EXHIBIT 4.1
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QUALITY DISTRIBUTION, LLC,
AS ISSUER,
THE GUARANTORS NAMED HEREIN,
AS GUARANTORS,
AND
THE BANK OF NEW YORK,
AS TRUSTEE
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INDENTURE
DATED AS OF MAY 30, 2002
12-1/2% SENIOR SUBORDINATED SECURED NOTES DUE 2008
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
----------- -----------------
310(a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ N.A.
(a)(4)................................................ N.A.
(a)(5)................................................ 7.8; 7.10
(b)................................................... 7.8; 7.10; 13.2
(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)(1)................................................ 7.6
(b)(2)................................................ 7.6
(c)................................................... 7.6; 13.2
(d)................................................... 7.6
314(a)................................................... 4.8; 4.10; 13.2
(b)................................................... 14.4
(c)(1)................................................ 7.2; 13.4; 13.5
(c)(2)................................................ 7.2; 13.4; 13.5
(c)(3)................................................ N.A.
(d)................................................... 14.6
(e)................................................... 13.5
(f)................................................... N.A.
315(a)................................................... 7.1(b)
(b)................................................... 7.5
(c)................................................... 7.1
(d)................................................... 6.5; 7.1(c)
(e)................................................... 6.11
316(a)(last sentence).................................... 2.9
(a)(1)(A)............................................. 6.5
(a)(1)(B)............................................. 6.4
(a)(2)................................................ 9.5
(b)................................................... 6.7
(c)................................................... 9.5
317(a)(1)................................................ 6.8
(a)(2)................................................ 6.9
(b)................................................... 2.4
318(a)................................................... 13.1
TIA Section Indenture Section
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(c)................................................. 13.1
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE ..................... 1
1.1 DEFINITIONS ................................................... 1
1.2 INCORPORATION BY REFERENCE OF TIA ............................. 29
1.3 RULES OF CONSTRUCTION ......................................... 30
ARTICLE II THE SECURITIES ................................................ 30
2.1 FORM AND DATING ............................................... 30
2.2 EXECUTION AND AUTHENTICATION .................................. 31
2.3 REGISTRAR AND PAYING AGENT .................................... 32
2.4 PAYING AGENT TO HOLD ASSETS IN TRUST .......................... 32
2.5 HOLDER LISTS .................................................. 33
2.6 TRANSFER AND EXCHANGE ......................................... 33
2.7 REPLACEMENT SECURITIES ........................................ 34
2.8 OUTSTANDING SECURITIES ........................................ 35
2.9 TREASURY SECURITIES ........................................... 35
2.10 TEMPORARY SECURITIES .......................................... 35
2.11 CANCELLATION .................................................. 36
2.12 DEFAULTED INTEREST ............................................ 36
2.13 CUSIP NUMBER .................................................. 36
2.14 RESTRICTIVE LEGENDS ........................................... 36
2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY ..................... 38
2.16 SPECIAL TRANSFER PROVISIONS ................................... 40
ARTICLE III REDEMPTION ................................................... 41
3.1 NOTICES TO TRUSTEE ............................................ 41
3.2 SELECTION OF SECURITIES TO BE REDEEMED ........................ 42
3.3 NOTICE OF REDEMPTION .......................................... 42
3.4 EFFECT OF NOTICE OF REDEMPTION ................................ 43
3.5 DEPOSIT OF REDEMPTION PRICE ................................... 43
3.6 SECURITIES REDEEMED IN PART ................................... 43
ARTICLE IV COVENANTS ..................................................... 43
4.1 PAYMENT OF SECURITIES ......................................... 43
4.2 MAINTENANCE OF OFFICE OR AGENCY ............................... 44
4.3 LIMITATION ON RESTRICTED PAYMENTS ............................. 44
4.4 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS ........... 48
4.5 CORPORATE EXISTENCE ........................................... 48
4.6 PAYMENT OF TAXES AND OTHER CLAIMS ............................. 49
4.7 MAINTENANCE OF PROPERTIES AND INSURANCE ....................... 49
4.8 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT, ETC ................ 49
4.9 COMPLIANCE WITH LAWS .......................................... 50
4.10 REPORTS TO HOLDERS ............................................ 50
4.11 WAIVER OF STAY, EXTENSION OR USURY LAWS ....................... 51
4.12 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES ................... 51
4.13 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES ...................................... 52
4.14 LIMITATION ON LIENS ........................................... 53
4.15 CHANGE OF CONTROL ............................................. 54
4.16 LIMITATION ON ASSET SALES ..................................... 56
4.17 PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT ......... 59
4.18 ADDITIONAL SUBSIDIARY GUARANTEES .............................. 59
ARTICLE V SUCCESSOR CORPORATION .......................................... 60
