereafter), make such recordings, registerings, or filings of all
financing statements, notices of Lien or similar instruments with respect to
the Collateral that is not Perfection Collateral as are possible to make on
commercially reasonable terms.
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SECTION 16.03. RECORDING AND OPINIONS.
(a) The Company shall furnish to the Collateral Trustee and
the Trustee promptly following the execution and delivery of this Indenture, but
no later than the Issue Date, Opinions of Counsel (i) stating that, in the
opinion of such counsel, no further action is necessary under the laws of the
[Approved Jurisdictions] to make the Judicial Lien effective against all Persons
and (ii) stating that, in the opinion of such counsel, action has been taken
with respect to the recording, registering, filing, re-recording, re-registering
and re-filing of all supplemental indentures, financing statements, continuation
statements or other instruments of further assurance as is necessary to make
effective against all Persons the Lien intended to be created by the Security
Agreements.
(b) The Company shall furnish to the Collateral Trustee and
the Trustee within three months after each anniversary of the Issue Date an
Opinion of Counsel, dated as of such date, (i) stating that, in the opinion
of such counsel, no further action is necessary under the laws of the
Approved Jurisdictions to make the Judicial Lien effective against all
Persons and (ii) either (A)(I) stating that, in the opinion of such counsel,
action has been taken with respect to the recording, registering, filing,
re-recording, re-registering and re-filing of all supplemental indentures,
financing statements, continuation statements and other instruments of
further assurance as is necessary to maintain the Lien intended to be created
by the Security Agreements and reciting with respect to the security
interests in the Perfection Collateral the details of such action or
referring to prior Opinions of Counsel in which such details are given and
(II) stating that, based on relevant laws as in effect on the date of such
Opinion of Counsel, all financing statements, continuation statements and
other instruments of further assurance have been executed and filed that are
necessary as of such date and during the succeeding 12 months fully to
preserve and protect, to the extent such protection and preservation are
possible by filing, the rights of the Holders of Securities and the
Collateral Trustee and the Trustee under the Security Agreements with respect
to the Security Interests and Liens in the Collateral, or (B) stating that,
in the opinion of such counsel, no such action is necessary to maintain such
Liens.
SECTION 16.04. RELEASE OF COLLATERAL.
(a) Collateral may be released from the Lien and security
interest of the Judicial Lien at any time or from time to time in accordance
with the provisions hereof and of the Security Agreements and as provided
hereby. The Company shall have the right, from time to time, to sell or
dispose of any part of the Collateral and the Trustee and Collateral Trustee
shall, from time to time, release property so sold or disposed of from the
Lien of this Indenture and the Security Agreements, but only upon receipt by
the Trustee of the following:
(1) a Board Resolution requesting such release
and describing the property so to be released;
64
(2) an Officers' Certificate containing the
statements required by Sections 314(c) and 314(d) of the Trust
Indenture Act together with any other certificates and opinions
required by Section 314(d) of the Trust Indenture Act;
(3) a report containing the information required
by Section 313(b) of the Trust Indenture Act; and
(4) an Opinion of Counsel containing the
statements required by Section 314(c) of the Trust Indenture Act; and
(5) immediately upon the release and sale or
disposition of the Collateral, cash equal to the fair value, as
certified pursuant to this Section, of the property to be released.
(b) The Collateral will be automatically released from the
Lien at such time as the Company has paid in full or otherwise provided for
the payment in full in accordance with this Indenture of the principal amount
and interest due on all of the Securities PROVIDED, HOWEVER, that if no
default or Event of Default exists, the Company and the Guarantors' Accounts
will be automatically released from the Judicial Lien at such time as the
Company has paid or redeemed five million dollars ($5,000,000) of the
principal amount of the Series A Notes in accordance with this Indenture. The
Company shall thereafter deliver an Officers' Certificate to the Trustee and
the Collateral Trustee stating that such principal amount has been paid in
full and no default or Event of Default exists, and request the Collateral
Trustee to release the Lien created by this Indenture and the Collateral
Documents upon the Accounts. Upon the request of the Company pursuant to such
Officers' Certificate certifying that all conditions precedent to such
release hereunder and under the Security Agreements have been met, which
shall be accompanied by an Opinion of Counsel to the same effect, the
Collateral Trustee shall release the Accounts or Collateral, as applicable.
Upon receipt of such Officers' Certificate, the Collateral Trustee shall (at
the sole cost and expense of the Company) execute, deliver or acknowledge any
necessary or proper instruments of termination, satisfaction or release to
evidence the release of the Accounts or Collateral permitted to be released
pursuant to this Indenture and the Security Agreements.
(c) The release of any Collateral from the terms of this
Indenture and the Security Agreements shall not be deemed to impair the
security under this Indenture in contravention of the provisions hereof if
and to the extent the Collateral is released pursuant to the terms of this
Indenture and the Security Agreements. The Company shall cause Section 313(b)
of the Trust Indenture Act, relating to reports, and Section 314(d) of the
Trust Indenture Act, relating to the release of property or securities from
the Lien and security interest of the Security Agreements and relating to the
substitution therefore of any property or securities to be subjected to the
Lien and security interest of the Security Agreements, to be satisfied. Any
certificate or opinion required by Section 314(d) of the Trust Indenture Act
may be made by an Officer of the Company except in cases where Section 314(d)
of the Trust Indenture Act requires that such certificate or opinion be made
by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected or approved by the Company.
65
SECTION 16.05. CERTIFICATES OF THE COMPANY. The Company
shall furnish to the Trustee and the Collateral Trustee, prior to each
proposed release of Collateral, (i) all documents required by Section 314(d)
of the Trust Indenture Act and (ii) an Opinion of Counsel, which may be
rendered by internal counsel to the Company, to the effect that such
accompanying documents constitute all documents required by Section 314(d) of
the Trust Indenture Act. The Trustee and the Collateral Trustee may, to the
extent permitted by Section 12.02 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained
in such documents and such Opinion of Counsel and shall be fully protected in
relying thereon.
SECTION 16.06. CERTIFICATES OF THE TRUSTEE. In the event
that the Company wishes to release Collateral and has delivered the
certificates and documents required by the Security Agreements and/or
Sections 16.04 and 16.05, and, based solely on the Opinions of Counsel
delivered pursuant to Sections 16.04 and 16.05, the Trustee shall deliver a
certificate to the Collateral Trustee setting forth such determination;
provided, however, that so long as the Trustee is the Collateral Trustee, the
requirement that the Trustee deliver a certificate to the Collateral Trustee
shall not be applicable.
SECTION 16.07. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE
TRUSTEE AND THE COLLATERAL TRUSTEE UNDER THE SECURITY AGREEMENTS. Subject to
the provisions of Section 12.02 hereof, the Trustee shall, in its sole
discretion and without the consent of the Holders of Securities, direct, on
behalf of the Holders of Securities, the Collateral Trustee to take all
actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Security Agreements and (b) collect, receive and distribute any
and all amounts payable in respect of the obligations of the Company under
this Indenture or the Security Agreements. The Trustee and the Collateral
Trustee shall have power to institute and maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Collateral by any
acts that may be unlawful or in violation of the Security Agreements or this
Indenture, and such suits and proceedings as the Trustee or the Collateral
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders of Securities in the Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement
of, or compliance with, such enactment, rule or order would impair the
security interest hereunder or be prejudicial to the interests of the Holders
of Securities or of the Trustee or the Collateral Trustee).
SECTION 16.08. AUTHORIZATION OF RECEIPT OF FUNDS BY THE
TRUSTEE UNDER THE SECURITY AGREEMENTS. The Collateral Trustee shall deliver
to the Trustee and the Trustee is authorized to receive any funds for the
benefit of the Holders of Securities distributed under the Security
Agreements with respect to the Collateral, and to make further distributions
of such funds to the Holders of Securities according to the provisions of
this Indenture and the Security Agreements.
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ARTICLE SEVENTEEN
SUBSIDIARY GUARANTEES
SECTION 17.01. GUARANTEE.
(a) Subject to this Article Seventeen, each Guarantor hereby
jointly and severally unconditionally and irrevocably guarantees as a primary
obligor and not merely as a surety, jointly and severally, to each Holder and to
the Trustee and its successors and assigns (i) the full and punctual payment of
principal of and interest on the Securities when due, whether at Stated
Maturity, by acceleration, by redemption, by required repurchase or otherwise,
and all other monetary obligations of the Company, under this Indenture
(including obligations to the Trustee) and the Securities to which the Company
is a party and (ii) the full and punctual performance of all other obligations
of the Company, whether for expenses, indemnification or otherwise under this
Indenture and the Securities (all of the foregoing being hereinafter
collectively, the "GUARANTEED OBLIGATIONS") whether or not such Guaranteed
Obligations are arising after the commencement of a proceeding under the
Bankruptcy Code (including post-petition interest) and whether or not allowed or
allowable as a claim in any such proceeding, and whether or not recovery of any
such Guaranteed Obligation may be barred by a statute of limitations or may
otherwise be unenforceable. Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from it or any other Guarantor and that it will remain bound
under this Subsidiary Guaranty notwithstanding any extension or renewal of any
Guaranteed Obligation.
(b) Each Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Guaranteed Obligations
and also waives notice of protest for nonpayment. Each Guarantor waives
notice of any default under the Securities or the Guaranteed Obligations. The
obligations of each Guarantor hereunder shall not be affected by (i) the
failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under
this Indenture, the Securities or any other agreement or otherwise; (ii) any
extension or renewal of any thereof; (iii) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Indenture, the
Securities or any other agreement; (iv) the release of any security held by
any Holder or the Trustee for the Guaranteed Obligations or any of them; (v)
the failure of any Holder or the Trustee to exercise any right or remedy
against any other guarantor of the Guaranteed Obligations; or (vi) except as
specifically set forth in Section 17.07, any change in the ownership of such
Guarantor.
(c) Each Guarantor further agrees that its Subsidiary Guaranty
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 Holder or the Trustee to any security held for payment of
the Guaranteed Obligations.
(d) Except as specifically set forth herein, the obligations
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than payment of the Guaranteed
Obligations in full), including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or
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unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or
omission or delay to do any other act or thing that may or might in any manner
or to any extent vary the risk of such Guarantor or would otherwise operate as a
discharge of such Guarantor as a matter of law or equity.
(e) Each Guarantor further agrees that its Guaranty herein
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of, premium, if any, or interest
on any Guaranteed Obligation is rescinded or must otherwise be restored by any
Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
(f) In furtherance of the foregoing and not in limitation of
any other right that any Holder or the Trustee has at law or in equity against
any Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of, premium, if any, or interest on any Guaranteed Obligation when and
as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Guaranteed
Obligation, each Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (i) the unpaid amount of
such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (iii) all other
monetary Guaranteed Obligations of the Company to the Holders and the Trustee.
(g) Each Guarantor agrees that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, (i) the maturity of
the Guaranteed Obligations guaranteed hereby may be accelerated as provided in
Article 9 for the purposes of such Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of such Guaranteed
Obligations as provided in Article 9, such Guaranteed Obligations (whether or
not due and payable) shall forthwith become due and payable by such Guarantor
for the purposes of this Section.
(h) Each Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 17.02. LIMITATION ON GUARANTOR LIABILITY. Each
Guarantor, and by its acceptance of Securities, each Holder, hereby confirms
that it is the intention of all such parties that the Subsidiary Guaranty of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar law to the extent applicable to any
Subsidiary Guaranty. To effectuate the foregoing intention, the Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will, after giving effect to such
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maximum amount and all other contingent and fixed liabilities of such Guarantor
that are relevant under such laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
this Article Seventeen, result in the obligations of such Guarantor under its
Subsidiary Guaranty not constituting a fraudulent transfer or conveyance.
SECTION 17.03. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTY.
(a) To evidence its Subsidiary Guaranty set forth in Section
17.01, each Guarantor hereby agrees that a notation of such Subsidiary Guaranty
substantially in the form included in Exhibit [E] may be endorsed by an Officer
of such Guarantor on each Security authenticated and delivered by the Trustee.
(b) Each Guarantor hereby agrees that its Subsidiary Guaranty
set forth in Section 17.01 shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of such Subsidiary Guaranty.
(c) If an Officer whose signature is on this Indenture or on
the Subsidiary Guaranty no longer holds that office at the time the Trustee
authenticates the Security on which a Subsidiary Guaranty is endorsed, the
Subsidiary Guaranty shall be valid nevertheless.
(d) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guaranty set forth in this Indenture on behalf of the Guarantors.
SECTION 17.04. SUCCESSORS AND ASSIGNS. This Article 17 shall
be binding upon each Guarantor and its successors and assigns and shall enure to
the benefit of the successors and assigns.
SECTION 17.05. NO WAIVER. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 17 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits that either may have under this Article 17 at
law, in equity, by statute or otherwise.
SECTION 17.06. MODIFICATION. No modification, amendment or
waiver of any provision of this Article 17, nor the consent to any departure by
any Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Trustee, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice to or demand on any Guarantor in any case shall entitle such Guarantor
to any other or further notice or demand in the same, similar or other
circumstances.
SECTION 17.07. RELEASE OF GUARANTOR. Upon the sale or other
disposition (including by way of consolidation or merger) of a Guarantor or the
sale or disposition of all or substantially all the assets of such Guarantor (in
each case other than a sale or disposition to the Company or another Guarantor),
in a transaction permitted by this Indenture, such Guarantor
69
shall be deemed released from all obligations under this Article 17 without any
further action required on the part of the Trustee or any Holder. Upon the
request of the Company pursuant to such Officers' Certificate certifying that
all conditions precedent to such release have been met, which shall be
accompanied by an Opinion of Counsel to the same effect, the Collateral Trustee
shall release such Guarantor and execute and deliver an appropriate instrument
evidencing such release.
SECTION 17.08. NO SUBROGATION.
Each Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Indenture Guaranteed until payment in
full of all such obligations. If any amount shall be paid to any Guarantor on
account of any Guaranteed Obligations at any time when all of the Company's
obligations or any other obligations under this Indenture shall not have been
paid in full, such amount shall be held by such Guarantor in trust for the
Trustee and the Holders, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the
Trustee in the exact form received by such Guarantor (duly endorsed by such
Guarantor to the Trustee, if required), to be applied against such
obligations.
ARTICLE EIGHTEEN
MISCELLANEOUS PROVISIONS
SECTION 18.01. CONSOLIDATION, MERGER, SALE OR LEASE. Subject
to the provisions of Section 8.06, nothing contained in this Indenture or in the
Securities shall be deemed to prevent the consolidation or merger of the Company
with or into any other corporation, or the merger into the Company of any other
corporation, or the sale or lease by the Company of its property and assets as,
or substantially as, an entirety, or otherwise.
Upon any consolidation or merger, or any sale other than
for cash or lease of all or substantially all of the assets of the Company in
accordance with the provisions of Section 8.06, the corporation formed by
such consolidation or into which the Company shall have been merged or to
which such sale or lease shall have been made shall succeed to and be
substituted for the Company with the same effect as if it had been named
herein as a party hereto, and thereafter from time to time such corporation
may exercise each and every right and power of the Company under this
Indenture, in the name of the Company or in its own name; and any act or
proceeding by any provision of this Indenture required or permitted to be
done by the Board of Directors or any officer of the Company may be done with
like force and effect by the like board or officer of any corporation that
shall at the time be the successor of the Company hereunder. In the event of
any such sale or conveyance, but not any such lease, the Company (or any
successor corporation which shall theretofore have become such in the manner
described in Section 8.06) shall be discharged from all obligations and
covenants under this Indenture and the Securities and may thereupon be
dissolved and liquidated, provided, however, the Company shall have redeemed
any series of Securities required to be redeemed upon a Change of Control, if
such consolidation, merger, sale lease or purchase constitutes a Change of
Control.
Anything in this Section 18.01 to the contrary
notwithstanding, no such consolidation or merger shall be entered into, and no
such conveyance or transfer shall be made, by the Company with or to another
corporation or Person which has outstanding any obligations secured by a Lien if
as a result thereof, any of the properties of any character owned by the Company
immediately prior thereto would be subject to such Lien, unless
simultaneously therewith or prior thereto effective provisions shall be made
to secure all of the Securities equally and ratably with (or prior to) such
other secured obligations.
SECTION 18.02. RIGHTS UNDER INDENTURE CONFINED TO PARTIES AND
HOLDERS OF SECURITIES. Nothing in this Indenture expressed and nothing that may
be implied from any of the provisions hereof is intended, or shall be construed,
to confer upon, or to give to, any Person other than the parties hereto and
their successors and the holders of the Securities any right, remedy or claim
under or by reason of this Indenture or any covenant, condition, stipulation,
promise or agreement hereof, and all covenants, conditions, stipulations,
promises and
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agreements in this Indenture contained shall be for the sole and
exclusive benefit of the parties hereto and their successors and of the holders
of the Securities.
SECTION 18.03. EVIDENCE OF COMPLIANCE. As evidence of
compliance with the conditions precedent provided for in this Indenture
(including any covenants compliance with which constitutes a condition
precedent) which relate to the authentication and delivery of the Securities, to
the release of Collateral, to the satisfaction and discharge of this Indenture
or to any other action to be taken by the Trustee at the request or upon the
application of the Company, the Company will furnish to the Trustee an Officers'
Certificate, stating that such conditions precedent have been complied with and
an Opinion of Counsel stating that in the opinion of such counsel such
conditions precedent have been complied with.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read such
condition or covenant; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such person, such examination or investigation as is necessary to enable the
expression of an informed opinion as to whether or not such condition or
covenant has been complied with has been made; and (4) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
Notwithstanding any provision of this Indenture authorizing
the Trustee conclusively to rely upon any certificates or opinions, the Trustee,
before granting any application by the Company or taking or refraining from
taking any other action in reliance thereon, may, but shall not be obligated to,
require any further evidence or make any further investigation as to the facts
or matters stated therein which it may, in good faith, deem reasonable in the
circumstances, and in connection therewith the Trustee may examine or cause to
be examined the pertinent books, records and premises of the Company or of any
Subsidiary; and the Trustee shall, in any such case, require such further
evidence or make such further investigation as may be requested by the holders
of a majority in principal amount of the Securities then outstanding, provided
that, if payment to the Trustee of the costs, expenses and liabilities likely to
be incurred by it in making such investigation is not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee before making such investigation may require reasonable indemnity
against such costs, expenses and liabilities. Any further evidence which may be
requested by the Trustee pursuant to any of the provisions of this paragraph
shall be furnished by the Company at its own expense; and any cost, expenses and
liabilities incurred by the Trustee pursuant to any of the provisions of this
paragraph shall be paid by the Company, or, if paid by the Trustee, shall be
repaid by the Company, upon demand, with interest at the highest rate borne by
the Securities, and, until such repayment, shall be secured by a lien on any
moneys held by the Trustee hereunder prior to any rights therein of the holders
of Securities.
SECTION 18.04. CANCELLATION OF SECURITIES. All Securities
paid, redeemed, exchanged, surrendered for registration of transfer or retired,
if surrendered to the Company or to any paying agent, be delivered to the
Trustee for cancellation and shall be cancelled by it or, if surrendered to the
Trustee, shall be cancelled by it, and, except as otherwise provided in
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Sections 2.05, 2.06, 2.08, 7.02 and 15.05, no Securities shall be issued under
the Indenture in lieu thereof. The Trustee shall make appropriate notations in
its records in respect of all such Securities and shall destroy such Securities
and deliver a certificate of such destruction to the Company. If the Company
shall acquire any of the Securities, however, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for
cancellation. The Trustee shall dispose of any Securities cancelled by it
pursuant to the provisions of this Section in accordance with its then practice
for disposition of securities.
SECTION 18.05. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF
1939 TO CONTROL. If any provision of this Indenture limits, qualifies or
conflicts with any duties under any required provision of the Trust Indenture
Act imposed hereon by Section 318(c) thereof, such required provision shall
control.
