EXHIBIT 4.7
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KOMAG, INCORPORATED
$7,000,000
Initial Amount
of
JUNIOR SECURED NOTES DUE 2007
INDENTURE
Dated as of June 30, 2002
BANK ONE TRUST COMPANY, N.A.
TRUSTEE
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CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
--------------- -----------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N/A
(a)(4) N/A
(a)(5) 7.10
(b) 7.10
(c) N/A
311(a) 7.11
(b) 7.11
(c) N/A
312(a) 2.5
(b) 13.3
(c) 13.3
313(a) 7.6
(b)(2) 7.6
(c) 7.6
(d) 7.6
314(a) 4.3;4.4
(b) 10.9
(c)(1) 12.4
(c)(2) 12.4
(c)(3) N/A
(d) 10.3;10.9;
10.11;10.12
(e) 13.4;13.5
(f) N/A
315(a) 7.1
(b) 7.5
(c) 7.1
(d) 7.1
(e) 6.11
316(a)(last sentence) 2.9
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(b) 6.7
(c) 13.13(d)
317(a)(1) 6.8
(a)(2) 6.9
(b) 2.4
318(a) 13.1
(b) N/A
(c) N/A
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*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
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Article 1. DEFINITIONS AND INCORPORATION BY REFERENCE.................................1
Section 1.1 Definitions................................................................1
Section 1.2 Other Definitions.........................................................21
Section 1.3 Incorporation by Reference of Trust Indenture Act.........................21
Section 1.4 Rules of Construction.....................................................22
Article 2. THE NOTES.................................................................22
Section 2.1 Form and Dating...........................................................22
Section 2.2 Execution and Authentication..............................................23
Section 2.3 Registrar and Paying Agent................................................24
Section 2.4 Paying Agent to Hold Money in Trust.......................................24
Section 2.5 Holder Lists..............................................................24
Section 2.6 Transfer and Exchange.....................................................25
Section 2.7 Replacement Notes.........................................................29
Section 2.8 Outstanding Notes.........................................................29
Section 2.9 Treasury Notes............................................................29
Section 2.10 Temporary Notes...........................................................30
Section 2.11 Cancellation..............................................................30
Section 2.12 Payment of Interest; Defaulted Interest...................................30
Section 2.13 CUSIP Numbers.............................................................31
Article 3. REDEMPTION AND PREPAYMENT.................................................31
Section 3.1 Notices to Trustee........................................................31
Section 3.2 Selection of Notes to Be Redeemed.........................................31
Section 3.3 Notice of Redemption......................................................32
Section 3.4 Effect of Notice of Redemption............................................32
Section 3.5 Deposit of Redemption Price...............................................33
Section 3.6 Notes Redeemed in Part....................................................33
Section 3.7 Optional Redemption.......................................................33
Section 3.8 Mandatory Redemption......................................................33
Article 4. COVENANTS.................................................................34
Section 4.1 Payment of Notes..........................................................34
Section 4.2 Maintenance of Office or Agency...........................................35
Section 4.3 Reports...................................................................35
Section 4.4 Compliance Certificate; Notices and Information...........................36
Section 4.5 Taxes and Claims..........................................................38
Section 4.6 Stay, Extension and Usury Laws............................................38
Section 4.7 Maintenance of Properties; Insurance......................................39
Section 4.8 Compliance with Laws, Etc.................................................39
Section 4.9 Notification..............................................................39
Section 4.10 Dividends, etc............................................................40
Section 4.11 Dividend and Other Payment Restrictions Affecting Subsidiaries............40
Section 4.12 Loans, Indebtedness, Investments, Secondary Liabilities...................41
Section 4.13 Capital Raising Events....................................................43
Section 4.14 Asset Sales...............................................................44
Section 4.15 Liens.....................................................................45
Section 4.16 Adjusted Tangible Net Worth...............................................45
Section 4.17 Minimum Adjusted Net Working Capital......................................46
Section 4.18 Total Cash Debt Service Coverage Ratio....................................46
Section 4.19 Capital Expenditures......................................................47
Section 4.20 Consolidated EBITDAR......................................................47
Section 4.21 Corporate Existence.......................................................48
Section 4.22 Payments for Consent......................................................48
Section 4.23 Advances to Subsidiaries..................................................48
Section 4.24 Amendments to Certain Agreements..........................................49
Section 4.25 Transactions with Affiliates..............................................49
Section 4.26 Restrictions on Senior or Pari Passu Indebtedness.........................50
Section 4.27 Impairment of Rights......................................................50
Section 4.28 Location of Inventory and Equipment.......................................50
Section 4.29 Escrow Account............................................................51
Section 4.30 Komag Bermuda.............................................................51
Section 4.31 Account Control Agreement.................................................52
Section 4.32 Further Assurances........................................................52
Article 5. MERGERS, ETC..............................................................52
Section 5.1 Consolidation, Merger or Acquisition......................................52
Article 6. DEFAULTS AND REMEDIES.....................................................53
Section 6.1 Events of Default.........................................................53
Section 6.2 Acceleration..............................................................55
Section 6.3 Other Remedies............................................................56
Section 6.4 Waiver of Past Defaults...................................................56
Section 6.5 Control by Majority.......................................................56
Section 6.6 Limitation on Suits.......................................................56
Section 6.7 Rights of Holders of Notes to Receive Payment.............................57
Section 6.8 Collection Suit by Trustee................................................57
Section 6.9 Trustee May File Proofs of Claim..........................................57
Section 6.10 Priorities................................................................58
Section 6.11 Undertaking for Costs.....................................................58
Section 6.12 Restoration of Rights and Remedies........................................59
Article 7. TRUSTEE...................................................................59
Section 7.1 Duties of Trustee.........................................................59
Section 7.2 Certain Rights of Trustee.................................................60
Section 7.3 Individual Rights of Trustee..............................................61
Section 7.4 Trustee's Disclaimer......................................................61
Section 7.5 Notice of Defaults........................................................61
Section 7.6 Reports by Trustee to Holders of the Notes; Stock Exchange Listing........62
Section 7.7 Compensation and Indemnity................................................62
Section 7.8 Replacement of Trustee....................................................63
Section 7.9 Successor Trustee by Merger, Etc..........................................64
Section 7.10 Eligibility; Disqualification.............................................64
Section 7.11 Preferential Collection of Claims Against Company.........................64
Section 7.12 Authorization of Trustee to Take Other Actions............................65
Section 7.13 Assignment of Rights, Not Assumption of Duties............................65
Section 7.14 Limitation on Duty of Trustee in Respect of Collateral; Indemnification...65
Section 7.15 Appointment of Co-Trustee.................................................66
Section 7.16 No Liability for Clean-up of Hazardous Materials..........................67
Article 8. DEFEASANCE AND COVENANT DEFEASANCE........................................67
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance..................67
Section 8.2 Legal Defeasance and Discharge............................................67
Section 8.3 Covenant Defeasance.......................................................68
Section 8.4 Conditions to Legal or Covenant Defeasance................................68
Section 8.5 Deposited Money and Government Securities to Be Held in Trust; Other
Miscellaneous Provisions..................................................70
Section 8.6 Repayment to the Company..................................................70
Section 8.7 Reinstatement.............................................................70
Article 9. AMENDMENT, SUPPLEMENT AND WAIVER..........................................71
Section 9.1 Without Consent of Holders of Notes.......................................71
Section 9.2 With Consent of Holders of Notes..........................................72
Section 9.3 Compliance with Trust Indenture Act.......................................73
Section 9.4 Revocation and Effect of Consents.........................................74
Section 9.5 Notation on or Exchange of Notes..........................................74
Section 9.6 Trustee to Sign Amendments, Etc...........................................74
Article 10. COLLATERAL AND SECURITY...................................................74
Section 10.1 Security..................................................................74
Section 10.2 Grant of a Security Interest..............................................75
Section 10.3 Collateral Matters........................................................75
Section 10.4 Negotiable Collateral.....................................................76
Section 10.5 Collection of Accounts, General Intangibles, and Negotiable Collateral....76
Section 10.6 Power of Attorney.........................................................76
Section 10.7 Grants, Rights and Remedies...............................................77
Section 10.8 Survival..................................................................77
Section 10.9 Recording and Opinions....................................................78
Section 10.10 Protection of the Trust Estate............................................79
Section 10.11 Certificates of the Company...............................................79
Section 10.12 Certificates of the Trustee...............................................79
Section 10.13 Authorization of Actions to Be Taken by the Trustee Under the Collateral
Documents, the Liquidity Facility Intercreditor Agreement and the Senior
Notes Intercreditor Agreement.............................................80
Section 10.14 Trustee's Duties..........................................................80
Section 10.15 Authorization of Receipt of Funds by the Trustee Under the Collateral
Documents.................................................................80
Section 10.16 Cooperation of Trustee....................................................81
Section 10.17 Collateral Agent..........................................................81
Section 10.18 Representations and Warranties............................................82
Article 11. SATISFACTION AND DISCHARGE................................................84
Section 11.1 Satisfaction and Discharge................................................84
Section 11.2 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions..................................................84
Section 11.3 Repayment to Company......................................................85
Article 12. SUBORDINATION OF NOTES....................................................85
Section 12.1 Notes Subordinate to Senior Indebtedness Only.............................85
Section 12.2 Trustee to Effectuate Subordination.......................................85
Section 12.3 Notice to Trustee.........................................................86
Section 12.4 Rights of Trustee.........................................................86
Section 12.5 Defeasance of this Article Twelve.........................................86
Section 12.6 This Article Not To Prevent Events of Default.............................86
Article 13. MISCELLANEOUS.............................................................87
Section 13.1 Trust Indenture Act Controls..............................................87
Section 13.2 Notices...................................................................87
Section 13.3 Communication by Holders of Notes with Other Holders of Notes.............88
Section 13.4 Certificate and Opinion as to Conditions Precedent........................88
Section 13.5 Statements Required in Certificate or Opinion.............................88
Section 13.6 Rules by Trustee and Agents...............................................89
Section 13.7 No Personal Liability of Directors, Officers, Employees and Stockholders..89
Section 13.8 Governing Law.............................................................89
Section 13.9 No Adverse Interpretation of Other Agreements.............................89
Section 13.10 Successors................................................................89
Section 13.11 Severability..............................................................90
Section 13.12 Counterpart Originals.....................................................90
Section 13.13 Acts of Holders...........................................................90
Section 13.14 Benefit of Indenture......................................................91
Section 13.15 Table of Contents, Headings, Etc..........................................91
EXHIBITS
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF DEED OF TRUST FOR CALIFORNIA
EXHIBIT C FORM OF TRUST DEED FOR OREGON
EXHIBIT D FORM OF PLEDGE AGREEMENT
EXHIBIT E FORM OF LIQUIDITY FACILITY INTERCREDITOR AGREEMENT
EXHIBIT F FORM OF SENIOR NOTES INTERCREDITOR AGREEMENT
SCHEDULE 1.1 EXISTING LIENS
SCHEDULE 4.25 AFFILIATE TRANSACTIONS
SCHEDULE 4.28 LOCATION OF INVENTORY AND EQUIPMENT
SCHEDULE 10.18(B) EXCEPTED EQUIPMENT
SCHEDULE 10.18(G) LIST OF SUBSIDIARIES
SCHEDULE 10.18(H)(1) REGISTERED PATENTS AND REGISTERED TRADEMARKS
SCHEDULE 10.18(H)(2) INTELLECTUAL PROPERTY CLAIMS
SCHEDULE R-1 REAL PROPERTY
SCHEDULE A SCHEDULED INCREASES TO PRINCIPAL IN RESPECT OF
DEFERRED INTEREST
INDENTURE dated as of June 30, 2002 among Komag, Incorporated, a
Delaware corporation (the "COMPANY") and Bank One Trust Company, N.A. , a
national banking association (the "TRUSTEE").
The Company and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the Junior
Secured Notes due 2007 (the "NOTES"):
RECITALS
WHEREAS, HMT Technology Corporation ("HMT") issued certain 5 3/4%
Convertible Subordinated Notes due 2004, in an original principal amount of
$230,000,000.00 (the "Bonds") pursuant to that certain Indenture dated January
15, 1997 between HMT and State Street Bank and Trust Company of California, as
Trustee;
WHEREAS, the Company is the successor obligor on the Bonds
pursuant to the terms of a First Supplemental Indenture dated October 2, 2000
and a Second Supplemental Indenture dated December 20, 2000.
WHEREAS, on or about August 24, 2001, the Company filed a
voluntary petition under the Bankruptcy Law (the "PETITION DATE"), thereby
commencing Case Number 01-54143-JRG (the "CHAPTER 11 CASE") currently pending
before the United States Bankruptcy Court for the Northern District of
California (the "BANKRUPTCY COURT");
WHEREAS, the Company's Plan of Reorganization requires that the
Company issue certain "Class 6 PIK Notes" to certain holders of the Bonds;
WHEREAS, it is anticipated that the Bankruptcy Court will enter
its order confirming the Company's Plan of Reorganization; and
NOW, THEREFORE, in consideration of the above recitals and in
order to induce the Holders to purchase the Notes, the parties hereto agree as
follows:
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"2 WIRE LEASE" means the sublease, dated January 10, 2000, by 2
Wire, Inc., a Delaware corporation, from the Company of all or a portion of the
Real Property located at 0000 Xxxxxxxxxx Xxxxxxx, Xxx Xxxx, Xxxxxxxxxx.
"ACCOUNT CONTROL AGREEMENT" means, with respect to a Securities
Account or deposit account maintained by the Company, an account control
agreement executed by the Company, the Trustee, as secured party, and the
applicable securities intermediary with respect to a Securities Account or bank
with respect to a deposit account and to which the collateral agent under the
Liquidity Facility and the Senior Notes Trustee may be a party which (i) prior
to the date that the Liquidity Facility Intercreditor Agreement shall have been
terminated in accordance with its terms, provides the Trustee, subject to the
Liquidity Facility Intercreditor
1
Agreement and the Senior Notes Intercreditor Agreement, and further subject to
the liens of the lenders and agent under the Liquidity Facility and of the
Senior Trustee under the Senior Notes Indenture, and further subject to the
terms and conditions of the Liquidity Facility Intercreditor Agreement until
terminated in accordance with its terms and the Senior Notes Intercreditor
Agreement until terminated in accordance with its terms, substantially identical
rights with respect to the relevant Securities Account or bank account, as
applicable, as granted to the collateral agent under the Liquidity Facility and
the Senior Trustee under the Senior Notes Indenture; (ii) subsequent to the date
that the Liquidity Facility Intercreditor Agreement and prior to the date that
the Senior Notes Intercreditor Agreement shall have been terminated in
accordance with their respective terms, provides the Trustee, subject to the
Senior Notes Intercreditor Agreement and further subject to the liens of the
Senior Trustee, and further subject to the terms and conditions of the Senior
Notes Intercreditor Agreement until terminated in accordance with its terms,
substantially identical rights with respect to the relevant Securities Account
or bank account, as applicable, as granted to the collateral agent under the
Senior Notes Indenture and (iii) on and after the date on which the Senior Notes
Intercreditor Agreement is terminated in accordance with its terms, a first
priority security interest in such Securities Account or deposit account, as
applicable.
"ACCOUNT DEBTOR" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account.
"ACCOUNTS" means all of the Company's now owned or hereafter
acquired right, title, and interest in and to, and with respect to, "accounts"
(as that term is defined in the UCC), and any and all supporting obligations in
respect thereof.
"ADJUSTED CURRENT ASSETS" means, with respect to the Company and
its Consolidated Subsidiaries as of any date of determination (i) the Current
Assets of the Company and its Consolidated Subsidiaries, minus (ii) the Non-Cash
Deferred Tax Assets of the Company and its Consolidated Subsidiaries.
"ADJUSTED CURRENT LIABILITIES" means, with respect to the Company
and its Consolidated Subsidiaries as of any date of determination (i) the
Current Liabilities of the Company and its Consolidated Subsidiaries, minus (ii)
Non-Cash Deferred Tax Liabilities of the Company and its Consolidated
Subsidiaries, minus (iii) the Current Maturities of Long Term Indebtedness, plus
(iv) to the extent not included in clause (i) above, all liabilities of the
Company and its Consolidated Subsidiaries under the Liquidity Facility that are
appropriately recorded as liabilities under GAAP.
"ADJUSTED NET WORKING CAPITAL" means, with respect to the Company
and its Consolidated Subsidiaries at any date of determination (i) the Adjusted
Current Assets of the Company and its Consolidated Subsidiaries, minus (ii) the
Adjusted Current Liabilities of the Company and its Consolidated Subsidiaries
(excluding liabilities accrued in respect of the Company's non-cash stock-based
deferred compensation program).
"ADJUSTED TANGIBLE NET WORTH" means the excess of (a) total assets of the
Company and its Consolidated Subsidiaries determined on a consolidated basis
over (b) the sum of (without duplication) (x) consolidated liabilities of the
Company and its Consolidated
2
Subsidiaries determined on a consolidated basis (excluding liabilities accrued
in respect of the Company's non-cash stock-based deferred compensation program),
(y) all liabilities appropriately recorded under GAAP under the Liquidity
Facility and (z) to the extent not already deducted from total assets, reserves
for depreciation, depletion, obsolescence, or amortization of properties and all
other reserves or appropriation of retained earnings which, in accordance with
GAAP, should be established in connection with the business conducted by the
Company and its Consolidated Subsidiaries, excluding, however from the
determination of total assets (i) all intangible assets, including, without
limitation, Goodwill (whether representing the excess cost over book value of
assets acquired or otherwise), patents, trademarks, trade names, copyrights,
franchises, and deferred charges (including, without limitation, unamortized
debt discount and expense, organization and research and product development
costs but excluding deferred income taxes), (ii) treasury stock and (iii) cash
set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of capital stock.
"AFFILIATE" means, 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. For the purposes of this
definition, "CONTROL," when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of, the management and policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Securities of a Person shall
be deemed to be Control. For purposes of this definition, the terms
"CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL WITH" have correlative
meanings.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ANNUALIZED" means in respect of any amount with respect to the
Company and its Consolidated Subsidiaries: (a) for the fiscal quarter ending
June 30, 2002, such amount for such fiscal quarter multiplied by four, (b) for
the fiscal quarter ending September 29, 2002, such amount for such fiscal
quarter together with the immediately preceding fiscal quarter multiplied by
two, (c) for the fiscal quarter ending December 29, 2002, such amount for such
fiscal quarter, together with the immediately preceding two fiscal quarters
multiplied by four-thirds (4/3), and (d) for each fiscal quarter ending on or
after March 30, 2003, such amount for such fiscal quarter, together with the
three immediately preceding fiscal quarters.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in the Global Note, the rules and
procedures of the Depositary that apply to such transfer or exchange.
"ASSET SALE" means the sale, lease, conveyance or other
disposition of any assets or rights (including but not limited to sale and
leaseback transactions); provided, that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company and its
Subsidiaries, taken as a whole, will be governed by Section 5.1 hereof and not
by Section 4.14 hereof.
Notwithstanding the foregoing, the following items will not be deemed to be
Asset Sales:
3
(a) any single transaction or series of related transactions
entered into in the ordinary course of business that involves assets having a
fair market value of less than $1.0 million;
(b) the sale of inventory or obsolete furniture, fixtures, or
equipment or other assets (including the licensing of intellectual property) in
the ordinary course of business;
(c) the sale or other disposition of Cash;
(d) any sublease of Real Property with a term, including any
period for which such sublease shall be renewable without the prior consent of
the Company or relevant Subsidiary, of not greater than one (1) year; and
(e) the 2 Wire Lease.
"BANKRUPTCY COURT" has the meaning assigned to it in the recitals
to this Indenture.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors.
"BOOKS" means all of the Company's now owned or hereafter
acquired right, title, and interest in and to, and with respect to, the
Company's and its Subsidiaries' now owned or hereafter acquired books and
records (including all of its or their respective Records indicating,
summarizing or evidencing its assets (including the Collateral) or liabilities,
all of the Company's or its Subsidiaries' respective Records relating to its or
their business operations or financial condition, and all of its or their
respective goods or General Intangibles related to such information).
"BUSINESS DAY" means any day other than a Saturday, Sunday or a
day on which commercial banks in New York are authorized or required by law to
close.
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures (including, among others, by the expenditure of cash or the
incurrence of Indebtedness) made in connection with the acquisition of any
assets which are required to be capitalized pursuant to GAAP.
"CAPITAL LEASE" means as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which would,
in accordance with GAAP, be required to be accounted for as a capital lease on
the balance sheet of that Person.
"CAPITAL RAISING EVENT" means any issuance or sale of Equity
Interests or Debt Instruments described in clause (a), (b) or (c) of Section
4.13 hereof.
"CAPITAL STOCK" means: (1) in the case of a corporation,
corporate stock; (2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (3) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited); and
4
(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"CASH" means cash, cash equivalents or other investments of the
type permitted in Section 4.12(a).
"CASH RECORD DATE" has the meaning specified therefor in the
Notes.
"CHAPTER 11 CASE" has the meaning assigned to it in the recitals
to this Indenture.