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5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS ...................... 60
5.2 SUCCESSOR CORPORATION SUBSTITUTED ............................. 62
ARTICLE VI DEFAULT AND REMEDIES .......................................... 62
6.1 EVENTS OF DEFAULT ............................................. 62
6.2 ACCELERATION .................................................. 64
6.3 OTHER REMEDIES ................................................ 64
6.4 WAIVER OF PAST DEFAULTS ....................................... 65
6.5 CONTROL BY MAJORITY ........................................... 65
6.6 LIMITATION ON SUITS ........................................... 65
6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT .......................... 66
6.8 COLLECTION SUIT BY TRUSTEE .................................... 66
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM .............................. 66
6.10 PRIORITIES .................................................... 67
6.11 UNDERTAKING FOR COSTS ......................................... 67
6.12 ENFORCEMENT OF REMEDIES UNDER THE SECURITY DOCUMENTS .......... 67
ARTICLE VII TRUSTEE ...................................................... 68
7.1 DUTIES OF TRUSTEE ............................................. 68
7.2 RIGHTS OF TRUSTEE ............................................. 69
7.3 INDIVIDUAL RIGHTS OF TRUSTEE .................................. 70
7.4 TRUSTEE'S DISCLAIMER .......................................... 70
7.5 NOTICE OF DEFAULT ............................................. 70
7.6 REPORTS BY TRUSTEE TO HOLDERS ................................. 71
7.7 COMPENSATION AND INDEMNITY .................................... 71
7.8 REPLACEMENT OF TRUSTEE ........................................ 72
7.9 SUCCESSOR TRUSTEE BY MERGER, ETC .............................. 73
7.10 ELIGIBILITY; DISQUALIFICATION ................................. 73
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY ............. 73
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE .......................... 74
8.1 TERMINATION OF THE COMPANY'S OBLIGATIONS ...................... 74
8.2 LEGAL DEFEASANCE AND COVENANT DEFEASANCE ...................... 75
8.3 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE ......... 76
8.4 APPLICATION OF TRUST MONEY .................................... 77
8.5 REPAYMENT TO THE COMPANY ...................................... 78
8.6 REINSTATEMENT ................................................. 78
ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS ........................... 78
9.1 WITHOUT CONSENT OF HOLDERS .................................... 78
9.2 WITH CONSENT OF HOLDERS ....................................... 80
9.3 EFFECT ON SENIOR DEBT ......................................... 81
9.4 COMPLIANCE WITH TIA ........................................... 81
9.5 REVOCATION AND EFFECT OF CONSENTS ............................. 81
9.6 NOTATION ON OR EXCHANGE OF SECURITIES ......................... 82
9.7 TRUSTEE TO SIGN AMENDMENTS, ETC ............................... 82
ARTICLE X SUBORDINATION OF SECURITIES .................................... 82
10.1 SECURITIES SUBORDINATED TO SENIOR DEBT ........................ 82
10.2 SUSPENSION OF PAYMENT WHEN SENIOR DEBT IS IN DEFAULT .......... 83
10.3 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR DEBT
ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF COMPANY .... 84
10.4 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION ..................... 85
10.5 HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR DEBT .. 86
10.6 OBLIGATIONS OF COMPANY UNCONDITIONAL .......................... 86
10.7 NOTICE TO TRUSTEE ............................................. 86
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10.8 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT 87
10.9 TRUSTEE'S RELATION TO SENIOR DEBT ............................. 87
10.10 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
COMPANY OR HOLDERS OF SENIOR DEBT ........................... 87
10.11 SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES ................................. 88
10.12 THIS ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT ............... 88
10.13 TRUSTEE'S COMPENSATION NOT PREJUDICED ......................... 88
ARTICLE XI GUARANTEE OF SECURITIES ....................................... 89
11.1 UNCONDITIONAL GUARANTEE ....................................... 89
11.2 LIMITATIONS ON GUARANTEES ..................................... 90
11.3 EXECUTION AND DELIVERY OF GUARANTEE ........................... 90
11.4 RELEASE OF A GUARANTOR ........................................ 91
11.5 WAIVER OF SUBROGATION ......................................... 92
11.6 IMMEDIATE PAYMENT ............................................. 92
11.7 NO SET-OFF .................................................... 92
11.8 OBLIGATIONS ABSOLUTE .......................................... 92
11.9 OBLIGATIONS CONTINUING ........................................ 93
11.10 OBLIGATIONS NOT REDUCED ....................................... 93
11.11 OBLIGATIONS REINSTATED ........................................ 93
11.12 OBLIGATIONS NOT AFFECTED ...................................... 93
11.13 WAIVER ........................................................ 95
11.14 NO OBLIGATION TO TAKE ACTION AGAINST COMPANY .................. 95
11.15 DEALING WITH THE COMPANY AND OTHERS ........................... 95
11.16 DEFAULT AND ENFORCEMENT ....................................... 95
11.17 AMENDMENT, ETC ................................................ 96
11.18 ACKNOWLEDGMENT ................................................ 96
11.19 COSTS AND EXPENSES ............................................ 96
11.20 NO MERGER OR WAIVER; CUMULATIVE REMEDIES ...................... 96
11.21 SURVIVAL OF OBLIGATIONS ....................................... 96
11.22 GUARANTEE IN ADDITION TO OTHER OBLIGATIONS .................... 97