SECTION 18.06. ACTION OF AUTHORIZED COMMITTEE DEEMED TO BE
ACTION OF BOARD OF DIRECTORS. Whenever action is required by this Indenture by
the Board of Directors of the Company and there is at the time constituted a
committee of the Board of Directors duly authorized to take such action, such
action by said committee shall be deemed to be the action of the Board of
Directors and shall be sufficient for all purposes of this Indenture where
action by the Board of Directors is specified.
SECTION 18.07. NOTICES. Any notice or demand authorized by
this Indenture to be given to the Company shall be sufficiently given for all
purposes, if it shall be given or made in writing, by hand, telecopier (with
confirmation of receipt) or certified or registered mail (confirmation of
receipt requested) to the Company addressed to it at: Xxxxx Xxxxx, 00 Xxxxx
Xxxxxx, X.X. Xxx XX00, Xxxxxxxx XX XX, Bermuda (telephone: 000-000-0000;
telecopier: 000-000-0000 to the attention of ________________________ with a
copy to 0 Xxxxx Xxxxxx, Xxxxxx X0X0XX Xxxxxx Xxxxxxx (telephone: 00 00 0000
0800; telecopier: 44 20 7317 0808) to the attention of General Counsel or at
such other address as may have been furnished in writing to the Trustee by the
Company. Any notice, direction, request or demand to or upon the Trustee shall
be sufficiently given, for all purposes, if it shall be given or made in
writing, by hand, telecopier (with confirmation of receipt) or certified or
registered mail (confirmation of receipt requested) to The Bank of New York, 000
Xxxxxxx Xxxxxx--00X, Xxx Xxxx, Xxx Xxxx 00000, Attention: _______________
(telephone: (000) 000-0000; telecopier: (000) 000-0000 or 815-5803) to the
attention of its Global Finance Unit (GFU), or at such other address as may have
been furnished in writing to the Company by the Trustee. Anything contained
herein to the contrary notwithstanding, notice, direction, request or demand to
or upon the Trustee shall be sufficiently given for any purpose under this
Indenture unless actually received by the Trustee at the address as hereinabove
provided. Any notice required or permitted to be given to Securityholders shall
be sufficiently given if given by first class mail, postage prepaid, to such
holders, at their addresses as the same shall appear on the Security Register. A
failure to give notice with respect to any particular holder or any defect
therein shall not affect the sufficiency of notice given to any other holder.
Notice may be waived in writing by the Person entitled to receive such notice
either before or after such event and such waiver shall be the equivalent of
receipt of such notice.
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SECTION 18.08. ACT OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by or pursuant to this Indenture
including, without limitation, pursuant to Section 9.03 and 9.06, to be
given or taken by holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such holders in person
or by an agent duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments or record or both are delivered to the Trustee and, where it
is hereby expressly required, to the Company. Such instrument or instruments
and any such record (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject
to Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee
and the Company and any agent of the Trustee or the Company, if made in the
manner provided in this Section.
Without limiting the generality of this Section, unless
otherwise provided in or pursuant to this Indenture, a holder, including a
Depositary that is a holder of a Global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in or
pursuant to this Indenture to be made, given or taken by holders, and a
Depositary that is a holder of a Global Security may provide for the beneficial
owners of interests in any such Global Security to direct such Depositary in
taking such action through such Depositary's standing instructions and customary
practices. The Depositary shall report only one result of its solicitation of
proxies to the Trustee.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient and in accordance with such reasonable rules as the
Trustee may determine; and the Trustee may in any instance require further proof
with respect to any of the matters referred to in this Section.
(c) The ownership, principal amount and serial numbers of
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
(d) If the Company shall solicit from the holders of any
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company shall, by Board Resolution, fix in advance a
Record Date for the determination of holders of Securities entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act.
Such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such Record Date, but only the holders of
Securities of record at the close of business on such Record Date shall be
deemed to be holders for the purpose of determining whether holders of the
requisite proportion of outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding Securities shall be
computed as of such Record Date; provided that no such authorization, agreement
or consent by the holders
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of Securities shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
Record Date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the holder of any Security shall bind every
future holder of the same Security and the holder of every Security issued upon
the registration of transfer thereof or in exchange therefore or in lieu thereof
in respect of anything done or suffered to be done by the Trustee, any Security
Registrar or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
SECTION 18.09. PAYMENTS DUE ON NON-BUSINESS DAYS. In any case
where the date of Maturity of any payment of principal of the Securities, the
due date of any payment of interest or the date fixed for redemption of any
Securities shall not be a Business Day, then payment of interest, principal may
be made on the next succeeding Business Day with the same force and effect as if
made on the date of maturity and no interest shall accrue for the period after
such date.
SECTION 18.10. EXECUTION IN COUNTERPARTS. This Indenture may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 18.11. INDENTURE DEEMED A NEW YORK CONTRACT; VENUE;
WAIVER OF TRIAL BY JURY.
(a) This Indenture, each Security and each Subsidiary Guaranty
shall be deemed to be a contract made under the law of the State of New York
(including without limitation Section 5-1401 of the New York General Obligations
Law or any successor to such statute), and for all purposes shall be construed
and enforced in accordance with the laws of said State. The Trustee, the
Company, the Guarantors and (by their acceptance of the Securities) the Holders,
agree to submit to the non-exclusive jurisdiction of any United States federal
or New York state court located in the Borough of Manhattan, The City of New
York, in any action or proceeding arising out of or relating to this Indenture,
the Notes or any Subsidiary Guaranty.
(b) The Trustee, the Company and the Guarantors hereby
knowingly, voluntarily and intentionally waive any rights they may have to a
trial by jury in respect of any litigation based hereon, or arising out of,
under or in connection with, this Indenture or any Security Agreement, any
course of conduct, course of dealing, statements (whether oral or written) or
actions of the Trustee or the Company and its Subsidiaries relating thereto. The
Company and each Guarantor acknowledges and agrees that it has received full and
sufficient consideration for this provision and that this provision is a
material inducement for the Trustee and the Holders entering into this
Indenture.
SECTION 18.12. CURRENCY OF PAYMENTS. Dollars are the sole
currency of account and payment for all sums payable by the Company under or in
connection with the Securities or this Indenture, including damages.
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SECTION 18.13. SUCCESSORS AND ASSIGNS. All agreements of the
Company and the Guarantors in this Indenture, the Securities and the Subsidiary
Guaranties shall bind their successors and assigns. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 18.14. SEVERABILITY. In case any provision in this
Indenture or 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, and a Holder shall have no claim
therefor against any party hereto.
SECTION 18.15. CONSENT TO SERVICE OF PROCESS.
(a) The Company irrevocably (i) agrees that any legal suit,
action or proceeding arising out of or based upon this Indenture or the
Securities issued hereunder, as the case may be, may be instituted in any
federal or state court located in the City of New York, (ii) waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of venue of any such proceeding, and any claim that any suit,
action or proceeding in such a court has been brought in an inconvenient forum,
and (iii) irrevocably submits to the nonexclusive jurisdiction of such courts in
any such suit, action or proceeding. Each of the Company and the Guarantors has
appointed _________________________, as its authorized agent (the "Authorized
Agent") upon whom process may be served in any suit, action or proceeding
arising out of or based on this Indenture which may be instituted in any federal
or state court located in the City of New York, expressly consents to the
jurisdiction of any such court in respect of any suit, action or proceeding, and
waives any other requirements of or objections to personal jurisdiction with
respect thereto. Such appointment shall be irrevocable. The Company agrees to
take any and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment in full force
and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company or a Guarantor shall be deemed, in
every respect, effective service of process upon the Company or such Guarantor,
as applicable.
(b) To the extent that any of the Company and the Guarantors
have or hereafter may acquire any immunity (sovereign or otherwise) from any
legal action, suit or proceeding, from jurisdiction of any court or from set-off
or any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, the Company and the Guarantors
hereby irrevocably waive and agree not to plead or claim such immunity in
respect of their respective obligations under this Indenture or the Securities.
SECTION 18.16. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings in this Indenture and the Table of Contents are for
convenience only and shall not affect the construction hereof. References herein
to a Section or Article are to Sections or Articles of this Indenture.
SECTION 18.17. BENEFITS OF INDENTURE. Nothing in this
Indenture, the Securities or in any Subsidiary Guaranty, express or implied,
shall give to any Person, other than the parties hereto [and each Guarantor],
their successors hereunder [and under the Subsidiary Guaranties] and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture or the Subsidiary Guaranties.
75
IN WITNESS WHEREOF, FLAG TELECOM GROUP LIMITED has caused this
Indenture to be executed in its corporate name by one of its officers thereunto
duly authorized and to be attested by its Secretary or one of its Assistant
Secretaries, and ___________________, has caused this Indenture to be executed
in its corporate name by one of its authorized officers thereunto duly
authorized, all as of _______________.
FLAG TELECOM GROUP LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG ACQUISITION NO. 1 CORPORATION
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG PACIFIC HOLDINGS LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG PACIFIC LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG PACIFIC CANADA LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG PACIFIC JAPAN LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
00
XXXX XXXXXXX XXXXXXXXX PTE. LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG Telecom Development Limited
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM DEVELOPMENT SERVICES COMPANY LLC
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG ACCESS INDIA PRIVATE LTD.
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAGWEB LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM NETWORK SERVICES LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
77
FLAG TELECOM IRELAND LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM JAPAN LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM ESPANA SA
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM SERVIZI ITALIA SPA
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM IRELAND SERVICES LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM SERVICIOS S.A. DE C.V.
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM ARGENTINA SA
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
78
FLAG TELECOM VENEZUELA SA
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM BRASIL HOLDINGS LTDA
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM BRASIL LTDA
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM IRELAND NETWORK LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM NETWORK USA LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM DEUTSCHLAND NETWORK GMBH
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
79
FLAG TELECOM NEDERLAND NETWORK BV
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM BELGIUM NETWORK SA
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM SWITZERLAND NETWORK AG
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM AUSTRIA NETWORK GMBH
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM NORWAY NETWORK AS
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM FRANCE NETWORK SAS
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM ESPANA NETWORK SAU
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
80
FLAG TELECOM GLOBAL NETWORK LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM ASIA LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM FRANCE SERVICES EURL
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM DEUTSCHLAND GMBH
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM NEDERLAND BV
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM HELLAS AE
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
81
FLAG TELECOM AUSTRIA GMBH
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG ASIA HOLDINGS LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM KOREA LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
SEOUL TELENET INC.
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM TAIWAN SERVICES LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG HOLDINGS (TAIWAN) LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM TAIWAN LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
82
FLAG ATLANTIC UK LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG ATLANTIC FRANCE SARL
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG PACIFIC USA LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM GROUP SERVICES LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG TELECOM LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
83
FLAG TELECOM USA LTD.
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
FLAG ASIA LIMITED
By:
----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Attest: ___________________
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------------------
84
A-8
EXHIBIT A
THIS SERIES A NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT,
FOR PURPOSES OF SECTIONS 1272, 1273 AND 0000 XX XXX XXXXXX XXXXXX INTERNAL
REVENUE CODE OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS SERIES A NOTE WAS
$______PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE AGGREGATE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, ASSUMING THAT THE NOTE IS OUTSTANDING UNTIL ITS
MATURITY DATE, IS $_________ PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE
ISSUE DATE IS [ ], 2002; AND THE YIELD TO MATURITY FOR THE PURPOSES OF ACCRUING
ORIGINAL ISSUE DISCOUNT IS _____% PER ANNUM, CALCULATED ON A SEMIANNUAL BOND
EQUIVALENT BASIS, SUBJECT TO INCREASE BY REASON OF TREASURY REGULATION SECTION
1.1272-1(c).
[DTC LEGEND]
FLAG TELECOM GROUP LIMITED
SERIES A NOTES DUE 2005
No. ___ CUSIP No.
$
----------
FLAG Telecom Group Limited, a corporation organized under the laws of
Bermuda (the "ISSUER"), promises to pay to _________, or its registered assigns,
the principal sum of $45,000,000 in U.S. Dollars on October __, 2005.
Interest Payment Dates: April __ and October __.
Record Dates: The [fifteenth] day immediately preceding
each Interest Payment Date
Additional provisions of this Series A Note are set forth on the other
side of this Series A Note.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the other side of this Series A Note by manual
signature, this Series A Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
A-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
FLAG TELECOM GROUP LIMITED
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is
one of the Securities of the series [Seal]
designated therein referred to in
the within-mentioned Indenture,
By: _________________________
Authorized Signatory
A-2
[FORM OF REVERSE SIDE OF SECURITY]
SERIES A NOTES DUE 2005
1. INTEREST
FLAG Telecom Group Limited, a corporation organized under the laws of
Bermuda (the "Issuer"), promises to pay interest on the principal amount of this
Series A Note at the rate of (i) six point sixty-seven percent (6.67%) per annum
for the first twelve (12) months after the Issue Date; (ii) seven point
thirty-three percent (7.33%) per annum for months thirteen (13) through
twenty-four (24) after the Issue Date; and (iii) eight percent (8%) per annum
for months twenty-five (25) through thirty-six (36) after the Issue Date until
payment of the principal amount shall have been made or duly provided for.
The Issuer shall pay interest semi-annually in arrears on April __
and October __, in each year, commencing April __, 2003. The Issuer shall pay
interest on overdue principal at 2% per annum in excess of such rate and
shall also pay interest on overdue installments of interest at such higher
rate. Interest on the Series A Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the Issue
Date with respect to this Series A Note; PROVIDED that if there is no
existing default in the payment of interest, and if this Series A Note is
authenticated between a Record Date referred to on the face hereof and the
next succeeding interest payment date, interest on this Series A Note shall
accrue from such next succeeding interest payment date. Interest shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT
The Issuer shall pay interest (except defaulted interest) on the Series
A Notes to the persons who are registered holders of Series A Notes at the close
of business on the [fifteenth] day immediately preceding the Interest Payment
Date even if Series A Notes are cancelled after the Record Date and on or before
the Interest Payment Date. The principal of and interest on the Series A Notes
shall be payable at each office or agency of the Company designated pursuant to
Section 8.02 of the Indenture for such purpose; provided, however, that interest
may at the option of the Company be paid by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register
(including the records of any Security Co-Registrar). Such payments will be made
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts by
wire transfer and if no wire instructions are specified, then by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register (including the records of any Security Co-Registrar). On each
Interest Payment Date the Trustee shall pay to the registered holder interest
accrued in respect of such Series A Notes. Payment of principal on the Series A
Notes shall be paid to the registered holder or upon his order only upon
presentation and surrender for payment of such Series A Notes on or after the
payment date at the office or agency of the Company designated pursuant to
Section 8.02 of the Indenture for such purpose.
A-3
3. PAYING AGENT AND REGISTRAR
Initially, the Bank of New York (the "TRUSTEE") shall act as paying
agent and Registrar. The Issuer may appoint and change any paying agent,
Registrar without notice to the Holders. The Issuer or any Subsidiary may act as
paying agent, Registrar.
4. INDENTURE
The Issuer issued the Series A Notes under an Indenture dated as of
October __, 2002 (as such may be amended or supplemented from time to time, the
"INDENTURE"), among the Issuer, the Guarantors and the Trustee. The terms of the
Series A Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act. Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Series A Notes are subject to all such terms, and Securityholders
are referred to the Indenture and the Trust Indenture Act for a statement of
those terms.
The Series A Notes are secured senior obligations of the Issuer and are
limited to $45,000,000 in aggregate principal amount outstanding, of which
$45,000,000 in aggregate principal amount shall be initially issued on the Issue
Date. Subject to the conditions set forth in the Indenture, the Issuer may issue
additional Securities in an unlimited principal amount. The Guarantors have,
jointly and severally, unconditionally guaranteed the Guaranteed Obligations
pursuant to the terms of the Indenture.
5. OPTIONAL REDEMPTION
So long as no Event of Default has occurred, the Series A Notes will be
redeemable at the Company's option in whole or in part at any time in accordance
with Section 3.05 and Article Seven of the Indenture. The Redemption Price for
the Series A Notes shall be two-thirds of the face amount thereof plus accrued
but unpaid interest as of the Redemption Date, during the first eighteen (18)
months after the Issue Date. On the day that is the first date after the
expiration of the eighteenth (18) month after the Issue Date and on the
corresponding day of each month thereafter, the Redemption Price shall increase
by 1.85185184444% of the face amount thereof to the Stated Maturity, in all
instances in addition to accrued but unpaid interest as of the date of such
payment.
The Series A Notes will be subject to redemption at the option of the
Company or a successor corporation at any time, in whole but not in part, upon
not less than 30 nor more than 60 days' notice, at a redemption price equal to
the principal amount thereof plus accrued and unpaid interest to the redemption
date if, as a result of any change in or amendment to the laws or any
regulations or rulings promulgated thereunder of:
(a) Bermuda or any political subdivision or governmental
authority thereof or therein having power to tax,
(b) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Series A
Notes is made by the Company or a successor corporation, or its paying
agent in its capacity as such, or any
A-4
political subdivision or governmental authority thereof or therein
having the power to tax, or
(c) any other jurisdiction, other than the United States, in
which the Company or a successor corporation is organized, or any
political subdivision or governmental authority thereof or therein
having the power to tax, or any change of law, which becomes effective
on or after the Issue Date, the Company or a successor corporation is
or would be required on the next succeeding Interest Payment Date to
pay Additional Amounts with respect to the Series A Notes, and the
payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Company or the successor
corporation.
In the case of any partial redemption, selection of the Series A Notes
for redemption will be made in accordance with Article 7 of the Indenture. On
and after the redemption date, interest will cease to accrue on Series A Notes
or portions thereof called for redemption as long as the Company has deposited
with the paying agent funds in satisfaction of the applicable redemption price
pursuant to the Indenture.
6. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL
In the event of a Change of Control, the principal of and interest on
all Series A Notes shall IPSO facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder
and the Company shall be required to redeem the Series A Notes in accordance
with Article Seven of the Indenture. Notwithstanding Section 3.05 of the
Indenture, upon a Change of Control, the Series A Notes shall be redeemed at a
Redemption Price equal to $45,000,000 plus all accrued and unpaid interest
thereon to the Redemption Date, less any principal amount prepaid by the
Company.
7. LIQUIDATION AMOUNT
Notwithstanding Section 3.05 of the Indenture, in the event of any
liquidation, dissolution or winding up of the Company, either voluntary or
involuntary, the holders of Series A Notes shall be entitled to receive,
prior and in preference to any distribution of any of the assets of the
Company to the holders of Common Shares, preferred stock, indebtedness issued
upon the conversion of any preferred stock or Subordinated Debt of the
Company by reason of their ownership thereof, an amount per share equal to
$45,000,000 plus all accrued and unpaid interest thereon to the date of
liquidation, less any principal amount prepaid by the Company.
8. NOTICES OF REDEMPTION
Notices of redemption shall be mailed by first-class mail at least 30
days before the Redemption Date to each Holder of Series A Notes to be redeemed
at its registered address all in accordance with the Indenture. Each notice of
redemption shall identify the Series A Notes to be redeemed (including CUSIP
number) and shall state such election on the part of the Company, the Redemption
Date and place of payment of the Series A Notes to be redeemed and the
Redemption Price and that the Series A Notes designated in such notice for
redemption are required to be presented on or after such Redemption Date and at
such place for payment and that interest to the Redemption Date on the Series A
Notes and portions of Series A Notes called
A-5
for redemption will be paid as specified in said notice and shall cease to
accrue thereon on such date. If less than all the outstanding Series A Notes are
to be redeemed, the notice shall also designate the Series A Notes or portions
of Series A Notes that are to be redeemed. If any Series A Note is to be
redeemed in part only, the notice shall also state that upon presentation of
such Series A Note on or after the redemption date at said place, such Series A
Note will be cancelled and a new Series A Note or Series A Notes, in an
aggregate principal amount equal to the unredeemed portion of such Series A Note
will be issued and delivered without charge to the holder. On and after the
Redemption Date, interest ceases to accrue on Series A Notes or portions of them
called for redemption.