"COLLATERAL" means all now owned or owing to, or arising in favor
of or hereafter acquired assets and property of, or consigned by or to, the
Company, regardless of where located, including, without limitation, each of the
following to the fullest extent that the Company is permitted under applicable
law to grant a security interest in such assets and property (in the case of
Investment Property, as limited by the proviso in the definition thereof):
(a) the Accounts,
(b) the Books,
(c) the Equipment,
(d) the General Intangibles,
(e) the Inventory,
(f) the Investment Property,
(g) the Negotiable Collateral,
(h) the Real Property Collateral,
(i) (A) any money, cash or cash equivalents of the Company or
other assets of the Company (including any Intellectual Property of the Company)
that now or hereafter come into the possession, custody, or control of the
Trustee, and (B) all money, cash, cash equivalents or deposit accounts of the
Company, and
(j) all supporting obligations and all proceeds and products,
whether tangible or intangible, of any of the foregoing, including proceeds of
insurance covering any or all of the Collateral, and any and all Accounts,
Books, Equipment, General Intangibles, Inventory, Investment Property,
Negotiable Collateral, Real Property, money, deposit accounts, or other tangible
or intangible property resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof or interest therein,
and the proceeds thereof.
Notwithstanding anything to the contrary contained in this
definition, the term Collateral shall not include any rights or interest in any
contract, lease, permit, license, charter or license agreement covering real or
personal property of the Company if under the terms of such contract, lease,
permit, license, charter or license agreement, or applicable law with respect
5
thereto, the grant of a security interest or lien therein to the Trustee is
prohibited as a matter of law or under the terms of such contract, lease,
permit, license, charter or license agreement and such prohibition has not been
or is not waived or the consent of the other party to such contract, lease,
permit, license, charter or license agreement has not been or is not otherwise
obtained; provided, that, the foregoing exclusion shall in no way be construed
(a) to apply if any such prohibition is unenforceable under Sections 9-406,
9-407, or 9-408 of the UCC or other applicable law, or (b) so as to limit,
impair or otherwise affect the Trustee's unconditional continuing security
interests in and liens upon any rights or interests of the Company in or to
monies due or to become due under any such contract, lease, permit, license,
charter or license agreement (including any Accounts), or (c) to limit, impair,
or otherwise affect Trustee's continuing security interests in and liens upon
any rights or interests of the Company in and to any proceeds from the sale,
license, lease, or other dispositions of any such contract, lease, permit,
license, charter or license agreement.
"COLLATERAL AGENT" means the Trustee or any person appointed by
the Trustee as a Collateral Agent hereunder.
"COLLATERAL DOCUMENTS" means, collectively, (i) the Deeds of
Trust made by the Company as trustor, to the trustee thereunder, for the benefit
of the Trustee, as beneficiary, as amended, modified or revised in accordance
with its terms; (ii) the Pledge Agreement made by the Company to and for the
benefit of the Trustee, as amended, modified or revised in accordance with its
respective terms; (iii) the Account Control Agreement; and (iv) this Indenture.
"COMPANY" has the meaning assigned to it in the preamble to this
Indenture.
"CONSOLIDATED CASH INTEREST EXPENSE" means for any period the sum
of:
(a) the aggregate of the interest expense with respect to
Indebtedness of the Company and its Consolidated Subsidiaries (other than
non-cash interest) for such period, on a consolidated basis as determined in
accordance with GAAP (excluding the amortization of costs relating to original
debt issuances and the amortization of debt discount) plus
(b) without duplication, that portion of the Capital Leases of
the Company and its Consolidated Subsidiaries representing the interest factor
for such period as determined in accordance with GAAP plus
(c) without duplication, dividends paid in respect of
preferred stock of Consolidated Subsidiaries of the Company or Disqualified
Stock of the Company to Persons other than the Company or a Wholly Owned
Subsidiary.
"CONSOLIDATED EBITDAR" means, with respect to the Company and its
Consolidated Subsidiaries for any period, the result of, without duplication,
(i) the Consolidated Net Income for such period, plus (ii) the consolidated
interest expense for such period determined in accordance with GAAP, whether
paid or accrued, plus (iii) provision for taxes based on income or profits for
such period (to the extent such income or profits were included in computing
Consolidated Net Income for such period), plus (iv) consolidated depreciation
and amortization, plus (v) losses incurred on the sale of assets not in the
ordinary course of business,
6
plus (vi) Restructuring Charges, plus (vii) write-downs and charges required by
pronouncements issued by the Financial Accounting Standards Board that do not
and will not result in the expenditure of cash (e.g., SFAS 121), plus (viii)
non-cash stock-based compensation (to the extent such compensation was included
in computing Consolidated Net Income), less (ix) gains incurred on the sale of
assets not in the ordinary course of business. Notwithstanding the foregoing,
items (i) through (viii) of a Consolidated Subsidiary of the Company shall be
added to Consolidated Net Income to compute Consolidated EBITDAR only to the
extent (and in the same proportion) that the Net Income of such Consolidated
Subsidiary was included in calculating the Consolidated Net Income of the
Company.
"CONSOLIDATED NET INCOME" means, with respect to the Company and
its Consolidated Subsidiaries for any period, the aggregate of the Net Income of
the Company and its Consolidated Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP; provided, that (i) the Net Income
(but not loss) of any Person that is not a Consolidated Subsidiary that is
accounted for by the equity method of accounting shall be included only to the
extent of the amount of dividends or distributions paid in cash to the Company,
(ii) the Net Income of any Consolidated Subsidiary shall be excluded to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that Net Income is prohibited at the date of determination
without any prior approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders except to the extent a
corresponding amount would not be prohibited at the date of determination to be
paid in any other manner to the Company by such Consolidated Subsidiary without
any prior approval (that has not been obtained), pursuant to the terms of its
charter and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such Consolidated Subsidiary or
its stockholders, as certified by the Company in an Officer's Certificate,
provided, however, that Net Income of any Consolidated Subsidiary excluded from
Consolidated Net Income pursuant to this clause (ii) as a result of any action
taken by the Malaysian government that began during the immediately prior fiscal
quarter which action is the subject of negotiations at the time of the
determination of Consolidated Net Income shall be included in Consolidated Net
Income for such period notwithstanding this clause (ii), (iii) the cumulative
effect of a change in accounting principles shall be excluded, (iv) all other
extraordinary gains and extraordinary losses determined in accordance with GAAP
shall be excluded and (v) the effect of discontinued operations, as determined
in accordance with GAAP, shall be excluded.
"CONSOLIDATED SUBSIDIARY" or "CONSOLIDATED SUBSIDIARIES" of any
Person means any corporation or other Person which, for financial reporting
purposes, is required by GAAP to be consolidated into the financial statements
of such Person or another Consolidated Subsidiary of such Person.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address
of the Trustee specified in Section 13.2 hereof or such other address as to
which the Trustee may give notice to the Company.
7
"CURRENT ASSETS" means, with respect to any Person, all current
consolidated assets of such Person as of any date of determination calculated in
accordance with GAAP, but excluding Indebtedness due from Affiliates.
"CURRENT LIABILITIES" means, with respect to any Person, all
current consolidated liabilities of such Person as of any date of determination
calculated in accordance with GAAP, but excluding Indebtedness owed to
Affiliates.
"CURRENT MATURITIES OF LONG TERM INDEBTEDNESS" means the current
maturities of long term Indebtedness of the Company and its Consolidated
Subsidiaries, as determined in accordance with GAAP, but excluding all or any
portion of amounts owing under the Liquidity Facility.
"CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"DEEDS OF TRUST" means, collectively, (i) the Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing with respect to the
Fremont Properties substantially in the form of Exhibit B hereto, made by the
Company in favor of Chicago Title Company, a California corporation, as trustee
for the benefit of the Trustee and the Holders, as amended, supplemented or
otherwise modified from time to time and (ii) the Trust Deed, Assignment of
Rents, Security Agreement and Fixture Filing with respect to the Xxxxxx Property
substantially in the form of Exhibit C hereto, made by the Company in favor of
Chicago Title Insurance Company of Oregon, an Oregon corporation, as trustee for
the benefit of the Trustee and the Holders, as amended, supplemented or
otherwise modified from time to time.
"DEFAULT" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTES" means one or more certificated Notes
registered in the name of the Holder thereof and issued in accordance with
Section 2.6 hereof, substantially in the form of Exhibit A hereto, except that
such Note shall not bear the Global Note Legend and shall not have the "Schedule
of Exchanges of Interests in the Global Note" attached thereto.
"DELINQUENT TAX LIENS" means Liens on any Real Property
Collateral for taxes, assessments or other governmental charges or levies that
are at the time delinquent and not subject to a Permitted Protest that
effectively suspends enforcement of such Lien.
"DEPOSITARY" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.3 hereof
as the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"DISQUALIFIED STOCK" means any Capital Stock, which, by its terms
(or by the terms of any security into which it is convertible or exchangeable),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder thereof, in whole or in part on, or prior to, or is exchangeable
for debt securities of the Company or its Subsidiaries prior to, the final
maturity
8
date of the Notes; provided that only the amount of such Capital Stock that is
redeemable prior to the maturity of the Notes shall be deemed to be Disqualified
Stock.
"ELIGIBLE INSTITUTIONS" means those financial institutions
identified as "Anchor Banks" by Bank Negara Malaysia from time to time.
"EMPLOYEE BENEFIT PLAN" means any Pension Plan, any employee
welfare benefit plan, or any other employee benefit plan which is described in
Section 3(3) of ERISA and which is maintained for employees of the Company or
any ERISA Affiliate of the Company.
"EQUIPMENT" means all of Company's now owned or hereafter
acquired right, title, and interest in and to, and with respect to, equipment,
machinery, machine tools, motors, furniture, furnishings, fixtures, vehicles
(including motor vehicles), tools, parts, goods (other than consumer goods, farm
products, or Inventory), wherever located, including all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing.
"EQUITY INTERESTS" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statute.
"ERISA AFFILIATE" means (a) any corporation subject to ERISA
whose employees are treated as employed by the same employer as the employees of
the Company under Internal Revenue Code Section 414(b), (b) any trade or
business subject to ERISA whose employees are treated as employed by the same
employer as the employees of the Company under Internal Revenue Code Section
414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the
Internal Revenue Code, any organization subject to ERISA that is a member of an
affiliated service group of which the Company is a member under Internal Revenue
Code Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the Internal Revenue Code, any party subject to ERISA that is a
party to an arrangement with the Company and whose employees are aggregated with
the employees of the Company under Internal Revenue Code Section 414(o).
"ESCROW ACCOUNT" means the Escrow Account with a bank or trust
company with not less than $100,000,000 in assets, as escrow agent, set up by
the Company in accordance with Sections 4.14 and 4.29, which Escrow Account
shall be pledged to the Trustee, for the benefit of the Holders, in accordance
with Article 10 hereof.
"EUGENE PROPERTY" means the real property, buildings,
improvements, and other property located at 0000 X. 0xx Xxxxxx, Xxxxxx, Xxxxxx.
"EXCEPTED COMPANY" means Western Digital Corporation and each of
the Restructure Lenders.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
9
"FOREIGN SUBSIDIARY" means a Subsidiary of Company that is
organized under the laws of a country other than the United States of America or
any state, province, territory, or possession thereof.
"FREMONT PROPERTY" means the real property, buildings,
improvements, and other property located at (a) 00000 Xxxx Xxxx and (b) 1055
Page Road, each in Fremont, California.
"GAAP" means generally accepted accounting principles
consistently applied set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.
"GENERAL INTANGIBLES" means all of the Company's now owned or
hereafter acquired right, title, and interest in and to, and with respect to,
general intangibles (including payment intangibles, contract rights, rights to
payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade names, trademarks, servicemarks,
copyrights, blueprints, drawings, purchase orders, customer lists, monies due or
recoverable from pension funds, route lists, rights to payment and other rights
under any royalty or licensing agreements, infringement claims, computer
programs, information contained on computer disks or tapes, software,
literature, reports, catalogs, money, deposit accounts, insurance premium
rebates, tax refunds, and tax refund claims), and any and all supporting
obligations in respect thereof, and any other personal property other than
goods, Accounts, Investment Property, and Negotiable Collateral.
"GLOBAL NOTE" means the permanent global Note substantially in
the form of Exhibit A hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.6(f), which is required to be placed on the Global Note issued under this
Indenture.
"GOODWILL" of any Person means goodwill of such Person and its
Consolidated Subsidiaries as determined in accordance with GAAP.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through Capital Stock or capital ownership or otherwise, by any of
the foregoing.
"GOVERNMENT SECURITIES" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations of a person controlled or
supervised by and acting as an agency or instrumentality
10
of the United States of America, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act) as a custodian with respect to
any such U.S. Government obligation or a specific payment of principal of or
interest on any such U.S. Government obligation held by such custodian for the
account of the holder of such depository receipt. However, except as required by
law, such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government obligation or the specific payment
of principal of or interest on the U.S. Government obligation evidenced by such
depository receipt.
"GUARANTEE" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner, including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any Person: (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments and
all reimbursement or other obligations of such Person in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
whether or not representing obligations for borrowed money, (c) all obligations
of such Person under Capital Leases, (d) all obligations or liabilities of any
other Person secured by a Lien on any property or asset of such Person,
irrespective of whether such obligation or liability is assumed, (e) all
obligations of such Person for the deferred purchase price of assets (other than
trade Indebtedness incurred in the ordinary course of such Person's business and
repayable in accordance with customary trade practices), (f) any obligation of
such Person guaranteeing or intended to guarantee (whether guaranteed, endorsed,
co-made, discounted, or sold with recourse to such Person) any Indebtedness,
lease, dividend, letter of credit, or other obligation of any other Person and
(g) any obligation owed for all or any part of the deferred purchase price of
property or services which purchase price is (i) due more than six months from
the date of incurrence of the obligation in respect thereof, or (ii) evidenced
by a note or similar written instrument.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in the Global Note through a Participant.
"INTERCOMPANY NOTES" means (a) the Komag Malaysia Intercompany
Note, (b) the Komag Bermuda Intercompany Note, and (c) one or more negotiable
promissory notes evidencing other Indebtedness owed to the Company by any of its
Subsidiaries.
"INTERCREDITOR AGREEMENTS" means the Liquidity Facility
Intercreditor Agreement and the Senior Notes Intercreditor Agreement.
11
"INTEREST PAYMENT DATE" has the meaning specified therefor in the
Notes.
"INTERNAL REVENUE CODE" means the U.S. Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVENTORY" means all of Company's now owned or hereafter
acquired right, title, and interest in and to, and with respect to, inventory,
including goods held for sale or lease or to be furnished under a contract of
service, goods that are leased by Company as lessor, goods that are furnished by
Company under a contract of service, and raw materials, work in process, or
materials used or consumed in Company's business.
"INVESTMENT PROPERTY" means all of Company's now owned or
hereafter acquired right, title, and interest in and to, and with respect to,
"investment property" as that term is defined in the UCC and any supporting
obligations in respect thereof; provided, that in the case of the Capital Stock
of Foreign Subsidiaries of the Company, Investment Property shall be limited to
only 65% of such shares of Stock.
"KOMAG BERMUDA" means Komag (Bermuda) Ltd., a corporation
organized under the laws of Bermuda.
"KOMAG BERMUDA INTERCOMPANY NOTES" means one or more negotiable
promissory notes executed and delivered by Komag Bermuda to the order of the
Company.
"KOMAG MALAYSIA" means Komag USA (Malaysia) Sdn., a corporation
organized under the laws of Malaysia.
"KOMAG MALAYSIA INTERCOMPANY NOTE" means one or more negotiable
promissory notes executed and delivered by Komag Malaysia to the order of the
Company.
"LEGAL REQUIREMENTS" means all applicable international, foreign,
federal, state, and local laws, judgments, decrees, orders, statutes,
ordinances, rules, regulations, or Permits.
"LIEN" means any interest in property securing an obligation owed
to, or a claim by, any Person other than the owner of the property, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, adverse
claim or charge, conditional sale or trust receipt, or from a lease,
consignment, or bailment for security purposes and also including reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting Real
Property.
"LIQUIDITY FACILITY" means the Loan and Security Agreement, dated
as of the date hereof, by and among the Company, Foothill Capital Corporation,
as arranger and administrative agent, Ableco Finance LLC, as collateral agent,
and the lenders party thereto, as such Loan and Security Agreement may be
amended, modified or supplemented from time to time, or any Permitted
Refinancing Indebtedness with respect thereto permitted pursuant to the
12
terms of this Indenture, in an aggregate amount not to exceed at any one time
outstanding (x) $20,000,000 plus interest, fees and expenses minus (y) the
aggregate amount of all Delinquent Tax Liens.
"LIQUIDITY FACILITY INTERCREDITOR AGREEMENT" means that certain
Intercreditor Agreement among the Trustee, the collateral agent under the
Liquidity Facility, the Senior Notes Trustee and the Company, substantially in
the form attached hereto as Exhibit E, which shall be entered into concurrently
with or prior to the issuance of the Notes in accordance with Section 7.12(b)
hereof, as amended, supplemented or otherwise modified from time to time.
"MANAGEMENT COMMITTEE" means:
(1) with respect to a corporation or a limited liability company,
the board of directors or the management committee, as applicable;
(2) with respect to a partnership, the board of directors or
management committee, as applicable, of the general partner of the
partnership; and
(3) with respect to any other Person, the board or committee of
that Person serving a similar function.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change in
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Company and its Subsidiaries taken
as a whole, (b) the material impairment of Company's ability to perform its
obligations under the Collateral Documents to which it is a party or of the
Holders to enforce the Obligations or realize upon the Collateral, (c) a
material adverse effect on the value of the Collateral or the amount that the
Holders would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of the Collateral, or (d) a
material impairment of the priority of the Trustee's Liens with respect to the
Collateral.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
consolidated financial condition or operations of the Company or which could
reasonably be expected to have a material adverse effect on the Company's
ability to perform its obligations under this Indenture, any of the Notes or any
of the other Collateral Documents, having regard for its other financial
obligations.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) to which the Company, any of its Subsidiaries, or
any ERISA Affiliate has contributed, or was obligated to contribute, within the
past six years.
"NEGOTIABLE COLLATERAL" means all of Company's now owned and
hereafter acquired right, title, and interest in and to, and with respect to,
letters of credit, letter-of-credit rights, instruments, promissory notes,
drafts, documents, and chattel paper (including electronic chattel paper and
tangible chattel paper), and any and all supporting obligations in respect
thereof.
13
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP.
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale or Capital
Raising Event (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale or
Capital Raising Event), net of the direct costs relating to such Asset Sale or
Capital Raising Event, including, without limitation, legal, accounting and
investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available tax credits or deductions and any
tax sharing arrangements other than, in the case of an Asset Sale, any reserve
for adjustment in respect of the sale price of such asset or assets established
in accordance with GAAP.
"NON-CASH DEFERRED TAX ASSETS" means, with respect to any Person,
any non-cash portion of deferred tax assets of such Person and its Consolidated
Subsidiaries included in Current Assets, determined in accordance with GAAP.
"NON-CASH DEFERRED TAX LIABILITIES" means, with respect to any
Person, any non-cash portion of deferred tax liabilities of such Person and its
Consolidated Subsidiaries included in Current Liabilities, determined in
accordance with GAAP.
"NON-MATERIAL SUBSIDIARIES" means Komag Materials Technology at
such time as it ceases to hold any material assets, Komag FSC (Barbados) Ltd.,
Komag Technology Partners, Komag Asia Pacific, Inc., and Komag Distribution
Company, and in each case for so long as the Company or any of its Subsidiaries
shall not have, from the date of this Indenture, contributed any amount to the
capital of, loaned any money to, transferred any assets to, or entered into any
other transaction with, such Subsidiary.
"NOTES" has the meaning assigned to it in the preamble to this
Indenture.
"OBLIGATIONS" means any principal, premium, interest, interest on
overdue principal or premium, whether on an interest payment date, at maturity,
by acceleration, repurchase, redemption, or otherwise, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable on the
Notes or under this Indenture.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of
the Company by at least two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
Section 13.5 hereof.
14
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.5 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"PARTICIPANT" means, with respect to the Depositary, a Person who
has an account with the Depositary.
"PBGC" means the Pension Benefit Guaranty Corporation as defined
in Title IV of ERISA, or any successor thereto.