11.23 SEVERABILITY .................................................. 97
11.24 SUCCESSORS AND ASSIGNS ........................................ 97
ARTICLE XII SUBORDINATION OF GUARANTEE ................................... 97
12.1 GUARANTEE OBLIGATIONS SUBORDINATED TO GUARANTOR SENIOR DEBT ... 97
12.2 SUSPENSION OF GUARANTEE OBLIGATIONS ........................... 98
12.3 GUARANTEE OBLIGATIONS SUBORDINATED TO PRIOR PAYMENT OF ALL
GUARANTOR SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR
REORGANIZATION OF SUCH GUARANTOR ............................ 98
12.4 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION ..................... 99
12.5 HOLDERS OF GUARANTEE OBLIGATIONS TO BE SUBROGATED TO RIGHTS
OF HOLDERS OF GUARANTOR SENIOR DEBT .......................... 100
12.6 OBLIGATIONS OF GUARANTORS UNCONDITIONAL ....................... 100
12.7 NOTICE TO TRUSTEE ............................................. 100
12.8 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT 101
12.9 TRUSTEE'S RELATION TO GUARANTOR SENIOR DEBT ................... 101
12.10 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
GUARANTORS OR HOLDERS OF GUARANTOR SENIOR DEBT .............. 102
12.11 HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
GUARANTEE OBLIGATIONS ....................................... 102
12.12 THIS ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT ............. 103
12.13 TRUSTEE'S COMPENSATION NOT PREJUDICED ......................... 103
ARTICLE XIII MISCELLANEOUS ............................................... 103
13.1 TIA CONTROLS .................................................. 103
13.2 NOTICES ....................................................... 103
13.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS .................. 104
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13.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT ............ 104
13.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION ................. 105
13.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR ..................... 105
13.7 LEGAL HOLIDAYS ................................................ 105
13.8 GOVERNING LAW ................................................. 105
13.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS ................. 106
13.10 NO RECOURSE AGAINST OTHERS .................................... 106
13.11 SUCCESSORS .................................................... 106
13.12 DUPLICATE ORIGINALS ........................................... 106
13.13 SEVERABILITY .................................................. 106
ARTICLE XIV COLLATERAL AND SECURITY DOCUMENTS ............................ 106
14.1 COLLATERAL AND SECURITY DOCUMENTS ............................. 106
14.2 APPLICATION OF PROCEEDS OF COLLATERAL ......................... 107
14.3 POSSESSION, USE AND RELEASE OF COLLATERAL ..................... 107
14.4 OPINION OF COUNSEL ............................................ 108
14.5 ADDITIONAL COLLATERAL ......................................... 108
14.6 TRUST INDENTURE ACT REQUIREMENTS .............................. 109
14.7 SUITS TO PROTECT THE COLLATERAL ............................... 109
14.8 PURCHASER PROTECTED ........................................... 109
14.9 POWERS EXERCISABLE BY RECEIVER OR TRUSTEE ..................... 109
14.10 RELEASE UPON TERMINATION OF COMPANY'S OBLIGATIONS ............. 110
ARTICLE XV APPLICATION OF TRUST MONEYS ................................... 110
15.1 "TRUST MONEYS" DEFINED ........................................ 110
15.2 RETIREMENT OF SECURITIES ...................................... 111
15.3 POWERS EXERCISABLE NOTWITHSTANDING EVENT OF DEFAULT ........... 111
15.4 POWERS EXERCISABLE BY RECEIVER ................................ 112
15.5 DISPOSITION OF SECURITIES RETIRED ............................. 112
15.6 INVESTMENT OF TRUST MONEYS .................................... 112
Exhibit A - Form of Note
Exhibit B - Form of Exchange Note
Exhibit C - Form of Guarantee
Exhibit D - Form of Transfer Certificate for Non-QIB Accredited Investors
Exhibit E - Form of Transfer Certificate for Transfers Pursuant to Regulation S
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
the Indenture
iv
INDENTURE dated as of May 30, 2002
among Quality Distribution, LLC, a
Delaware limited liability company (the
"Company"), as Issuer, each of the
Guarantors named herein, as Guarantors,
and The Bank of New York, a New York
banking corporation, as Trustee (the
"Trustee").
The Company has duly authorized the creation of an issue of 12 1/2%
Senior Subordinated Secured Notes due 2008 and, when and if issued as provided
in the Registration Rights Agreement pursuant to an Exchange Offer (as such
terms are defined herein), 12 1/2% Senior Subordinated Secured Notes due 2008,
which shall have been registered under the Securities Act of 1933, and, to
provide therefor, the Company has duly authorized the execution and delivery of
this Indenture. All things necessary to make the Securities, when duly issued
and executed by the Company and authenticated and delivered hereunder, the valid
and binding obligations of the Company and to make this Indenture a valid and
binding agreement of the Company have been done.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 DEFINITIONS.
"Acceleration Notice" has the meaning set forth in Section 6.2.
"Accredited Investor" has the meaning set forth in Section 2.16(a)
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of such Person or any of its Subsidiaries existing at the time such
Person becomes a Restricted Subsidiary of the Company or at the time it merges
or consolidates with the Company or any of its Restricted Subsidiaries or
assumed in connection with the acquisition of assets from such Person and in
each case not incurred by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Company or
such acquisition, merger or consolidation unless such Indebtedness is incurred
in connection with a tax- advantaged Asset Acquisition.