9. CERTAIN COVENANTS
The Indenture imposes certain limitations on the creation of Liens
and the incurrence of Indebtedness by the Issuer and its Subsidiaries and
consolidations, mergers and sales of all or substantially all of the Issuer's
assets.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Series A Notes are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Series A Notes in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar shall not be
required to make any exchange or effect registration of transfer of (A) any
Security which shall have been designated for redemption in whole or in part
except, in the case of any Security to be redeemed in part, the portion thereof
not so to be redeemed, or (B) any Security for a period of 15 days next
preceding any selection of Securities for redemption.
11. PERSONS DEEMED OWNERS
The registered Holder of this Series A Note may be treated as the owner
of it for all purposes.
12. UNCLAIMED MONEY
Any money deposited with the Trustee or any paying agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for three years after such principal or
interest has become due and payable shall be paid to the Company on Company
request, or (if then held by the Company) shall be discharged from such trust;
and the holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such paying agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions set forth in the Indenture, the Issuer at
any time may terminate some or all of its obligations under the Indenture, the
Security Agreements and the Series A Notes if the Issuer deposits with the
Trustee money or direct obligations of the United
A-6
States of America for the payment of principal and interest on the Series A
Notes to redemption or maturity, as the case may be.
14. AMENDMENT, WAIVER
Subject to certain exceptions, the Indenture or the Series A Notes may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Series A Notes then outstanding,
and any existing Default or Event of Default or noncompliance with any provision
may be waived with the written consent of the Holders of a majority in aggregate
principal amount of the Series A Notes then outstanding. Without notice to or
consent of any Holder, the parties thereto may amend or supplement the
Indenture, among other things, cure any ambiguity, defect or inconsistency or
make any other change that does not adversely affect the rights of any Holder.
15. DEFAULTS AND REMEDIES
Events of Default are set forth in the Indenture. If an Event of
Default shall have occurred and be continuing, the Trustee or the holders of 25%
or more in principal amount of the Securities of such series then outstanding
may, and upon the written request of the holders of a majority in principal
amount of such Securities then outstanding the Trustee shall, declare the
principal of all the Securities of such series then outstanding, if not then due
and payable, to be due and payable, and upon any such declaration the same shall
become and be immediately due and payable, anything in the Indenture or in the
Securities of such series contained to the contrary notwithstanding; provided,
however, that upon the acceleration of any series of Securities pursuant to
Section 9.02 of the Indenture, the principal of all other series of Securities
then outstanding shall become immediately due and payable without any further
act on the part of or notice from the Trustee.
Securityholders may not enforce the Indenture or the Series A Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Series A Notes unless it receives indemnity or security
reasonably satisfactory to it. Subject to certain limitations, Holders of a
majority in principal amount of the Series A Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Event of Default (except an Event of Default in payment
of principal or interest) if and so long as the board of directors or trustees,
the executive committee, or a trust committee of directors or trustees or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the holders of Securities of
such series.
16. TRUSTEE DEALINGS WITH THE ISSUER
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Series A Notes and may otherwise deal with and collect
obligations owed to it by the Issuer or its affiliates and may otherwise deal
with the Issuer or its affiliates with the same rights it would have if it were
not Trustee.
A-7
17. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the
Issuer, as such, shall have any liability for any obligations of the Issuer
under the Series A Notes, the Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. No director, officer,
employee, incorporator or stockholder of any of the Guarantors, as such, shall
have any liability for any obligations of the Guarantors under the Security
Agreements, the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each holder of Series A Notes and
Security Agreements by accepting a Series A Note and a Security Agreements
waives and releases all such liabilities. The waiver and release are part of the
consideration for issuance of the Series A Notes and the Security Agreements.
18. GOVERNING LAW
THE SERIES A NOTES SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAW
OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF SAID STATE.
19. AUTHENTICATION
This Series A Note and the Security Agreements endorsed hereon shall
not be valid until an authorized signatory of the Trustee (or an authenticating
agent) manually signs the certificate of authentication on the other side of
this Series A Note.
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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuer has caused CUSIP numbers to be
printed on the Series A Notes 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 Series A
Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Issuer shall furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Series A Note in larger type. Requests may be made to:
[ISSUER]
[ISSUER ADDRESS]
ATTENTION OF SECRETARY
A-8
EXHIBIT B
THIS SERIES B NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR
PURPOSES OF SECTIONS 1272, 1273 AND 0000 XX XXX XXXXXX XXXXXX INTERNAL REVENUE
CODE OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS SERIES B NOTE WAS $______PER
$1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE AGGREGATE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, ASSUMING THAT THE NOTE IS OUTSTANDING UNTIL ITS MATURITY DATE, IS
$_________ PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE ISSUE DATE IS [ ],
2002; AND THE YIELD TO MATURITY FOR THE PURPOSES OF ACCRUING ORIGINAL ISSUE
DISCOUNT IS _____% PER ANNUM, CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS,
SUBJECT TO INCREASE BY REASON OF TREASURY REGULATION SECTION 1.1272-1(c).
NEW HOLDCO
SERIES B NOTES DUE 2004
No. ___ CUSIP No.
$__________
New Holdco, a corporation organized under the laws of Bermuda (the
"Issuer"), promises to pay to _________, or its registered assigns, the
principal sum of $4,000,000 in U.S. Dollars on October __, 2004.
Interest Payment Dates: April __ and October.
Record Dates: The [fifteenth] day immediately
preceding each Interest Payment Date
Additional provisions of this Series B Note are set forth on the other
side of this Series B Note.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the other side of this Series B Note by manual
signature, this Series B Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
B-1
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
NEW HOLDCO
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is
one of the Securities of the series [Seal]
designated therein referred to in
the within-mentioned Indenture,
By: _________________________
Authorized Signatory
B-2
[FORM OF REVERSE SIDE OF SECURITY]
SERIES B NOTES DUE 2004
1. INTEREST
New Holdco, a corporation organized under the laws of Bermuda (the
"Issuer"), promises to pay interest on the principal amount of this Series B
Note at the rate of ((i) ten percent (10%) per annum for the first twelve (12)
months after the Issue Date; and (ii) eleven percent (11%) per annum for months
thirteen (13) through twenty-four (24) after the Issue Date until payment of the
principal amount shall have been made or duly provided for.
The Issuer shall pay interest semi-annually in arrears on April __
and October __, in each year commencing on April __, 2003. The Issuer shall
pay interest on overdue principal at 2% per annum in excess of such rate and
shall also pay interest on overdue installments of interest at such higher
rate. Interest on the Series B Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the Issue
Date with respect to this Series B Note; PROVIDED that if there is no
existing default in the payment of interest, and if this Series B Note is
authenticated between a Record Date referred to on the face hereof and the
next succeeding interest payment date, interest on this Series B Note shall
accrue from such next succeeding interest payment date. Interest shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT
The Issuer shall pay interest (except defaulted interest) on
the Series B Notes to the persons who are REGISTERED MAIL holders of Series B
Notes at the close of business on the [fifteenth] day immediately preceding the
Interest Payment Date even if Series B Notes are cancelled after the Record Date
and on or before the Interest Payment Date. The principal of and interest on the
Series B Notes shall be payable at each office or agency of the Company
designated pursuant to Section 8.02 of the Indenture for such purpose; provided,
however, that interest may at the option of the Company be paid by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Security Register (including the records of any Security Co-Registrar). Such
payments will be made in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts by wire transfer and if no wire instructions are specified, then
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register (including the records of any Security
Co-Registrar). On each Interest Payment Date the Trustee shall pay to the
registered holder interest accrued in respect of such Series B Notes. Payment of
principal on the Series B Notes shall be paid to the registered holder or upon
his order only upon presentation and surrender for payment of such Series B
Notes on or after the payment date at the office or agency of the Company
designated pursuant to Section 8.02 of the Indenture for such purpose.
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3. PAYING AGENT AND REGISTRAR
Initially, the Bank of New York (the "TRUSTEE") shall act as paying
agent and Registrar. The Issuer may appoint and change any paying agent,
Registrar without notice to the Holders. The Issuer or any Subsidiary may act as
paying agent, Registrar.
4. INDENTURE
The Issuer issued the Series B Notes under an Indenture dated as of
October __, 2002 (the "INDENTURE"), among the Issuer, the Guarantors and the
Trustee. The terms of the Series B Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act.
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Series B Notes are subject to all such terms, and
Securityholders are referred to the Indenture and the Trust Indenture Act for a
statement of those terms.
The Series B Notes are secured senior obligations of the Issuer and are
limited to $4,000,000 in aggregate principal amount outstanding, of which
$4,000,000 in aggregate principal amount shall be initially issued on the
Closing Date. Subject to the conditions set forth in the Indenture, the Issuer
may issue additional Securities in an unlimited principal amount. The Guarantors
have, jointly and severally, unconditionally guaranteed the Guaranteed
Obligations pursuant to the terms of the Indenture.
5. OPTIONAL REDEMPTION
So long as no Event of Default has occurred, the Series B Notes will be
redeemable at the Company's option in whole or in part at any time in accordance
with Article Seven of the Indenture. The Redemption Prices for the Series B
Notes shall be four million dollars ($4,000,000) plus accrued but unpaid
interest as of the Redemption Date.
The Series B Notes will be subject to redemption at the option of the
Company or a successor corporation at any time, in whole but not in part, upon
not less than 30 nor more than 60 days' notice, at a redemption price equal to
the principal amount thereof plus accrued and unpaid interest to the redemption
date if, as a result of any change in or amendment to the laws or any
regulations or rulings promulgated thereunder of:
(a) Bermuda or any political subdivision or governmental
authority thereof or therein having power to tax,
(b) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Series B
Notes is made by the Company or a successor corporation, or its paying
agent in its capacity as such, or any political subdivision or
governmental authority thereof or therein having the power to tax, or
(c) any other jurisdiction, other than the United States, in
which the Company or a successor corporation is organized, or any
political subdivision or governmental authority thereof or therein
having the power to tax, or any change of law, which
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becomes effective on or after the Issue Date, the Company or a
successor corporation is or would be required on the next succeeding
Interest Payment Date to pay Additional Amounts with respect to the
Series B Notes, and the payment of such Additional Amounts cannot be
avoided by the use of any reasonable measures available to the Company
or the successor corporation.
In the case of any partial redemption, selection of the Series B Notes
for redemption will be made in accordance with Article 7 of the Indenture. On
and after the redemption date, interest will cease to accrue on Series B Notes
or portions thereof called for redemption as long as the Company has deposited
with the paying agent funds in satisfaction of the applicable redemption price
pursuant to the Indenture.
6. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL
In the event of a Change of Control, the principal of and interest on
all Series B Notes shall IPSO FACTO become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder
and the Company shall be required to redeem the Series B Notes in accordance
with Article Seven of the Indenture. Notwithstanding Section 4.05 of the
Indenture, upon a Change of Control, the Series B Notes shall be redeemed at a
Redemption Price equal to $4,000,000 plus all accrued and unpaid interest
thereon to the Redemption Date, less any principal amount prepaid by the
Company.
7. LIQUIDATION AMOUNT
In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, the holders of Series B Notes shall be
entitled to receive, prior and in preference to any distribution of any of the
assets of the Company to the holders of Common Shares, preferred stock,
indebtedness issued upon the conversion of any preferred stock or Subordinated
Debt of the Company by reason of their ownership thereof, an amount per share
equal to six million ($6,000,000) plus all accrued and unpaid interest thereon
to the date of liquidation, less any principal amount prepaid by the Company.
8. NOTICES OF REDEMPTION
Notices of redemption shall be mailed by first-class mail at least 30
days before the Redemption Date to each Holder of Series B Notes to be redeemed
at its registered address all in accordance with the Indenture. Each notice of
redemption shall identify the Series B Notes to be redeemed (including CUSIP
number) and shall state such election on the part of the Company, the Redemption
Date and place of payment of the Series B Notes to be redeemed and the
Redemption Price and that the Series B Notes designated in such notice for
redemption are required to be presented on or after such Redemption Date and at
such place for payment and that interest to the Redemption Date on the Series B
Notes and portions of Series B Notes called for redemption will be paid as
specified in said notice and shall cease to accrue thereon on such date. If less
than all the outstanding Series B Notes are to be redeemed, the notice shall
also designate the Series B Notes or portions of Series B Notes that are to be
redeemed. If any Series B Note is to be redeemed in part only, the notice shall
also state that upon presentation of such Series B Note on or after the
redemption date at said place, such Series B Note will be cancelled
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and a new Series B Note or Series B Notes, in an aggregate principal amount
equal to the unredeemed portion of such Series B Note will be issued and
delivered without charge to the holder. On and after the Redemption Date,
interest ceases to accrue on Series B Notes or portions of them called for
redemption.
9. CERTAIN COVENANTS
The Indenture imposes certain limitations on the creation of Liens
and the incurrence of Indebtedness by the Issuer and its Subsidiaries and
consolidations, mergers and sales of all or substantially all of the Issuer's
assets.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Series B Notes are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Series B Notes in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar shall not be
required to make any exchange or effect registration of transfer of (A) any
Security which shall have been designated for redemption in whole or in part
except, in the case of any Security to be redeemed in part, the portion thereof
not so to be redeemed, or (B) any Security for a period of 15 days next
preceding any selection of Securities for redemption.
11. PERSONS DEEMED OWNERS
The registered Holder of this Series B Note may be treated as the owner
of it for all purposes.
12. UNCLAIMED MONEY
Any money deposited with the Trustee or any paying agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for three years after such principal or
interest has become due and payable shall be paid to the Company on Company
request, or (if then held by the Company) shall be discharged from such trust;
and the holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such paying agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions set forth in the Indenture, the Issuer at
any time may terminate some or all of its obligations under the Indenture, the
Security Agreements and the Series B Notes if the Issuer deposits with the
Trustee money or direct obligations of the United States of America for the
payment of principal and interest on the Series B Notes to redemption or
maturity, as the case may be.
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14. AMENDMENT, WAIVER
Subject to certain exceptions, the Indenture or the Series B Notes may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Series B Notes then outstanding,
and any existing Default or Event of Default or noncompliance with any provision
may be waived with the written consent of the Holders of a majority in aggregate
principal amount of the Series B Notes then outstanding. Without notice to or
consent of any Holder, the parties thereto may amend or supplement the
Indenture, among other things, cure any ambiguity, defect or inconsistency or
make any other change that does not adversely affect the rights of any Holder.
15. DEFAULTS AND REMEDIES
Events of Default are set forth in the Indenture. If an Event of
Default shall have occurred and be continuing, the Trustee or the holders of 25%
or more in principal amount of the Securities of such series then outstanding
may, and upon the written request of the holders of a majority in principal
amount of such Securities then outstanding the Trustee shall, declare the
principal of all the Securities of such series then outstanding, if not then due
and payable, to be due and payable, and upon any such declaration the same shall
become and be immediately due and payable, anything in the Indenture or in the
Securities of such series contained to the contrary notwithstanding; provided,
however, that upon the acceleration of any series of Securities pursuant to
Section 9.02 of the Indenture, the principal of all other series of Securities
then outstanding shall become immediately due and payable without any further
act on the part of or notice from the Trustee.
Securityholders may not enforce the Indenture or the Series B Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Series B Notes unless it receives indemnity or security
reasonably satisfactory to it. Subject to certain limitations, Holders of a
majority in principal amount of the Series B Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Event of Default (except an Event of Default in payment
of principal or interest) if and so long as the board of directors or trustees,
the executive committee, or a trust committee of directors or trustees or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the holders of Securities of
such series.
16. TRUSTEE DEALINGS WITH THE ISSUER
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Series B Notes and may otherwise deal with and collect
obligations owed to it by the Issuer or its affiliates and may otherwise deal
with the Issuer or its affiliates with the same rights it would have if it were
not Trustee.
17. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the
Issuer, as such, shall have any liability for any obligations of the Issuer
under the Series B Notes, the Indenture or for
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any claim based on, in respect of, or by reason of, such obligations or their
creation. No director, officer, employee, incorporator or stockholder of any of
the Guarantors, as such, shall have any liability for any obligations of the
Guarantors under the Security Agreements, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
holder of Series B Notes and Security Agreements by accepting a Series B Note
and a Security Agreements waives and releases all such liabilities. The waiver
and release are part of the consideration for issuance of the Series B Notes and
the Security Agreements. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
18. GOVERNING LAW
THE SERIES B NOTES SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAW
OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF SAID STATE.
19. AUTHENTICATION
This Series B Note and the Security Agreements endorsed hereon shall
not be valid until an authorized signatory of the Trustee (or an authenticating
agent) manually signs the certificate of authentication on the other side of
this Series B Note.
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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuer has caused CUSIP numbers to be
printed on the Series B Notes 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 Series B
Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Issuer shall furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Series B Note in larger type. Requests may be made to:
[ISSUER]
[ISSUER ADDRESS]
ATTENTION OF SECRETARY
B-8
EXHIBIT C
THIS SERIES C NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR
PURPOSES OF SECTIONS 1272, 1273 AND 0000 XX XXX XXXXXX XXXXXX INTERNAL
REVENUE CODE OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS SERIES C NOTE WAS
$______PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE AGGREGATE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, ASSUMING THAT THE NOTE IS OUTSTANDING UNTIL ITS
MATURITY DATE, IS $_________ PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE
ISSUE DATE IS [ ], 2002; AND THE YIELD TO MATURITY FOR THE PURPOSES OF
ACCRUING ORIGINAL ISSUE DISCOUNT IS _____% PER ANNUM, CALCULATED ON A
SEMIANNUAL BOND EQUIVALENT BASIS, SUBJECT TO INCREASE BY REASON OF TREASURY
REGULATION SECTION 1.1272-1(c).
NEW HOLDCO
SERIES C NOTES DUE 2004
No. ___ CUSIP No.
$
----------
New Holdco, a corporation organized under the laws of Bermuda (the
"Issuer"), promises to pay to _________, or its registered assigns, the
principal sum of $1,250,000 in U.S. Dollars on October __, 2004.
Interest Payment Dates: April __ and October __.
Record Dates: The [fifteenth] day immediately
preceding each Interest Payment Date
Additional provisions of this Series C Note are set forth on the other
side of this Series C Note.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the other side of this Series B Note by manual
signature, this Series B Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
NEW HOLDCO
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies that this is
one of the Securities of the series [Seal]
designated therein referred to in
the within-mentioned Indenture,
By: _________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
SERIES C NOTES DUE 2004
1. INTEREST
New Holdco, a corporation organized under the laws of Bermuda (the
"Issuer"), promises to pay interest on the principal amount of this Series C
Note at the rate of ((i) ten percent (10%) per annum for the first twelve (12)
months after the Issue Date; and (ii) eleven percent (11%) per annum for months
thirteen (13) through twenty-four (24) after the Issue Date until payment of the
principal amount shall have been made or duly provided for.