"PENSION PLAN" means a "pension plan," as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 400 1 (a)(3) of ERISA), and to which
the Company or any of its ERISA Affiliates, has or within the prior six years
has had any liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"PERMITTED LIENS" means the following Liens of the Company and
its Subsidiaries:
(a) (i) Liens covering only the assets acquired with the
related Indebtedness granted to secure payment of capitalized lease obligations
incurred in connection with Capital Expenditures or with respect to "tooling,"
(ii) Liens granted to secure mortgage financings with respect to Real Property
owned by the Company as of the date hereof, and (iii) Liens granted to secure
payment of Permitted Refinancing Indebtedness issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund Indebtedness incurred under clause (i) or (ii) of this paragraph (a), in
a maximum aggregate principal amount at any one time not to exceed $15,000,000
for all such Indebtedness incurred under clause (i), (ii) and (iii) of this
paragraph (a);
(b) Liens for taxes, assessments or other governmental charges
or levies, including liens pursuant to Section 107(l) of CERCLA or other similar
law, not at the time delinquent or thereafter payable without penalty or subject
to a Permitted Protest, provided that such Permitted Protest effectively
suspends enforcement of such Lien;
(c) Liens of carriers, warehousemen, mechanics, repairmen,
materialmen, contractors, laborers and landlords or other like Liens incurred in
the ordinary course of business for sums not overdue for a period of more than
30 days or subject to a Permitted Protest, provided that such Permitted Protest
effectively suspends enforcement of such Lien;
(d) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders, bids,
customs bonds, statutory or regulatory obligations, insurance obligations,
leases and contracts (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety or appeal bonds;
15
(e) judgment Liens in respect of judgments that do not
otherwise constitute an Event of Default in existence less than 30 days after
the entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full by a bond or (subject to a customary
deductible) by insurance maintained with responsible insurance companies;
(f) Liens with respect to minor imperfections of title and
easements, rights-of-way, restrictions, reservations, permits, servitudes and
other similar encumbrances on real property and fixtures (i) existing on the
date hereof and set forth in the title report provided to the Trustee, or (ii)
which do not materially detract from the value or materially impair the use by
the Company and its Subsidiaries in the ordinary course of their business of the
property subject thereto;
(g) leases, subleases or licenses granted by the Company and its
Subsidiaries to any other Person in the ordinary course of business;
(h) Liens of sellers of goods to the Company and its
Subsidiaries arising under Article 2 of the UCC or similar provisions of
applicable law in the ordinary course of business, covering only the goods sold
and securing only the unpaid purchase price for such goods and related expenses;
(i) deposit arrangements with suppliers, equipment vendors and
the like made in the ordinary course of business;
(j) Liens taken by the Company on its Subsidiaries;
(k) Liens granted by the Company to the Trustee or the Holders
pursuant to or in connection with this Indenture and the other Collateral
Documents;
(l) Liens granted to the lenders or their agent pursuant to or in
connection with the Liquidity Facility;
(m) Liens existing prior to the date hereof and set forth on
Schedule 1.1; and
(n) Liens granted to the Senior Notes Trustee pursuant to or in
connection with the Senior Notes and the Senior Notes Indenture.
"PERMITTED PRIORITY LIENS" means all Permitted Liens other than
(i) the Liens described in paragraph (b) of the definition of the term
"Permitted Liens" and (ii) the Liens described in paragraphs (a) and (c) of the
definition of the term "Permitted Liens" securing the payment of money in an
aggregate principal amount at any one time in excess of $2,000,000.
"PERMITTED PROTEST" means the right of the Company to protest any
Lien (other than any such Lien that secures the Obligations), tax (other than
payroll taxes or taxes that are the subject of a United States federal tax
lien), or rental payment, provided that (a) a reserve with respect to such
obligation is established on the books of the Company in an amount equal to such
obligation, (b) any such protest is instituted and diligently prosecuted by the
Company in good faith, and (c) the Company certifies to the Trustee that, while
any such protest is pending, there
16
will be no impairment of the enforceability, validity, or priority of any of the
Trustee's Liens in and to the Collateral.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of
the Company or of any of its Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or of any of its Subsidiaries (other
than intercompany Indebtedness) incurred pursuant to Section 4.12(i) or Section
4.12(k); provided, that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus all
accrued interest thereon and the amount of all expenses and premiums
incurred in connection therewith);
(2) the Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, the Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in right
of payment to, the Notes on terms at least as favorable to the holders
of the Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
(4) the Indebtedness is incurred either by the Company or by the
Subsidiary of the Company that is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(5) in the case of Permitted Refinancing Indebtedness issued in
exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund the Indebtedness incurred
pursuant to Section 4.12(k), the Company shall not have consummated an
Asset Sale with respect to a material portion of the Real Property
Collateral prior to the date of such issuance.
"PERMITS" of a Person shall mean all rights, franchises, permits,
authorities, licenses, certificates of approval or authorizations, including
licenses and other authorizations issuable by a Governmental Authority, which
pursuant to applicable Legal Requirements are necessary to permit such Person
lawfully to conduct and operate its business as currently conducted and to own
and use its assets.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PETITION DATE" has the meaning assigned to it in the recitals to
this Indenture.
17
"PLAN OF REORGANIZATION" means the Chapter 11 Modified First
Amended Plan of Reorganization of the Company filed in the Chapter 11 Case on
April 5, 2002, as amended and as it may be further modified or amended from time
to time; provided, that any amendment or modification materially adverse to the
Restructure Lenders shall have been consented to by the Restructure Lenders.
"PLEDGE AGREEMENT" means the Stock Pledge Agreement substantially
in the form of Exhibit D hereto, dated as of the Closing, made by Company in
favor of the Trustee for the benefit of the Holders, as amended, supplemented or
otherwise modified from time to time.
"REAL PROPERTY" means any estates or interests in real property
now owned or hereafter acquired by the Company.
"REAL PROPERTY COLLATERAL" means all owned real property of the
Company and the related improvements thereto identified on Schedule R-1,
including without limitation, the Fremont Properties, the Xxxxxx Property, and
any Real Property hereafter acquired by the Company.
"RECORD" means information that is inscribed on a tangible medium
or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"RECORD DATE" has the meaning specified therefor in the Notes.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"RESPONSIBLE OFFICER" shall mean when used with respect to the
Trustee (a) any officer within the corporate trust department of the Trustee
including any vice president, assistant vice president, treasurer, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter is
referred because of such person's knowledge of and familiarity with the
particular subject and (b) who shall have direct responsibility for the
administration of this Indenture.
"RESTRUCTURING CHARGES" means all expenses incurred by the
Company and its Consolidated Subsidiaries, as applicable, related to the
Company's Chapter 11 Case, including expenses related to the implementation of
the American Institute of Certified Public Accountants' Statement of Position
90-7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code" ("SOP 90-7"), and, to the extent not classified as "reorganization items"
pursuant to SOP-97, expenses related to bankruptcy claims, expenses related to
the write-down of assets and any other expenses incurred by the Company and its
Consolidated Subsidiaries, as applicable, in connection with the Company's
Chapter 11 Case.
"RESTRUCTURE LENDERS" means those lenders under that certain Loan
Restructure Agreement dated as of June 1, 2000 with Fleet National Bank f/k/a
BankBoston, N.A., a national banking association, as agent for such lenders, and
the Company.
18
"S&P" means Standard & Poor's Ratings Group (a division of The
McGraw Hill Companies, Inc.), or any successor rating agency.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACCOUNT" means a "securities account" as that term is
defined in the UCC.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR INDEBTEDNESS" means any of the obligations of the Company
(i) to pay principal and interest under the Senior Notes; provided, however,
that to the extent indebtedness on account of principal of the Company under the
Senior Notes exceeds $128,832,000, such obligations shall not be "Senior
Indebtedness" under this Indenture, and (ii) to pay principal and interest under
the Liquidity Facility; provided, however, that to the extent indebtedness on
account of principal of the Company under the Liquidity Facility exceeds $15.0
million, such obligations shall not be "Senior Indebtedness" under the
Indenture.
"SENIOR NOTES" means the Senior Secured Notes due 2007 issued by
the Company pursuant to the Senior Notes Indenture in the aggregate original
principal amount of $128,832,000.
"SENIOR NOTES ESCROW ACCOUNT" means the escrow account with a
bank or trust company with not less than $100,000,000 in assets, as escrow
agent, set up by the Company in accordance with the Senior Notes Indenture,
which escrow account shall be pledged to the Senior Notes Trustee for the
benefit of the holders of the Senior Notes and, subject to the terms of the
Senior Notes Intercreditor Agreement, the Holders.
"SENIOR NOTES INDENTURE" means that certain Indenture dated as of
the date hereof between the Company and the Senior Notes Trustee, relating to
the Senior Notes.
"SENIOR NOTES INTERCREDITOR AGREEMENT" means that certain
agreement among the Trustee, the Senior Notes Trustee and the Company,
substantially in the form attached hereto as Exhibit F, which shall be entered
into concurrently with or prior to the issuance of the Notes in accordance with
Section 7.12(b) hereof, as amended, supplemented or otherwise modified from time
to time.
"SENIOR NOTES TRUSTEE" means The Bank of New York, as trustee for
the holders of the Senior Notes, and any successor trustee under the Senior
Notes Indenture.
"STATED PRINCIPAL AMOUNT" means at any time with respect to the
outstanding Notes, the Initial Principal Amount of all such Notes outstanding at
such time less all principal amounts of such Notes theretofor redeemed (without
taking into account any increases in principal due to deferred interest).
"SUBSIDIARY" means, with respect to any specified Person:
19
(1) any corporation, association or other business entity
(including a limited liability company) of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more other
subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is that Person or a Subsidiary of that Person
or (b) the only general partners of which are that Person or one or more
Subsidiaries of that Person (or a combination thereof).
"TERMINATION EVENT" means (a) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
"Reportable Event" not subject to the provision for 30-day notice to the PBGC
under such regulations), or (b) the withdrawal of the Company or any of its
ERISA Affiliates from a Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(1)(2) or 4068(f) of ERISA, or
(c) the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate a Pension Plan by the
PBGC, (e) any other event or condition which might constitute grounds under
ERISA for the termination of, or the appointment by the PBGC of a trustee to
administer, any Pension Plan, or (f) the imposition of a lien pursuant to
Section 412(n) of the Internal Revenue Code.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"TOTAL CASH DEBT SERVICE COVERAGE RATIO" means, with respect to
the Company and its Consolidated Subsidiaries, for each fiscal quarter, the
ratio of (x) the greater of (i) Annualized Consolidated EBITDAR of the Company
and its Consolidated Subsidiaries and (ii) Consolidated EBITDAR of the Company
and its Consolidated Subsidiaries for such fiscal quarter, and each of the three
immediately preceding fiscal quarters, to (y) the sum of (without duplication)
(i) Annualized Consolidated Cash Interest Expense of the Company and its
Consolidated Subsidiaries and (ii) scheduled cash payments with respect to the
amortization of Indebtedness paid during such fiscal quarter and each of the
three immediately preceding fiscal quarters.
"TRUSTEE" has the meaning assigned to it in the preamble to this
Indenture.
"UCC" means the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided, that,
in the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to, the
Trustee's security interest in any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.
20
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final
maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between that date and the
making of the payment; by
(2) the then outstanding principal amount of that Indebtedness.
"WHOLLY OWNED SUBSIDIARY" of any specified Person means a
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person and by one or more Wholly Owned Subsidiaries of
such Person or by one or more Wholly Owned Subsidiaries of such Person.
Section 1.2 Other Definitions.
DEFINED
IN
TERM SECTION
---- -------
"ACT"..................................................... 13.13
"AFFILIATE TRANSACTION"................................... 4.25
"AGGREGATE PROCEEDS"...................................... 3.8
"AUTHENTICATION ORDER".................................... 2.2
"CAPITAL RAISING PROCEEDS"................................ 4.13
"COVENANT DEFEASANCE"..................................... 8.3
"DEBT INSTRUMENT"......................................... 4.12
"DTC"..................................................... 2.3
"EVENT OF DEFAULT"........................................ 6.1
"INCUR"................................................... 4.12
"LEGAL DEFEASANCE"........................................ 8.2
"INTELLECTUAL PROPERTY"................................... 10.18
"MANDATORY REDEMPTION TRIGGERING EVENT"................... 3.8
"PAYING AGENT"............................................ 2.3
"REGISTRAR"............................................... 2.3
"REMAINING ASSET SALE PROCEEDS"........................... 4.14
"REMAINING CAPITAL RAISING PROCEEDS"...................... 4.13
"TRUSTEE'S LIENS"......................................... 10.2
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
21
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.4 Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the plural
include the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time;
(g) references to the outstanding principal amount at any time of
any Note shall be to the outstanding principal amount thereof at such time as
such amount shall have been increased from any addition of deferred interest in
accordance with the terms of such Note and this Indenture; and
(h) As used in the definitions relating to Collateral, the
terms "accounts", "chattel paper", "consumer goods", "deposit account",
"document", "electronic chattel paper", "equipment", "farm products", "goods",
"instrument", "inventory", "letter-of-credit rights", "payment intangible",
"proceeds", "supporting obligations" and "tangible chattel paper" have the
respective meanings ascribed thereto in Article 9 of the UCC.
ARTICLE 2. THE NOTES
Section 2.1 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be issued only in registered form without coupons. Notes issued on the
date of original issuance of Notes hereunder shall be issued only in minimum
denominations of $100 and larger integral multiples of $1.00. As to any Note
issued thereafter (including on any exchange or transfer or any issuance of
Notes in accordance with Section 4.1) there shall be no minimum denomination or
integral multiple requirements.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
22
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) Global Note. The Note issued in global form shall be
substantially in the form of Exhibit A hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Definitive Notes shall be issued substantially in the form of Exhibit
A hereto (but without the Global Note Legend thereon and without the "Schedule
of Exchanges of Interests in the Global Note" attached thereto). The Global Note
shall represent such of the outstanding Notes as shall be specified therein and
shall provide that it shall represent the aggregate Stated Principal Amount
(without taking into account any increases due to deferred interest) of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount at maturity of outstanding Notes represented thereby shall be
increased through the addition of deferred interest, if any, as provided in the
Notes and may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Whenever as a result of any optional or
mandatory redemption or an exchange for Definitive Notes pursuant to Section 2.6
hereof, a Global Note is redeemed, repurchased or exchanged in part, an
endorsement will be made to the Global Note so that the Stated Principal Amount
of the Global Note shall be equal to the portion thereof not so redeemed,
repurchased or exchanged (without taking into account any increase due to
deferred interest). Any endorsement of the Global Note to reflect the amount of
any increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian in accordance
with the terms hereof and of the Global Note and otherwise in accordance with
instructions given by the Holder thereof as required by Section 2.6 hereof.
Section 2.2 Execution and Authentication. One Officer of the
Company shall sign the Notes for the Company by manual or facsimile signature.
The Company seal shall be reproduced on the Notes and may be in facsimile form.
If an Officer of the Company whose signature is on a Note no
longer holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. Such signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by
one Officer of the Company (an "AUTHENTICATION ORDER"), authenticate the Notes
for original issue up to the initial aggregate principal amount stated in
paragraph 5 of the Notes. The aggregate principal amount of Notes outstanding at
any time (without taking into account any increases due to deferred interest)
may not exceed such amount except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
23
Section 2.3 Registrar and Paying Agent. The Company shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange ("REGISTRAR") and an office or agency where Notes may
be presented for payment ("PAYING AGENT"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such to the extent that it determines that it may do so.
The Company or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Note.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Notes.
Section 2.4 Paying Agent to Hold Money in Trust. The Company
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Holders of the Notes or
the Trustee all money held by the Paying Agent for the payment of principal,
premium or interest on the Notes, and will notify the Trustee in writing of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or one of its Subsidiaries) shall have no further
liability for the money. If the Company or one of its Subsidiaries acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent with respect to the
Notes. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.5 Holder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of all Holders of the Notes and shall otherwise
comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least seven Business Days before each interest
payment date, or in the event interest is deferred pursuant to the terms of the
Notes, three days after any Record Date, and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders of the Notes
and the Company shall otherwise comply with TIA Section 312(a).
Section 2.6 Transfer and Exchange.
(a) Transfer and Exchange of the Global Note. The Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary, or to another
nominee of the Depositary, or by the Depositary
24
or any such nominee to a successor Depositary or a nominee of such successor
Depositary. The Global Note will be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee written notice from the
Depositary that it is unwilling or unable to continue to act as Depositary or
that it is no longer a clearing agency registered under the Exchange Act and, in
either case, a successor Depositary is not appointed by the Company within 120
days after the date of such notice from the Depositary or (ii) the Company in
its sole discretion determines that the Global Note (in whole but not in part)
should be exchanged for Definitive Notes and delivers a written notice to such
effect to the Trustee. Upon the occurrence of either of the preceding events in
clause (i) or (ii) above, Definitive Notes shall be issued in such names as the
Depositary shall instruct the Trustee. The Global Note also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.7 and 2.10 hereof.
Every Note authenticated and delivered in exchange for, or in lieu of, the
Global Note or any portion thereof, pursuant to this Section 2.6 or Section 2.7
or 2.10 hereof, that is not a Definitive Note shall be authenticated and
delivered in the form of, and shall be, the Global Note. The Global Note may not
be exchanged for another Note other than as provided in this Section 2.6(a);
however, beneficial interests in the Global Note may be transferred and
exchanged as provided in Section 2.6(b) or (c) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Note. The transfer and exchange of beneficial interests in the Global Note shall
be effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Global Note
shall be subject to restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Note also shall require compliance with either clause
(i) or (ii) below, as applicable, as well as one or more of the other following
clauses, as applicable:
(i) Transfer of Beneficial Interests in the Global Note.
Beneficial interests in the Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial
interest in the Global Note. No written orders or instructions
shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.6(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in the Global Note. In connection with all transfers
and exchanges of beneficial interests that are not subject to
Section 2.6(b)(i) above, the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a written
order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures causing
to be credited a beneficial interest in the Global Note in an
amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase or (B) (1)
a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable
Procedures causing to be issued a Definitive Note in an amount
equal to the beneficial interest to be transferred or exchanged
and (2) instructions given by the participant to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or
exchange referred to in clause (1) above. Upon satisfaction of
all of the requirements for
25
transfer or exchange of beneficial interests in the Global Note
contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal
amount of the Global Note pursuant to Section 2.6(g) hereof.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes. If any holder of a beneficial interest in the Global Note proposes to
exchange such beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, upon satisfaction of the conditions set forth in Section
2.6(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the
Global Note to be reduced accordingly pursuant to Section 2.6(g) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.6(c) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests. A Holder of a Definitive Note may exchange such Note for a beneficial
interest in the Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in the Global Note
at any time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Definitive Note and increase or cause to be
increased the aggregate principal amount of the Global Note, pursuant to Section
2.6(g).
(e) Transfer and Exchange of Definitive Notes for Definitive
Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance
with the provisions of this Section 2.6(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. A Holder of Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form of a
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Definitive Notes pursuant to the instructions from
the Holder thereof.
(f) Global Note Legend. The Global Note shall bear a legend in
substantially the following form:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by
an authorized
26
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.
(g) Cancellation or Adjustment of the Global Note. At such time
as all beneficial interests in the Global Note have been exchanged for
Definitive Notes or the Global Note has been redeemed, repurchased or canceled
in whole and not in part, the Global Note shall be returned to or retained and
canceled by the Trustee in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in the Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in the Global Note or for Definitive Notes, the
aggregate Stated Principal Amount of Notes represented by the Global Note shall
be reduced accordingly (without taking into account any increases due to
deferred interest), in the case of an exchange for Definitive Notes, and an
endorsement shall be made on the Global Note by the Trustee or by the Depositary
in accordance with applicable procedures to reflect such exchange or reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in the
Global Note, the aggregate Stated Principal Amount of the Global Note (without
taking into account any increases due to deferred interest) shall be increased
accordingly and an endorsement shall be made on the Global Note by the Trustee
or by the Depositary in accordance with applicable procedures to reflect such
increase.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate the
Global Note and Definitive Notes upon the Company's order or at
the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in the Global Note or to a Holder of a
Definitive Note for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to
Sections 2.10, 3.6, 3.8, 4.13, 4.14 and 9.5 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being
redeemed in part.
(iv) The Global Note and all Definitive Notes issued upon
any registration of transfer or exchange of the Global Note or
Definitive Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Global Note or Definitive Notes
surrendered upon such registration of transfer or exchange.
27
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of
any selection of Notes for redemption under Section 3.2 hereof
and ending at the close of business on the day of selection, (B)
to register the transfer of or to exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part or (C) to register the
transfer of or to exchange a Note between a Record Date and the
next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Note is registered as
the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all
other purposes, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate the Global Note and
Definitive Notes in accordance with the provisions of Section 2.2
hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to
this Section 2.6 to effect a registration of transfer or exchange
may be submitted by facsimile.
(ix) Each Holder of a Note agrees to indemnify the Company
and the Trustee to their reasonable satisfaction against any
liability that may result from the transfer, exchange or
assignment of such Holder's Note in violation of any provision of
this Indenture or applicable United States Federal or state
securities law.
(x) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in
any Note (including any transfers between or among Depositary
participants or beneficial owners of interest in the Global Note)
other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do
so if and when expressly required by the terms of, this
Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
Section 2.7 Replacement Notes. If any mutilated Note is
surrendered to the Trustee or the Company and the Trustee receives evidence to
its reasonable satisfaction of the destruction, loss or theft of any Note, the
Company shall issue and the Trustee, upon receipt of an Authentication Order,
shall authenticate a replacement Note if the Trustee's requirements are met. An
indemnity bond must be supplied by the Holder that is sufficient in the
reasonable judgment of the Trustee and the Company to protect the Company, the
Trustee, any Agent and any authenticating agent from any loss that any of them
may suffer if a Note is replaced. The Company may charge for its expenses in
replacing a Note.
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Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.8 Outstanding Notes. The Notes outstanding at any time
are all the Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in the
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section 2.8 as not outstanding. Except as set forth
in Section 2.9 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the aggregate principal amount of any Note (taking into
account any increases in principal due to deferred interest) is considered paid
under Section 4.1 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any of the foregoing) holds, by no later than 12:00 noon Eastern
Time on a redemption date or maturity date, money sufficient to pay Notes
payable on that date, then on and after that date such Notes shall be deemed to
be no longer outstanding and shall cease to accrue interest.