"Additional Securities" has the meaning set forth in Exhibit A or
Exhibit B, as applicable.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have correlative
meanings.
"Affiliate Transaction" has the meaning set forth in Section 4.12.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning set forth in Section 2.15(a).
"Apollo" means Apollo Management, L.P. and its Affiliates.
"Ares" means Ares Management, L.P. and its Affiliates.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into or consolidated with
the Company or any Restricted Subsidiary of the Company, or (b) the acquisition
by the Company or any Restricted Subsidiary of the Company of the assets of any
Person (other than a Restricted Subsidiary of the Company) which constitute all
or substantially all of the assets of such Person or comprises any division or
line of business of such Person or any other properties or assets of such Person
other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Wholly Owned Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted Subsidiary
of the Company; or (b) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business. Notwithstanding the preceding, the following items shall not be deemed
to be Asset Sales: (i) a transaction or series of related transactions for which
the Company or its Restricted Subsidiaries receive aggregate consideration of
less than $1.5 million, (ii) the sale or exchange of equipment in connection
with the purchase or other acquisition of other equipment, in each case used in
the business of the Company and its Restricted Subsidiaries, (iii) the sale,
lease, conveyance, disposition or other transfer of all or substantially all of
the assets of the Company as permitted under Section 5.1, (iv) disposals of
tractors and trailers in connection with the reinvestment in or the replacement
of its fleet and disposals or replacements of worn-out or obsolete equipment, in
each case in the ordinary course of business of the Company or its Restricted
Subsidiaries, (v) the sale of accounts receivable pursuant to a Qualified
Receivables Transaction, (vi) sales or grants of licenses to use the Company's
or any of its Restricted Subsidiary's patents, trade secrets, know-how and
technology to the extent that such license does not prohibit the licensor from
using the patent, trade secret, know-how or technology, (vii) the disposition of
any Capital Stock or other ownership interest in or assets or property of an
Unrestricted Subsidiary, (viii) any Restricted Payment permitted under Section
4.3 or that constitutes a Permitted Investment and (ix) one or more Sale and
Leaseback Transactions for which the Company or any Restricted Subsidiary of
2
the Company receives aggregate consideration from all such Sale and Leaseback
Transactions of less than $15.0 million.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of
directors, board of managers or other similar governing body of such Person or
any duly authorized committee thereof.
"Board of Managers" means the board of managers of the Company.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the City of New York are required or
authorized by law or other governmental action to be closed.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and any refinancing
thereof and, for purposes of this definition, the amount of such obligations at
any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents,
however designated and whether or not voting, of corporate stock, including each
class of Common Stock and Preferred Stock of such Person or options to purchase
the same; and (ii) with respect to any Person that is not a corporation, any and
all partnership or other equity interests of such Person.
"Cash Equivalents" means (i) U.S. dollars, and in the case of any
Restricted Subsidiary of the Company organized under the laws of Canada or
Mexico, Canadian dollars or Mexican pesos, and such local currencies held by
them from time to time in the ordinary course of business; (ii) marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or the Canadian Government or issued by any agency thereof and
backed by the full faith and credit of such country, in each case maturing
within one year from the date of acquisition thereof; (iii) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Ratings Services ("S&P") or Xxxxx'x Investors Service, Inc.
("Moody's") or, if S&P and Moody's cease to exist, any other nationally
recognized statistical rating organization designated by the Board of Managers;
(iv) commercial paper maturing no more than one year from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 from
S&P or at least P-1 from Moody's or if S&P and Moody's cease to exist, the
equivalent from any other
3
nationally recognized statistical rating organization designated by the Board of
Managers; (v) time deposits, certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any foreign jurisdiction having at the date of
acquisition thereof combined capital and surplus of not less than $250.0
million; (vi) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (ii) above entered into
with any bank meeting the qualifications specified in clause (v) above; (vii)
investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (ii) through (vi) above; and (viii)
overnight deposits and demand deposit accounts (in the respective local
currencies) maintained in the ordinary course of business.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (whether in
one transaction or a series of related transactions) of all or substantially all
of the assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group"), together with any
Affiliates thereof (whether or not otherwise in compliance with the provisions
of this Indenture), other than to the Permitted Holders; (ii) the approval by
the holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) any Person or Group
(other than the Permitted Holders) shall become the owner, directly or
indirectly, beneficially or of record, of shares representing more than 50% of
the aggregate ordinary voting power represented by the issued and outstanding
Capital Stock of the Company; or (iv) the replacement of a majority of the Board
of Managers of the Company over a two-year period from the managers who
constituted the Board of Managers of the Company at the beginning of such
period, and such replacement shall not have been approved by the Permitted
Holders or a vote of at least a majority of the Board of Managers of the Company
then still in office who either were members of such Board of Managers at the
beginning of such period or whose election as a member of such Board of Managers
was previously so approved.
"Change of Control Date" has the meaning set forth in Section
4.15(c).
"Change of Control Offer" has the meaning set forth in Section
4.15(a).