The Issuer shall pay interest semi-annually in arrears on April __
and October __, in each year commencing on April __, 2003. The Issuer shall
pay interest on overdue principal at 2% per annum in excess of such rate and
shall also pay interest on overdue installments of interest at such higher
rate. Interest on the Series C Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the Issue
Date with respect to this Series C Note; PROVIDED that if there is no
existing default in the payment of interest, and if this Series C Note is
authenticated between a Record Date referred to on the face hereof and the
next succeeding interest payment date, interest on this Series C Note shall
accrue from such next succeeding interest payment date. Interest shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
2. METHOD OF PAYMENT
The Issuer shall pay interest (except defaulted interest) on the Series
C Notes to the persons who are registered holders of Series C Notes at the close
of business on the [fifteenth] day immediately preceding the Interest Payment
Date even if Series C Notes are cancelled after the Record Date and on or before
the Interest Payment Date. The principal of and interest on the Series C Notes
shall be payable at each office or agency of the Company designated pursuant to
Section 8.02 of the Indenture for such purpose; provided, however, that interest
may at the option of the Company be paid by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register
(including the records of any Security Co-Registrar). Such payments will be made
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts by
wire transfer and if no wire instructions are specified, then by check mailed to
the address of the Person entitled thereto as such address shall appear in the
Security Register (including the records of any Security Co-Registrar). On each
Interest Payment Date the Trustee shall pay to the registered holder interest
accrued in respect of such Series C Notes. Payment of principal on the Series C
Notes shall be paid to the registered holder or upon his order only upon
presentation and surrender for payment of such Series C Notes on or after the
payment date at the office or agency of the Company designated pursuant to
Section 8.02 of the Indenture for such purpose.
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3. PAYING AGENT AND REGISTRAR
Initially, the Bank of New York (the "TRUSTEE") shall act as paying
agent and Registrar. The Issuer may appoint and change any paying agent,
Registrar without notice to the Holders. The Issuer or any Subsidiary may act as
paying agent, Registrar.
4. INDENTURE
The Issuer issued the Series C Notes under an Indenture dated as of
October __, 2002 (the "INDENTURE"), among the Issuer, the Guarantors and the
Trustee. The terms of the Series C Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act.
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Series C Notes are subject to all such terms, and
Securityholders are referred to the Indenture and the Trust Indenture Act for a
statement of those terms.
The Series C Notes are secured senior obligations of the Issuer and are
limited to $1,250,000 in aggregate principal amount outstanding, of which
$1,250,000 in aggregate principal amount shall be initially issued on the
Closing Date. Subject to the conditions set forth in the Indenture, the Issuer
may issue additional Securities in an unlimited principal amount. The Guarantors
have, jointly and severally, unconditionally guaranteed the Guaranteed
Obligations pursuant to the terms of the Indenture.
5. OPTIONAL REDEMPTION
So long as no Event of Default has occurred, the Series C Notes will be
redeemable at the Company's option in whole or in part at any time in accordance
with Article Seven of the Indenture. The Redemption Prices for the Series C
Notes shall be one million two hundred twenty-five thousand dollars ($1,250,000)
plus accrued but unpaid interest as of the Redemption Date.
The Series C Notes will be subject to redemption at the option of the
Company or a successor corporation at any time, in whole but not in part, upon
not less than 30 nor more than 60 days' notice, at a redemption price equal to
the principal amount thereof plus accrued and unpaid interest to the redemption
date if, as a result of any change in or amendment to the laws or any
regulations or rulings promulgated thereunder of:
(a) Bermuda or any political subdivision or governmental
authority thereof or therein having power to tax,
(b) any jurisdiction, other than the United States, the United
Kingdom or Luxembourg, from or through which payment on the Series C
Notes is made by the Company or a successor corporation, or its paying
agent in its capacity as such, or any political subdivision or
governmental authority thereof or therein having the power to tax, or
(c) any other jurisdiction, other than the United States, in
which the Company or a successor corporation is organized, or any
political subdivision or governmental
C-4
authority thereof or therein having the power to tax, or any change of
law, which becomes effective on or after the Issue Date, the Company or
a successor corporation is or would be required on the next succeeding
Interest Payment Date to pay Additional Amounts with respect to the
Series C Notes, and the payment of such Additional Amounts cannot be
avoided by the use of any reasonable measures available to the Company
or the successor corporation.
In the case of any partial redemption, selection of the Series C Notes
for redemption will be made in accordance with Article 7 of the Indenture. On
and after the redemption date, interest will cease to accrue on Series C Notes
or portions thereof called for redemption as long as the Company has deposited
with the paying agent funds in satisfaction of the applicable redemption price
pursuant to the Indenture.
6. MANDATORY REDEMPTION UPON A CHANGE OF CONTROL
In the event of a Change of Control, the principal of and interest on
all Series C Notes shall IPSO FACTO become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder
and the Company shall be required to redeem the Series C Notes in accordance
with Article Seven of the Indenture. Notwithstanding Section 5.05 of the
Indenture, upon a Change of Control, the Series C Notes shall be redeemed at a
Redemption Price equal to $1,250,000 plus all accrued and unpaid interest
thereon to the Redemption Date, less any principal amount prepaid by the
Company.
7. LIQUIDATION AMOUNT
In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, the holders of Series C Notes shall be
entitled to receive, prior and in preference to any distribution of any of the
assets of the Company to the holders of Common Shares, preferred stock,
indebtedness issued upon the conversion of any preferred stock or Subordinated
Debt of the Company by reason of their ownership thereof, an amount per share
equal to one million eight hundred seventy-five thousand dollars ($1,875,000)
plus all accrued and unpaid interest thereon to the date of liquidation, less
any principal amount prepaid by the Company.
8. NOTICES OF REDEMPTION
Notices of redemption shall be mailed by first-class mail at least 30
days before the Redemption Date to each Holder of Series C Notes to be redeemed
at its registered address all in accordance with the Indenture. Each notice of
redemption shall identify the Series C Notes to be redeemed (including CUSIP
number) and shall state such election on the part of the Company, the Redemption
Date and place of payment of the Series C Notes to be redeemed and the
Redemption Price and that the Series C Notes designated in such notice for
redemption are required to be presented on or after such Redemption Date and at
such place for payment and that interest to the Redemption Date on the Series C
Notes and portions of Series C Notes called for redemption will be paid as
specified in said notice and shall cease to accrue thereon on such date. If less
than all the outstanding Series C Notes are to be redeemed, the notice shall
also designate the Series C Notes or portions of Series C Notes that are to be
redeemed. If any Series
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C Note is to be redeemed in part only, the notice shall also state that upon
presentation of such Series C Note on or after the redemption date at said
place, such Series C Note will be cancelled and a new Series C Note or Series C
Notes, in an aggregate principal amount equal to the unredeemed portion of such
Series C Note will be issued and delivered without charge to the holder. On and
after the Redemption Date, interest ceases to accrue on Series C Notes or
portions of them called for redemption.
9. CERTAIN COVENANTS
The Indenture imposes certain limitations on the creation of Liens
and the incurrence of Indebtedness by the Issuer and its Subsidiaries and
consolidations, mergers and sales of all or substantially all of the Issuer's
assets.
10. DENOMINATIONS; TRANSFER; EXCHANGE
The Series C Notes are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Series C Notes in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar shall not be
required to make any exchange or effect registration of transfer of (A) any
Security which shall have been designated for redemption in whole or in part
except, in the case of any Security to be redeemed in part, the portion thereof
not so to be redeemed, or (B) any Security for a period of 15 days next
preceding any selection of Securities for redemption.
11. PERSONS DEEMED OWNERS
The registered Holder of this Series C Note may be treated as the owner
of it for all purposes.
12. UNCLAIMED MONEY
Any money deposited with the Trustee or any paying agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for three years after such principal or
interest has become due and payable shall be paid to the Company on Company
request, or (if then held by the Company) shall be discharged from such trust;
and the holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such paying agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
13. DISCHARGE AND DEFEASANCE
Subject to certain conditions set forth in the Indenture, the Issuer at
any time may terminate some or all of its obligations under the Indenture, the
Security Agreements and the Series C Notes if the Issuer deposits with the
Trustee money or direct obligations of the United States of America for the
payment of principal and interest on the Series C Notes to redemption or
maturity, as the case may be.
C-6
14. AMENDMENT, WAIVER
Subject to certain exceptions, the Indenture or the Series C Notes may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Series C Notes then outstanding,
and any existing Default or Event of Default or noncompliance with any provision
may be waived with the written consent of the Holders of a majority in aggregate
principal amount of the Series C Notes then outstanding. Without notice to or
consent of any Holder, the parties thereto may amend or supplement the
Indenture, among other things, cure any ambiguity, defect or inconsistency or
make any other change that does not adversely affect the rights of any Holder.
15. DEFAULTS AND REMEDIES
Events of Default are set forth in the Indenture. If an Event of
Default shall have occurred and be continuing, the Trustee or the holders of 25%
or more in principal amount of the Securities of such series then outstanding
may, and upon the written request of the holders of a majority in principal
amount of such Securities then outstanding the Trustee shall, declare the
principal of all the Securities of such series then outstanding, if not then due
and payable, to be due and payable, and upon any such declaration the same shall
become and be immediately due and payable, anything in the Indenture or in the
Securities of such series contained to the contrary notwithstanding; provided,
however, that upon the acceleration of any series of Securities pursuant to
Section 9.02 of the Indenture, the principal of all other series of Securities
then outstanding shall become immediately due and payable without any further
act on the part of or notice from the Trustee.
Securityholders may not enforce the Indenture or the Series C Notes
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Series C Notes unless it receives indemnity or security
reasonably satisfactory to it. Subject to certain limitations, Holders of a
majority in principal amount of the Series C Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Event of Default (except an Event of Default in payment
of principal or interest) if and so long as the board of directors or trustees,
the executive committee, or a trust committee of directors or trustees or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the holders of Securities of
such series.
16. TRUSTEE DEALINGS WITH THE ISSUER
Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Series C Notes and may otherwise deal with and collect
obligations owed to it by the Issuer or its affiliates and may otherwise deal
with the Issuer or its affiliates with the same rights it would have if it were
not Trustee.
17. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the
Issuer, as such, shall have any liability for any obligations of the Issuer
under the Series C Notes, the Indenture or for
C-7
any claim based on, in respect of, or by reason of, such obligations or their
creation. No director, officer, employee, incorporator or stockholder of any of
the Guarantors, as such, shall have any liability for any obligations of the
Guarantors under the Security Agreements, the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
holder of Series C Notes and Security Agreements by accepting a Series C Note
and a Security Agreements waives and releases all such liabilities. The waiver
and release are part of the consideration for issuance of the Series C Notes and
the Security Agreements. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that such
a waiver is against public policy.
18. GOVERNING LAW
THE SERIES B NOTES SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAW
OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF SAID STATE.
19. AUTHENTICATION
This Series C Note and the Security Agreements endorsed hereon shall
not be valid until an authorized signatory of the Trustee (or an authenticating
agent) manually signs the certificate of authentication on the other side of
this Series C Note.
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 rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Issuer has caused CUSIP numbers to be
printed on the Series C Notes 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 Series C
Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Issuer shall furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Series C Note in larger type. Requests may be made to:
[ISSUER]
[ISSUER ADDRESS]
ATTENTION OF SECRETARY
C-8
EXHIBIT D
[GUARANTORS AS OF THE ISSUE DATE][SUBJECT TO CONFIRMATION]
Grantor Jurisdiction of Incorporation
------- -----------------------------
FLAG Acquisition No. 1 Corporation [Delaware]
FLAG Pacific Holdings Limited Bermuda
FLAG Pacific Limited Bermuda
FLAG Pacific Canada Limited New Brunswick
FLAG Pacific Japan Limited Japan
FLAG Telecom Singapore Pte. Limited Singapore
FLAG Telecom Development Limited Bermuda
FLAG Telecom Development Services Company LLC Egypt
FLAG Access India Private Ltd. India
FLAGWEB Limited Bermuda
FLAG Telecom Network Services Limited Ireland
FLAG Telecom Ireland Limited Ireland
FLAG Telecom Japan Limited Japan
FLAG Telecom Espana SA Spain
FLAG Telecom Serizi Italia SpA Italy
FLAG Telecom Ireland Services Limited Ireland
FLAG Telecom Servicios S.A. de C.V. Mexico
FLAG Telecom Venezuela SA Venezuela
FLAG Telecom Argentina SA Argentina
FLAG Telecom Brasil Holdings Ltda Brazil
FLAG Telecom Brasil Ltda Brazil
FLAG Telecom Ireland Network Limited Ireland
FLAG Telecom Network USA Limited Delaware
FLAG Telecom Deutschland Network GmbH Germany
FLAG Telecom Nederland Network BV The Netherlands
FLAG Telecom Belgium Network SA Belgium
FLAG Telecom Switzerland Network AG Switzerland
FLAG Telecom Austria Network GmbH Austria
FLAG Telecom Norway Network AS Norway
FLAG Telecom France Network SAS France
FLAG Telecom Espana Network SAU Spain
FLAG Telecom Global Network Limited Bermuda
FLAG Telecom Asia Limited Bermuda
FLAG Telecom France Services Eurl France
FLAG Telecom Deutschland GmbH Germany
FLAG Telecom Nederland BV The Netherlands
FLAG Telecom Hellas AE Greece
FLAG Telecom Austria GmbH Austria
D-1
Grantor Jurisdiction of Incorporation
------- -----------------------------
FLAG Asia Holdings Limited Bermuda
FLAG Telecom Korea Limited Korea
Seoul Telenet Inc. Korea
FLAG Telecom Taiwan Services Limited Taiwan
FLAG Holdings (Taiwan) Limited Taiwan
FLAG Telecom Taiwan Limited (in incorporation) Taiwan
FLAG Atlantic UK Limited United Kingdom
FLAG Atlantic France SARL France
FLAG Limited Bermuda
FLAG Pacific USA Limited Delaware
FLAG Telecom Group Services Limited Bermuda
FLAG Telecom Limited United Kingdom
FLAG Telecom USA Ltd. Delaware
FLAG Asia Limited Xxxxxxx
X-0
EXHIBIT E
[FORM OF NOTATION OF SECURITY GUARANTEE]
For value received, the undersigned (each a "GUARANTOR") have, jointly
and severally, and unconditionally, guaranteed, to the extent set forth in and
subject to the provisions of the Indenture, dated as of [CLOSING DATE], among
[ISSUER], a [STATE OF INCORPORATION OF ISSUER] corporation (the "ISSUER"), the
Guarantors, and The Bank of New York, a _____________ (the "TRUSTEE"), to each
Holder and to the Trustee and its successors and assigns (i) the full and
punctual payment of principal of and interest on the Securities (as defined in
the Indenture) when due, whether at maturity, by acceleration, by redemption, by
reciprocal repurchase or otherwise, and all other monetary obligations of the
Issuer under the Indenture (including obligations to the Trustee) and the
Securities and (ii) the full and punctual performance of all other obligations
of the Issuer, whether for expenses, indemnification or otherwise under the
Indenture and the Securities (all of the foregoing being hereinafter
collectively called the "GUARANTEED OBLIGATIONS"). The Guarantors have further
agreed that the Guaranteed Obligations may be extended or renewed, in whole or
in part, without notice to or further assent from the Guarantors, and that the
Guarantors shall remain bound under Article Seventeen of the Indenture
notwithstanding any extension or renewal of any Guaranteed Obligation. The
obligations of the Guarantors to the Holders of the Securities and to the
Trustee pursuant to the Security Guarantee and the Indenture, are expressly set
forth in Article Seventeen of the Indenture, to which reference is hereby made.
[NAME OF GUARANTOR(S)]
By:__________________________________
Name:
Title:
E-1
================================================================================
Exhibit F
SECURITY AND PLEDGE AGREEMENT
DATED AS OF
_____________, 2002
AMONG
THE GRANTORS HERETO
AND
THE BANK OF NEW YORK
AS TRUSTEE
AND
THE BANK OF NEW YORK
AS COLLATERAL TRUSTEE
================================================================================
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS.........................................................1
SECTION 1.1 DEFINITIONS...............................................1
ARTICLE II GRANT OF SECURITY INTERESTS........................................6
SECTION 2.1 GRANT OF SECURITY INTERESTS...............................6
ARTICLE III REPRESENTATIONS AND WARRANTIES....................................6
SECTION 3.1 NO OTHER LIEN.............................................6
SECTION 3.2 PERFECTED LIENS; PRIORITY.................................6
SECTION 3.3 SECURITY COLLATERAL.......................................7
SECTION 3.4 JURISDICTION OF INCORPORATION; CHIEF EXECUTIVE OFFICE;
RECORDS...................................................7
SECTION 3.5 LOCATION OF INVENTORY AND EQUIPMENT.......................7
SECTION 3.6 RECEIVABLES...............................................8
SECTION 3.7 FARM PRODUCTS.............................................8
SECTION 3.8 INTELLECTUAL PROPERTY COLLATERAL..........................8
SECTION 3.9 DEPOSIT ACCOUNTS..........................................8
ARTICLE IV COVENANTS..........................................................9
SECTION 4.1 FURTHER ASSURANCES........................................9
SECTION 4.2 DELIVERY OF SECURITY COLLATERAL...........................9
SECTION 4.3 CHANGE OF JURISDICTION OF INCORPORATION...................9
SECTION 4.4 CHANGE OF LOCATION OF INVENTORY AND EQUIPMENT............10
SECTION 4.5 ADDITIONAL DEPOSIT ACCOUNTS..............................10
SECTION 4.6 CHANGE OF NAME; IDENTITY OR CORPORATE STRUCTURE..........10
SECTION 4.7 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER................11
SECTION 4.8 MAINTAIN AND XXXX RECORDS AND RECEIVABLES................11
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SECTION 4.9 RIGHT OF INSPECTION......................................11
SECTION 4.10 RECEIVABLES........................................12
SECTION 4.11 CONTRACTS..........................................12
SECTION 4.12 WAREHOUSE RECEIPTS NON-NEGOTIABLE..................12
SECTION 4.13 NO IMPAIRMENT......................................12
SECTION 4.14 LIMITATIONS ON DISPOSITIONS OF COLLATERAL..........12
SECTION 4.15 NOTICE.............................................12
SECTION 4.16 PERFORMANCE BY COLLATERAL TRUSTEE OF GRANTOR'S
OBLIGATIONS; REIMBURSEMENT.........................13
ARTICLE V SPECIAL PROVISIONS REGARDING RECEIVABLES AND CONTRACTS.............13
SECTION 5.1 GRANTOR REMAINS LIABLE UNDER RECEIVABLES AND CONTRACTS...13
SECTION 5.2 NOTICE TO ACCOUNT DEBTORS AND CONTRACTING PARTIES........14
SECTION 5.3 COLLECTIONS ON RECEIVABLES AND CONTRACTS.................14
ARTICLE VI SPECIAL PROVISIONS REGARDING SECURITY COLLATERAL..................14
SECTION 6.1 VOTING RIGHTS; DIVIDENDS; ETC............................14
SECTION 6.2 ADDITIONAL SHARES........................................15
ARTICLE VII COLLATERAL ACCOUNT...............................................16
SECTION 7.1 COLLATERAL ACCOUNT.......................................16
SECTION 7.2 DEPOSIT OF PROCEEDS......................................16
ARTICLE VIII POWER OF ATTORNEY...............................................16
SECTION 8.1 COLLATERAL TRUSTEE'S APPOINTMENT AS ATTORNEY-IN-FACT.....16
ARTICLE IX REMEDIES; RIGHTS UPON DEFAULT.....................................18
SECTION 9.1 RIGHTS AND REMEDIES GENERALLY............................18
ii
TABLE OF CONTENTS
(CONTINUED)
PAGE
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SECTION 9.2 COLLECTION OF RECEIVABLES AND OTHER PROCEEDS.............18
SECTION 9.3 DIRECT GRANTOR TO DISPOSE OF COLLATERAL..................18
SECTION 9.4 COLLATERAL ACCOUNT.......................................19
SECTION 9.5 POSSESSION OF COLLATERAL.................................19
SECTION 9.6 DISPOSITION OF THE COLLATERAL............................19
SECTION 9.7 RECOURSE.................................................20
SECTION 9.8 EXPENSES; ATTORNEYS' FEES................................20
SECTION 9.9 LIMITATION ON DUTIES REGARDING PRESERVATION
OF COLLATERAL............................................20
SECTION 9.10 WAIVER OF CLAIMS...................................21
SECTION 9.11 DISCONTINUANCE OF PROCEEDINGS......................21
SECTION 9.12 RESTORATION OF POSITIONS...........................21
ARTICLE X INDEMNITY 21
SECTION 10.1 INDEMNITY AND EXPENSES.............................21
SECTION 10.2 INDEMNITY OBLIGATIONS SECURED BY COLLATERAL;
SURVIVAL...........................................23
ARTICLE XI MISCELLANEOUS.....................................................23
SECTION 11.1 GOVERNING LAW......................................23
SECTION 11.2 SUBMISSION TO JURISDICTION.........................23
SECTION 11.3 WAIVER OF TRIAL BY JURY............................23
SECTION 11.4 LIMITATION OF LIABILITY............................23
SECTION 11.5 NOTICES............................................24
SECTION 11.6 SUCCESSORS AND ASSIGNS.............................24
SECTION 11.7 WAIVERS AND AMENDMENTS.............................24
SECTION 11.8 NO WAIVER; REMEDIES CUMULATIVE.....................24
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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SECTION 11.9 TERMINATION; RELEASE...............................24
SECTION 11.10 COUNTERPARTS.......................................25
SECTION 11.11 EFFECTIVENESS......................................25
SECTION 11.12 HEADINGS DESCRIPTIVE...............................25
SECTION 11.13 SEVERABILITY.......................................25
SECTION 11.14 SURVIVAL...........................................25
SECTION 11.15 POWERS COUPLED WITH AN INTEREST....................26
SECTION 11.16 ACKNOWLEDGEMENT....................................26
iv
SECURITY AND PLEDGE AGREEMENT
This
SECURITY AND PLEDGE AGREEMENT, dated as of __________, 2002, is
made among each of the undersigned (each, a "GRANTOR") and The Bank of New York,
as collateral trustee (the "COLLATERAL TRUSTEE") and as trustee (the "TRUSTEE")
for the holders of Securities issued under the Indenture referred to below.