Section 2.9 Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded.
Section 2.10 Temporary Notes. Until certificates representing
Notes are ready for delivery, the Company may prepare and the Trustee, upon
receipt of an Authentication Order, shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of certificated Notes but may
have variations that the Company considers appropriate for temporary Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate Definitive Notes in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11 Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall dispose of canceled Notes in accordance with its
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procedures for the disposition of canceled securities in effect as of the date
of such disposition (subject to the record retention requirement of the Exchange
Act). Certification of the disposition of all canceled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that they
have paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Payment of Interest; Defaulted Interest.
(a) Each of the Notes shall bear interest at 12% per annum
from July 1, 2002 or from the most recent date to which interest has been paid
or duly provided for in accordance with Section 4.1 hereof until the principal
amount thereof is paid. Interest shall be paid to the Person in whose name the
Note is registered as provided in the Notes.
(b) If the Company defaults in a payment of interest on the Notes
when due, the Company shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date or, in the case of
the payment of non-cash defaulted interest, to the Persons who are Holders on
the date of such payment, in each case at the rate provided in the Notes and in
Section 4.1 hereof. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; provided, that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such cash
interest to be paid.
Section 2.13 CUSIP Numbers. The Company in issuing the Notes may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the Notes or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3. REDEMPTION AND PREPAYMENT
Section 3.1 Notices to Trustee. If the Company elects to redeem
the Notes pursuant to the optional redemption provisions of Section 3.7 hereof,
or is required to redeem the Notes pursuant to the mandatory redemption
provisions of Section 3.8, it shall furnish to the Trustee, at least 20 days but
not more than 60 days before a redemption date (unless the Trustee agrees to a
shorter notice period), an Officers' Certificate setting forth (i) the
redemption date, (ii) the principal amount of Notes to be redeemed, (iii) the
redemption price and (iv) a revised Schedule A as to (x) the aggregate amount of
deferred interest scheduled to be added to principal on all of the Notes on each
Interest Payment Date, and (y) the aggregate amount of interest scheduled to be
paid in cash together with the principal amount of the Notes at maturity, all
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based on the same assumptions as those set forth in Schedule A but taking into
account the principal amount of the Notes to be so redeemed as well as any prior
redemptions or other prepayments of principal of the Notes.
Section 3.2 Selection of Notes to Be Redeemed. If less than all
of the Notes are to be redeemed at any time, the Trustee shall select the Notes
to be redeemed among the Holders in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed in
the United States, or, if the Notes are not listed, on a pro rata basis, or, to
the extent that the Trustee shall have determined that selection on a pro rata
basis is not feasible, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption by lot, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 15 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount outstanding to be redeemed. If fewer than all
Notes are to be redeemed at any time, Notes and portions of Notes selected shall
be in integral multiples of $1.00; except that if all of the Notes of a Holder
are to be redeemed, the entire outstanding amount of the Notes held by such
Holder, even if not a multiple of $1.00, shall be redeemed. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Notes
called for redemption also apply to portions of Notes called for redemption.
Section 3.3 Notice of Redemption. At least 15 days but not more
than 60 days before a redemption date, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes
are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed, contain a
copy of the revised Schedule A furnished under Section 3.1 in connection with
such redemption, and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on the portion of such Notes called for redemption ceases to
accrue on and after the redemption date;
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(g) the paragraph of the Notes or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.4 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.3 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
Section 3.5 Deposit of Redemption Price. Prior to the redemption
date, the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay in cash the redemption price of and accrued interest in cash
on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after a Cash Record Date but on or prior to the related Interest Payment
Date, then any accrued and unpaid cash interest thereon shall be paid to the
Person in whose name such Note was registered at the close of business on such
Cash Record Date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest shall be paid on the unpaid principal, from
the redemption date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.1 hereof.
Section 3.6 Notes Redeemed in Part. Upon surrender of a Note that
is redeemed in part, the Company shall issue and the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in aggregate
Stated Principal Amount (without taking into account any increases due to
deferred interest) to the unredeemed portion of the Note surrendered. No Notes
of $1.00 or less shall be redeemed in part.
Section 3.7 Optional Redemption. The Company may redeem all or a
part of the Notes upon not less than 30 nor more than 60 days' notice, at the
principal amount outstanding thereof plus accrued interest thereon that has not
been paid or duly provided for, to the applicable redemption date (subject, in
the case of a redemption on or after a Cash Record Date but on or prior to the
related Interest Payment Date, to the right of Holders of record on such Cash
Record Date to receive any cash interest due on the related Interest Payment
Date in
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accordance with Section 3.5). If less than all of the Notes are to be redeemed
at any time of redemption, the provisions of this Indenture relating to the
redemption of the Notes shall relate to the portion of the aggregate principal
amount of the Notes which has been or is to be redeemed.
Section 3.8 Mandatory Redemption. At any time the sum (the
"AGGREGATE PROCEEDS") of (x) the aggregate amount of all Remaining Capital
Raising Proceeds and (y) the aggregate amount of all Remaining Asset Sale
Proceeds exceeds $5 million (a "MANDATORY REDEMPTION TRIGGERING EVENT"), the
Company shall make a mandatory redemption of Senior Notes to the extent required
under the Senior Notes Indenture; provided, however, that if any such Aggregate
Proceeds remain after application to any such redemption of Senior Notes, the
Company shall, within 60 days of such Mandatory Redemption Triggering Event,
redeem the maximum principal amount of the Notes that may be redeemed out of any
such remaining Aggregate Proceeds. Such redemption of the Notes shall be made
upon not less than 15 nor more than 60 days' notice, at the principal amount
outstanding thereof plus accrued interest thereon that has not been paid or duly
provided for, to the applicable redemption date (subject, in the case of a
redemption on or after a Cash Record Date but on or prior to the related
Interest Payment Date, to the right of Holders of record on such Cash Record
Date to receive any cash interest due on the related Interest Payment Date in
accordance with Section 3.5). Pending the final application of any Remaining
Capital Raising Proceeds or Remaining Asset Sale Proceeds, the Company or the
applicable Subsidiary, as the case may be, may invest such proceeds in Cash
which shall be pledged to the Senior Notes Trustee to the extent required by the
Senior Indenture and, to the extent not so required, shall be pledged to the
Trustee as security for the Holders of the Notes.
The Company shall not be required to make mandatory redemption
payments or sinking fund payments with respect to the Notes other than as set
forth in this Section 3.8.
ARTICLE 4. COVENANTS
Section 4.1 Payment of Notes The Company shall pay or cause to be
paid the principal of, premium, if any, and interest on the Notes on the dates
and in the manner provided herein and in the Notes. Unless the Company has
elected, in its sole discretion, to pay interest in cash in accordance with the
following sentence, on each Interest Payment Date the outstanding principal
amount of each Note shall be automatically increased by the amount of interest
to be paid on such Interest Payment Date in respect of such Note, and upon any
such automatic increase the Company shall be deemed to have paid and duly
provided for such interest payment on such Interest Payment Date; provided,
however, that if the payment of interest by addition to principal in the manner
provided in this sentence shall for any reason be prohibited by applicable law
on any Interest Payment Date, the Company shall be obligated, instead, to
deliver an additional Note, substantially in the form of Exhibit A hereto, to
each Holder in an aggregate principal amount equal to the interest due on such
Holder's Notes on such Interest Payment Date, and as provided in Section 2.1 no
requirements as to minimum denominations shall apply to any such additional
Notes. The Company may elect to pay interest due on any Interest Payment Date in
cash rather than in kind, provided that the Company has so elected and notified
the Trustee and the Paying Agent at least five (5) Business Days prior to the
Cash Record Date that such payment shall be made in cash, such notice to be
accompanied by a revised Schedule A as to (x) the aggregate amount of deferred
interest scheduled to be added to principal on all of the Notes
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on each Interest Payment Date subsequent to the Interest Payment Date on which
the Company has elected to pay interest in cash, and (y) the aggregate amount of
interest scheduled to be paid in cash together with the principal amount of the
Notes at maturity, all based on the same assumptions as those set forth in
Schedule A but taking into account such cash payment of interest on such
Interest Payment as well as all prior deferrals of interest, if any. A copy of
such Schedule shall be delivered to any Holder by the Company or the Trustee
promptly upon such Holder's request to such Person. Except as provided in the
second sentence of this Section 4.1, principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or one of its Subsidiaries, holds as of 12:00 noon Eastern Time on the
due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay in cash all principal, premium, if any, and
interest then due.
The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium (if
any) at the rate equal to 14% per annum to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.2 Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an agent of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3 of this Indenture.
Section 4.3 Reports.
(a) Whether or not required by the SEC, so long as any Notes are
outstanding (unless defeased in a Legal Defeasance), the Company shall furnish
to the Trustee and the Holders, within the time periods specified in the SEC's
rules and regulations (as though required by the SEC):
34
(i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file those
Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect
to the annual information only, a report on the annual
consolidated financial statements by KPMG or other independent
certified public accountants of recognized national standing; and
(ii) all current reports that would be required to be
filed with the SEC on Form 8-K if the Company were required to
file such reports.
(b) So long as any Notes are outstanding (unless defeased in a
Legal Defeasance), the Company shall furnish to the Trustee and the Holders, in
each case as soon as available, notice of filing or delivery of all reports
which the Company sends to its security holders generally and copies of all
reports and registration statements which the Company or any Subsidiary of the
Company files with the SEC or any national securities exchange, to the extent
not previously provided to the Holders, including, but not limited to: Form 8-K
Current Report, Form 10-K Annual Report, Form 10-Q Quarterly Report, Annual
Report to Shareholders, Proxy Statements and Registration Statements.
(c) In addition, whether or nor required by the SEC, the Company
shall file a copy of all of the information and reports referred to in clauses
(a)(i) and (a)(ii) above with the SEC for public availability within the time
periods specified in the SEC's rules and regulations (unless the SEC will not
accept such filing) and make such information available to securities analysts
and prospective investors upon request if not obtainable from the SEC. In
addition, the Company agrees that, for so long as any Notes remain outstanding,
it shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144(d)(4) under the Securities Act if not obtainable from the SEC.
Section 4.4 Compliance Certificate; Notices and Information.
(a) The Company shall deliver to the Trustee, on a quarterly
basis, but in any event within forty-five (45) days after the end of the
applicable fiscal quarter for the first three quarters of each fiscal year and
within ninety (90) days following the Company's fiscal year end, an Officers'
Certificate stating that a review in reasonable detail of the activities of the
Company and its Subsidiaries during the preceding fiscal quarter or, in the case
of each Officers' Certificate delivered at the Company's fiscal year end, the
preceding fiscal year, has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge, no event has occurred and remains in
existence by
35
reason of which payments on account of the principal of or interest, if any, on
the Notes is prohibited or if such event has occurred, a description of the
event and what action the applicable entity is taking or proposes to take with
respect thereto.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
consolidated financial statements delivered pursuant to Section 4.3(a)(i) above
shall be accompanied by a report from the Company's independent public
accountants (each of which shall be a firm of established national reputation),
addressed to the Company's Board of Directors, that in conjunction with their
audit of such consolidated financial statements, nothing has come to their
attention that would lead them to believe that the Company has failed to comply
with the terms, covenants, provisions or conditions of Sections 4.1, 4.5, 4.10,
4.12 through 4.20, 4.23, 4.26, 4.30 and Article 5 hereof or, if any such
violation has been identified, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to a Responsible Officer of the Trustee, the following:
(i) promptly upon any Officer of the Company obtaining
knowledge (A) of any condition or event which constitutes a
Default or Event of Default, (B) that any Person has given any
notice to the Company or any Consolidated Subsidiary or taken any
other action with respect to a claimed default or event or
condition of the type referred to in Section 6.1(d), (C) of the
institution of any litigation involving an alleged liability
(including possible forfeiture of property) of the Company or any
of its Subsidiaries equal to or greater than $4,000,000 or any
adverse determination in any litigation involving a potential
liability of the Company or any of its Subsidiaries equal to or
greater than $4,000,000, or (D) of a material adverse change in
the business, operations, properties, assets or condition
(financial or otherwise) of the Company and its Subsidiaries,
taken as a whole, an Officers' Certificate specifying the nature
and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or
Person, the nature of such claimed default, Default, Event of
Default, event or condition, and what action the Company has
taken, is taking and proposes to take with respect thereto;
(ii) promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any (A) Termination Event, or (B)
"prohibited transaction," as such term is defined in Section 4975
of the Internal Revenue Code or Section 406 of ERISA, in
connection with any Employee Benefit Plan or any trust created
thereunder, a written notice specifying the nature thereof, what
action the Company has taken, is taking or proposes to take with
respect thereto, and, when known, any action taken or threatened
by the Internal Revenue Service, the Department of Labor, or the
PBGC with respect thereto;
(iii) with reasonable promptness copies of (A) all notices
received by the Company or any of its ERISA Affiliates of the
PBGC's intent to terminate any
36
material Pension Plan or to have a trustee appointed to
administer any Pension Plan; (B) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by the
Company or any of its ERISA Affiliates with the Internal Revenue
Service with respect to each material Pension Plan; and (C) all
notices received by the Company or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning the material
imposition or material amount of withdrawal liability pursuant to
Section 4202 of ERISA;
(iv) promptly, and in any event within thirty (30) days
after receipt thereof, a copy of any notice, summons, citation,
directive, letter or other form of communication from any
Governmental Authority or court in any way concerning any
material action or omission on the part of the Company or any of
its Subsidiaries in connection with any substance defined as
toxic or hazardous by any applicable Federal, state or local law,
rule, regulation, order or directive or any waste or by-product
thereof, or concerning the filing of a material lien upon,
against or in connection with the Company, its Subsidiaries, or
any of their leased or owned real or personal property, in
connection with a Hazardous Substance Superfund or a Post-Closure
Liability Fund as maintained pursuant to Section 9507 of the
Internal Revenue Code; and
(v) promptly, and in any event within fifteen (15) days
after request, such other information and data with respect to
the business affairs and financial condition of the Company or
any of its Subsidiaries as from time to time may be reasonably
requested by any Holder or the Trustee; provided, however, that
such fifteen (15) day period may be extended for a reasonable
period at the request of the Company and with the consent of the
Trustee (which consent shall not be unreasonably withheld) if the
Company determines that such information and data cannot
reasonably be provided within such fifteen (15) day period;
provided, further, that the Company may condition disclosure of
any such information or data on the Company's receipt of a
confidentiality agreement on reasonable and customary terms
obligating the Person making such request to keep the information
furnished to such Person pursuant to this subparagraph (v)
confidential.
(d) Promptly, and in any event within thirty (30) days after
the adjustments described in the provisos to Sections 4.16 and 4.17, the Company
shall deliver to the Trustee an Officers' Certificate setting forth such
adjustments.
Section 4.5 Taxes and Claims. The Company shall pay, and cause
each of Subsidiaries to pay, all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or property before any penalty or interest
accrues thereon, and all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums which have become due and
payable and which by law have or may become a lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided, however, that no such charge or claim need be paid if
being contested in good faith by appropriate proceedings
37
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
Section 4.6 Stay, Extension and Usury Laws. The Company, on
behalf of itself and each of its Subsidiaries, covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives, on its behalf
and on behalf of each of its Subsidiaries, all benefit or advantage of any such
law, and covenants that it shall not, and shall not permit any of its
Subsidiaries to, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.7 Maintenance of Properties; Insurance. The Company
shall, so long as any Notes are outstanding, maintain or cause to be maintained
in good repair, working order and condition all material properties used or
useful in the business of the Company and its Subsidiaries, subject to
reasonable wear and tear, and from time to time will make or cause to be made
all appropriate repairs, renewals and replacements thereof, subject to the
limitations set forth in Section 4.19. The Company will maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to its properties and business and the properties and business of its
Subsidiaries against loss or damage of the kinds customarily insured against by
corporations of established reputation engaged in the same or similar businesses
and similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other corporations and shall deliver
to the Trustee no less often than once in each calendar year a certified report
from an independent insurance agent evidence of such insurance.
Section 4.8 Compliance with Laws, Etc. The Company shall, so long
as any Notes are outstanding, exercise, and cause each of its Subsidiaries to
exercise, all due diligence in order to comply with the requirements of all
applicable laws, rules, regulations and orders of any Governmental Authority,
including, without limitation, all environmental laws, rules, regulations and
orders, noncompliance with which would have a Material Adverse Effect.
Section 4.9 Notification.
(a) Notice of Liquidity Facility and Debt Instrument Default. The
Company shall promptly give written notification to the Trustee of (i) any
default under any Debt Instrument involving in excess of $1,000,000 of
Indebtedness outstanding or (ii) any default under the Liquidity Facility and,
in each case, specify the nature of such default thereunder.
(b) Notice with respect to Limitations on Subsidiaries. The
Company shall promptly give written notification to the Trustee of any change in
applicable law that has the effect of encumbering or restricting in any way the
ability of any Subsidiary to:
(i) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Subsidiaries, or with
respect to any other interest or
38
participation in, or measured by, its profits, or pay any
Indebtedness owed to the Company or any of its Subsidiaries;
(ii) make loans or advances to the Company or any of its
Subsidiaries; or
(iii) transfer any of their respective properties or
assets to the Company or any of its Subsidiaries.
Section 4.10 Dividends, etc. Except with respect to preferred
stock of the Company issued in accordance with Section 4.13, the Company shall
not, so long as any Notes are outstanding, declare or pay any dividends,
purchase or otherwise acquire for value its Capital Stock now or hereafter
outstanding, or make any distribution of assets to its stockholders as such, or
permit any of its Subsidiaries to purchase or otherwise acquire for value any
Capital Stock of the Company.
Section 4.11 Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to:
(a) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Subsidiaries, or with respect to any other
interest or participation in, or measured by, its profits, or pay any
Indebtedness owed to the Company or any of its Subsidiaries;
(b) make loans or advances to the Company or any of its
Subsidiaries; or
(c) transfer any of their respective properties or assets to the
Company or any of its Subsidiaries.
However, the restrictions above shall not apply to encumbrances
or restrictions existing under or by reason of:
(i) this Indenture, the Notes, the other Collateral
Documents or any of the documents governing the Liquidity
Facility or the Senior Notes;
(ii) applicable law;
(iii) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its
Subsidiaries as in effect at the time of the acquisition (except
to the extent that Indebtedness was incurred in connection with
or in contemplation of the acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or
assets of the Person, so acquired, provided, that in the case of
Indebtedness, the Indebtedness was permitted by the terms of this
Indenture to be incurred;
39
(iv) customary non-assignment provisions in leases and
other contracts entered into in the ordinary course of business;
(v) purchase money obligations for property acquired in
the ordinary course of business that impose restrictions on the
property so acquired of the nature described in clause (c) of the
preceding paragraph;
(vi) any restriction or encumbrance contained in contracts
for the sale of assets permitted by this Indenture, provided,
that such restrictions or encumbrances relate only to the assets
being sold pursuant to these contracts;
(vii) Liens securing Indebtedness that limit the right of
the debtor to dispose of the assets subject to the Lien; and
(viii) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business.
Section 4.12 Loans, Indebtedness, Investments, Secondary
Liabilities.