"Change of Control Payment Date" has the meaning set forth in
Section 4.15(a).
"Collateral" means (a) all of the existing and future assets
(whether now owned or hereafter arising or acquired) of the Company and the
Guarantors that from time to time secure the Company's and the Guarantors'
obligations under the Credit Agreement and the interest rate protection and
other hedging agreements permitted thereunder, including, without limitation,
all (i) receivables; (ii) contracts; (iii) inventory; (iv) cash and cash
accounts; (v) equipment; (vi) intellectual property; (vii) insurance policies;
(viii) permits; (ix) tractor trailers; (x) material real property; (xi)
commercial tort claims; (xii) chattel paper; (xiii) letter of credit rights;
(xiv) supporting obligations; (xv) general intangibles; and (xvi) proceeds and
products from any and all of the foregoing; and (b) all other assets of the
Company and the Guarantors that are from time to time subject to or are required
to be subject to the Lien created by the Security
4
Documents in favor of the Collateral Agent for the benefit of the Trustee and
the holders of the Securities; provided, however, that the term "Collateral"
shall not include Excluded Collateral.
"Collateral Agent" means Credit Suisse First Boston, as collateral
agent under the Security Documents, until a successor replaces it in accordance
with the provisions of the Security Documents and thereafter, shall mean such
successor.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or non-voting) of, such Person's common equity,
whether outstanding on the Issue Date or issued after the Issue Date, including
all series and classes of such common equity.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter shall mean such
successor corporation.
"Consolidated Debt" means, on any date, the sum of (without
duplication) (i) all Indebtedness of the Company and its Restricted Subsidiaries
as would be required to be reflected on the liability side of a balance sheet of
the Company in accordance with GAAP as determined on a consolidated basis, (ii)
all Indebtedness of the Company and its Restricted Subsidiaries of the type
described in clause (viii) of the definition of Indebtedness, (iii) the face
amount of all letters of credit issued for the account of the Company and its
Restricted Subsidiaries, and without duplication, all drafts drawn thereunder
and (iv) all contingent Obligations of the Company and its Restricted
Subsidiaries in respect of Indebtedness of other Persons (i.e., Persons other
than the Company or any of its Restricted Subsidiaries) of the type referred to
in preceding clauses (i), (ii) and (iii) of this definition; provided, however,
that for purposes of this definition, (x) the amount of Indebtedness in respect
of Interest Swap Obligations shall be at any time the unrealized net loss
position, if any, of the Company and/or its Restricted Subsidiaries thereunder
on a marked-to-market basis determined no more than one month prior to such time
and (y) any outstanding Indebtedness permitted pursuant to clause (xv)(y) of the
definition of Permitted Indebtedness and otherwise included as a component of
Consolidated Debt pursuant to clause (i) above shall be excluded in making any
determination of Consolidated Debt.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses), (B) Consolidated
Interest Expense and (C) Consolidated Non-cash Charges less any non-cash items
increasing Consolidated Net Income for such period, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in accordance
with GAAP, as applicable.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters for which financial statements are available (the "Four Quarter
Period") ending on or prior to the date of the transaction giving rise to the
need to calculate the Consolidated Fixed Charge Coverage Ratio
5
(the "Transaction Date") to Consolidated Fixed Charges of such Person for the
Four Quarter Period. In addition to and without limitation of the foregoing, for
purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed
Charges" shall be calculated after giving effect on a pro forma basis
(consistent with the provisions below) for the period of such calculation to (i)
the incurrence or repayment of any Indebtedness of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
asset sales or other dispositions or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA (including any pro forma
expense and cost reductions, adjustments and other operating improvements or
synergies both achieved by such Person during such period and to be achieved by
such Person and with respect to the acquired assets, all as shall be determined
in good faith by a responsible financial or accounting officer of the Company)
attributable to the assets which are the subject of any asset sale or other
disposition or Asset Acquisition occurring during the Four Quarter Period or at
any time subsequent to the last day of the Four Quarter Period and on or prior
to the Transaction Date, as if such asset sale or other disposition or Asset
Acquisition (including the incurrence, assumption or liability for any such
Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If
such Person or any of its Restricted Subsidiaries directly or indirectly
guarantees Indebtedness of a third Person, the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if such Person or
any Restricted Subsidiary of such Person had directly incurred or otherwise
assumed such guaranteed Indebtedness. Furthermore, in calculating "Consolidated
Fixed Charges" for purposes of determining the denominator (but not the
numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1) interest on
outstanding Indebtedness determined on a fluctuating basis as of the Transaction
Date and which will continue to be so determined thereafter shall be deemed to
have accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date; and (2) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations or Currency Agreements, shall be deemed to accrue at the rate per
annum resulting after giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense
(excluding amortization or write-off of deferred financing costs), plus (ii) the
product of (x) the amount of all dividend payments on any series of Preferred
Stock of such Person (other than dividends paid in Qualified Capital Stock)
paid, accrued or scheduled to be paid or accrued during such period times (y) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current effective consolidated federal, state and local tax rate
of such Person, expressed as a decimal.