RECITALS:
WHEREAS, FLAG Telecom Group Limited (the "COMPANY"), [Guarantors] and
the Collateral Trustee have entered into an Indenture (as the same may be
amended, supplemented or otherwise modified from time to time, the "INDENTURE"),
dated as of __________, 2002 pursuant to which, among other things, the Company
has provided for the authentication and delivery of $45,000,000 aggregate
principal amount of the Company's Series A Notes Due 2005, $4,000,000 aggregate
principal amount of the Company's Series B Notes Due 2004 and $1,250,000
aggregate principal amount of the Company's Series C Notes Due 2004 (together
with any additional securities issuable thereunder, the "SECURITIES"), and the
Collateral Trustee has agreed to act as collateral trustee for the benefit of
the holders of the Securities (the "HOLDERS");
NOW, THEREFORE, to secure the prompt payment in full of the Secured
Obligations (as hereinafter defined) and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Grantors have agreed to pledge and grant a security interest in the Collateral
(as hereinafter defined) as security for the Secured Obligations. Accordingly
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Capitalized terms used herein or in the Charge
Agreements but not otherwise defined herein or therein shall have the meanings
ascribed thereto in the Indenture. The following terms shall have the following
meanings:
"ACCOUNT DEBTOR" shall mean the person who is obligated on a
Receivable.
"ACCOUNTS" shall mean "accounts" as such term is defined in Section
9-102(a)(2) of the UCC.
"AGREEMENT" shall mean this
Security and Pledge Agreement, as the same
may from time to time be amended, supplemented or otherwise modified.
"BANKS" shall mean the banks with which the Deposit Accounts are
maintained.
"CAPITAL STOCK" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation or an individual) and any and all warrants, rights or options to
purchase any of the foregoing.
"CHARGE AGREEMENTS" shall mean the first registered fixed and floating
charge from each of the Guarantors organized under the laws of Bermuda in favor
of the Collateral Trustee.
"CHATTEL PAPER" shall mean "chattel paper" as such term is defined in
Section 9-102(a)(11) of the UCC.
"COLLATERAL" shall have the meaning assigned to it in Section 2.1
hereof.
"COLLATERAL ACCOUNT" shall mean the account (which may be a securities
account and which account shall be an interest bearing account) maintained
pursuant to this Agreement by the Collateral Trustee, and all funds, investment
property and instruments or other items from time to time credited to such
account and all interest thereon.
"COLLATERAL RECORDS" shall mean books, records, computer software,
computer printouts, customer lists, blueprints, technical specifications,
manuals, and similar items that relate to any Collateral other than such items
obtained under license or franchise agreements which prohibit assignment or
disclosure of such items.
"CONTRACTS" shall mean all contracts to which each Grantor now is, or
hereafter will be, bound, or a party, beneficiary or assignee and all other
instruments, agreements and documents executed and delivered with respect to
such contracts, and all revenues, rentals, Proceeds and other sums of money due
and to become due from any of the foregoing, as the same may be modified,
supplemented or amended from time to time in accordance with their terms.
"CONTROL" shall have the meaning ascribed to it in Section 3.1 hereof.
"CONTROL AGREEMENT" shall mean an agreement among the Collateral
Trustee, the respective Grantors and each Bank substantially in the form of
Annex II hereto.
"CORPORATE CHANGES" shall have the meaning ascribed to it in Section
4.16 hereof.
"COPYRIGHTS" shall have the meaning ascribed to it in Section
3.8(a)(3).
"DEBTOR TERMINATION STATEMENT" shall have the meaning ascribed to it in
Section 4.14 hereof.
"DEPOSIT ACCOUNTS" shall mean the Collateral Account and any deposit
account, including without limitation, "deposit accounts" as such term is
defined in Section 9-102(a)(29) of the UCC and any other deposit or securities
account, together with any funds, instruments or other items credited to any
such account from time to time, and all interest thereon.
"DOCUMENTS" shall mean "documents" as such term is defined in Section
9-102(a)(30) of the UCC.
"EQUIPMENT" shall mean "equipment" as such term is defined in Section
9-102(a)(33) of the UCC, including, without limitation, machinery, manufacturing
equipment, data processing equipment, computers, office equipment, furniture,
appliances, tools, furnishings, fixtures, vehicles, motor vehicles, and any
manuals, instructions, blueprints, computer software and
2
similar items which relate to the above, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all improvements thereon and all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"EVENT OF DEFAULT" shall have the meaning assigned thereto in the
Indenture.
"FIXTURES" shall mean "fixtures" as such term is defined in Section
9-102(a)(41) of the UCC.
"GENERAL INTANGIBLES" shall mean "general intangibles" as such term is
defined in Section 9-102(a)(42) of the UCC, including, without limitation,
rights to the payment of money (other than Receivables), Trademarks, Copyrights,
Patents and Contracts, licenses and franchises, partnership interests, joint
venture interests, federal income tax refunds, computer software, databases,
inventions, designs, trade secrets, goodwill, tradenames, fictitious business
names, business names, company names, business identifiers, trade styles and
service marks (whether or not registered), proprietary rights, customer lists,
supplier and customer contracts, sale orders, correspondence, advertising
materials, payments due in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of any property, reversionary interests in
pension and profit-sharing plans and reversionary, beneficial and residual
interests in trusts, credits with and other claims against any Person, insurance
policies and all rights and claims therein or thereunder (including prepaid and
unearned premiums), including insurance against casualty (including by fire or
earthquake) or liability (including against environmental cleanup costs), title
insurance, business interruption insurance and builders risk insurance, whether
covering personal or real property, together with any collateral for any of the
foregoing and the rights under any security agreement granting a security
interest in such collateral.
"INSTRUMENT" shall mean "instrument" as such term is defined in Section
9-102(a)(47)of the UCC.
"INTELLECTUAL PROPERTY" shall mean, collectively, the Copyrights, the
Patents and the Trademarks.
"INTEREST RATE AGREEMENTS" shall mean interest rate or currency
protection or hedging arrangements, including without limitation, caps, collars,
floors, forwards and any other similar or dissimilar interest rate or currency
exchange agreements or other interest rate or currency hedging arrangements.
"INVENTORY" shall mean "inventory" as such term is defined in Section
9-102(a)(48) of the UCC, including, without limitation, all goods (whether such
goods are in the possession of a Grantor or of a bailee or other Person for
sale, lease, storage, transit, processing, use or otherwise and whether
consisting of whole goods, spare parts, components, supplies, materials or
consigned or returned or repossessed goods), including without limitation, all
such goods whether raw, in process or finished, all materials usable in
processing the same and all documents of title covering any inventory,
including, but not limited to, work in process, materials used or consumed in
such Grantor's business, now owned or hereafter acquired or manufactured by such
Grantor and held for sale in the ordinary course of its business; all present
3
and future substitutions therefor, parts and accessories thereof and all
additions thereto; and all proceeds thereof and products of such inventory in
any form whatsoever.
"INVESTMENT PROPERTY" shall mean "investment property" as such term is
defined in Section 9-102(a)(49) of the UCC and including all "financial assets"
and "security entitlements" as each term is defined in Section 8-102 of the UCC.
"LIENS" shall have the meaning set forth in the Indenture.
"MONEY" shall mean "money" as such term is defined in Section 1-201(24)
of the UCC.
"MOTOR VEHICLES" shall mean motor vehicles, tractors, trailers and
other like property, if title thereto is governed by a certificate of title
ownership.
"PATENTS" shall have the meaning ascribed to it in Section 3.8(a)(1).
"PERMITTED LIENS" has the meaning set forth in the Indenture.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or any other entity
or organization, including a government or any agency or political subdivision
thereof.
"PLEDGED NOTES" shall mean any promissory notes listed on Schedule 3.3
hereto and all intercompany notes at any time issued to a Grantor.
"PLEDGED STOCK" shall mean any shares of Capital Stock listed on
Schedule 3.3 hereto, together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the Capital Stock of any Person
that may be issued or granted to, or held by, a Grantor while this Agreement is
in effect.
"PROCEEDS" shall mean "proceeds" as such term is defined in Section
9-102(a)(64) of the UCC.
"RECEIVABLES" shall mean all rights to payment for goods sold or leased
or services rendered, whether or not earned by performance and all rights in
respect of an Account Debtor, including, without limitation, all such rights in
which a Grantor has any right, title or interest by reason of the purchase
thereof by such Grantor, and including, without limitation, all such rights
constituting or evidenced by any Account, Chattel Paper, Instrument, General
Intangible, note, contract, invoice, purchase order, draft, acceptance,
intercompany account, security agreement, or other evidence of indebtedness or
security, together with (a) any collateral assigned, hypothecated or held to
secure any of the foregoing and the rights under any security agreement granting
a security interest in such collateral, (b) all goods, the sale of which gave
rise to any of the foregoing, including, without limitation, all rights in any
returned or repossessed goods and unpaid seller's rights, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing and (d) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith.
4
"RECEIVABLES RECORDS" shall mean (a) all original copies of all
documents, instruments or other writings evidencing the Receivables, (b) all
books, correspondence, credit or other files, records, ledger sheets or cards,
invoices, and other papers relating to Receivables, including without
limitation, all tapes, cards, computer tapes, computer discs, computer runs,
record keeping systems and other papers and documents relating to the
Receivables, whether in the possession or under the control of a Grantor or any
computer bureau or agent from time to time acting for such Grantor or otherwise,
(c) all evidences of the filing of financing statements and the registration of
other instruments in connection therewith and amendments, supplements or other
modifications thereto, notices to other creditors or secured parties, and
certificates, acknowledgments, or other writings, including, without limitation,
charge or Lien search reports, from filing or other registration officers, (d)
all credit information, reports and memoranda relating thereto, and (e) all
other written or non-written forms of information related in any way to the
foregoing or any Receivable.
"SECURED OBLIGATIONS" shall mean each Grantor's obligations under the
Indenture, the Securities and the Subsidiary Guaranties.
"SECURITY COLLATERAL" shall mean:
(i) any Pledged Stock and the certificates representing the
Pledged Stock, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Stock;
(ii) any Pledged Notes and the instruments evidencing the
Pledged Notes, and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Notes;
(iii) all additional shares of Capital Stock (of any issuer of
the Pledged Stock) from time to time acquired by each Grantor in any
manner, and the certificates representing such additional shares, and
all dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares; and
(iv) all additional indebtedness from time to time owed to
each Grantor by any obligor of the Pledged Notes and the instruments
evidencing such indebtedness, and all interest, cash, instruments and
other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness.
"SECURITY INTEREST" shall mean "Security Interest" as such term is
defined in Section 1-201(37) of the UCC, and the Liens in the Collateral granted
pursuant to Section 2.1.
"TRADEMARKS" shall have the meaning ascribed to it in Section
3.8(a)(2).
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York.
5
ARTICLE II
GRANT OF SECURITY INTERESTS
Section 2.1 GRANT OF SECURITY INTERESTS. As security for the prompt and
complete payment and performance in full of all the Secured Obligations when due
(whether at stated maturity, by acceleration or otherwise), each Grantor hereby
grants to the Collateral Trustee a Security Interest in and lien on all of such
Grantor's right, title and interest in, to and under the collateral listed
opposite such Grantor's name on Annex I hereto, in each case, whether now owned
or existing or hereafter acquired or arising and wherever located (all of which
being hereinafter collectively called the "COLLATERAL"; when used with respect
to a particular Grantor, such term shall refer only to the portion of the
Collateral in which a Security Interest or lien has been granted by it) and any
and all Proceeds and products of the foregoing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Grantor hereby represents and warrants to the Collateral Trustee,
which representations and warranties shall survive execution and delivery of
this Agreement, as follows:
Section 3.1 NO OTHER LIEN.
(a) Except for the pledge or Lien granted to the Collateral
Trustee hereunder and under the Indenture, each Grantor owns and, as to all of
its Collateral, whether now existing or hereafter acquired, will continue to
own, each item of its Collateral free and clear of any and all Liens, rights or
claims of all other Persons other than Permitted Liens, such Grantor has the
right to pledge, sell, assign or transfer such Collateral, subject to the
terms of the Indenture, and such Grantor shall defend such Collateral against
all claims and demands of all Persons (except beneficiaries of Permitted Liens)
at any time claiming the same or any interest therein adverse to the Collateral
Trustee.
(b) No effective financing statement or other evidence of a
Lien covering or purporting to cover any of such Grantor's Collateral is on file
in any public office other than (i) financing statements filed or to be filed in
connection with the Security Interests and liens granted to the Collateral
Trustee hereunder, (ii) financing statements or equivalent instruments for which
proper termination statements have been delivered to the Collateral Trustee for
filing and (iii) financing statements or equivalent instruments filed in
connection with Permitted Liens. None of the Grantors have consented to any
other Person other than the Collateral Trustee having "control" (within the
meaning of Section 9-104 of the UCC) over the Collateral Account.
Section 3.2 PERFECTED LIENS; PRIORITY.
(a) The Security Interests in such Grantor's Collateral
granted to the Collateral Trustee hereunder constitute valid Security Interests
in such Collateral.
6
(b) (i) Upon filing the financing statements or equivalent
instrument listed in Schedule 3.2 naming each Grantor as "debtor" and the
Collateral Trustee as "secured party" and describing such Grantor's Collateral
in the filing offices set forth on Schedule 3.2 hereto, (ii) in the case of such
Grantor's Deposit Accounts, other than the Collateral Account which does not
require the execution of a Control Agreement, if any, upon the execution by
each of the Banks of a counterpart of the Control Agreement in the form of Annex
II hereto, and (iii) to the extent not subject to Article 9 of the UCC, in the
case of such Grantor's Security Collateral, if any, upon the delivery of such
Grantor's Security Collateral and Investments, if any to the Collateral Trustee,
then in each instance, the Security Interests in such Grantor's Collateral
granted to the Collateral Trustee hereunder will constitute perfected first
priority Security Interests therein superior and prior to all Liens (other than
Permitted Liens pursuant to Section 8.04(4)(a), (b) or (c) of the Indenture),
rights or claims of all other Persons; PROVIDED, HOWEVER, that the foregoing is
accurate only to the extent that a Security Interest can be perfected by such
filings or delivery.
Section 3.3 SECURITY COLLATERAL.
(a) Such Grantor's Pledged Stock, if any, has been and when
issued to any Grantor hereafter will be duly authorized and validly issued, and
such Pledged Stock is fully paid, non-assessable and freely transferable to the
Collateral Trustee. An appropriate notation has been placed on the stock ledger
or other books and records of the respective issuer of such Pledged Stock (and,
in the case of Pledged Stock hereafter acquired by the Grantors, will be so
placed on the stock ledger or other books and records of the respective issuer
of such stock pledged hereunder) in order to reflect the pledge in favor of the
Collateral Trustee for the ratable benefit and security of the Holders created
or provided for in this Agreement. Each of such Grantor's Pledged Notes, if any,
has been duly authorized, authenticated or issued and delivered, and is the
legal, valid and binding obligation of the issuer or issuers thereof, is freely
transferable to the Collateral Trustee and is not in default.
(b) Such Grantor's Pledged Stock, if any, constitutes (i) the
percentage of the issued and outstanding shares of Capital Stock of the
respective issuers thereof indicated on Schedule 3.3 hereto and (ii) all of the
shares of stock of the respective issuer held by the Grantor. There are no
outstanding options, warrants or other rights to purchase any shares of the
Pledged Stock. Such Grantor's Pledged Notes, if any, are outstanding in the
principal amount indicated on Schedule 3.3 hereto.
Section 3.4 JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE;
RECORDS. The jurisdiction of organization, exact legal name and jurisdiction of
chief executive office of each Grantor is as specified on Schedule 3.4 hereto.
Such Grantor's Receivables Records, Contracts and Collateral Records are at the
locations identified on Schedule 3.4 hereto as such or at the chief executive
office of such Grantor. All such Grantor's Receivables and Contracts are
identified on Schedule 3.4 and maintained at and controlled and directed
(including, without limitation, for general accounting purposes) from the chief
executive office of the applicable Grantor that owns such Receivables and
Contracts or the offices identified on Schedule 3.4 hereto as such.
Section 3.5 LOCATION OF INVENTORY AND EQUIPMENT. All such Grantor's
Inventory and Equipment now or from time to time included in the Collateral are
kept only at the locations
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listed on Schedule 3.5 hereto. None of such Inventory or Equipment is in the
possession of an issuer of a negotiable document (as defined in Section 7-104 of
the UCC) therefor or otherwise in the possession of a bailee.
Section 3.6 RECEIVABLES. Except as disclosed in Schedule 3.6 or on
such balance sheet, all Accounts and other Receivables of such Grantor reflected
on the balance sheet of the Grantor dated _____, ____, which, to the
Company's knowledge represent enforceable obligations of the Account Debtor
thereunder in the respective amounts thereof reported on such balance sheet,
and there are no setoffs or counterclaims or disputes existing or asserted
with respect to any such Receivables.]
Section 3.7 FARM PRODUCTS. None of such Grantor's Collateral
constitutes, or is the proceeds of, Farm Products (as defined in the UCC).
[Section 3.8 INTELLECTUAL PROPERTY COLLATERAL.
(a) Schedule 3.8(a) lists all of the following in which any
Grantor that has granted a Security Interest in Intellectual Property
pursuant to Section 2.1 has an interest or uses on the date hereof:
(1) all patents and patent applications
(including all amendments, "PATENTS");
(2) all trademarks, trademark applications,
service marks, service xxxx applications, tradenames and trade dress, including
logos and designs, and whether or not registered (including all amendments from
time to time, the "TRADEMARKS"); and
(3) all copyrights and copyright applications,
whether or not registered (including all amendments from time to time,
"COPYRIGHTS").