Other than as permitted by this Indenture, for so long as any
Notes are outstanding, the Company shall not, and shall not permit any of its
Subsidiaries to (i) make or permit to remain outstanding, any loan or advance
to, (ii) incur, assume, Guarantee, become or be liable in any manner in respect
of, suffer to exist, induce or otherwise become contingently liable for,
directly or indirectly, any Indebtedness of (each of the foregoing items in this
clause (ii) referred to as "INCUR") or (iii) own, purchase or acquire any stock,
obligations or securities of or any other interest in, or make any capital
contribution to, any Person, except that the Company and its Subsidiaries may:
(a) own, purchase or acquire (i) certificates of deposit, time
deposits and bankers' acceptances issued by (A) any financial institution
organized and existing under the laws of the United States of America or any
state thereof, or (B) with respect to any Subsidiary domiciled outside the
United States of America, any financial institution located in the same
jurisdiction of such Subsidiary, which financial institution is an Eligible
Institution or a financial institution that has, together with its parent
financial institution, a combined capital and surplus of at least $100,000,000,
in an amount consistent with past practices but in no event shall such deposits
in all such overseas financial institutions in the aggregate exceed the greater
of $12 million or 20% of the Cash of the Company and its Subsidiaries calculated
on a consolidated basis, (ii) commercial paper rated Moody's P-2 or better or
S&P's A-2 or better, (iii) obligations or instruments issued by or guaranteed by
an entity designated as S&P's A-2 or better, or Moody's P-2 or better or the
equivalent by a nationally recognized credit agency, (iv) municipal bonds and
other governmental and corporate debt obligations rated S&P's A or better or
Moody's A-2 or better, (v) direct obligations of the United States of America or
its agencies and (vi) obligations guaranteed or insured by the United States of
America;
(b) acquire and own stock, obligations or securities received in
connection with Indebtedness created in the ordinary course of business owing to
the Company or a Subsidiary of the Company;
40
(c) continue to own the existing capital stock of the Company's
Subsidiaries;
(d) endorse negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business;
(e) make loans, advances to or investments in a Subsidiary of the
Company in connection with the normal operations of the business of such
Subsidiary and allow the Company's Subsidiaries to make or permit to remain
outstanding advances from the Company's Subsidiaries to the Company;
(f) make or permit to remain outstanding loans or advances to the
Company's Subsidiaries or enter into or permit to remain outstanding guarantees
in connection with the obligations of the Company's Subsidiaries;
(g) make or permit to remain outstanding (A) loans or advances to
the Company's or its Subsidiaries' officers, stockholders or employees, which,
in the aggregate, would not exceed $3,000,000 during the term of this Indenture,
(B) loans to the Company's or its Subsidiaries' vendors, in the ordinary course
of the Company's business, which, in the aggregate, do not exceed $500,000, (C)
progress payments to the Company's or its Subsidiaries' vendors made in the
ordinary course of the Company's or its Subsidiaries' business, and (D) (i)
loans or advances for the purpose of purchasing the Company's or its
Subsidiaries' shares of stock pursuant to its employee stock purchase or option
plans, (ii) advances for salary, travel and other expenses, advances against
commission and other similar advances made to officers or employees in the
ordinary course of the Company's or its Subsidiaries' business, and (iii) loans
or advances to or for the benefit of officers, directors or employees of the
Company or its Subsidiaries in connection with litigation and other proceedings
involving such persons by virtue of their status as officers, directors or
employees of the Company or its Subsidiaries, respectively; provided, that such
loans or advances made pursuant to this clause (D), together with all loans and
advances made pursuant to clause (A), may not exceed $3,000,000 in the aggregate
at any time outstanding, and provided, further, that loans or advances made
pursuant to clause (D)(iii) above that the Company was required to make pursuant
to any indemnification agreement approved by the Management Committee of the
Company or its organizational documents shall not constitute a breach of this
clause (g);
(h) make investments under the Company's deferred compensation
plans for the benefit of the employees of the Company and its Subsidiaries;
(i) incur (A) subject to Section 4.13, Indebtedness securities,
promissory notes or similar types of instruments related to financing
(collectively, "DEBT INSTRUMENTS"), if and only if such Debt Instruments are
subordinated and junior to the Notes pursuant to a subordination agreement
reasonably acceptable to the Trustee or (B) any Permitted Refinancing
Indebtedness with respect to Indebtedness incurred pursuant to this clause (i);
(j) incur Indebtedness on account of a Permitted Lien;
(k) incur Indebtedness under the Liquidity Facility or under any
Permitted Refinancing Indebtedness with respect to Indebtedness incurred
pursuant to this clause (k);
41
(l) incur Permitted Refinancing Indebtedness;
(m) incur Indebtedness evidenced by the Senior Notes; and
(n) incur Indebtedness in the ordinary course of business
consisting of standby letters of credit, bank guarantees or similar arrangements
in favor of suppliers, equipment vendors and the like in an aggregate principal
amount outstanding at any one time not in excess of $5,000,000; provided that
such Indebtedness was incurred in lieu of deposit arrangements that would
otherwise have been required by such suppliers, equipment vendors and the like.
Section 4.13 Capital Raising Events. The Company shall not, and
shall not permit any of its Subsidiaries to:
(a) issue any Equity Interests in the Company other than to a
Wholly Owned Subsidiary of the Company or pursuant to employee benefit plans
approved by the Management Committee of the Company,
(b) transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Subsidiary of the Company other than to the Company or a
Wholly Owned Subsidiary of the Company or pursuant to employee benefit plans
approved by the Management Committee of the Company, or
(c) issue or sell any Debt Instruments,
except that the Company may transfer, convey, sell, lease or otherwise dispose
of Equity Interests in the Company or, pursuant to Section 4.12(i) hereof, issue
or sell any Debt Instruments of the Company if, no later than the Business Day
following the date of receipt of the proceeds thereof, the Company shall use
100% of the Net Proceeds therefrom (or such lesser amount of Net Proceeds as
approved by at least a majority in outstanding principal amount of the then
outstanding Notes) (the "CAPITAL RAISING PROCEEDS") to prepay the outstanding
balance, if any, under the Liquidity Facility and to permanently reduce the loan
commitments thereunder by the amount so prepaid. The Company shall use 50% of
any remaining Capital Raising Proceeds after application pursuant to the prior
sentence (or such lesser amount of Net Proceeds as approved by at least a
majority in outstanding principal amount of the then outstanding Notes) (the
"REMAINING CAPITAL RAISING PROCEEDS") to redeem the maximum principal amount of
the Senior Notes that may be redeemed out of the Remaining Capital Raising
Proceeds to the extent required by the Senior Notes Indenture and, if any such
Remaining Capital Raising Proceeds remain after application to any such
redemption of Senior Notes, the Company shall redeem, in accordance with Section
3.8, the maximum principal amount of the Notes that may be redeemed out of any
of such Remaining Capital Raising Proceeds remaining after such redemption of
Senior Notes.
Pending the final applications of any such Capital Raising
Proceeds, the Company or the applicable Subsidiary may invest such Capital
Raising Proceeds in Cash which shall be held, to the extent required by the
Senior Notes Indenture, in an account in which the Senior Notes Trustee shall
have a first priority perfected security interest, subject to Permitted Priority
Liens, for the benefit of the Holders of Senior Notes and, subject to the terms
of the Senior Notes Intercreditor Agreement, the Notes and, to the extent not so
required, shall be held in an account
42
in which the Trustee shall have a first priority perfected security interest,
subject to Permitted Priority Liens, for the benefit of the Holders of Notes.
Section 4.14 Asset Sales. The Company shall not, and shall not
permit any of its Subsidiaries to, consummate an Asset Sale unless:
(a) the Company, or the Subsidiary, as the case may be, receives
(i) consideration at the time of the Asset Sale at least equal to the fair
market value of the assets issued, sold or otherwise disposed of or (ii) in the
case of a lease of assets that constitute an Asset Sale, a lease providing for
rents or other consideration which are no less favorable to the Company or the
Subsidiary, as the case may be, than the prevailing market conditions;
(b) Company's Management Committee adopts a resolution evidencing
its determination that such consideration constitutes such fair market value, or
such lease payments are at prevailing market conditions, as the case may be, as
certified in an Officers' Certificate delivered to the Trustee; and
(c) at least 75% or, with the approval of the Management
Committee of the Company, 50%, of the consideration therefor received by the
Company or the Subsidiary is in the form of Cash; provided, that:
(i) any liabilities (as shown on the Company's or the
Subsidiary's most recent balance sheet) of the Company or the
Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes) that are
assumed by the transferee of any of those assets under a
customary novation agreement that unconditionally releases the
Company or the Subsidiary, as the case may be, from further
liability will be deemed to be Cash for purposes of this
provision; and
(ii) any securities, notes or other obligations received
by the Company or the Subsidiary from the transferee that are
promptly, but in any event within 30 days of receipt, converted
by the Company or the Subsidiary into Cash (to the extent of the
Cash received in that conversion) will be deemed to be Cash for
purposes of this provision.
No later than the Business Day following the date of receipt of
any Net Proceeds from an Asset Sale, the Company shall apply 100% of such Net
Proceeds to (i) repay Indebtedness with respect to Permitted Priority Liens
incurred or permitted pursuant to the terms of this Indenture in connection
with, and secured by, the asset so sold and pay down the outstanding balance, if
any, under the Liquidity Facility (or such lesser amount of the outstanding
balance of the Liquidity Facility as approved by at least a majority in
outstanding principal amount of the then outstanding Notes) and to permanently
reduce the loan commitments thereunder by the amount so prepaid. The Company
shall use 50% of any remaining Net Proceeds from any Asset Sale after
application pursuant to the prior sentence (or such lesser amount of Net
Proceeds as is approved by at least a majority in outstanding principal amount
of the then outstanding Notes) as follows: (x) up to $20 million of such amount
may be deposited into the Senior Notes Escrow Account to the extent required by
the Senior Notes
43
Indenture and, to the extent not so required, into the Escrow Account; and (y)
to the extent not deposited into the Senior Notes Escrow Account or the Escrow
Account, the Company shall use such amount (the "REMAINING ASSET SALE PROCEEDS")
to the extent required by the Senior Notes Indenture to redeem the maximum
principal amount of the Senior Notes that may be redeemed out of the Remaining
Asset Sale Proceeds in accordance with the Senior Notes Indenture and, if any of
such Remaining Asset Sale Proceeds remain after application to any such
redemption of Senior Notes, the Company shall use such remaining amount to
redeem the maximum principal amount of the Notes that may be redeemed out of
such moneys in accordance with Section 3.8.
Pending the final applications of any Net Proceeds from Asset
Sales governed by the preceding paragraph, the Company or the applicable
Subsidiary may invest such Net Proceeds in Cash which (to the extent required by
the Senior Notes Indenture) shall be held in an account in which the Senior
Notes Trustee shall have a first priority perfected security interest, subject
to Permitted Priority Liens, for the benefit of the Holders of Senior Notes and,
subject to the terms of the Senior Notes Intercreditor Agreement, the Notes and,
to the extent not so required, shall be held in an account in which the Trustee
shall have a first priority perfected security interest, subject to Permitted
Priority Liens, for the benefit of the Holders of Notes.
Section 4.15 Liens. The Company shall not create or suffer to
exist, or permit any of its Subsidiaries to create or suffer to exist, any Lien
upon or with respect to any of its properties, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, other than Permitted Liens.
Section 4.16 Adjusted Tangible Net Worth. The Company shall not
permit the Adjusted Tangible Net Worth on a quarterly basis to be less than the
amounts set forth below at the end of the applicable fiscal quarter:
Quarters Ending Closest To: Minimum Adjusted Tangible Net Worth:
-------------------------- -----------------------------------
September 30, 2002 $88,462,000
December 31, 2002 82,906,000
March 31, 2003 80,386,000
June 30, 2003 76,845,000
September 30, 2003 72,951,000
December 31, 2003 70,775,000
March 31, 2004 70,857,000
June 30, 2004 69,739,000
September 30, 2004 68,033,000
December 31, 2004 68,562,000
March 31, 2005 70,678,000
June 30, 2005 71,564,000
September 30, 2005 72,204,000
December 31, 2005 75,332,000
March 31, 2006 79,897,000
June 30, 2006 84,125,000
September 30, 2006 88,761,000
December 31, 2006 96,261,000
44
March 31, 2007 107,753,000
June 30, 2007 116,554,000
Section 4.17 Minimum Adjusted Net Working Capital. The Company
shall not permit the Company's Adjusted Net Working Capital on a quarterly basis
to be less than the amounts set forth below at the end of the applicable fiscal
quarter:
Quarters Ending Closest To: Minimum Adjusted Net Working Capital:
--------------------------- ------------------------------------
September 30, 2002 $13,000,000
December 31, 2002 18,000,000
March 31, 2003 21,308,000
June 30, 2003 18,693,000
September 30, 2003 20,049,000
December 31, 2003 21,812,000
March 31, 2004 26,857,000
June 30, 2004 24,962,000
September 30, 2004 29,295,000
December 31, 2004 34,468,000
March 31, 2005 42,574,000
June 30, 2005 48,744,000
September 30, 2005 56,210,000
December 31, 2005 59,794,000
March 31, 2006 71,296,000
June 30, 2006 80,799,000
September 30, 2006 91,666,000
December 31, 2006 103,506,000
March 31, 2007 103,506,000
June 30, 2007 103,506,000
Section 4.18 Total Cash Debt Service Coverage Ratio. The Company
shall not permit the Total Cash Debt Service Coverage Ratio on a quarterly basis
to be less than the amounts set forth below at the end of the applicable fiscal
quarter:
Quarters Ending Closest To: Cash Debt Service Ratio:
-------------------------- -----------------------
December 31, 2002 2.00
March 31, 2003 2.00
June 30, 2003 2.00
September 30, 2003 2.00
December 31, 2003 2.00
March 30, 2004 1.80
June 30, 2004 1.60
September 30, 2004 1.70
December 31, 2004 1.80
March 31, 2005 1.90
45
June 30, 2005 2.00
September 30, 2005 2.00
December 31, 2005 2.00
March 31, 2006 2.00
June 30, 2006 2.00
September 30, 2006 2.00
December 31, 2006 2.00
March 31, 2007 2.00
June 30, 2007 2.00
Section 4.19 Capital Expenditures. The Company shall not permit
the Capital Expenditures of the Company and its Subsidiaries to exceed
$30,000,000 in the aggregate in any fiscal year.
Section 4.20 Consolidated EBITDAR. The Company shall not permit,
for the applicable quarter, the greater of (i) Annualized Consolidated EBITDAR
of the Company and its Consolidated Subsidiaries and (ii) Consolidated EBITDAR
of the Company and its Consolidated Subsidiaries for the Company's most recently
ended four full quarters to be less than the amount set forth below at the end
of the applicable fiscal quarter:
Quarters Ending Closest To: Consolidated EBITDAR:
-------------------------- --------------------
December 31, 2002 $20,000,000
March 31, 2003 26,841,000
June 30, 2003 38,540,000
September 30, 2003 40,146,000
December 31, 2003 41,825,000
March 31, 2004 43,852,000
June 30, 2004 45,932,000
September 30, 2004 48,107,000
December 31, 2004 50,676,000
March 31, 2005 52,776,000
June 30, 2005 54,841,000
September 30, 2005 56,889,000
December 31, 2005 59,095,000
March 31, 2006 61,419,000
June 30, 2006 63,661,000
September 30, 2006 65,952,000
December 31, 2006 68,401,000
March 31, 2007 71,674,000
June 30, 2007 74,896,000
Section 4.21 Corporate Existence. Subject to Article Five hereof,
the Company shall do or cause to be done all things necessary to preserve and
keep in full force and effect (i) its corporate existence and the corporate,
partnership or other existence, as the case may be, of each of its Subsidiaries,
in accordance with the respective organizational documents (as the same may be
amended from time to time) of each of the Company and any such Subsidiary and
(ii) the
46
rights (charter and statutory), licenses and franchises of each of the Company
and its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any of its Subsidiaries if the Management Committee of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.22 Payments for Consent. The Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, pay or
cause to be paid any consideration to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture, the Notes, the Liquidity Facility Intercreditor
Agreement, the Senior Notes Intercreditor Agreement, or the other Collateral
Documents unless that consideration is offered to be paid and is paid to all
Holders of the Notes that consent, waive or agree to amend in the time frame
described in the solicitation documents relating to that consent, waiver or
agreement, as applicable.
Section 4.23 Advances to Subsidiaries.
(a) All advances to Subsidiaries made by the Company or any of
its Subsidiaries (other than (x) equity contributions and (y) advances to
Subsidiaries with a maturity date of less than 90 days from the date of such
advance not to exceed $5 million for any one Subsidiary or $8 million in the
aggregate for all Subsidiaries) shall be evidenced by intercompany notes in
favor of the Company or such Subsidiary. Intercompany notes in favor of the
Company shall be pledged pursuant to the Collateral Documents to the Trustee as
Collateral to secure the Notes. Each intercompany note shall be payable upon
demand and will bear interest at a rate equal to the then current fair market
interest rate.
(b) If an intercompany advance to a Subsidiary of the Company
where assets constitute part of the Collateral is evidenced by an Intercompany
Note, and if the applicable Subsidiary of the Company that is the maker of such
Intercompany Note proposes to remit monies to the Company, the Company shall
cause such Subsidiary to distribute such monies to the Company, directly or
indirectly, by means of a dividend or other manner and not as a repayment of the
Indebtedness evidenced by the applicable Intercompany Note; provided, however,
that monies may be distributed to the Company as repayment of the Indebtedness
evidenced by an Intercompany Note so long as, after giving effect thereto, the
aggregate amount of Indebtedness evidenced by the Komag Malaysia Intercompany
Notes and of the Komag Bermuda Intercompany Notes is not less than $100 million
in the aggregate; and provided, further, that on and after December 31, 2005,
monies may be distributed to the Company as repayment of the Indebtedness
evidenced by the Komag Malaysia Intercompany Notes or of the Komag Bermuda
Intercompany Notes if, to the extent that such monies result in the aggregate
amount of Indebtedness evidenced by such Intercompany Notes to be less than $100
million, such monies are used by the Company in the ordinary course of its
business or to repay the Senior Notes in accordance with the terms of the Senior
Notes Indenture or to pay the Notes in accordance with the terms of this
Indenture.
47
Section 4.24 Amendments to Certain Agreements. Neither the
Company nor any of its Subsidiaries may amend, waive or modify, or take or
refrain from taking any action that has the effect of amending, waiving or
modifying any provision of any of the Collateral Documents, the Liquidity
Facility Intercreditor Agreement or the Senior Notes Intercreditor Agreement;
provided, however, that any of the Collateral Documents, the Liquidity Facility
Intercreditor Agreement or the Senior Notes Intercreditor Agreement may be
amended, waived or modified as set forth under Article 9 hereof.
Section 4.25 Transactions with Affiliates. Except as set forth on
Schedule 4.25, the Company shall not, and shall not permit any of its
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend or permit to exist any transaction
or series of related transactions, or any contract, agreement, understanding,
loan, advance or Guarantee with, or for the benefit of, any Affiliate (each, an
"AFFILIATE TRANSACTION"), unless:
(a) the Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Subsidiary than those that would have
been obtained in a comparable transaction by the Company or the Subsidiary with
an unrelated Person;
(b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$1.0 million, the Company delivers to the Trustee a resolution of its Management
Committee, approving such Transaction(s) and evidencing the Committee's
determination of the compliance of such Transaction(s) with this Section 4.25,
and certified in an Officers' Certificate that also certifies as to (x) the
compliance of such Affiliate Transaction(s) with this Section 4.25 and (y) the
approval of such Affiliate Transaction(s) by a majority of the members of its
Management Committee; and
(c) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration of $10.0
million or more, the Company delivers to the Trustee the items required by the
foregoing clause (b), together with an opinion as to the fairness to the Company
or the relevant Subsidiary of that Affiliate Transaction or series of related
Affiliate Transactions from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing; provided, however,
that the Company shall not be required to deliver such opinion with respect to
any Affiliate Transaction or series of related Affiliate Transactions entered
into in the ordinary course of the Company's business with any Excepted Company
involving aggregate consideration of less than $25 million.
The following items will not be deemed to be Affiliate
Transactions and will not be subject to the provisions of the prior paragraph:
(i) transactions, to the extent not otherwise prohibited
under this Indenture, between or among the Company or its Wholly
Owned Subsidiaries;
(ii) reasonable compensation paid to and indemnities
provided on behalf of, officers, directors, employees or, as may
be approved by the Management Committee of the Company from time
to time, consultants of the Company or any Subsidiary; and
48
(iii) purchases of goods and services in the ordinary
course of business.
Section 4.26 Restrictions on Senior or Pari Passu Indebtedness.
Except as expressly permitted pursuant to the terms of this Indenture, the
Company shall not, nor will it permit any of its Subsidiaries to, directly or
indirectly, create, issue, assume, Guarantee or otherwise become directly or
indirectly liable with respect to or become responsible for any Indebtedness
that is senior or pari passu in any respect in right of payment to the Notes.
Section 4.27 Impairment of Rights. The Company agrees, on its
behalf and on behalf of each of its Subsidiaries, that the Company and its
Subsidiaries shall not, directly or indirectly, (a) subject to applicable law,
create or permit to exist or become effective any restriction of any kind on the
ability of the Company or any of its Subsidiaries, as applicable, to vote the
Equity Interests held by the Company or such Subsidiary in any of its
Subsidiaries to amend such Subsidiary's organizational documents or remove or
replace any member of such Subsidiary's Management Committee or (b) in any way
impair the security interest granted pursuant to the Collateral Documents or the
ability of the Trustee, or the Holders to exercise their rights and remedies
under this Indenture, the Notes, the Liquidity Facility Intercreditor Agreement,
the Senior Notes Intercreditor Agreement or any of the other Collateral
Documents.
Section 4.28 Location of Inventory and Equipment. (a) The Company
agrees that it shall keep the Inventory and Equipment only at the locations
identified on Schedule 4.28; provided, however, that the Company may amend
Schedule 4.28 so long as such amendment occurs by written notice to the Trustee
not less than 30 days prior to the date on which the Inventory or Equipment is
moved to such new location, and so long as, at the time of such written
notification, the Company provides any financing statements or fixture filings
necessary to perfect and continue perfected the Trustee's Liens on such assets.
(b) The Company shall not (i) permit any of its Inventory or
Equipment to be transferred between Subsidiaries of the Company unless fair
value is paid or provided for by the transferee of such Inventory or Equipment
(through an intercompany note, provision of services, equity investment or other
valuable consideration), or (ii) permit any of its Inventory or Equipment to be
transferred by the Company to a location outside of the continental United
States of America unless (A) such transfer is to a direct or indirect
Wholly-Owned Subsidiary of the Company, (B) immediately prior to transfer, such
Inventory or Equipment was not being used or held for use in the business of the
Company in the United States (including the research and development activities
conducted by the Company with respect to its or any of its Subsidiaries'
manufacturing and operations) and (C) fair value is paid or provided for
(through an intercompany note, provision of services, equity investment or other
valuable consideration).