6
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication: (i) the aggregate of the cash
interest expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including, without
limitation (to the extent paid in cash), (a) any amortization of debt discount
and amortization or write-off of deferred financing costs (including the
amortization of costs relating to interest rate caps or other similar
agreements), (b) the net costs under Interest Swap Obligations, (c) all
capitalized interest and (d) the interest portion of any deferred payment
obligation; and (ii) the cash interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP, minus interest income for such
period; it being understood that all interest on the Securities paid by the
issuance of Additional Securities issued in lieu of cash interest on the
Securities shall not be included in Consolidated Interest Expense.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that the following shall be excluded: (a) after-tax gains or
losses from Asset Sales (without regard to the $1.5 million limitation set forth
in the definition thereof) or abandonments or reserves relating thereto, (b)
after-tax non-recurring gains or losses or after-tax items classified as
extraordinary or nonrecurring gains or losses, (c) the net income of any Person
acquired in a "pooling of interests" transaction accrued prior to the date it
becomes a Restricted Subsidiary of the referent Person or is merged or
consolidated with the referent Person or any Restricted Subsidiary of the
referent Person, (d) the net income (but not loss) of any Restricted Subsidiary
of the referent Person to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is restricted
by a contract, operation of law or otherwise, (e) the net income of any Person,
other than a Restricted Subsidiary of the referent Person, except to the extent
of cash dividends or distributions paid to the referent Person or to a Wholly
Owned Restricted Subsidiary of the referent Person by such Person, (f) income or
loss attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued), and (g) in the case of a successor to the referent
Person by consolidation or merger or as a transferee of the referent Person's
assets, any earnings of the successor corporation prior to such consolidation,
merger or transfer of assets.
"Consolidated Non-cash Charges" means, with respect to any Person,
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Senior Debt" means, on any date, (x) Consolidated Debt
at such time less (y) all Indebtedness included in Consolidated Debt which by
its terms is not Senior Debt (including, without limitation, the Obligations
under the Securities and the Obligations under the guarantees of the QDI Inc.
Subordinated Notes).
"Convertible Subordinated Notes" means promissory notes issued by
QDI Inc. to management of any Person acquired by QDI Inc. or any of its
Restricted Subsidiaries after the Issue Date, which promissory notes (i) shall
be convertible into Common Stock of QDI Inc. on
7
the terms provided therein, and (ii) shall be subordinated in right of payment
to any Indebtedness of QDI Inc., whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the QDI Inc. Subordinated Notes.
"Covenant Defeasance" has the meaning set forth in Section 8.2.
"Credit Agreement" means the Credit Agreement dated as of June 9,
1998, and amended and restated as of August 28, 1998, among the Company, QDI
Inc., Levy Transport, Ltd., the lenders party thereto in their capacities as
lenders thereunder and Credit Suisse First Boston, as administrative agent,
together with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing (whether contemporaneously or any time
thereafter) or otherwise restructuring (including increasing the amount of
available borrowings thereunder or adding Restricted Subsidiaries of QDI Inc. as
additional and/or replacement borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which, with
the lapse of time or the giving of notice or both, would be an Event of Default.
"Default Notice" has the meaning set forth in Section 10.2(b).
"Depository" shall mean The Depository Trust Company, New York, New
York, or a successor thereto registered under the Exchange Act or other
applicable statute or regulation.
"Designated Senior Debt" means (i) Indebtedness under or in respect
of the Credit Agreement and (ii) any other Indebtedness constituting Senior Debt
which, at the time of determination, has an aggregate principal amount of at
least $25.0 million and is specifically designated in the instrument evidencing
such Senior Debt as "Designated Senior Debt" by the Company (it being expressly
understood, however, that on the Issue Date, the Credit Agreement prohibits the
Company from designating any Indebtedness other than Indebtedness evidenced by
the Credit Agreement as "Designated Senior Debt").
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), at the option of the holder
thereof, or upon the happening of any event (other than an event which would
constitute a Change of Control or an Asset Sale), matures or is
8
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control or an Asset Sale), on or prior to the
Maturity Date of the Securities; provided that any class of Capital Stock of
such Person that by its terms authorizes such Person to satisfy its obligations
thereunder by delivery of Qualified Capital Stock shall be deemed not to be
Disqualified Capital Stock.
"Event of Default" has the meaning set forth in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Notes" means the 12-1/2% Senior Subordinated Secured Notes
due 2008 (the terms of which are identical to the Initial Notes except that the
Exchange Notes shall be registered under the Securities Act, and shall not
contain the restrictive legend on the face of the form of the Initial Notes), to
be issued in exchange for the Initial Notes pursuant to the registered Exchange
Offer, together with any Additional Securities issued with respect thereto.
"Exchange Offer" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Holder of the Initial Notes to exchange all the Initial Notes held by
such Holder for the Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Initial Notes held by such Holder, all in
accordance with the terms and conditions of the Registration Rights Agreement.