(b) Except as disclosed in Schedule 3.8(b)
(1) all such Grantor's Patents, Trademarks and
Copyrights are valid and enforceable;
(2) the relevant Grantor is the sole and
exclusive owner of each of the Patents, Trademarks and Copyrights, free and
clear of any Liens other than Permitted Liens (including licenses, shop rights
and covenants not to xxx); and
(3) the relevant Grantor is not aware of any
claim by any third party that, or any reason why, any of the Patents, Trademarks
and Copyrights are or would be invalid or unenforceable.]
Section 3.9 DEPOSIT ACCOUNTS. Schedule 3.10 is a complete list of all
Deposit Accounts maintained by such Grantor on the date hereof [in the Approved
Jurisdictions] and includes the name and location of the financial institutions
with which such Deposit Accounts are maintained and the account numbers.
Section 3.10 FORECLOSURE VALUE. The foreclosure values of the
Collateral listed on Schedule __ hereto represent the Company's good faith
best estimate of the actual foreclosure values of such Collateral. Such
foreclosure values have been reasonably prepared based on assumptions
reflecting the best currently available estimates and judgments by management
of the Company and represent substantially all of the Company's assets.
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ARTICLE IV
COVENANTS
Each Grantor covenants and agrees with the Collateral Trustee that from
and after the date of this Agreement:
Section 4.1 FURTHER ASSURANCES. At any time and from time to time, upon
the written request of the holders of a majority in principal amount of such
Securities then outstanding and at the sole expense of such Grantor, each
Grantor will promptly and duly execute and deliver any of the following
instruments, endorsements, powers of attorney and other documents, make the
following filings, or give the following notices:
(a) file any financing statements, in a form reasonably
acceptable to the Collateral Trustee, as necessary to perfect Security Interests
in the [Approved Jurisdictions] with respect to the Security Interests granted
hereby by such Grantor. A photocopy or other reproduction of this Agreement
shall be sufficient as a financing statement and may be filed in lieu of the
original to the extent permitted by applicable law. Each Grantor will pay or
reimburse the Collateral Trustee for all filing fees and related expenses;
(b) furnish to each of the Banks an executed Control Agreement
stating that the Collateral Trustee has Control of each of such Grantor's
Deposit Accounts;
(c) if an Event of Default shall occur and be continuing,
furnish to each of the Banks notice in an authenticated record that the Grantor
has no further right to Control any of such Grantor's Deposit Accounts and the
Collateral Trustee has exclusive Control of each such Deposit Account;
(d) furnish to the Collateral Trustee from time to time
statements and schedules further identifying and describing such Grantor's
Collateral, and such other reports in connection with the Collateral as the
Collateral Trustee may reasonably request, all in reasonable detail and in a
form satisfactory to the Collateral Trustee.
Section 4.2 DELIVERY OF SECURITY COLLATERAL. All certificates or
instruments representing or evidencing such Grantor's Security Collateral shall
be delivered to and held by or on behalf of the Collateral 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 Collateral Trustee. The Collateral
Trustee shall have the right, at any time in its discretion, to transfer to or
to register in the name of the Collateral Trustee any or all of such Grantor's
Security Collateral, subject only to the revocable rights specified in Section
6.1(a).
Section 4.3 CHANGE OF JURISDICTION OF INCORPORATION OR ORGANIZATION.
None of the Grantors will change its jurisdiction of incorporation or
organization except to such new jurisdiction as such Grantor may establish in
accordance with the last sentence of this Section 4.3. The originals of all such
Grantor's Receivables Records and Contracts and all Collateral Records will
continue to be kept at such chief executive office or at the locations
identified on Schedule 3.4 hereto as such, or at such new locations as such
Grantor may establish in
9
accordance with the last sentence of this Section 4.3. All Receivables,
Receivables Records and Contracts of such Grantor will continue to be maintained
at and controlled and directed (including, without limitation, for general
accounting purposes) from, a location identified as such on Schedule 3.4 hereto
or such new locations as such Grantor may establish in accordance with the last
sentence of this Section 4.3. None of the Grantors shall establish a new
jurisdiction of incorporation or organization (or move any such activities from
the location listed in Schedule 3.4 therefor) or be continued from one
jurisdiction to another or merge or consolidate with a Person organized under
the law of another jurisdiction until (i) it shall have given to the Collateral
Trustee not less than thirty (30) days' prior written notice of its intention to
do so, clearly describing such new jurisdiction and providing such other
information in connection therewith as the Collateral Trustee may reasonably
request and (ii) with respect to such new jurisdiction, it shall have taken all
action satisfactory to the Collateral Trustee, as the Collateral Trustee may
reasonably request, to maintain the Security Interest of the Collateral Trustee
in the Collateral intended to be granted hereby at all times fully perfected,
with the same or better priority and in full force and effect. Notwithstanding
the foregoing, any such merger or consolidation shall be subject to the terms,
conditions and limitations set forth in the Indenture.
Section 4.4 CHANGE OF LOCATION OF INVENTORY AND EQUIPMENT. Each
Grantor agrees that all Inventory and Equipment now held or subsequently
acquired by it shall be kept at (or shall be in transport to) any one of the
locations shown on Schedule 3.5 hereto or such new location as such Grantor
may establish in accordance with the last sentence of this Section 4.4. Each
Grantor agrees to provide the Collateral Trustee notice of any change of
location of any Inventory or Equipment in excess of $500,000 within the
locations shown on Schedule 3.5 hereto within ten (10) days of such change of
location. Each Grantor may establish a new location for Inventory and
Equipment only if (i) it shall have given to the Collateral Trustee not less
than thirty (30) day prior written notice of its intention to do so, clearly
describing such new location and providing such other information in
connection therewith as the Collateral Trustee may reasonably request and
(ii) with respect to such new location, it shall have taken all action
satisfactory to the Collateral Trustee, as the Collateral Trustee may
reasonably request, to maintain the Security Interest of the Collateral
Trustee in the Collateral intended to be granted hereby at all times fully
perfected, with the same or better priority and in full force and effect.
Section 4.5 ADDITIONAL DEPOSIT ACCOUNTS. Each Grantor that has granted
a Security Interest in Deposit Accounts pursuant to Section 2.1 may establish a
new Deposit Account only if (i) it shall have given to the Collateral Trustee
not less than 1 Business Day's prior written notice of its intention to do so,
clearly describing the location and account number of such new Deposit Account
and providing such other information in connection therewith as the Collateral
Trustee may reasonably request; provided that any such new Deposit Account shall
be established only for legitimate cash management purposes and (ii) with
respect to such new Deposit Account, it shall have entered into an Account
Control Agreement substantially in the form of Annex II hereto.
Section 4.6 CHANGE OF NAME; IDENTITY OR CORPORATE STRUCTURE. None of
the Grantors shall change its name (or conduct any significant portion of its
business under any new tradenames), identity or corporate structure until (i) it
shall have given to the Collateral Trustee not less than thirty (30) days' prior
written notice of its intention to do so, clearly describing such new name,
identity or corporate structure or such new trade name and providing such other
10
information in connection therewith as the Collateral Trustee may reasonably
request and (ii) with respect to such new name, identity or corporate structure
or such new trade name, it shall have taken all action satisfactory to the
Collateral Trustee as the Collateral Trustee may reasonably request, to maintain
the Security Interest of the Collateral Trustee in the Collateral intended to be
granted hereby at all times fully perfected, with the same or better priority
and in full force and effect.
Section 4.7 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER. If any amount
payable under or in connection with any of such Grantor's Collateral shall be or
become evidenced by any Instrument or Chattel Paper, such Instrument or Chattel
Paper shall be immediately delivered to the Collateral Trustee, duly indorsed in
a manner satisfactory to the Collateral Trustee, to be held as Collateral
pursuant to this Agreement.
Section 4.8 MAINTAIN AND XXXX RECORDS AND RECEIVABLES. Each Grantor
will keep and maintain at its own cost and expense in the ordinary course of
business satisfactory and complete records of such Grantor's Collateral,
including, but not limited to, the originals of all documentation with respect
to all Receivables and records of all payments received and all credits granted
on the Receivables and all merchandise returned and all other dealings
therewith. Each Grantor shall legend, in form and manner reasonably satisfactory
to the Collateral Trustee, all Chattel Paper and other evidence of Receivables,
as well as the Receivables Records with an appropriate reference to the fact
that such Chattel Paper, Receivables and Receivable Records have been assigned
to the Collateral Trustee and that the Collateral Trustee has a Security
Interest therein.
Section 4.9 PLEDGE OF SECURITY COLLATERAL. Each Grantor that has
granted a Security Interest in Security Collateral:
(a) has delivered to the Collateral Trustee on the date hereof, and
each such Grantor shall deliver to the Collateral Trustee promptly after
acquisition of such Collateral after the date hereof, the certificate,
instrument or other writing evidencing such Security Collateral, in each case
together with appropriate endorsements or documentation of assignment thereof
acceptable to the Collateral Trustee; and
(b) will cause any debt with any Grantor to be properly documented
as an intercompany note and will deliver such note to the Collateral Trustee.
Section 4.10 RIGHT OF INSPECTION. Subject to the prior execution of a
confidentiality agreement in a form reasonably acceptable to the Grantors, the
Collateral Trustee shall at all times have full and free access during normal
business hours to all the books, correspondence and records of the Grantors and
the Collateral Trustee and its representatives may examine the same, take
extracts therefrom and make photocopies thereof, and each Grantor agrees to
render to the Collateral Trustee, at such Grantor's reasonable cost and expense,
such clerical and other assistance as may be reasonably requested with regard
thereto. The Collateral Trustee and its respective representatives shall at all
times have the right to enter and inspect any property of any of the Grantors
and enter into and upon any premises where any of the Inventory or Equipment is
located for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.
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Section 4.11 RECEIVABLES. Each Grantor shall perform in all material
respects all of its obligations with respect to its Receivables.
Section 4.12 CONTRACTS. Each Grantor shall perform in all material
respects all of its obligations under each of its Contracts.
Section 4.13 WAREHOUSE RECEIPTS NON-NEGOTIABLE. Each Grantor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt or
other Document is issued with respect to any of its Inventory such warehouse
receipt or receipt in the nature thereof or other Document shall not be
"negotiable" (as such term is used in Section 7-104 of the UCC or under other
relevant law).
Section 4.14 NO IMPAIRMENT.
(a) None of the Grantors will take or permit to be taken any
action that could impair the Collateral Trustee's rights in such Grantor's
Collateral.
(b) Each Grantor shall not file or record any instrument or
document with any entity, officer or office having responsibility for recording
of security interests or liens which purports to terminate, vitiate, modify or
extinguish a Security Interest in the Collateral in which the Trustee holds a
Security Interest or lien (a "DEBTOR TERMINATION STATEMENT").
(c) Each Grantor will take any action reasonably necessary to
maintain or preserve any of such Grantor's Collateral.
Section 4.15 LIMITATIONS ON DISPOSITIONS OF COLLATERAL. None of the
Grantors will sell, transfer, lease, license or otherwise dispose of any of its
Collateral or any rights therein or attempt, offer or contract to do so, except
as permitted in the Indenture or this Security Agreement.
Section 4.16 NOTICE.
(a) Each Grantor will advise the Collateral Trustee promptly,
in reasonable detail and in accordance with the provisions hereof of any Lien
(other than a Permitted Lien) on, or claim asserted against, any of its
Collateral.
(b) Each Grantor shall inform the Trustee in writing within
thirty (30) days of any change, amendment, or modification of its place of
organization, form of organization, or change in Grantor's name (including, but
not by way of limitation, resulting from mergers, acquisitions, tax free
exchanges, or other transactions) (all of which are sometimes referred to as
"CORPORATE CHANGES," regardless of whether the Grantor is organized as a
corporation, partnership, limited partnership, limited liability company,
limited liability partnership, sole proprietorship, or other form of entity
recognized under the law of the state in which the Grantor is organized), and
each Grantor shall cooperate with the Trustee by executing as soon as reasonably
practicable after receipt thereof any and all amendments to UCC financing
statements deemed necessary by the Trustee in insure that the security interest
of the Trustee in any and all
12
collateral of the Grantor remains fully perfected. The Trustee may rely on
opinions of counsel as to whether any or all UCC financing statements of the
Grantor need to be amended as a result. If the Grantors fail to provide
information to the Trustee about Corporate Changes on a timely basis, the
Trustee shall not be liable or responsible to any party for any failure to
maintain a perfected security interest in the Grantors' collateral, for which
the Trustee needed to have information about the Corporate Changes. The Trustee
shall have no duty to inquire about Corporate Changes if the Grantors do not
inform the Trustee of such Corporate Changes, the parties acknowledging and
agreeing that it would not be feasible or practical for the Trustee to search
for information on the Corporate Changes if such information is not provided by
the Grantors.
(c) Each Grantor shall provide the Trustee with copies of any
Debtor Termination Statement the Grantor files in violation of the covenant
contained in this document at Section 4.14.
Section 4.17 PERFORMANCE BY COLLATERAL TRUSTEE OF GRANTOR'S
OBLIGATIONS; REIMBURSEMENT. Unless otherwise permitted hereby, if a Grantor
fails to perform or comply with any of its agreements contained herein which
would, if not cured, result in an Event of Default, the Collateral Trustee may,
without notice to or consent by such Grantor, perform or comply or cause
performance or compliance therewith and the expenses of the Collateral Trustee
incurred in connection with such performance or compliance, together with
interest thereon, shall be payable by such Grantor to the Collateral Trustee on
demand and such reimbursement obligation shall be secured hereby.
ARTICLE V
SPECIAL PROVISIONS REGARDING
RECEIVABLES AND CONTRACTS
Section 5.1 GRANTOR REMAINS LIABLE UNDER RECEIVABLES AND CONTRACTS.
Anything herein to the contrary notwithstanding (including, without limitation,
the grant of any rights to the Collateral Trustee), each Grantor shall remain
liable under each of its Receivables and Contracts to observe and perform all
the conditions and obligations to be observed and performed by it thereunder,
all in accordance with the terms of any agreement giving rise to each such
Receivable or Contract; provided, however, that notwithstanding this Section
5.1, each Grantor shall be allowed to write off a Receivable not in excess of
$100,000. The Collateral Trustee shall have no obligation or liability under any
Receivable (or any agreement giving rise thereto) or Contract by reason of or
arising out of this Agreement or the receipt by the Collateral Trustee of any
payment relating to such Receivable or Contract pursuant hereto, nor shall the
Collateral Trustee be obligated in any manner to perform any of the obligations
of any Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto) or under any Contract, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts that may have been assigned to it or to which it may be entitled
at any time or times.
13
Section 5.2 NOTICE TO ACCOUNT DEBTORS AND CONTRACTING PARTIES. At any
time after an Event of Default has occurred and is continuing, (i) the
Collateral Trustee may, and upon request of the Collateral Trustee, each Grantor
that has granted a Security Interest in Accounts and Contracts pursuant to
Section 2.1 shall notify Account Debtors and parties to such Contracts that the
Accounts and the Contracts have been assigned to the Collateral Trustee and that
payments in respect thereof shall be made directly to the Collateral Trustee,
and (ii) the Collateral Trustee may in its own name or in the name of others,
communicate with Account Debtors and parties to the Contracts to verify with
them to the Collateral Trustee's satisfaction the existence, amount and terms of
any such Receivables or Contracts.
Section 5.3 COLLECTIONS ON RECEIVABLES AND CONTRACTS. The Collateral
Trustee hereby authorizes each Grantor that has granted a Security Interest in
Receivables and Contracts pursuant to Section 2.1 to collect such Receivables
and Contracts and, at any time after an Event of Default has occurred and is
continuing, the Collateral Trustee may curtail or terminate said authority and
by itself or by its agents, collect all Receivables and amounts owing under the
Contracts. After an Event of Default has occurred and is continuing, if required
by the Collateral Trustee, any payments of such Receivables and Contracts, when
collected by a Grantor, shall be forthwith (and, in any event, within two (2)
Business Days) delivered by such Grantor to the Collateral Trustee in the exact
form received, duly indorsed to the Collateral Trustee if required, for deposit
into the Collateral Account, and until so turned over, shall be held by such
Grantor in trust for the Collateral Trustee, segregated from other funds of such
Grantor. All Proceeds, while held by the Collateral Trustee (or by a Grantor in
trust for the Collateral Trustee) shall continue to be Collateral securing all
of the Secured Obligations and shall not constitute payment thereof until
applied as hereinafter provided.
ARTICLE VI
SPECIAL PROVISIONS REGARDING
SECURITY COLLATERAL
Section 6.1 VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default or event that, with the
giving of notice or the lapse of time or both, would become an Event of Default,
shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise
or refrain from exercising any and all voting and other consensual rights
pertaining to the Security Collateral or any part thereof, for any purpose not
inconsistent with the terms of this Agreement or the Indenture;
(ii) Each Grantor shall be entitled to receive
and retain any and all dividends and interest paid in respect of its Security
Collateral, PROVIDED, HOWEVER, that any and all
14
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Security Collateral,
(B) dividends and other distributions paid or
payable in cash in respect of any Security Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed
in respect of principal of, or in redemption of, or in exchange for, any
Security Collateral,
[(except any distributions or payments by any wholly-owned Subsidiary to the
Company)] shall be forthwith delivered to the Collateral Trustee to hold as
Security Collateral and shall, if received by such Grantor, be received in trust
for the benefit of the Collateral Trustee, be segregated from the other property
or funds of such Grantor and be forthwith delivered to the Collateral Trustee as
Security Collateral in the same form as so received (with any necessary
endorsement or assignment); and
(iii) The Collateral Trustee shall execute and
deliver (or cause to be executed and delivered) to each Grantor all such proxies
and other instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event
of Default or an event that, with the giving of notice or the lapse of time or
both, would become an Event of Default:
(i) All rights of each Grantor (x) to exercise
or refrain from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 6.1(a)(i) shall, upon
notice to such Grantor by the Collateral Trustee, cease and (y) to receive the
dividends and interest payments that it would otherwise be authorized to receive
and retain pursuant to Section 6.1(a)(ii) shall automatically cease and all such
rights shall thereupon become vested in the Collateral Trustee who shall
thereupon have the sole right to exercise or refrain from exercising such voting
and other consensual rights and to receive and hold as Security Collateral such
dividends and interest payments; and
(ii) All dividends and interest payments that are
received by a Grantor contrary to the provisions of this Section 6.1(b), shall
be received in trust for the benefit of the Collateral Trustee, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Trustee as Security Collateral in the same form as so received
(with any necessary endorsement).
Section 6.2 ADDITIONAL SHARES. Each Grantor agrees that it will (i)
cause each issuer of the Pledged Stock (if controlled by a Grantor) not to issue
any stock or other securities in addition to or in substitution for the Pledged
Stock issued by such issuer, except to such Grantor and (ii) immediately upon
its acquisition (directly or indirectly) thereof, deliver to the Collateral
15
Trustee as additional security hereunder any and all additional shares of stock
or other securities of each issuer of the Pledged Stock.
ARTICLE VII
COLLATERAL ACCOUNT
Section 7.1 COLLATERAL ACCOUNT. There is hereby established with
______________ the Collateral Account. The Collateral Account shall be under the
sole and exclusive dominion and control of the Collateral Trustee and none of
the Grantors shall have any rights with respect to the Collateral Account,
except as specifically set forth below with regard to determination of the
nature of investments to be made with amounts credited to the Collateral
Account. Without limiting the generality of the foregoing, none of the Grantors
shall have a right of withdrawal or transfer from the Collateral Account.
Section 7.2 DEPOSIT OF PROCEEDS. There shall be deposited in the
Collateral Account from time to time the cash proceeds (as defined in Section
9-102(a)(9) of the UCC) of any of the Collateral (including insurance proceeds
thereon) required to be delivered to the Collateral Trustee pursuant to the
terms of the Indenture or this Agreement. All amounts and investments and other
items credited to the Collateral Account from time to time shall constitute
Collateral hereunder and shall not constitute payment of the Secured Obligations
until applied as hereinafter provided. At any time following the occurrence and
during the continuance of an Event of Default, the Collateral Trustee may in its
discretion with written notice to Grantors apply or cause to be applied (subject
to collection) the balance from time to time outstanding to the credit of the
Collateral Account to the payment of the Secured Obligations in the manner
specified in Section 9.9 hereof and as provided in the Indenture.