Section 4.29 Escrow Account. In the event the Company shall have
deposited any amounts in the Senior Notes Escrow Account in accordance with the
Senior Notes Indenture or in the Escrow Account in accordance with Section 4.14
hereof, the Company:
(a) may withdraw all or any portion of such amounts (i) to redeem
the Senior Notes in accordance with the Senior Notes Indenture or to redeem the
Notes in accordance with Sections 3.8 (in which case, any amounts so withdrawn
shall constitute Remaining Asset Sale Proceeds) or (ii) for any other purpose
not otherwise prohibited by the terms of this Indenture so
49
long as, at such time, the Company is in compliance with the covenants set forth
in this Article 4 and the representations and warranties contained in Sections
5.2, 5.3, 5.4, 5.5, 5.6, 5.7(a), 5.9, 5.10, 5.11, 5.12, 5.13, 5.14 and 5.16
(first sentence) of the Liquidity Facility (as in effect on the date hereof) are
true and correct in all respects on and as of the date of such withdrawal as
though made on and as of such date, as certified in an Officers' Certificate
delivered to the Trustee prior to such withdrawal; and
(b) shall be obligated to re-deposit in the Senior Notes Escrow
Account (to the extent required by the Senior Notes Indenture) or in the Escrow
Account any amounts withdrawn from the Senior Notes Escrow Account or the Escrow
Account pursuant to clause (a)(ii) above at the time, and in the amount, that
the Company would have been required to pay down the Liquidity Facility as in
effect immediately prior to the payment in full of the Liquidity Facility to the
extent such amounts shall not have been used to redeem the Senior Notes in
accordance with the Senior Notes Indenture or to redeem the Notes in accordance
with Section 3.8 (in which case, any amounts so withdrawn shall constitute
Remaining Asset Sale Proceeds).
Section 4.30 Komag Bermuda. The Company shall not permit the
liabilities of Komag Bermuda at any time outstanding to exceed $1,000,000.
Section 4.31 Account Control Agreement. Within 30 days after the
date hereof, the Company shall have delivered to the Trustee an Account Control
Agreement with respect to each Securities Account and each deposit account
maintained by the Company.
Section 4.32 Further Assurances. The Company shall execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, as applicable, any and all such further acts, deeds, conveyances,
security agreements, mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments as may be
required under applicable law from time to time in order to:
(a) carry out more effectively the purposes of this Indenture,
the Notes, the other Collateral Documents, the Liquidity Facility Intercreditor
Agreement and the Senior Notes Intercreditor Agreement;
(b) subject to the Liens created by any of the Collateral
Documents any of the properties, rights or interests required to be encumbered
thereby, subject only to Permitted Priority Liens;
(c) perfect and maintain the validity, effectiveness and priority
of any of the Collateral Documents and the Liens intended to be created thereby;
and
(d) better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Trustee any of the rights granted now or hereafter
intended by the parties thereto to be granted to the Trustee under any other
instrument executed in connection therewith or granted to the Company under the
Collateral Documents or under any other instrument executed in connection
therewith.
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ARTICLE 5. MERGERS, ETC.
Section 5.1 Consolidation, Merger or Acquisition. The Company
shall not, and shall not permit any of its Subsidiaries to, liquidate or
dissolve or enter into any consolidation, merger, acquisition, material
partnership, material joint venture, syndication or other combination, except
that (i) the Company may consolidate with, merge into or acquire any other
corporation or entity; (ii) any corporation or entity may consolidate with or
merge into the Company otherwise in accordance with Section 4.12 hereof and the
other provisions of this Indenture; (iii) any Subsidiary of the Company may
consolidate with, merge into or acquire any other Subsidiary of the Company;
provided, however, that, in the case of clause (i) or (ii), the Company shall be
the surviving entity of such merger or consolidation and in the case of clause
(iii), a Wholly Owned Subsidiary of the Company shall be the surviving entity in
any such merger or consolidation; and provided, further, that immediately after
the consummation of such consolidation, merger or acquisition there shall exist
no condition or event which constitutes a Default or Event of Default; and (iv)
the Company may dissolve and liquidate any Non-Material Subsidiary.
ARTICLE 6. DEFAULTS AND REMEDIES
Section 6.1 Events of Default. Each of the following shall
constitute an "EVENT OF DEFAULT":
(a) the Company shall fail to pay (i) any installment of the
principal of any Note outstanding hereunder when due or (ii) any installment of
interest on any Note or other amount payable hereunder or thereunder and such
failure under this clause (ii) shall continue for a period of five (5)
consecutive days of the date when due; or
(b) the Company shall fail to perform or observe any term,
covenant or agreement in any material respect, or shall have breached any
representation or warranty in any material respect, contained in this Indenture,
the Notes, the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement or the other Collateral Documents or in any document
executed in conjunction with or delivered pursuant to this Indenture, the
Liquidity Facility Intercreditor Agreement, the Senior Notes Intercreditor
Agreement or the other Collateral Documents, which failure continues uncured for
more than thirty (30) consecutive days. Notwithstanding the foregoing, any
failure of the Company to perform or observe the covenants contained in Sections
4.10 through 4.22, 4.23(b), 4.24 through 4.27, 4.29, 4.30 and 4.31 shall
constitute an Event of Default immediately without regard to or benefit of any
lapse of time or cure period; or
(c) the Company or any of its Subsidiaries shall (i) fail to pay
when due (giving effect to any applicable grace period) any amounts owing under
the Liquidity Facility or the Senior Notes or any obligation or Indebtedness
(except those specifically arising under this Indenture) in excess of $1.0
million in aggregate amount, or (ii) fail to observe or perform any material
term, covenant or agreement contained in any agreement governing the Liquidity
Facility or the Senior Notes Indenture or entered into pursuant thereto or any
agreement for such obligation or Indebtedness by which it is bound, in each case
for such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of
51
any obligations issued thereunder to accelerate the maturity thereof; provided,
however, that any default under this Section 6.1(c) with regard to the Liquidity
Facility or the Senior Notes Indenture shall be deemed to be cured if such
default shall have been cured by the Company or unconditionally waived by the
lenders or the holders of the Senior Notes thereunder, as applicable, pursuant
to the terms thereof; or
(d) (i) the Company or any of its Subsidiaries (other than any
Non-Material Subsidiaries) shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debt, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or the Company or any of its Subsidiaries (other than any Non-Material
Subsidiaries) shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against the Company or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause (i) above
which (X) results in the entry of an order for relief or any such adjudication
or appointment or (Y) remains undismissed, undischarged or unbonded for a period
of thirty (30) days; or (iii) there shall be commenced against the Company or
any of its Subsidiaries any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within thirty (30) days from the entry thereof; or (iv)
the Company or any of its Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii) and (iii) above; or (v) the Company or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debt as they become due or (vi) the
stockholders of the Company shall approve any plan or proposal for the
liquidation of the Company or any of its Subsidiaries (other than any
Non-Material Subsidiaries); or
(e) one judgment or decree shall be entered against the Company
or any of its Subsidiaries involving a liability (to the extent not paid or
covered by insurance or the third party indemnity of a solvent indemnitor) equal
to or greater than $5.0 million or one or more judgments or decrees shall be
entered against the Company or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid or covered by insurance or the
third party indemnity of a solvent indemnitor) equal to or greater than $10.0
million and, in all such cases, all such judgments or decrees shall not have
been vacated, discharged, or stayed or bonded pending appeal within thirty (30)
days from the entry thereof; or
(f) (i) the Company or any of its ERISA Affiliates fails to make
full payment when due of all material amounts which, under the provisions of any
Pension Plan or Section 412 of the Internal Revenue Code, the Company or any of
its ERISA Affiliates is required to pay as contributions thereto;
(ii) any material accumulated funding deficiency occurs or
exists, whether or not waived, with respect to any Pension Plan;
52
(iii) the excess of the actuarial present value of all
benefit liabilities under all material Pension Plans over the
fair market value of the assets of such Pension Plans (excluding
in such computation Pension Plans with assets greater than
benefit liabilities) allocable to such benefit liabilities are
greater than five percent of Adjusted Tangible Net Worth;
(iv) the Company or any of its ERISA Affiliates enters
into any transaction which has as its principal purpose the
evasion of liability under Subtitle D of Title IV of ERISA;
(v) any material Pension Plan maintained by the Company or
any of its ERISA Affiliates shall be terminated within the
meaning of Title IV of ERISA, or (B) a trustee shall be appointed
by an appropriate United States district court to administer any
material Pension Plan, or (C) the PBGC (or any successor thereto)
shall institute proceedings to terminate any material Pension
Plan or to appoint a trustee to administer any Pension Plan, or
(D) the Company or any of its ERISA Affiliates shall withdraw
(under Section 4063 of ERISA) from any material Pension Plan, if
as of the date of the event listed in subclauses (A) through (C)
of this paragraph or any subsequent date, either the Company or
its ERISA Affiliates has any material liability (such liability
to include, without limitation, any material liability to the
PBGC, or any successor thereto, or to any other party under
Sections 4062, 4063 or 4064 of ERISA or any other provision of
law) resulting from or otherwise associated with the events
listed in subclauses (A) through (C) of this paragraph;
(vi) as used in this Section 6.1(f), the term "accumulated
funding deficiency" has the meaning specified in Section 412 of
the Internal Revenue Code, and the terms "actuarial present
value" and "benefit liabilities" have the meanings specified in
Section 4001 of ERISA; or
(g) there shall be instituted against the Company, or any of its
Subsidiaries, any proceeding for which forfeiture (to the extent not paid or
covered by insurance or the third party indemnity of a solvent indemnitor) of
any property equal to or greater than $5.0 million is a potential penalty and
such proceeding shall not have been vacated or discharged within thirty (30)
days of its institution.
Section 6.2 Acceleration. Upon (i) the occurrence of any Event of
Default described in clause (d) above or upon any acceleration of the
outstanding principal amount of any Senior Note or of any outstanding principal
amount owing under the Liquidity Facility, the Notes, and each of them, with
accrued interest thereon, and all other amounts owing under this Indenture and
the Notes shall automatically become due and payable in cash, and (ii) upon the
occurrence and continuance of any other Event of Default, the Trustee, or the
Holders of at least a majority in outstanding principal amount of the then
outstanding Notes may, by notice to the Company, declare the Notes, with accrued
interest thereon, and all other amounts owing under this Indenture and the Notes
to be due and payable forthwith, whereupon the same shall immediately become due
and payable in cash. Except as expressly provided above in this Section 6.2,
presentment, demand, protest and all other notices of any kind are hereby
expressly
53
waived. The Holders of a majority in outstanding principal amount of the then
outstanding Notes, by written notice to the Trustee, may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal or interest on the Notes that has become due
solely because of the acceleration) have been cured or waived. The foregoing
notwithstanding, if an automatic acceleration of payment of the Notes occurs due
solely to any acceleration of the outstanding principal amount owing under the
Liquidity Facility or any Senior Note and the principal amount owing under the
Liquidity Facility or the Senior Note, as the case may be, Indenture is
subsequently de-accelerated, payment of the Notes shall thereupon also be
automatically de-accelerated (without need for any action on the part of any of
the Holders) unless, prior to any such de-acceleration of principal under the
Liquidity Facility or such Senior Note, as the case may be, the Notes, and all
other amounts owing under this Indenture and the Notes, shall otherwise have
become or been declared due and payable. Any payments in cash received by any
Holder in accordance with the Liquidity Facility Intercreditor Agreement or the
Senior Notes Intercreditor Agreement prior to the date such de-acceleration
occurs may be retained by such Holder.
Section 6.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest with respect to, the Notes or to
enforce the performance of any provision of the Notes or this Indenture. The
Trustee may also pursue any remedy available to the Holders of the Notes or the
Trustee, whether hereunder or under the Notes, any of the other Collateral
Documents, the Liquidity Facility Intercreditor Agreement or the Senior Notes
Intercreditor Agreement, or otherwise available to any Holders or the Trustee at
law or equity.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.4 Waiver of Past Defaults. Holders of not less than a
majority in outstanding principal amount of then outstanding Notes, by notice to
the Trustee, may on behalf of the Holders of all of the Notes waive an existing
Default or Event of Default and its consequences hereunder, except a continuing
Default or Event of Default in the payment of the principal of, or interest on,
the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in outstanding principal amount of then
outstanding Notes may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration). Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.5 Control by Majority. Holders of a majority in
outstanding principal amount of then outstanding Notes may direct the time,
method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that conflicts
54
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
Section 6.6 Limitation on Suits. Subject to the restrictions
contained in the Liquidity Facility Intercreditor Agreement and the Senior Notes
Intercreditor Agreement, a Holder of a Note may pursue a remedy with respect to
an Event of Default under this Indenture or any Note only if:
(a) the Holder of a Note gives to a Responsible Officer of the
Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in outstanding principal amount
of then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Holders of a majority in
outstanding principal amount of then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note other than as expressly provided in this Indenture.
Section 6.7 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium, if any, or interest with
respect to, the Note, on or after the respective due dates expressed in the Note
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(a) occurs and is continuing, the Trustee is authorized
to recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount of principal remaining unpaid of, interest
remaining unpaid on the Notes and interest on overdue principal and premium, if
any, and, to the extent lawful, interest, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in
55
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders of the Notes allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7 hereof. To the extent that the payment
of any such compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 7.7
hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties that
the Holders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10 Priorities. If the Trustee collects any money
pursuant to this Article 6, after application to any amounts contemplated by
clauses (b) and (c) of the second paragraph of Section 10.15, the Trustee shall
pay out such money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to Holders of
Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder of a Note
56
pursuant to Section 6.7 hereof, or a suit by Holders of more than ten percent in
aggregate amount of the then outstanding Notes.
Section 6.12 Restoration of Rights and Remedies. If the Trustee
or any Holder has instituted a proceeding to enforce any right or remedy under
this Indenture, any of the Notes, the Liquidity Facility Intercreditor
Agreement, the Senior Notes Intercreditor Agreement or any other Collateral
Document and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.
ARTICLE 7. TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement and the other Collateral Documents, and use the same
degree of care and skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely
by the express provisions of this Indenture, the Liquidity
Facility Intercreditor Agreement, the Senior Notes Intercreditor
Agreement and the other Collateral Documents and the Trustee need
perform only those duties that are specifically set forth in this
Indenture, the Liquidity Facility Intercreditor Agreement, the
Senior Notes Intercreditor Agreement, the other Collateral
Documents and no others, and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture, the Liquidity Facility
Intercreditor Agreement, the Senior Notes Intercreditor Agreement
and the other Collateral Documents. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture, the Liquidity
Facility Intercreditor Agreement, the Senior Notes Intercreditor
Agreement and the other Collateral Documents.
(c) Notwithstanding any contrary provision of any document or
instrument, the Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
57
(i) this paragraph does not limit the effect of clause (b)
of this Section 7.1;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture, the Liquidity Facility Intercreditor Agreement, the Senior
Notes Intercreditor Agreement and the other Collateral Documents that in any way
relates to the Trustee is subject to clauses (a), (b) and (c) of this Section
7.1.
(e) No provision of this Indenture, the Liquidity Facility
Intercreditor Agreement, the Senior Notes Intercreditor Agreement or any other
Collateral Document shall require the Trustee to expend or risk its own funds or
incur any liability.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
Section 7.2 Certain Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. 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 from liability in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith, without negligence or willful misconduct, that it
believes to be authorized or within the rights or powers conferred upon it by
this Indenture, the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement or any other Collateral Document.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.
(g) 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, note, other evidence of Indebtedness 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 shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation.
(h) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of such event is sent to the Trustee
in accordance with Section 13.2 hereof, and such notice references the Notes;
and
(i) 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 to each Agent, custodian and co-trustee
employed to act hereunder.
Section 7.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may become a creditor of, or otherwise deal with, the Company, or any Affiliate
of the Company with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.4 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement, the other Collateral Documents or the Notes, it shall
not be accountable for the Company's use of the proceeds from the Notes or any
money paid to the Company or upon the Company's direction under any provision of
this Indenture, the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement or the other Collateral Documents, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.5 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is actually known to the Trustee, the Trustee
shall mail to Holders of Notes a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, or interest on, any Note, the Trustee may
59
withhold the notice if and so long as a Responsible Officer in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.6 Reports by Trustee to Holders of the Notes; Stock
Exchange Listing. Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or any delisting thereof.
Section 7.7 Compensation and Indemnity. The Company shall pay to
the Trustee from time to time such compensation for its acceptance of this
Indenture and services hereunder in accordance with a written schedule provided
by the Trustee to the Company. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses (including fees of legal counsel to the Trustee)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture or any Note, the Liquidity Facility
Intercreditor Agreement, the Senior Notes Intercreditor Agreement or any other
Collateral Document against the Company or any other party thereto (including
this Section 7.7) and defending itself 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 its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or willful misconduct. The Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations hereunder.
The Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable and duly documented fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.7,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee,
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except that held in trust to pay principal and interest on particular Notes.
Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(d) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.8 Replacement of Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.8.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of a
majority in outstanding principal amount of then outstanding Notes may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee; provided, however, that if a Default or Event of Default has
occurred and is continuing, or if any Holder shall have given notice to the
Trustee under Section 6.6, the Holders of a majority in outstanding principal
amount of then outstanding Notes may appoint a successor Trustee or appoint a
successor Trustee to replace any successor Trustee appointed by the Company.
Within one year after the successor Trustee takes office, the Holders of a
majority in outstanding principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 30 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least ten percent (10%) in outstanding principal amount of
then outstanding Notes may petition any court of competent jurisdiction at the
expense of the Company for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has been
a Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture, the Liquidity Facility Intercreditor Agreement, the Senior
Notes Intercreditor Agreement and the other Collateral Documents. The successor
Trustee shall mail a notice of its succession to Holders. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided, that all sums owing to the Trustee hereunder have been paid
and are subject to the Lien provided for in Section 7.7 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 hereof shall continue for the benefit of the
retiring Trustee.
Section 7.9 Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another Person, the successor Person without
any further act shall be the successor Trustee; provided, however, such Person
shall be otherwise eligible and qualified under this Article.
Section 7.10 Eligibility; Disqualification. There shall at all
times be a Trustee hereunder that is a corporation organized and doing business
under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by Federal or state authorities and that has a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The Trustee hereby waives any right to set-off any claim that it may have
against the Company in any capacity (other than as Trustee, Paying Agent or
Trustee hereunder, under the Liquidity Facility Intercreditor Agreement, the
Senior Notes Intercreditor Agreement, or under the other Collateral Documents)
against any of the assets of the Company held by the Trustee; provided, however,
that if the Trustee is or becomes a lender of any other Indebtedness permitted
hereunder to be pari passu with the Notes, then such waiver shall not apply to
the extent of such Indebtedness.
Section 7.12 Authorization of Trustee to Take Other Actions.
(a) The Trustee is hereby authorized to enter into and take any
actions or deliver such consents required by or requested under each of the
Collateral Documents and such other documents as directed by the Holders of a
majority of outstanding aggregate principal amount of the Notes. If at any time
any action by or the consent of the Trustee is required under any of the
Collateral Documents or any other document entered into by the Trustee at the
direction of the Holders of a majority of outstanding aggregate principal amount
of the Notes, such action or consent shall be taken or given by the Trustee upon
the consent to such action by the Holders of a majority of outstanding aggregate
principal amount of the Notes.
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(b) The Trustee is hereby authorized and directed to enter into
the Liquidity Facility Intercreditor Agreement, the Senior Notes Intercreditor
Agreement and the other Collateral Documents and to take any actions or deliver
such consents required by or requested thereunder.
Section 7.13 Assignment of Rights, Not Assumption of Duties.
Anything herein contained to the contrary notwithstanding, (a) the Company shall
remain liable under each of the Collateral Documents to which it is a party to
the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Indenture had not been executed, (b)
the exercise by the Trustee or any Holder of any of their rights, remedies or
powers hereunder shall not release the Company from any of its duties or
obligations under each of the Collateral Documents to which it is a party and
(c) neither the Holders nor the Trustee shall have any obligation or liability
under any of the Collateral Documents to which the Company is a party by reason
of or arising out of this Indenture, nor shall any Holder or the Trustee be
obligated to perform any of the obligations or duties of the Company thereunder
or, except as expressly provided herein with respect to the Trustee, to take any
action to collect or enforce any claim for payment assigned hereunder or
otherwise.
Section 7.14 Limitation on Duty of Trustee in Respect of
Collateral; Indemnification.
(a) 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 filing
any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in 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
or other agent or bailee selected by the Trustee in good faith.
(b) Subject to Section 7.1, the Trustee shall not be responsible
for the existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Liens in any of the
Collateral, 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 negligence, or willful misconduct on the part of the
Trustee, for the validity or sufficiency of the Collateral or any agreement or
assignment contained therein, for the validity of the title of the Company 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.