"Excluded Collateral" means and includes (i) all capital stock,
notes, instruments, investment property and other equity interests and
securities owned or held by the Company and the Guarantors, (ii) any and all
assets and property owned or held by QDI Inc. or any foreign subsidiary of the
Company, (iii) any and all assets of the Company and the Guarantors that are
covered by a certificate of title issued by any foreign country or governmental
unit thereof or, in the case of intellectual property, licenses and permits,
registered, filed or issued, as the case may be, under the laws of any foreign
country or governmental unit thereof and all other assets owned or held by any
such Person situated, located or held outside the United States, in each case,
to the extent that the perfection of a security interest in the assets described
in this clause (iii) cannot be effected under the laws of the United States or
any State thereof and (iv) all proceeds and products of the foregoing collateral
described in the preceding clauses (i) through (iii) above.
"Excluded Contribution" means Net Cash Proceeds received by the
Company from (a) contributions to its common equity capital and (b) the sale of
Qualified Capital Stock of the Company, in each case designated as Excluded
Contributions pursuant to an Officers' Certificate executed on the date such
capital contributions are made or the date such Qualified Capital Stock is sold,
as the case may be, which are excluded from the calculation set forth in clause
(iii)(w) of the first paragraph of Section 4.3.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to
9
complete the transaction. Fair market value shall be determined by the Board of
Managers acting reasonably and in good faith and shall be evidenced by a Board
Resolution of the Board of Managers delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.
"Global Security" shall mean a Security which is executed by the
Company and authenticated and delivered by the Trustee to the Depository or
pursuant to the Depository's instruction, all in accordance with this Indenture
and pursuant to a written order, which shall be registered in the name of the
Depository or its nominee.
"Guarantee" means the guarantee by each Guarantor of the Obligations
of the Company under the Securities and this Indenture.
"Guarantee Obligations" has the meaning set forth in Section 12.1.
"Guarantor" means (i) each of American Transinsurance Group, Inc.,
Capacity Management Systems, Inc., Chemical Xxxxxx Corporation, Chemical Xxxxxx
Tank Lines, Inc., Chemical Properties, Inc., CLM, Inc., CLT Services, Inc., CLTL
of Nevada, EnviroPower, Inc., Fleet Transport Company, Inc., Lakeshore Leasing,
Inc., LLI, Inc., Mexico Investments, Inc., MTL of Nevada, Xxxxxxxxx Way Funding
Corp., Power Purchasing, Inc., Quala Systems, Inc., Quality Carriers, Inc., QSI
Services, Inc., and Transplastics, Inc.; and (ii) each of the Company's
Restricted Subsidiaries that in the future executes a supplemental indenture in
which such Restricted Subsidiary agrees to be bound by the terms of this
Indenture as a Guarantor and executes a Guarantee pursuant to this Indenture;
provided that any Person constituting a Guarantor as described above shall cease
to constitute a Guarantor when its respective Guarantee is released in
accordance with the terms of this Indenture.
"Guarantor Senior Debt" means, with respect to any Guarantor, the
principal of, premium, if any, and accrued and unpaid interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy or other
like proceedings at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on any Indebtedness of a Guarantor, whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Guarantee of such Guarantor. Without
limiting the generality of the foregoing, "Guarantor Senior Debt" shall also
include the principal of, premium, if any, accrued and unpaid interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy or other like proceeding at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law) on, and all other amounts owing by any Guarantor in
respect of, (x) all monetary obligations of every nature of a Guarantor under,
or
10
with respect to, the Credit Agreement, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities (including guarantees
thereof), (y) all Interest Swap Obligations (including guarantees thereof), and
(z) all obligations under Currency Agreements (including guarantees thereof), in
each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall not include (i) any
Indebtedness of such Guarantor to a Restricted Subsidiary of such Guarantor,
(ii) Indebtedness to, or guaranteed on behalf of, any director, manager, officer
or employee of such Guarantor or any director, manager, officer or employee of
any Restricted Subsidiary of such Guarantor (including, without limitation,
amounts owed for compensation), (iii) Indebtedness to trade creditors and other
amounts (excluding Indebtedness incurred and amounts owing under the Credit
Agreement) incurred in connection with obtaining goods, materials or services,
(iv) Indebtedness represented by Disqualified Capital Stock, (v) any liability
for federal, state, local or other taxes owed or owing by such Guarantor, (vi)
that portion of any Indebtedness incurred in violation of the provisions of
Section 4.4; provided that, as to any such obligation, no such violation shall
be deemed to exist for purposes of this clause (vi) if the holder(s) of such
obligation or their representative shall have received an officer's certificate
of (or representation from) the Company to the effect that the incurrence of
such Indebtedness does not violate such provisions of this Indenture (or, in the
case of revolving credit Indebtedness, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate such provisions of this Indenture, (vii) with respect
to any Guarantor, that portion of any Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx
Code, is without recourse to the Company or such Guarantor (viii) with respect
to any Guarantor, any Indebtedness which is, by its express terms, subordinated
in right of payment to any other Indebtedness of such Guarantor, and (ix) any
Obligations of such Guarantor under, or relating to, the Securities (by way of
Guarantee or otherwise) which may be included (or deemed to be included) under
the Credit Agreement as a result of the inclusion of security documents (which
specifically cover such Obligations) in the definition of Credit Agreement.