ARTICLE VIII
POWER OF ATTORNEY
Section 8.1 COLLATERAL TRUSTEE'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) Each Grantor hereby irrevocably constitutes and appoints
the Collateral Trustee and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, from time to time in the Collateral Trustee's
discretion, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Collateral Trustee the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do the following:
(i) at any time when any Event of Default shall
have occurred and be continuing, in the name of such Grantor or its own name or
otherwise, (A) to take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under or
with respect to, any Collateral; (B) to direct any party liable for
16
any payment under any of the Collateral to make payment of any and all moneys
due or to become due thereunder directly to the Collateral Trustee or as the
Collateral Trustee shall direct; and (C) to ask or demand for, collect and
receive payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any Collateral;
(ii) to prepare, sign and file any UCC financing
statements in the name of such Grantor as debtor;
(iii) to prepare, sign and deliver to the Banks
appropriate evidence of the Security Interest granted herein in the Deposit
Accounts in the name of such Grantor as such Grantor;
(iv) to take or cause to be taken all actions
necessary to perform or comply or cause performance or compliance with the terms
of this Agreement, including, without limitation, actions to pay or discharge
taxes and Liens levied or placed on or threatened against the Collateral, to
effect any repairs or obtain any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the costs
thereof;
(v) upon the occurrence and during the
continuance of any Event of Default (A) to sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (B) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any Proceeds thereof and to enforce
any other right in respect of any Collateral; (C) to defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral; (D) to
settle, compromise or adjust any suit, action or proceeding described in the
preceding clause and, in connection therewith, to give such discharges or
releases as the Collateral Trustee may deem appropriate; (E) and generally, to
sell or transfer and make any agreement with respect to, or otherwise deal with,
any of the Collateral as fully and completely as though the Collateral Trustee
were the absolute owner thereof for all purposes, and to do, at the Collateral
Trustee's option and such Grantor's expense, at any time or from time to time,
all acts and things that the Collateral Trustee deems necessary to protect,
preserve or realize upon the Security Interest over Collateral and to effect the
intent of this Agreement, all as fully and effectively as such Grantor might do;
(vi) at any time and from time to time, to
execute, in connection with any foreclosure, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the Collateral.
Each Grantor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
Each Grantor hereby acknowledges and agrees that in acting
pursuant to this power-of-attorney, the Collateral Trustee shall be acting in
its own interest and such Grantor acknowledges and agrees that the Collateral
Trustee shall have no fiduciary duties to such
17
Grantor and such Grantor hereby waives any claims to the rights of a beneficiary
of a fiduciary relationship hereunder.
(b) NO DUTY ON THE PART OF COLLATERAL TRUSTEE. The powers
conferred on the Collateral Trustee hereunder are solely to protect the
interests of the Collateral Trustee in the Collateral and shall not impose any
duty upon the Collateral Trustee to exercise any such powers. The Collateral
Trustee shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to such Grantor for any act
or failure to act hereunder, except for their own negligence or willful
misconduct.
ARTICLE IX
REMEDIES; RIGHTS UPON DEFAULT
Section 9.1 RIGHTS AND REMEDIES GENERALLY. If an Event of Default shall
occur and be continuing, then and in every such case, the Collateral Trustee
shall have all the rights of a secured party under Article 9 of the UCC, shall
have all rights now or hereafter existing under all other applicable laws or in
equity and, subject to any mandatory requirements of applicable law then in
effect, shall have all the rights set forth in this Agreement and all the rights
set forth with respect to the Collateral or this Agreement or in any other
agreement between the parties. No enumeration of rights in this Article IX or
elsewhere in this Agreement or in any related document or other agreement, shall
be deemed to in any way limit the rights of the Collateral Trustee as described
in this Article.
Section 9.2 COLLECTION OF RECEIVABLES AND OTHER PROCEEDS. If an Event
of Default shall occur and be continuing, in addition to the rights of the
Collateral Trustee specified in Section 5.3 with respect to the collection of
Receivables and Contracts, all Proceeds received by a Grantor consisting of
cash, checks and other near-cash items shall be held by such Grantor in trust
for the Collateral Trustee, segregated from other funds of such Grantor and
shall forthwith upon receipt by such Grantor, be turned over to the Collateral
Trustee, in the same form received by such Grantor (appropriately indorsed or
assigned by such Grantor to the order of the Collateral Trustee or in such other
manner as shall be satisfactory to the Collateral Trustee) for deposit into the
Collateral Account.
Section 9.3 DIRECT GRANTOR TO DISPOSE OF COLLATERAL. If an Event of
Default shall occur and be continuing, upon the direction of the Trustee, the
Collateral Trustee may direct a Grantor to sell, assign or otherwise liquidate
or dispose of all, or from time to time any portion of its Collateral and such
Grantor shall do so, and the Collateral Trustee may, at its option, take
possession of the Proceeds of such Collateral. The Collateral Trustee may direct
a Grantor to direct that all Proceeds of such Collateral be paid directly to the
Collateral Trustee or may permit the Proceeds of such Collateral to be paid to
such Grantor and, if directed by the Collateral Trustee, all such Proceeds
consisting of cash, checks or near-cash items shall be held by such Grantor in
trust for the Collateral Trustee, segregated from other funds of such Grantor
and shall forthwith upon receipt by such Grantor, be turned over to the
Collateral Trustee, in the same form received by such Grantor (appropriately
indorsed or assigned by such Grantor to the order
18
of the Collateral Trustee or in such other manner as shall be satisfactory to
the Collateral Trustee) for deposit into the Collateral Account.
Section 9.4 COLLATERAL ACCOUNT. If an Event of Default shall occur and
be continuing, upon direction from the Trustee, the Collateral Trustee, with
written notice to Grantor, may liquidate any securities credited to the
Collateral Account and apply the proceeds thereof and any other amounts credited
to the Collateral Account to the Secured Obligations (whether matured or
unmatured), in such order as the Collateral Trustee may elect. Any balance of
such Proceeds remaining after the Secured Obligations have been paid and
performed in full shall be paid over to each Grantor or to whomsoever may
lawfully be entitled to receive the same or as a court of competent jurisdiction
may direct.
Section 9.5 POSSESSION OF COLLATERAL.
(a) If an Event of Default shall occur and be continuing and
upon direction from the Trustee:
(i) the Collateral Trustee may personally or by
agents or attorneys, immediately retake possession of the Collateral (including
taking possession of the originals of all or any Receivables or Receivables
Records and exercising exclusive Control of the Deposit Accounts) or any part
thereof, from a Grantor or any other Person who then has possession of any part
thereof, with or without notice or judicial process and for that purpose may
enter upon such Grantor's premises where any of the Collateral is located and
remove the same and, the Collateral Trustee may use in connection with such
removal, any and all services, supplies, aids and other facilities of such
Grantor; and
(ii) upon five (5) Business Days notice to each
Grantor, such Grantor shall, at its own expense, assemble the Collateral,
including, without limitation, the originals of all Receivables Records (or from
time to time any portion thereof) and make it available to the Collateral
Trustee at any place or places designated by the Collateral Trustee which is
reasonably convenient to both parties, whether at such Grantor's or the
Collateral Trustee's premises or elsewhere. Each Grantor shall, at its sole
expense, store and keep any Collateral so assembled at such place or places
pending further action by the Collateral Trustee and while the Collateral shall
be so stored and kept, provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain the Collateral in
good condition. Such Grantor's obligation so to assemble and deliver the
Collateral is of the essence of this Agreement and, accordingly, upon
application to a court of equity having jurisdiction, the Collateral Trustee
shall be entitled to a decree requiring specific performance by such Grantor of
said obligation.
(b) When Collateral is in the Collateral Trustee's possession
the risk of accidental loss or damage shall be on the Grantors to the extent of
any deficiency in any effective insurance coverage.
Section 9.6 DISPOSITION OF THE COLLATERAL. If an Event of Default shall
occur and be continuing and upon direction from the Trustee, the Collateral
Trustee may sell, assign, lease, license (on an exclusive or non-exclusive
basis) give an option or options to purchase or otherwise dispose of the
Collateral (or contract to do any of the foregoing) under one or more
19
contracts or as an entirety and without the necessity of gathering at the
place of sale the property to be sold, at public or private sale or sales,
conducted by any officer, nominee or agent of, or auctioneer or attorney for,
the Collateral Trustee at any location of any third party conducting or
otherwise involved in such sale or any office of the Collateral Trustee or
elsewhere and in general, in such manner, at such time or times and upon such
terms and conditions and at such prices as it may consider commercially
reasonable in its sole discretion, for cash or on credit or for future
delivery without assumption of any credit risk. Any of the Collateral may be
sold, leased, assigned or options or contracts entered to do so or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Trustee or after any overhaul or repair which the Agent shall
determine to be commercially reasonable. To the extent permitted by
applicable law, the Collateral Trustee may bid for and become the purchaser
of the Collateral or any item thereof, offered for sale in accordance with
this Section 9.6 without accountability to a Grantor (except to the extent of
surplus money received) as provided below. In the payment of the purchase
price of the Collateral, the purchaser shall be entitled to have credit on
account of the purchase price thereof of amounts owing to such purchaser on
account of any of the Secured Obligations and any such purchaser may deliver
securities, notes, claims for interest or claims for other payment with
respect to such Secured Obligations in lieu of cash up to the amount which
would, upon distribution of the net proceeds of such sale, be payable
thereon. Such securities or notes, if the amount payable hereunder shall be
less than the amount due thereon, shall be returned to the holder thereof
after being appropriately stamped to show partial payment.
Section 9.7 RECOURSE. Each Grantor shall remain liable for any
deficiency if the Proceeds of any sale or other disposition of the Collateral
are insufficient to satisfy the Secured Obligations. Each Grantor shall also be
liable for all expenses of the Collateral Trustee incurred in connection with
collecting such deficiency including, without limitation, the fees and
disbursements of any attorneys employed by the Collateral Trustee to collect
such deficiency.
Section 9.8 EXPENSES; ATTORNEYS' FEES. Each Grantor shall reimburse the
Collateral Trustee for all its reasonable third party expenses in connection
with the exercise of its rights hereunder, including, without limitation, all
reasonable attorneys' fees and disbursements incurred by the Collateral Trustee
and all other reasonable third party expenses and fees in connection with
obtaining, taking possession of, removing, holding, insuring, repairing,
preparing for sale or lease, storing and disposing of Collateral. The Proceeds
of any disposition of Collateral shall be applied in accordance with Section
9.05 of the Indenture.
Section 9.9 LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL.
(a) The Collateral Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to deal with
it in the same manner as the Collateral Trustee deals with similar property for
its own account.
(b) The Collateral Trustee shall have no obligation to take
any steps to preserve rights against prior parties to any Collateral.
(c) Neither the Collateral Trustee nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the
20
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of a Grantor or
otherwise.
Section 9.10 WAIVER OF CLAIMS. Except as otherwise provided in this
Agreement, EACH GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL TRUSTEE'S
TAKING POSSESSION OR THE COLLATERAL TRUSTEE'S DISPOSITION OF ANY OF THE
COLLATERAL, and such Grantor hereby further waives, to the extent permitted by
law:
(a) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Trustee's gross
negligence or willful misconduct;
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the Collateral
Trustee's rights hereunder;
(c) demand of performance or other demand, notice of intent to
demand or accelerate, notice of presentment, notice of intent to accelerate,
protest, advertisement or notice of any kind (other than a notice of a Default)
to or upon such Grantor or any other Person; and
(d) all rights of redemption, appraisement, valuation,
diligence, stay, extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof and such Grantor, for
itself and all who may claim under it, insofar as it or they now or hereafter
lawfully may, hereby waives the benefit of all such laws.
Section 9.11 DISCONTINUANCE OF PROCEEDINGS. In case the Collateral
Trustee shall have instituted any proceeding to enforce any right, power or
remedy under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Trustee, then and in every such
case each Grantor and the Collateral Trustee shall be returned to their former
positions and rights hereunder with respect to the Collateral subject to the
Security Interest created under this Agreement, and all rights, remedies and
powers of the Collateral Trustee shall continue as if no such proceeding had
been instituted.
Section 9.12 RESTORATION OF POSITIONS. If the Collateral Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Agreement by foreclosure, entry or otherwise and such proceeding has
been discontinued or abandoned for any reason or has been determined
adversely to the Collateral Trustee or to such Bondholder, then and in every
such case the Company, the Collateral Trustee and the Holders shall, subject
to any determination in such proceeding, be restored to their former
positions hereunder, and thereafter all rights and remedies of the Collateral
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
ARTICLE X
INDEMNITY
Section 10.1 INDEMNITY AND EXPENSES.
(a) Each Grantor agrees to indemnify, reimburse and hold the
Holders, Collateral Trustee and their respective officers, directors, managers,
members, employees, representatives and agents (hereinafter in this Section 10.1
referred to individually as
21
"INDEMNITEE" and collectively as "INDEMNITEES") harmless from any and all
liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses or disbursements (including reasonable
attorneys' fees and expenses) (for the purposes of this Section 10.1 the
foregoing are collectively called "EXPENSES") for whatsoever kind or nature
which may be imposed on, asserted against or incurred by any of the Indemnitees
in any way relating to or arising out of this Agreement or the documents
executed in connection herewith or in any other way connected with the
administration of the transactions contemplated hereby or the enforcement of any
of the terms of or the preservation of any rights hereunder or in any way
relating to or arising out of the manufacture, ownership, ordering, purchase,
delivery, control, acceptance, lease, financing, possession, operation,
condition, sale, return or other disposition or use of the Collateral
(including, without limitation, latent or other defects, whether or not
discoverable), the violation of the applicable laws of any country, state or
other governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or for
property damage) or any contract claim; provided that no Indemnitee shall be
indemnified pursuant to this Section 10.1 for expenses to the extent caused by
or attributable to (i) the negligence or willful misconduct of such Indemnitee;
(ii) any representation or warranty by such Indemnitee being incorrect; (iii)
the failure by such Indemnitee to perform or observe any agreement or document
delivered in connection with the transactions described herein or in the
Indenture (iv) the creation or existence of a lien on any of the Collateral
other than the lien created or consented to by a Grantor; or (v) acts or
events (except as related to performance of obligations of the Collateral
Trustee under this Agreement or under the Indenture,) which occur after the
earlier of (I) the payment by Grantors of all indebtedness incurred by any
Grantor under the Indenture or any Note, and (II) the date of notice of
acceleration of the Securities. Each Grantor agrees that upon written notice
by any Indemnitee of any assertion that could give rise to an expense, such
Grantor shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use commercially reasonable efforts to promptly notify
such Grantor of any such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 10.1(a)
hereof, each Grantor agrees to pay, or reimburse the Collateral Trustee for any
and all reasonable third party fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Trustee's Security Interest for the benefit of the Collateral
Trustee in, the Collateral, including, without limitation, all fees and taxes in
connection with the recording or filing of instruments and documents in public
offices, payment or discharge of any taxes or Lien upon or in respect of the
Collateral, premiums for insurance with respect to the Collateral and all other
fees, costs and expenses in connection with protecting, maintaining or
preserving the Collateral and the Collateral Trustee's interest therein, whether
through judicial proceedings or otherwise, or in defending or prosecuting any
actions, suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 10.1(a) or (b)
hereof, each Grantor agrees to pay, indemnify and hold each Indemnitee harmless
from and against any expenses which such Indemnitee may suffer, expend or incur
in consequence of or growing out of any material misrepresentation by such
Grantor in this Agreement or in any statement or writing contemplated by or made
or delivered pursuant to or in connection with this Agreement.
(d) If and to the extent that the obligations of a Grantor
under this Section 10.1 are unenforceable for any reason, such Grantor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations that is permissible under applicable law.
22
Section 10.2 INDEMNITY OBLIGATIONS SECURED BY COLLATERAL; SURVIVAL. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Secured Obligations secured by the Collateral.
The indemnity obligations of each Grantor contained in this Article X shall
continue in full force and effect notwithstanding the full payment and
performance of the Secured Obligations and notwithstanding the discharge
thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.1 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL, SUBSTANTIVE LAWS OF THE STATE OF
NEW YORK.
Section 11.2 SUBMISSION TO JURISDICTION. Any legal action or proceeding
with respect to this Agreement and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York and, by execution
and delivery of this Agreement, each Grantor hereby accepts for itself and in
respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and appellate courts from any thereof. Each
Grantor irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid or nationally
recognized overnight carrier service, to such Grantor at its address set forth
under its signature below. Each Grantor hereby irrevocably waives any objection
that it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
brought in the courts referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
Nothing herein shall affect the right of the Collateral Trustee to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against a Grantor in any other jurisdiction.
Section 11.3 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH GRANTOR AND THE COLLATERAL TRUSTEE HEREBY IRREVOCABLY WAIVE
ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER.
Section 11.4 LIMITATION OF LIABILITY. No claim may be made by a Grantor
or any other Person against the Collateral Trustee, holders of Securities or the
affiliates, directors, officers, employees, attorneys or agents of any of them
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement or any act, omission
or event occurring in connection therewith; and each Grantor hereby waives,
releases and agrees not to
23
xxx upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
Section 11.5 NOTICES. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telecopier or similar writing) and shall be given, if to a Grantor,
at the address of the Company specified in the Indenture, and if to the
Collateral Trustee, at ___________________, or, as to either party, at such
other address as shall be designated by such party in a written notice to the
other party. Any notice or other communication shall be sufficiently given for
all purposes, if it shall be given or made in writing, by hand, telecopier (with
confirmation of receipt) or nationally recognized overnight carrier service or
certified or registered mail.
Section 11.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of each Grantor, the Collateral Trustee, all
Indemnitees hereunder, all future Holders and their respective successors and
assigns, except that no Grantor may assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Collateral Trustee.
Section 11.7 WAIVERS AND AMENDMENTS. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by each Grantor and the Collateral Trustee,
provided that any provision of this Agreement may be waived by the Collateral
Trustee in a written letter or agreement executed by the Collateral Trustee or
by telex or facsimile transmission from the Collateral Trustee. Any such
amendment, supplement, modification or waiver shall be binding upon each Grantor
and the Collateral Trustee and all future Holders of the Securities. In the case
of any waiver, each Grantor and the Collateral Trustee shall be restored to
their former position and rights hereunder and under the outstanding Secured
Obligations, and any Default or Event of Default waived shall be deemed to be
cured and not continuing, but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
Section 11.8 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Collateral Trustee in exercising any right, power or privilege
hereunder and no course of dealing between any of the Grantors and the
Collateral Trustee shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Collateral Trustee of any right or remedy hereunder
on any one occasion shall not be construed as a bar to any right or remedy which
the Collateral Trustee would otherwise have on any future occasion. The rights
and remedies herein expressly provided are cumulative and may be exercised
singly or concurrently and as often and in such order as the Collateral Trustee
deems expedient and are not exclusive of any rights or remedies which the
Collateral Trustee would otherwise have whether by agreement or now or hereafter
existing under applicable law. No notice to or demand on a Grantor in any case
shall entitle such Grantor to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Collateral
Trustee to any other or further action in any circumstances without notice or
demand.