Section 7.15 Appointment of Co-Trustee. It is the purpose of this
Indenture that there shall be no violation of any law of any jurisdiction
denying or restricting the right of banking corporations or associations to
transact business as Trustee in such jurisdiction. It is recognized that in case
of litigation under this Indenture, and in particular in case of the enforcement
thereof on default, or in the case the Trustee deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the powers,
rights or remedies granted to the Trustee herein or in the Liquidity Facility
Intercreditor Agreement, the Senior Notes
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Intercreditor Agreement or any of the other Collateral Documents or hold title
to the properties, in trust, as herein granted or take any action which may be
desirable or necessary in connection therewith, it may be necessary that the
Trustee appoint an individual or institution as a separate or co-trustee. The
following provisions of this Section are adopted to these ends.
In the event that the Trustee appoints an additional individual
or institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture or the Liquidity Facility Intercreditor
Agreement or the Senior Notes Intercreditor Agreement or any of the other
Collateral Documents to be exercised by or vested in or conveyed to the Trustee
with respect thereto shall be exercisable by and vest in such separate or
co-trustee but only to the extent necessary to enable such separate or
co-trustee to exercise such powers. rights and remedies, and only to the extent
that the Trustee by the laws of any jurisdiction (including particularly the
State of New York) is incapable of exercising such powers, rights and remedies
and every covenant and obligation necessary to the exercise thereof by such
separate or co-trustee shall run to and be enforceable by either of them.
Should any instrument in writing from the Company be required by
the separate or co-trustee so appointed by the Trustee for more fully and
certainly vesting in and confirming to him or it such properties, rights,
powers, trusts, duties and obligations, any and all such instruments in writing
shall, on request, be executed, acknowledged and delivered by the Company;
provided, that if a Default or an Event of Default shall have occurred and be
continuing, if the Company does not execute any such instrument within fifteen
(15) days after request therefor, the Trustee shall be empowered as an
attorney-in-fact for the Company to execute any such instrument in the Company's
name and stead. In case any separate or co-trustee or a successor to either
shall die, become incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of such separate or
co-trustee, so far as permitted by law, shall vest in and be exercised by the
Trustee until the appointment of a new trustee or successor to such separate or
co-trustee.
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 and powers, conferred or imposed upon the
Trustee shall be conferred or imposed upon and may be exercised
or performed by such separate trustee or co-trustee; and
(ii) No trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder.
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 Section 7.15.
Any separate trustee or co-trustee may at any time appoint the
Trustee as 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, the Notes, the Liquidity Facility Intercreditor Agreement,
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the Senior Notes Intercreditor Agreement or any of the other Collateral
Documents, 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 7.16 No Liability for Clean-up of Hazardous Materials. In
the event that the Trustee is required to acquire title to an asset for any
reason, or take any managerial action of any kind in regard thereto, in order to
carry out any fiduciary or trust obligation for the benefit of another, which in
the Trustee's sole discretion may cause the Trustee to be considered an "owner
or operator" under the provisions of the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601, et seq., or
otherwise cause the Trustee to incur liability under CERCLA or any other
federal, state or local law, the Trustee reserves the right, instead of taking
such action, either to resign as Trustee or to arrange for the transfer of the
title or control of the asset to a court appointed receiver.
The Trustee shall not be liable to the Company or Holders or any
other person for any environmental claims or contribution actions under any
federal, state or local law, rule or regulation by reason of the Trustee's
actions and conduct as authorized, empowered and directed hereunder or relating
to the discharge, release or threatened release of hazardous materials into the
environment.
ARTICLE 8. DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at the option of the Management Committee of the
Company evidenced by a resolution set forth in an Officers' Certificate, at any
time, elect to have either Section 8.2 or 8.3 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
Section 8.2 Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.1 hereof of the option applicable to this Section 8.2,
the Company shall, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes on the date the conditions set forth below are
satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the
other Sections of this Indenture referred to in clauses (a) and (b) below, and
to have satisfied all its other obligations under the Notes and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.4 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, or interest or premium on such Notes
when such payments are due, (b) the Company's obligations with respect to such
Notes under Article 2 and Section 4.2 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article 8. Subject to compliance with this
Article 8, the Company may exercise its
65
option to apply this Section 8.2 notwithstanding the prior exercise of its
option to apply Section 8.3 hereof.
Section 8.3 Covenant Defeasance. Upon the Company's exercise
under Section 8.1 hereof of the option applicable to this Section 8.3, the
Company shall, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, be released from its obligations under the covenants
contained in Sections 4.10 through 4.20, and 4.22 through 4.24 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
in Section 8.4 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes
shall thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.1 hereof of the option applicable to this Section 8.3, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, Sections 6.1(b),
(c), (e) and (g) shall not constitute Events of Default.
Section 8.4 Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.2 or
8.3 hereof to the outstanding Notes:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
noncallable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay in cash the principal of, premium (if
any) and interest on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(b) in the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (a) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (b) since
the date of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee
66
confirming that the Holders of the outstanding Notes will not recognize income,
gain or loss for Federal income tax purposes as a result of such Covenant
Defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing either (a) on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such deposit)
or (b) insofar as Section 6.1(d) hereof is concerned, at any time in the period
ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any material
agreement or instrument (except with respect to the borrowing of funds described
in clause (d) above) to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries are bound;
(f) the Company shall deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company or the Officers
signatory thereto with the intent of preferring the Holders of Notes over other
creditors of the Company or with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others;
(g) the Company shall deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have been
complied with; and
(h) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that:
(i) the trust funds will not be subject to any rights of
holders of Indebtedness of the Company other than the Notes, and
(ii) assuming no intervening bankruptcy by the Company
between the date of deposit and the 91st day following the
deposit and assuming that no Holder is an "insider" of the
Company under applicable Bankruptcy law, after the 91st day
following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally.
Section 8.5 Deposited Money and Government Securities to Be Held
in Trust; Other Miscellaneous Provisions. Subject to Section 8.6 hereof, all
money and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal, premium
(if any) and interest, but such money need not be segregated from other funds
except to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.4 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Section 8.6 Repayment to the Company. Any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, or interest on any Note and
remaining unclaimed for two years after such principal, and premium, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter 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 the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 8.7 Reinstatement. If the Trustee or Paying Agent is
unable to apply any United States dollars or non-callable Government Securities
in accordance with Section 8.2 or 8.3 hereof, as the case may be, by reason of
any order or judgment of any court or Governmental Authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.2 or 8.3 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.2 or 8.3 hereof, as the case may be; provided,
however, that, if the Company makes any cash payment of principal of, or
interest on, any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1 Without Consent of Holders of Notes. Notwithstanding
Section 9.2 of this Indenture, the Company and the Trustee may amend or
supplement this Indenture, the Notes, the Liquidity Facility Intercreditor
Agreement, the Senior Notes Intercreditor Agreement, or the other Collateral
Documents without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of a Note;
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(d) to enter into additional or supplemental Collateral
Documents pursuant to Section 10.16 hereof or additional intercreditor or
subordination agreements pursuant to Section 4.12(i); and
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
provided, however, that in the case of a change pursuant to clause (a) or (e)
above, the Company shall deliver to the Trustee an Opinion of Counsel stating
that the change does not adversely affect the right of any Holder.
Upon the request of the Company accompanied by a resolution of
the Company's Management Committee authorizing the execution of any such amended
or supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.2(b) hereof, the Trustee shall join with the Company in
the execution of any amended or supplemental Indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.2 With Consent of Holders of Notes. Except as provided
below in this Section 9.2, the Company and the Trustee may amend or supplement
this Indenture, the Notes, the Liquidity Facility Intercreditor Agreement, the
Senior Notes Intercreditor Agreement, or the other Collateral Documents with the
consent of the Holders of at least a majority in outstanding principal amount of
the then outstanding Notes voting as a single class (including, without
limitation, consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.4 and 6.7
hereof, any existing Default or Event of Default or compliance with any
provision of this Indenture, the Notes, the Liquidity Facility Intercreditor
Agreement, the Senior Notes Intercreditor Agreement, or the other Collateral
Documents may be waived with the consent of the Holders of a majority in
outstanding principal amount of the then outstanding Notes voting as a single
class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes).
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
Upon the request of the Company accompanied by a resolution of
its Management Committee authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consents of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
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7.2(b) hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment or
supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the
Holders of a majority in aggregate outstanding principal amount of the then
outstanding Notes voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture, the other
Collateral Documents, the Liquidity Facility Intercreditor Agreement, the Senior
Notes Intercreditor Agreement, or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.2 may not
(with respect to any Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity
of any Note or alter the provisions with respect to the
redemption of the Notes (other than provisions relating to
Sections 4.13 and 4.14 hereof);
(iii) reduce the rate of or change the time for payment of
interest on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of, or interest, on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority
in aggregate outstanding principal amount of the Notes and a
waiver of the payment default that resulted from such
acceleration);
(v) make any Note payable in money other than that stated
in the Notes;
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or Events of Default or the
rights of holders of Notes to receive payments of principal of,
or interest or premium on the Notes;
(vii) waive a redemption payment with respect to any Note
or modify the obligations of the Company to make offers to
purchase Notes from the proceeds of one or more Asset Sales or
Capital Raising Events;
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(viii) release all or substantially all of the Collateral
from the Lien of this Indenture or the other Collateral Documents
(except in accordance with the provisions thereof); or
(ix) make any change in the preceding amendment and waiver
provisions.
Any amendment to, or waiver of, the provisions of any of the
Collateral Documents (other than the Indenture), Section 4.15 hereof or the
security provisions of this Indenture will require the consent of the holders of
not less than a majority in outstanding principal amount of Notes then
outstanding.
Section 9.3 Compliance with Trust Indenture Act. Every amendment
or supplement to this Indenture, the other Collateral Documents or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents. Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same Indebtedness as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.5 Notation on or Exchange of Notes. The Trustee may
place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for any Note may issue
and the Trustee shall, upon receipt of an Authentication Order, authenticate a
new Note that reflects the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.6 Trustee to Sign Amendments, Etc. The Trustee may sign
any amended or supplemental indenture, Collateral Document, Liquidity Facility
Intercreditor Agreement, the Senior Notes Intercreditor Agreement, or Note
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplement to the Indenture, the
Liquidity Facility Intercreditor Agreement, the Senior Notes Intercreditor
Agreement, any other Collateral Document or any Note until its Management
Committee approves it. In executing any amendment or supplement to this
Indenture, any other Collateral Document, the Liquidity Facility Intercreditor
Agreement, the Senior Notes Intercreditor Agreement or any Note, the Trustee
shall be entitled to receive and (subject to Section 7.1 hereof) shall be fully
protected in relying upon, in addition to the documents required by Section 13.4
hereof, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Indenture.
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ARTICLE 10. COLLATERAL AND SECURITY
Section 10.1 Security. The due and punctual payment of the
principal of, premium and interest on the Notes when and as the same shall be
due and payable, whether on an interest payment date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on the overdue
principal of, premium and interest on the Notes and performance of all other
obligations of the Company to the Holders of Notes or the Trustee under this
Indenture or the Notes, according to the terms hereunder or thereunder, shall be
secured by the Collateral as provided in the Collateral Documents. Each Holder
of Notes, by its acceptance hereof and thereof, consents and agrees to the terms
of the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement and the Collateral Documents (including, without
limitation, the provision providing for foreclosure and release of Collateral as
well as any additional intercreditor arrangements entered into by the Trustee
pursuant to Section 7.12 hereof) as the same may be in effect or may be amended
from time to time in accordance with its terms, and authorizes and directs the
Trustee to enter into the Liquidity Facility Intercreditor Agreement, the Senior
Notes Intercreditor Agreement and the Collateral Documents and to perform its
obligations and exercise its rights thereunder in accordance therewith. The
Company shall deliver to the Trustee copies of all documents executed pursuant
to this Indenture, the Liquidity Facility Intercreditor Agreement, the Senior
Notes Intercreditor Agreement and the other Collateral Documents and shall 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 this Indenture or the other Collateral
Documents to assure and confirm to the Trustee the security interest in the
Collateral contemplated hereby, by the other Collateral Documents, or any part
thereof, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Notes secured thereby,
according to the intent and purposes herein and therein expressed. The Company
shall take, any and all actions reasonably required to cause this Indenture and
the other Collateral Documents to create and maintain, as security for the
obligations of the Company hereunder, a valid and enforceable perfected Lien on
the Collateral, subject only to Permitted Priority Liens.
Section 10.2 Grant of a Security Interest. The Company hereby
grants to the Trustee, for the benefit of the Holders, continuing Liens on all
right, title, and interest of the Company in and to all currently existing and
hereafter acquired or arising Collateral (other than Real Property Collateral)
in order to secure prompt repayment of any and all Obligations and in order to
secure prompt performance by the Company of its covenants and duties under this
Indenture (the "TRUSTEE'S LIENS"). The Trustee's Liens in and to the Collateral
(other than Real Property Collateral) shall attach to all Collateral (other than
Real Property Collateral) without further act on the part of Holders or the
Company. Anything contained in this Indenture or any other Collateral Document
to the contrary notwithstanding, except as permitted by Section 4.14, the
Company shall not have authority, express or implied, to dispose of any item or
portion of the Collateral. The secured claims of the Holders with respect to the
Obligations secured by the Collateral shall be of equal priority, and ratable
according to the respective Obligations due each Holder.
Section 10.3 Collateral Matters. Subject to Sections 10.11 and
10.12, the Holders hereby irrevocably direct and authorize the Trustee, subject
to the Liquidity Facility Intercreditor Agreement and the Senior Notes
Intercreditor Agreement, to release any Lien on
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any Collateral (i) upon payment and satisfaction in full by or on behalf of the
Company of all Obligations in accordance with Article 11; and upon such
termination, Trustee shall deliver to the Company, at the Company's sole cost
and expense, all documents reasonably requested by the Company to terminate this
Indenture and the other Collateral Documents and release the Liens with respect
to the Collateral; (ii) constituting property being sold or disposed of if a
release is required or desirable in connection therewith and if the Company
certifies to the Trustee that the sale or disposition is permitted under Section
4.14 of this Indenture (and, subject to Section 7.1, the Trustee may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which the Company owned no interest at the time the
Lien was granted or at any time thereafter, provided, that such property shall
not have been transferred by the Company other than in accordance with the terms
and provisions of this Indenture and the other Collateral Documents; or (iv)
constituting property leased to the Company under a lease that has expired or is
terminated in a transaction permitted under this Indenture or the other
Collateral Documents. Except as provided above, the Trustee will not execute and
deliver a release of any Lien on any Collateral without the prior written
authorization of (y) if the release is of all or any substantial portion of the
Collateral, all of the Holders, or (z) otherwise, the majority in principal
amount of the then outstanding Notes; provided, however, that (1) the Trustee
shall not be required to execute any document necessary to evidence such release
on terms that, in the Trustee's opinion, would expose the Trustee to liability
or create any obligation on the part of the Trustee or the Holders or entail any
consequence adverse to the Trustee or the Holders other than the release of such
Lien without recourse, representation, or warranty, and (2) such release shall
not in any manner discharge, affect, or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Company
in respect of) all interests retained by the Company, including, the proceeds of
any sale, all of which shall continue to constitute part of the Collateral. The
Company shall furnish to the Trustee, prior to each proposed release of
Collateral pursuant to the Collateral Documents, all documents required by TIA
Section 314(d).
Section 10.4 Negotiable Collateral. Subject to the provisions of
the Liquidity Facility Intercreditor Agreement and the Senior Notes
Intercreditor Agreement, in the event that any Collateral, including proceeds,
is evidenced by or consists of Negotiable Collateral, the Company promptly shall
endorse and deliver physical possession of such Negotiable Collateral to the
Senior Notes Trustee to be held for the benefit of the holders of the Senior
Notes and, subject to the terms of the Senior Notes Intercreditor Agreement, the
Holders of the Notes.
Section 10.5 Collection of Accounts, General Intangibles, and
Negotiable Collateral. Subject to the provisions of the Liquidity Facility
Intercreditor Agreement and the Senior Notes Intercreditor Agreement, at any
time after the occurrence and during the continuance of an Event of Default, the
Trustee or the Trustee's designee may (a) notify customers or Account Debtors of
the Company that the Accounts, General Intangibles, or Negotiable Collateral
have been assigned to the Trustee or that the Trustee for the benefit of the
Holders has a security interest therein and (b) collect the Accounts, General
Intangibles, and Negotiable Collateral directly and charge the collection costs
and expenses to the Company.
Section 10.6 Power of Attorney. Subject to the provisions of the
Liquidity Facility Intercreditor Agreement and the Senior Notes Intercreditor
Agreement, the Company hereby irrevocably makes, constitutes, and appoints the
Trustee (and any of the Trustee's
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officers, employees, or agents designated by the Trustee) as the Company's true
and lawful attorney, with power to (a) if the Company refuses to, or fails
timely to execute and deliver any of the documents described in Section 10.9,
sign the name of the Company on, and file, any of the documents described in
Section 10.9, (b) at any time that an Event of Default has occurred and is
continuing, sign the Company's name on any invoice or xxxx of lading relating to
any Account, drafts against Account Debtors, schedules and assignments of
Accounts, verifications of Accounts, and notices to Account Debtors, (c) send
requests for verification of Accounts, (d) endorse the Company's name on any
checks, notes, instruments, and other items of payment that may come into the
Trustee's or the Holders' possession, (e) at any time that an Event of Default
has occurred and is continuing, notify the post office authorities to change the
address for delivery of the Company's mail to an address designated by the
Trustee, to receive and open all mail addressed to the Company, and to retain
all mail relating to the Collateral and forward all other mail to the Company,
(f) at any time that an Event of Default has occurred and is continuing, make,
settle, and adjust all claims under the Company's policies of insurance and make
all determinations and decisions with respect to such policies of insurance, and
(g) at any time that an Event of Default has occurred and is continuing, settle
and adjust disputes and claims respecting the Accounts directly with Account
Debtors, for amounts and upon terms that Trustee determines to be reasonable,
and the Trustee may cause to be executed and delivered any documents and
releases that Trustee determines to be necessary. The appointment of the Trustee
as the Company's attorney, and each and every one of the Trustee's rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully and finally repaid and performed and this Indenture
has been discharged in accordance with Article 11.
Section 10.7 Grants, Rights and Remedies. The Liens and security
interests granted by the Company to the Trustee (for its benefit and for the
benefit of the Holders) by and pursuant to Section 10.2 hereof may be
independently granted by the Collateral Documents and by other collateral
documents hereafter entered into. This Indenture and such other Collateral
Documents supplement each other, and the grants, priorities, rights and remedies
of the Trustee and the Holders hereunder and thereunder are cumulative.
Section 10.8 Survival. To the fullest extent provided under
applicable law, the Liens and security interests granted to the Trustee (for its
benefit and for the benefit of the Holders), the priority of such Liens and
security interests, and other rights and remedies granted to the Trustee and the
Holders pursuant to this Indenture and the other Collateral Documents
(specifically including but not limited to the existence, perfection and
priority of the Liens and security interests provided herein and therein) shall
not be modified, altered or impaired in any manner by any other financing or
extension of credit or incurrence of Indebtedness by the Company, or by any
other act or omission whatsoever. To the fullest extent provided by applicable
law, notwithstanding any such order, financing, extension, incurrence,
dismissal, conversion, act or omission:
(a) subject to the provisions of the Liquidity Facility
Intercreditor Agreement and the Senior Notes Intercreditor Agreement, the Liens
and security interests granted by the Company to the Trustee (for its benefit
and for the benefit of the Holders) by and pursuant to Section 10.2 hereof shall
constitute valid, binding, continuing, enforceable and fully-perfected first
priority Liens, subject only to Permitted Priority Liens, to which such Liens
and security
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interests shall be subordinate and junior, and shall be prior to all other Liens
and interests, now existing or hereafter arising, in favor of any other creditor
or any other Person whatsoever; and
(b) the Liens and security interests granted by the Company to
the Trustee (for its benefit and for the benefit of the Holders) by and pursuant
to Section 10.2 hereof shall continue to be valid, binding, continuing,
enforceable and fully-perfected without the necessity for the Trustee to file
any financing statements or to otherwise perfect such Liens and security
interests under applicable non-bankruptcy law.
Section 10.9 Recording and Opinions. The Company will cause this
Indenture, the applicable Collateral Documents and any financing statements, and
all amendments or supplements to each of the foregoing and any other similar
security documents as necessary, to be registered, recorded and filed or
re-recorded, re-filed and renewed in such manner and in such place or places, if
any, as may be required by law or reasonably requested by the Trustee in order
fully to preserve and protect the Liens securing the obligations under the Notes
pursuant to this Indenture and the other Collateral Documents, except as
otherwise provided herein and therein. For the avoidance of doubt and without
limiting the rights of the Trustee under Section 9-509(b) of the UCC, the
Company hereby authorizes the Trustee to file financing statements and
amendments thereto with respect to the Collateral (including after-acquired
Collateral).
The Company shall furnish to the Trustee:
(a) promptly after the execution and delivery of this Indenture,
and promptly after the execution and delivery of any other instrument of further
assurance or amendment, an Opinion of Counsel in Bermuda either (i) stating
that, subject to customary assumptions and exclusions, in the opinion of such
counsel, this Indenture, the applicable Collateral Documents and all other
instruments of further assurance or amendment have been properly recorded,
registered and filed to the extent necessary to make effective the Liens
intended to be created by the Collateral Documents with respect to the Equity
Interests of any Foreign Subsidiary of the Company existing under the laws of
Bermuda and reciting the details of such action or referring to prior Opinions
of Counsel in which such details are given or (ii) stating that, subject to
customary assumptions and exclusions, in the opinion of such counsel, no such
action is necessary to make such Lien effective as intended by such Collateral
Documents;
(b) within 30 days after January 1, in each year beginning with
the year 2003, an Opinion of Counsel, dated as of such date, either (i) stating
that, subject to customary assumptions and exclusions, in the opinion of such
counsel, such action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of this Indenture and all
supplemental indentures, financing statements, continuation statements or other
instruments of further assurance as is necessary to maintain the Liens of this
Indenture and the other Collateral Documents with respect to the Equity
Interests of any Foreign Subsidiary of the Company existing under the laws of
Bermuda until the next Opinion of Counsel is required to be rendered pursuant to
this paragraph and reciting the details of such action or referring to prior
Opinions of Counsel in which such details are given or (ii) stating that,
subject to customary assumptions and exclusions, in the opinion of such counsel,
no such action is necessary to maintain such Lien, until the next Opinion of
Counsel is required to be rendered pursuant to this paragraph; and
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(c) the certificates or opinions, as the case may be, required by
TIA Section 314(d). Such certificates or opinions will be subject to the terms
of TIA Section 314(e).
Section 10.10 Protection of the Trust Estate. Subject to the
terms of this Indenture, the other Collateral Documents, the Liquidity Facility
Intercreditor Agreement and the Senior Notes Intercreditor Agreement, upon prior
written notice to the Company, the Trustee shall have the power (i) to institute
and maintain such suits and proceedings as it may deem expedient, to prevent any
impairment of the Collateral under this Indenture or any of the other Collateral
Documents and in the profits, rents, revenues and other income arising
therefrom, including the 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 any Collateral or be prejudicial to the interests of the Holders of
Notes or the Trustee, to the extent permitted thereunder; and (ii) to enforce
the obligations of the Company or any Subsidiary under this Indenture or the
other Collateral Documents. Upon receipt of notice that the Company is not in
compliance with any of the requirements of any Deed of Trust, the Trustee may,
but shall have no obligation to purchase, at the Company's expense, such
insurance coverage necessary to comply with the appropriate section of the Deed
of Trust.
Section 10.11 Certificates of the Company. The Company shall
furnish to the Trustee, prior to each proposed release of Collateral pursuant to
this Indenture or the other Collateral Documents, (i) all documents required by
TIA Section 314(d) and (ii) an Opinion of Counsel in the United States, which
may be rendered by internal counsel to the Company, to the effect that, subject
to customary assumptions and exclusions, such accompanying documents constitute
all documents required by TIA Section 314(d). The Trustee may, to the extent
permitted by Sections 7.1 and 7.2 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained in
such documents and such Opinion of Counsel.
Section 10.12 Certificates of the Trustee. In the event that the
Company wishes to release Collateral in accordance with this Indenture or the
other Collateral Documents and has delivered the certificates and documents
required by this Indenture or the other Collateral Documents and Sections 10.3
and 10.10 hereof, the Trustee shall determine whether it has received all
documentation required by TIA Section 314(d) in connection with such release.
Section 10.13 Authorization of Actions to Be Taken by the Trustee
Under the Collateral Documents, the Liquidity Facility Intercreditor Agreement
and the Senior Notes Intercreditor Agreement. Subject to the provisions of
Sections 7.1, 7.2, 7.3 and 9.2 hereof, the Trustee may and without the consent
of the Holders of Notes, on behalf of the Holders of Notes, take all actions it
deems necessary or appropriate in order to (a) enforce any of the terms of this
Indenture, the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement or the other Collateral Documents and (b) collect and
receive any and all amounts payable in respect of the Obligations of the Company
hereunder, including, but not limited to, the appointment and approval of
Collateral Agents and the appointment and approval of an insurance trustee. The
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 hereof or of the other Collateral
Documents, the Liquidity
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Facility Intercreditor Agreement or the Senior Notes Intercreditor Agreement,
and such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders of Notes 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 under any of the other
Collateral Documents or be prejudicial to the interests of the Holders of Notes
or of the Trustee).
Section 10.14 Trustee's Duties. The powers and duties conferred
upon the Trustee by this Article 10 are solely to protect the Collateral and,
subject to Section 7.1, shall not impose any duty upon the Trustee to exercise
any such powers and duties except as expressly provided in this Indenture.
Neither the Trustee nor any Holder shall be under any duty to the Company
whatsoever to make or give any presentment, demand for performance, notice or
nonperformance, protest, notice of protest, notice of dishonor, or other notice
or demand in connection with any Collateral or to take any steps necessary to
preserve this Indenture. Neither the Trustee nor any Holder shall be liable to
the Company for failure to collect or realize upon any or all of the Collateral,
or for any delay in doing so, nor shall the Trustee or any Holder be under any
duty to the Company to take any action whatsoever with regard thereto. Neither
the Trustee nor any Holder shall have any duty to the Company to comply with any
recording, filing or other legal requirements necessary to establish or maintain
the validity, priority or enforceability of the Liens in, or the Trustee's
rights in or to, any of the Collateral or to perform on behalf of the Company
under this Indenture or any other Collateral Documents or otherwise.
Section 10.15 Authorization of Receipt of Funds by the Trustee
Under the Collateral Documents. Subject to the provisions of the Liquidity
Facility Intercreditor Agreement and the Senior Notes Intercreditor Agreement,
upon an Event of Default and so long as such Event of Default continues, the
Trustee may exercise in respect of the Collateral, in addition to the other
rights and remedies provided for in this Indenture, in the Collateral Documents
or otherwise available to it, all of the rights and remedies of a secured party
under the UCC or other applicable law, and the Trustee may also upon obtaining
possession of the Collateral as set forth herein, without notice to the Company,
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board or at
any of the Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as are commercially reasonable. The Company
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable to the seller than if such a sale were a public sale.
The Company agrees that, to the extent notice of sale shall be required by law,
at least ten (10) days' notice to the Company of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Trustee shall not be obligated to make
any sale regardless of notice of sale having been given. The Trustee may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
Any cash that is Collateral held by the Trustee and all cash
proceeds received by the Trustee in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied
(unless otherwise provided for in the Liquidity Facility
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Intercreditor Agreement, the Senior Notes Intercreditor Agreement or Collateral
Documents and after payment of any and all amounts payable to the Trustee
pursuant to this Indenture), as the Trustee shall determine or as the Holders of
the Notes shall direct pursuant to Section 6.5 hereof, (a) against the
obligations for the ratable benefit of the Holders of the Notes, (b) to
maintain, repair or otherwise protect the Collateral or (c) to take such other
action to protect the other rights of the Holders of the Notes or to take any
other appropriate action or remedy for the benefit of the Holders of the Notes.
Any surplus of such cash or cash proceeds held by the Trustee and remaining
after payment in full of all the Obligations in accordance with Section 6.10
shall be applied in accordance with Section 6.10.
Section 10.16 Cooperation of Trustee. In the event the Company or
any Subsidiary pledges or grants a security interest in additional Collateral,
the Trustee shall cooperate with the Company or such Subsidiary in reasonably
and promptly agreeing to the form of, and executing as required, any instruments
or documents necessary to make effective the security interest in the Collateral
to be so substituted or pledged. To the extent practicable, the terms of any
security agreement or other instrument or document necessitated by any such
substitution or pledge shall be comparable to the provisions of this Indenture
and the existing Collateral Documents. Subject to, and in accordance with, the
requirements of this Article 10 and the terms of the Collateral Documents, in
the event that the Company engages in any transaction pursuant to Section 10.3
hereof, the Trustee shall cooperate with the Company in order to facilitate such
transaction in accordance with any reasonable time schedule proposed by the
Company, including by delivering and releasing the Collateral in a prompt and
reasonable manner.
Section 10.17 Collateral Agent. The Trustee may, from time to
time, appoint one or more Collateral Agents hereunder. Each of such Collateral
Agents may be delegated any one or more of the duties or rights of the Trustee
hereunder or under the other Collateral Documents or which are specified in any
Collateral Documents, including without limitation the right to hold any
Collateral in the name of, registered to, or in the physical possession of, such
Collateral Agent, for the ratable benefit of the Holders of the Notes. Each such
Collateral Agent shall have such rights and duties as may be specified in an
agreement between the Trustee and such Collateral Agent.
Section 10.18 Representations and Warranties. The Company hereby
represents and warrants to the Trustee and the Holders as follows:
(a) Each of Company and its Subsidiaries has good and valid title
to all its assets and properties (other than Collateral or goods sold on a
consignment basis), except where the failure to have such title could not
reasonably be expected to result in a Material Adverse Change, in each case free
and clear of all Liens of any nature whatsoever except the Liens permitted by
Section 4.15. With respect to interests in Real Property, each of Company and
its Subsidiaries has good and valid title to all Real Property owned by it and
the leasehold estates in all of the Real Property leased by it, except where the
failure to have such title could not reasonably be expected to result in a
Material Adverse Change, in each case free and clear of all Liens, easements,
covenants, rights-of-way and other similar restrictions of any nature
whatsoever, except (A) the Liens permitted by Section 4.15, (B) easements,
covenants, rights-of-way and other similar restrictions of record, (C) any
conditions that may be shown by a current,
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accurate survey or physical inspection of any Real Property owned or leased by
it made prior to the date hereof, (D) any immaterial condemnation or eminent
domain proceeding affecting any Real Property that does not prevent such Real
Property from being utilized by the Company or any of its Subsidiaries
substantially for the purposes for which it was being utilized prior to such
proceeding, and (E) (i) zoning, building and other similar restrictions, (ii)
Liens that have been placed by any developer, landlord or other third party on
property over which the Company or any of its Subsidiaries has easement rights
or on any Real Property leased by the Company or any of its Subsidiaries and
subordination or similar agreements relating thereto, and (iii) unrecorded
easements, covenants, rights-of-way or other similar restrictions, none of which
items set forth in clauses (i), (ii) and (iii), individually or in the
aggregate, materially impair the continued use and operation of the property to
which they relate in the business of the Company and its Subsidiaries, taken as
a whole, as currently conducted.
(b) Except as set forth in Schedule 10.18(b), all of the
Equipment is used or held for use in the Company's business and is fit for such
purposes.
(c) The Inventory and Equipment are not stored with a bailee,
warehouseman, or similar party and are located only at the locations identified
on Schedule 4.28 or otherwise permitted by Section 4.28.
(d) The Company keeps correct and accurate records in all
material respects itemizing and describing the kind, type, quality, and quantity
of the Inventory, and the Company's cost therefor.
(e) The chief executive office of the Company is located at the
applicable address indicated in Section 13.2. The Company's Federal Employer
Identification Number is 00-0000000.
(f) The Company and each of its Subsidiaries, (a) is duly
organized and existing and in good standing under the laws of the jurisdiction
of its incorporation and qualified and licensed to do business in, and in good
standing in, any state where the failure to be so licensed or qualified
reasonably could be expected to constitute a Material Adverse Change, (b) has
full corporate power and authority and possesses all governmental franchises,
licenses, permits, authorizations and approvals necessary to enable it to use
its corporate name and to own, lease or otherwise hold its properties and assets
and to carry on its business as currently conducted other than such franchises,
licenses, permits, authorizations and approvals the lack of which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Change, and (c) is in compliance with all applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Authority or
instrumentality, domestic or foreign (including, without limitation, those
related to asbestos, petroleum and hazardous wastes and substances), except
where noncompliance could not reasonably be expected to result in a Material
Adverse Change. The Company has not received any written communication from a
Governmental Authority that alleges that Company or any of its Subsidiaries is
not in compliance, in all material respects, with all material federal, state,
local or foreign laws, ordinances, rules and regulations, except where
non-compliance could not reasonably be expected to result in a Material Adverse
Change.
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(g) Set forth on Schedule 10.18(g) is a complete and accurate
list of the Company's direct and indirect Subsidiaries, showing: (i) the
jurisdiction of their incorporation; (ii) the number of shares of each class of
Capital Stock authorized for each of such Subsidiaries; and (iii) the number and
the percentage of the outstanding shares of each such class owned directly or
indirectly by the Company. All of the outstanding Capital Stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(h) To the Company's knowledge, the Company and each of its
Subsidiaries owns or possesses adequate licenses or other rights to use all
Permits, patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, trade names, copyrights, trade secrets
and know-how (collectively, the "INTELLECTUAL PROPERTY") that are necessary for
the operation of its business as currently conducted. Set forth on Schedule
10.18(h)(1) is a complete and accurate list of the Company's registered patents
and registered trademarks. Except as set forth in Schedule 10.18(h)(2), no claim
is pending or, to the knowledge of the Company, threatened to the effect that
the Company or its Subsidiaries infringes upon the asserted rights of any other
Person under any Intellectual Property, and to the Company's knowledge there is
no basis for any such claim (whether pending or threatened). Except as set forth
in Schedule 10.18(h)(2), no claim is pending or, to the knowledge of the
Company, threatened to the effect that any such Intellectual Property owned or
licensed by the Company or its Subsidiaries, or in which the Company or its
Subsidiaries otherwise has the right to use, is invalid or unenforceable by the
Company, and to the Company's knowledge, there is no basis for any such claim
(whether or not pending or threatened).
ARTICLE 11. SATISFACTION AND DISCHARGE
Section 11.1 Satisfaction and Discharge. This Indenture will be
discharged and will cease to be of further effect as to all Notes issued
hereunder, and the Trustee, at the request and expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when:
(a) either:
(i) all Notes that have been authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Company) have been delivered
to the Trustee for cancellation; or
(ii) (A) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason of
the making of a notice of redemption or otherwise or will become
due and payable within one year and (B) the Company has
irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust solely for the benefit of the Holders,
cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and
discharge all amounts owing on the Notes not delivered to the
Trustee for cancellation for principal (including any increases
in principal due to the addition of deferred interest in
accordance with the Notes and this Indenture),
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accrued interest that has not been paid or duly provided for, and
the maximum amount payable as premium to the date of maturity or
redemption;
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company is a party
or by which the Company is bound;
(c) the Company has paid or caused to be paid all sums payable by
it under this Indenture; and
(d) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money toward the payment of
the Notes at maturity or the redemption date, as the case may be.
The Company shall deliver an Officers' Certificate and an Opinion
of Counsel to the Trustee stating that all conditions precedent to satisfaction
and discharge have been satisfied.
Section 11.2 Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions. Subject to Section 11.3 hereof, all
money and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 11.2, the "Trustee") pursuant to Section 11.1 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal
(including increases (in any) in principal from the addition of deferred
interest in accordance with the Notes and this Indenture), premium (if any) and
interest, but such money, in the case of money held by the Trustee for any
Paying Agent other than the Company or any of its Subsidiaries, need not be
segregated from other funds except to the extent required by law. Moneys (if
any) deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the Notes in accordance with this Article
11 and remaining after all sums due and to become due on the Notes in respect of
principal (including increases (if any) in principal from the addition of
deferred interest), premium (if any) and interest have been paid in full, and
after all amounts due the Trustee hereunder have been paid or duly provided for
to the satisfaction of the Trustee, shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust.
Section 11.3 Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium (if any) or interest on any Note and
remaining unclaimed for two years after such principal, and premium, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Note shall thereafter 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
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the Company cause to be published once, in the New York Times or The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
ARTICLE 12. SUBORDINATION OF NOTES
Section 12.1 Notes Subordinate to Senior Indebtedness Only. The
Company covenants and agrees, and each Holder of a Note, by his acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
set forth in the Intercreditor Agreements and in this Article 12 (in each case
subject to the provisions of Article 8 and Article 11), the payment of the
principal of (and premium, if any) and interest (other than increases (if any)
in principal from the addition of deferred interest in accordance with the Notes
and this Indenture), on the Notes are subordinate in right of payment only to
the prior payment in full of all Senior Indebtedness, but not to any other
Indebtedness or other liabilities or obligations of the Company or any other
Person.
Section 12.2 Trustee to Effectuate Subordination. Each Holder of
a Note by his acceptance thereof authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
his attorney-in-fact for any and all such purposes, including, in the event of
any dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency, receivership, reorganization or similar
proceedings or upon an assignment for the benefit of creditors or otherwise),
the filing of a claim for the unpaid balance of such Holder's Notes in the form
required in those proceedings and the causing of such claim to be approved.
Section 12.3 Notice to Trustee. The Company shall give prompt
written notice to the Trustee and any Paying Agent of any default or event of
default under any Senior Indebtedness or under any agreement pursuant to which
any Senior Indebtedness may have been issued or as to any other fact known to
the Company which would prohibit the making of any payment to or by the Trustee
in respect of the Notes. Notwithstanding the provisions of this Article 12 or
any other provision of this Indenture, the Intercreditor Agreements or any other
Collateral Documents, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee in respect of the Notes, pursuant to the provisions in this Article
or the Intercreditor Agreements, unless and until the Trustee shall have
received written notice thereof from the Company or any holder or holders of
Senior Indebtedness or from any trustee therefor or representative thereof; and
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.1 hereof, shall be entitled in all respects conclusively
to assume that no such facts exist.
Section 12.4 Rights of Trustee.
Nothing in this Article or the Intercreditor Agreements shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.7.
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The provisions of this Article shall not be applicable to any
cash, properties or securities received by any Holder that are received as a
holder of any Senior Indebtedness and nothing in this Indenture shall deprive
such Holder of any of its rights as such holder.
Section 12.5 Defeasance of this Article Twelve. The subordination
of the Notes provided by this Article 12 is expressly made subject to the
provisions for Legal Defeasance or Covenant Defeasance in Article 8 hereof and,
anything herein to the contrary notwithstanding but subject in all respects to
the Intercreditor Agreements, upon the effectiveness of any such Legal
Defeasance or Covenant Defeasance and provided that either a legal defeasance or
covenant defeasance of the Senior Notes in accordance with the Senior Notes
Indenture has become effective, the Notes then outstanding shall thereupon cease
to be subordinated pursuant to this Article Twelve and the Intercreditor
Agreements.
Section 12.6 This Article Not To Prevent Events of Default. The
failure to make a payment on account of the principal of or interest on the
Notes by reason of any provision of this Article Twelve or the Intercreditor
Agreements will not be construed as preventing the occurrence of an Event of
Default under Section 6.1.
ARTICLE 13. MISCELLANEOUS
Section 13.1 Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with the duties imposed by TIA
Section 318(c), the imposed duties shall control.
Section 13.2 Notices. Any notice or communication by the Company
or the Trustee to the others is duly given if in writing and delivered in Person
or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
to the others' address:
If to the Company:
Komag, Incorporated
0000 Xxxxxxxxxx Xxxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
If to the Trustee:
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Bank One Trust Company, N.A.
1111 Polaris Parkway, Suite 1K
Mail Code OH1-0181
Xxxxxxxx, XX 00000
Telephone: 000 000-0000
Facsimile: 000 000-0000
Attention: Xxxxx Xxxxx, Account Executive
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 13.3 Communication by Holders of Notes with Other Holders
of Notes. Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
Section 13.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
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Section 13.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e)
and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 13.6 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 13.7 No Personal Liability of Directors, Officers,
Employees and Stockholders. No director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, this Indenture, the Liquidity
Facility Intercreditor Agreement, the Senior Notes Intercreditor Agreement, the
other Collateral Documents or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. The waiver may not be effective
to waive liabilities under the Federal securities laws.
Section 13.8 Governing Law. THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or any of its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors. All agreements of the Company in this
Indenture, the Liquidity Facility Intercreditor Agreement, the Senior Notes
Intercreditor Agreement, each of the other Collateral Documents to which it is a
party and the Notes shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
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Section 13.11 Severability. In case any provision in this
Indenture or the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 13.12 Counterpart Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
Section 13.13 Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by the Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section 13.13.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such witness, notary or officer the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) Notwithstanding anything to the contrary contained in this
Section 13.13, the principal amount and serial numbers of Notes held by any
Holder, and the date of holding the same, shall be proved by the register of the
Notes maintained by the Registrar as provided in Section 2.3 hereof.
(d) If the Company shall solicit from the Holders of the Notes
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to a resolution of its
Management Committee fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding TIA Section 316(c), if the Company at its option elects to so
fix a record date, such record date shall be the record date specified in or
pursuant to such resolution, which shall be a date not earlier than the date 30
days prior to the first solicitation of Holders generally in connection
therewith or the date of the most recent list of Holders forwarded to the
Trustee prior to such solicitation pursuant to Section 2.5 hereof and not later
than the date such solicitation is
86
completed. If such a record date is fixed, 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 record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of the then outstanding Notes have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the then
outstanding Notes shall be computed as of such record date; provided, that no
such demand, authorization, direction, notice, consent, waiver or other Act by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after such record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every
subsequent Holder of the same Note and the Holder of every Note issued upon the
registration or transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
(f) Without limiting the foregoing, a Holder entitled hereunder
to take any action hereunder with regard to any particular Note may do so itself
with regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
Section 13.14 Benefit of Indenture. Nothing, in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent, any Registrar and their successors hereunder,
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 13.15 Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Indenture as
of the dates first above written.
KOMAG, INCORPORATED
By: ________________________________
Name:
Title:
BANK ONE TRUST COMPANY, N.A.
By: ________________________________
Name:
Title:
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