Section 11.9 TERMINATION; RELEASE. When all of the Secured Obligations
have been indefeasibly paid in full this Agreement shall terminate and the
Collateral Trustee will execute
24
and deliver to the respective Grantors, at the expense of the Grantors, the
proper instruments (including UCC termination statements) acknowledging the
termination of this Agreement, and will duly assign, transfer and deliver to the
Grantors, at the expense of the Grantors and without recourse, representation or
warranty of any kind whatsoever (except with respect to the absence of any liens
created by or arising under the Collateral Trustee), such of the Collateral of
the respective Grantors as may be in possession of the Collateral Trustee and
has not theretofore been disposed of, applied or released PROVIDED, HOWEVER, if
no default or Event of Default exists, the Company and each Subsidiary Grantor's
Accounts will be automatically released from the Lien at such time as the
Company has paid five million dollars ($5,000,000) of the principal amount of
the Series A Notes in accordance with the Indenture and the Collateral Trustee
will execute and deliver to the respective Grantors the proper instruments
acknowledging the termination of such Lien. Upon the release of any Collateral
pursuant to the terms of the Indenture, the Collateral Trustee will promptly
return (and in any event within 10 Business Days) to the Grantors any Collateral
so released that is held by or on behalf of the Collateral Trustee, including,
without limitation, any Pledged Stock and any and all instruments of transfer or
assignments in blank with respect thereto.
Section 11.10. ADDITIONAL GRANTORS. If the Company or any Grantor
transfers or causes to be transferred, in one transaction or a series of related
transactions, any property to any Subsidiary that is not a Guarantor, or if the
Company or any of its Subsidiaries organizes, acquires or otherwise invests in
another Subsidiary, then such transferee or acquired or other Subsidiary shall
agree to be bound by this Security Agreement, provide that it shall not be
necessary to amend this Security Agreement to effectuate the addition of such
additional Guarantor.
Section 11.11 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 11.12 EFFECTIVENESS. This Agreement shall become effective on
the date on which a Grantor shall have signed a counterpart hereof and shall
have delivered the same to the Collateral Trustee.
Section 11.13 HEADINGS DESCRIPTIVE. The headings of the several
Sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
Section 11.4 SEVERABILITY. In case any provision in or obligation under
this Agreement or the Secured Obligations shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
Section 11.15 SURVIVAL. All indemnities set forth herein shall survive
the execution and delivery of this Agreement and the making and repayment of the
Secured Obligations.
25
Section 11.16 POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest.
Section 11.17 ACKNOWLEDGEMENT. The obligations of the Grantors under
this document are in addition to and are not in substitution of the obligations
of the Grantors under the Indenture and the Charge Agreements.
Section 11.18 CONSENT TO SERVICE OF PROCESS.
(a) The Company irrevocably (i) agrees that any legal suit,
action or proceeding arising out of or based upon this Indenture or the
Securities issued hereunder, as the case may be, may be instituted in any
federal or state court located in the City of New York, (ii) waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of venue of any such proceeding, and any claim that any suit,
action or proceeding in such a court has been brought in an inconvenient forum,
and (iii) irrevocably submits to the nonexclusive jurisdiction of such courts in
any such suit, action or proceeding. Each of the Company and the Guarantors has
appointed _________________________, as its authorized agent (the "Authorized
Agent") upon whom process may be served in any suit, action or proceeding
arising out of or based on this Indenture which may be instituted in any federal
or state court located in the City of New York, expressly consents to the
jurisdiction of any such court in respect of any suit, action or proceeding, and
waives any other requirements of or objections to personal jurisdiction with
respect thereto. Such appointment shall be irrevocable. The Company agrees to
take any and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment in full force
and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company or a Guarantor shall be deemed, in
every respect, effective service of process upon the Company or such Guarantor,
as applicable.
(b) To the extent that any of the Company and the Guarantors
have or hereafter may acquire any immunity (sovereign or otherwise) from any
legal action, suit or proceeding, from jurisdiction of any court or from set-off
or any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, the Company and the Guarantors
hereby irrevocably waive and agree not to plead or claim such immunity in
respect of their respective obligations under this Indenture or the Securities.
26
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
FLAG TELECOM GROUP LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG ACQUISITION NO. 1 CORPORATION
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG PACIFIC HOLDINGS LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG PACIFIC LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG PACIFIC CANADA LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG PACIFIC JAPAN LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
00
XXXX XXXXXXX XXXXXXXXX PTE. LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG Telecom Development Limited
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM DEVELOPMENT SERVICES
COMPANY LLC
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG ACCESS INDIA PRIVATE LTD.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAGWEB LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM NETWORK SERVICES
LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
28
FLAG TELECOM IRELAND LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM JAPAN LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM ESPANA SA
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM SERVIZI ITALIA SPA
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM IRELAND SERVICES
LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM SERVICIOS S.A. DE C.V.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM ARGENTINA SA
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM VENEZUELA S.A.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
29
FLAG TELECOM BRASIL HOLDINGS LTDA
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM BRASIL LTDA
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM IRELAND NETWORK LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM NETWORK USA LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM DEUTSCHLAND NETWORK
GMBH
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM NEDERLAND NETWORK BV
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
30
FLAG TELECOM BELGIUM NETWORK SA
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM SWITZERLAND NETWORK AG
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM AUSTRIA NETWORK GMBH
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM NORWAY NETWORK AS
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM FRANCE NETWORK SAS
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM ESPANA NETWORK SAU
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
31
FLAG TELECOM GLOBAL NETWORK LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM ASIA LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM FRANCE SERVICES EURL
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM DEUTSCHLAND GMBH
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM NEDERLAND BV
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM HELLAS AE
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
32
FLAG TELECOM AUSTRIA GMBH
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG ASIA HOLDINGS LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM KOREA LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
SEOUL TELENET INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM TAIWAN SERVICES LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG HOLDINGS (TAIWAN) LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
33
FLAG TELECOM TAIWAN LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG ATLANTIC UK LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG ATLANTIC FRANCE SARL
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG PACIFIC USA LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM GROUP SERVICES LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG TELECOM LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
34
FLAG TELECOM USA LTD.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
FLAG ASIA LIMITED
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
Acknowledged and Agreed:
THE BANK OF NEW YORK,
as Collateral Trustee and Trustee
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
35
ANNEX I
Please note that this schedule remains in draft form. This is only a preliminary
indication of what the collateral for each grantor may be.
Grantor Jurisdiction of Collateral
------- Incorporation ----------
-------------
FLAG Telecom Group 1. Common stock of FLAG
Limited Telecom Singapore Pte.
Limited, FLAG Telecom
Development Limited, FLAG
Limited, FLAG Telecom Group
Services Limited, FLAG
Telecom Global Network
Limited and FLAG Asia
Holdings Limited
Bermuda
2. Deposit Accounts
3. Intercompany notes and
receivables
4. The [claims][Proceeds
from the claims] in PSINet
and Teleglobe bankruptcies
FLAG Acquisition Delaware None
Xx. 0 Xxxxxxxxxxx
XXXX Xxxxxxx Xxxxxxxx Xxxxxxx Xxxx
Limited
FLAG Pacific Limited Bermuda None
FLAG Pacific Canada New Brunswick None
Limited
FLAG Pacific Japan Japan None
Limited
FLAG Telecom Singapore None
Singapore Pte. Limited
FLAG Telecom 1. Common stock of FLAG
Development Limited Telecom Development
Services Company LLC
Bermuda (Egypt), FLAGWEB Limited
and FLAG Telecom Network
Services Limited
FLAG Telecom None
Development Services Egypt
Company LLC
FLAG Access India India None
Private Ltd.
FLAGWEB Limited Bermuda None
FLAG Telecom Network Ireland 1. Common stock of FLAG
Services Limited Telecom Ireland Limited
FLAG Telecom Ireland 1. Common stock of FLAG
Limited Telecom Japan Limited, FLAG
Telecom Espana SA, FLAG
Ireland Telecom Servizi Italia SpA,
FLAG Telecom Ireland
Network Limited.
FLAG Telecom Japan 1. Terrestrial switching
Limited Japan equipment
2. Backhaul contracts
FLAG Telecom Espana SA Spain None
FLAG Telecom Servizi Italy None
Italia SpA
FLAG Telecom Ireland Ireland None
Services Limited
FLAG Telecom Mexico None
Servicios S.A. de C.V.
FLAG Telecom Argentina None
Argentina SA
FLAG Telecom Brasil Brazil None
Holdings Ltda
FLAG Telecom Brasil Brazil None
Ltda
FLAG Telecom Ireland 1. Common stock of FLAG
Network Limited Telecom Network USA
Limited, FLAG Telecom
Deutschland Network GmbH,
FLAG Telecom Nederland
Network BV, FLAG Telecom
Belgium Network, FLAG
Telecom Switzerland
Ireland Network, FLAG Telecom
Norway Network AS, FLAG
Telecom France Network SAS
and FLAG Telecom Espana
Network SAS
2. Terrestrial switching
equipment located in Europe
3. Backhaul contracts
related to terrestrial
switching equipment located
2
in Europe
4. Intercompany notes and
receivables
5. Receivables
6. Bank accounts
FLAG Telecom Network 1. POP located in the
USA Limited United States
2. Backhaul agreements
related to equipment located
Delaware in the United States
3. Terrestrial assets
located in the United
States that were part of
Atlantic Group
FLAG Telecom None
Deutschland Network Germany
GmbH
FLAG Telecom The Netherlands None
Nederland Network BV
FLAG Telecom Belgium Belgium None
Network SA
FLAG Telecom Switzerland None
Switzerland Network AG
FLAG Telecom Austria Austria None
Network GmbH
FLAG Telecom Norway Norway None
Network AS
FLAG Telecom France France None
Network SAS
FLAG Telecom Espana Spain None
Network SAU
FLAG Telecom Global 1. Common stock of FLAG
Network Limited Atlantic UK Limited and
FLAG Atlantic France SARL
2. Transpacific IRUs
Bermuda
3. Intercompany notes and
receivables
4. Receivables
3
5. Bank accounts
6. FA-1 cable
FLAG Telecom Asia Bermuda None
Limited
FLAG Telecom France France None
Services Eurl
FLAG Telecom Germany None
Deutschland GmbH
FLAG Telecom Services Italy None
Italia Srl
FLAG Telecom The Netherlands None
Nederland BV
FLAG Telecom Hellas AE Greece None
FLAG Telecom Austria Austria None
GmbH
FLAG Asia Holdings Bermuda 1. Common stock of FLAG
Limited Asia Limited
FLAG Telecom Korea Korea None
Limited
Seoul Telenet Inc. Korea None
FLAG Telecom Taiwan Taiwan None
Services Limited
FLAG Holdings Taiwan 1. Common stock of FLAG
(Taiwan) Limited Telecom Taiwan Limited
FLAG Telecom Taiwan None
Limited (in Taiwan
incorporation)
FLAG Atlantic UK 1. Terrestrial equipment
Limited located in United Kingdom
United Kingdom
2. Backhaul contracts
related to terrestrial
equipment located in
United Kingdom
FLAG Atlantic France France None
SARL
FLAG Limited 1. Common stock of FLAG
Pacific USA Limited
2. FEA cable
Bermuda
3. Transpacific IRUs
4. Intercompany notes and
receivables
4
5. Receivables
6. Bank accounts
FLAG Pacific USA Delaware None
Limited
FLAG Telecom Group 1. Common stock of FLAG
Services Limited Telecom Limited, FLAG
Telecom USA Ltd., FLAG
Telecom Asia Limited, FLAG
Bermuda Telecom Deutschland GmbH,
FLAG Telecom Nederland BV,
FLAG Telecom Hellas AE and
FLAG Telecom Austria GmbH
FLAG Telecom Limited 1. Cash deposits with
landlords
2. Offices in London and
Heathrow
United Kingdom
3. Equipment in offices in
London and Heathrow
4. Bank accounts
FLAG Telecom USA Ltd. Delaware None
FLAG Asia Limited 1. FNAL
2. POPs for FNAL,
including in Taiwan and
Korea
3. Terrestrial equipment
for FNAL, including Taiwan
and Korea
Bermuda 4. Backhaul contracts
related to terrestrial
equipment for FNAL,
including in Taiwan and
Korea
5. Intercompany notes and
receivables
6. Receivables
7. Bank accounts
5
8. Common stock of Seoul
Telenet Inc. and FLAG
Holdings (Taiwan) Limited
6
ANNEX II
ACCOUNT CONTROL AGREEMENT
AGREEMENT dated as of _________, 2002, among FLAG Telecom Group Limited
(the "COMPANY"), and Bank of New York, as collateral trustee (the "COLLATERAL
TRUSTEE"), and [name of bank holding the account] (the "INTERMEDIARY")
Intermediary represents and warrants to the Collateral Trustee that Intermediary
maintains Account No. ________ in the name of the Company (the "ACCOUNT"). The
parties hereto refer to the Account and hereby agree as follows:
1. The Company and the Collateral Trustee notify Intermediary that by
separate security agreement between the Company and the Collateral Trustee dated
as of _______,__ 2002 (the "SECURITY AGREEMENT") the Company has granted the
Collateral Trustee a Security Interest in the Account and any and all money,
instruments and other property from time to time deposited therein or credited
thereto, including all interest accruing thereon (collectively, "ITEMS").
Intermediary acknowledges that, as of the date hereof, it has not received
notice of any restraint, Security Interest, lien or other adverse claim in or to
the Account or any item therein.
2. The respective rights and duties of the Collateral Trustee, the
Company and the Intermediary regarding control of the Account shall be as
follows:
(a) The Intermediary shall comply with any instructions originated by
the Collateral Trustee directing disposition of the funds in the Account without
further consent by the Company.
(b) The Intermediary may rely on a written notice from the Collateral
Agent (an "Acceleration Certification") that an Event of Default under the
Security Agreement has occurred and is continuing, and upon the direction of
the trustee. The Acceleration Certification shall state an effective date
(which shall be no earlier than the date it is delivered to the Intermediary)
and may include a demand that the intermediary thereafter recognize the
exclusive control by the Collateral Trustee over the Account (including all
funds then held in the Account), plus any and all funds or amounts
subsequently deposited or transferred into the Account. The Collateral
Trustee shall simultaneously provide a copy of the Acceleration Certification
to the Company by notice in accordance with Section 6 hereof.
(c) Upon receipt of the Acceleration Certification, the Intermediary
shall follow all instructions of the Collateral Trustee regarding the Account,
and shall not allow withdrawals from or transfers out of the Account by or at
the direction of the Company, whether by check, draft, written or other
instruction, or other device or instrument.
(d) The Intermediary is authorized and shall be directed to accept the
Acceleration Certification from Collateral Trustee without obligation to
independently verify the correctness thereof.
(e) Until such time as the Intermediary has received an Acceleration
Certification from the Collateral Trustee, the Collateral Trustee hereby agrees
and consents that the Company shall be entitled to withdraw or receive funds
from the Account as it may elect, and that the Intermediary shall have no
liability to Collateral Trustee for having released such funds to, or upon the
direction of, the Company prior to the receipt by the Intermediary of an
Acceleration Certification in accordance with this Section 2.
(f) Except as expressly provided in this Agreement, the Intermediary
shall have no responsibility or liability to any party for determining or
verifying the occurrence of any event or circumstance or the satisfaction of any
condition giving rise to any order or other direction of or by the Collateral
Trustee. The parties hereto acknowledge that, notwithstanding any other
provision of this Agreement, the Intermediary shall have no responsibility or
liability for monitoring or determining compliance by any party with the
provisions of the Security Agreement or any other agreement between the Company
and the Collateral Trustee and to which the Intermediary is not a party.
(g) Intermediary shall send copies of all statements and confirmations
for the Account to the Collateral Trustee and the Company. Intermediary will use
reasonable efforts promptly to notify the Collateral Trustee and the Company if
any other person claims that it has a property interest in property in the
Account and that it is a violation of that person's rights for anyone else to
hold, transfer or deal with the property.
3. Intermediary (a) waives, releases and agrees not to assert, exercise
or claim any lien, encumbrance, right (including setoff rights) or other claim
against the Account or any cash balance, funds or other item therein, and (b)
shall neither advance margin or other credit against the Account, nor
hypothecate any items carried in the Account, without the prior written consent
of the Collateral Trustee. Intermediary shall not agree with any other person or
entity that it will comply with any withdrawal, delivery, transfer, payment and
redemption instructions, or any other entitlement or other orders, from such
person or entity concerning the Account or any items therein without the prior
written consent of the Collateral Trustee and any such agreement entered into
without such consent shall be null and void.
4. Anything to the contrary in this Agreement notwithstanding, (i)
Intermediary shall have only the duties and responsibilities expressly set forth
in writing herein, (ii) Intermediary shall be fully protected in acting or
refraining from acting in good faith on any written notice, instruction or
request purportedly furnished to it by the Collateral Trustee in accordance with
the terms hereof, in which case the parties hereto agree that Intermediary has
no duty to make any further inquiry whatsoever, (iii) Intermediary shall not be
liable to any party hereto or any other person for any action or failure to act
under or in connection with this Agreement except for its own willful misconduct
or gross negligence (and, to the maximum extent permitted by law, shall under no
circumstances be liable for indirect, special, punitive or consequential
damages) and (iv) the Company hereby indemnifies Intermediary for, and holds
Intermediary harmless against, any loss, cost, liability or expense (including
reasonable inside or outside counsel fees and disbursements) incurred or
suffered by Intermediary arising out of or in connection with this Agreement or
the Account, except as may result from its willful misconduct or gross
negligence.
5. Intermediary may terminate this Agreement upon the sending of at
least thirty (30) days' advance written notice to the other parties hereto. Any
other termination or any amendment or waiver of this Agreement shall be effected
solely by an instrument in writing executed by all the parties hereto.
6. All notices shall be in writing and sent (including via facsimile
transmission) to the parties hereto at their respective addresses or fax number
(or to such other address or fax number as any such party shall designate in
writing to the other parties from time to time):
the Collateral Trustee:
[To be added]__
Attention:
Facsimile No.:
Company:
New Holdco
------------------------
------------------------
Attention:
--------------
Facsimile No.:
----------
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
Attention: Xxxxx Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: (000) 000-0000
Intermediary:
[To be added]
Attention:
Facsimile No.:
7. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument and shall become effective when
counterparts hereof have been signed by the parties hereto. This Agreement and
the Account and all agreements relating thereto shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to conflict of laws provisions that would require the application
of any other law and New York shall be the Intermediary's jurisdiction for
purposes of Section 9-304(b) of the Uniform Commercial Code. It is expressly
agreed that this Agreement supersedes the provisions of any other agreement
relating to the Account or any item therein to the extent inconsistent herewith.
8. With respect to any actions, claims, or proceedings ("PROCEEDINGS")
relating to this Agreement, each party irrevocably (i) submits to the
non-exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York City and
(ii) waives any objection which it may have at any time to the laying of venue
of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings that such court does not have
jurisdiction over such party. Nothing in this Agreement precludes a party from
bringing Proceedings in any other jurisdiction nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction. Each party hereby irrevocably waives any
and all right to trial by jury in any Proceedings.
9. To the extent a provision of this Agreement is unenforceable, this
Agreement will be construed as if the unenforceable provision were omitted.
10. Intermediary and the Collateral Trustee agree that the individuals
whose names and specimen signatures are from time to time furnished to
Intermediary by the Collateral Trustee are authorized to give notices or orders
under the terms of this Agreement ("AUTHORIZED PERSONS"), until such authority
is revoked in writing by the Collateral Trustee. The names and specimen
signatures of Authorized Persons on the date hereof are set forth on Exhibit A
hereto.
11. A successor to or assignee of the Collateral Trustee's rights and
obligations under the Security Agreement between the Collateral Trustee and the
Company will succeed to the Collateral Trustee's rights and obligations under
this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
NEW HOLDCO
By:
------------------------------------------
Name:
Title:
[COLLATERAL TRUSTEE]
By:
------------------------------------------
Name:
Title:
BANK
By:
------------------------------------------
Name:
Title:
EXHIBIT A
AUTHORIZED PERSONS
Name Signature
----------------------------------- ----------------------------------
----------------------------------- ----------------------------------