"incur" has the meaning set forth in Section 4.4.
"Indebtedness" means with respect to any Person, without
duplication, (i) all Obligations of such Person for borrowed money, including,
without limitation, Senior Debt, (ii) all Obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all Capitalized
Lease Obligations of such Person, (iv) all Obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations and all Obligations under any title retention agreement (but
excluding trade accounts payable and other accrued liabilities arising in the
ordinary course of business), (v) all Obligations for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent Obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all Obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any Lien on any property or asset
of such Person, the amount of such Obligation being deemed to be the lesser of
the fair market value of such property or asset or the amount of the Obligation
so secured, (viii) all Obligations under Currency Agreements and Interest Swap
Obligations of such Person, and (ix) all Disqualified Capital Stock issued by
such Person with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the
11
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any. For purposes
hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock
which does not have a fixed repurchase price shall be calculated in accordance
with the terms of such Disqualified Capital Stock as if such Disqualified
Capital Stock were purchased on any date on which Indebtedness shall be required
to be determined pursuant to this Indenture, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined reasonably and in good faith by the Board of
Directors of the issuer of such Disqualified Capital Stock. For purposes of
Section 4.4, in determining the principal amount of any Indebtedness to be
incurred by the Company or a Guarantor or which is outstanding at any date, the
principal amount of any Indebtedness which provides that an amount less than the
principal amount thereof shall be due upon any declaration of acceleration
thereof shall be the accreted value thereof at the date of determination.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Managers of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Initial Notes" means the 12-1/2% Senior Subordinated Secured Notes
due 2008 of the Company issued on the Issue Date and authenticated and delivered
under this Indenture pursuant to Section 2.2, together with any Additional
Securities issued with respect thereto.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Securities.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. For purposes of Section 4.3, (i) "Investment"
shall include and be valued at the fair market value of the net assets of any
Restricted Subsidiary of the Company at the time that such Restricted Subsidiary
is designated
12
an Unrestricted Subsidiary of the Company and shall exclude the fair market
value of the net assets of any Unrestricted Subsidiary of the Company at the
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary of
the Company and (ii) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions in connection
with such Investment or any other amounts received in respect of such
Investment; provided that no such payment of dividends or distributions or
receipt of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such amounts would
be included in Consolidated Net Income. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Common Stock of any
direct or indirect Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, the Company no longer owns, directly or
indirectly, 100% of the outstanding Common Stock of such Restricted Subsidiary,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Common Stock of such
Restricted Subsidiary not sold or disposed of.
"Issue Date" means May 30, 2002, the date of original issuance of
the Initial Notes.
"Legal Defeasance" has the meaning set forth in Section 8.2(b).
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind, including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest.
"Lock-Up Agreements" means each of (i) the Lock-Up and Purchase
Agreement dated as of April 10, 2002 between QDI Inc. and Apollo, (ii) the
Lock-Up Agreement dated as of April 10, 2002 between QDI Inc. and Ares and (iii)
the Lock-Up Agreement dated as of April 10, 2002 among QDI Inc. and certain
members of the management of QDI Inc., in each case, as in effect on the Issue
Date.
"Management Agreement" means the Management Agreement dated February
10, 1998 between the Company and Apollo Management, L.P., as amended from time
to time in accordance with its terms.
"Maturity Date" means June 15, 2008.
"Mortgaged Property" means each real property owned by the Company
or any of its Subsidiaries required to be mortgaged pursuant to the Credit
Agreement.
"Mortgages" means each mortgage, deed of trust or deed to secure
debt (in each case as amended, restated, supplemented, replaced, extended and/or
otherwise modified from time to time) required to be delivered with respect to
any Mortgaged Property.
"Net Cash Proceeds" means, (i) with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations
13
when received in the form of cash or Cash Equivalents (other than the portion of
any such deferred payment constituting interest) received by the Company or any
of its Restricted Subsidiaries from such Asset Sale net of (a) reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales
commissions), (b) taxes paid or payable after taking into account any reduction
in consolidated tax liability due to available tax credits or deductions and any
tax sharing arrangements, (c) repayment of Indebtedness that is required to be
repaid in connection with such Asset Sale, (d) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, and (e) all distributions and other payments required to be
made to minority interest holders in Restricted Subsidiaries of the Company or
joint ventures as a result of such Asset Sales; and (ii) with respect to any
issuance or sale of Capital Stock, means the cash proceeds of such issuance or
sale, net of attorneys' fees, accountants' fees, underwriters' or placement
agents' or initial purchasers' fees, discounts or commissions and brokerage,
consultant and other fees and expenses actually incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof.
"Net Proceeds Offer" has the meaning set forth in Section 4.16.
"Net Proceeds Offer Amount" has the meaning set forth in Section
4.16.
"Net Proceeds Offer Payment Date" has the meaning set forth in
Section 4.16.
"Net Proceeds Offer Trigger Date" has the meaning set forth in
Section 4.16.
"Non-payment Default" has the meaning set forth in Section 10.2(b).
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"Offering" means the issuance of the Initial Notes in the exchange
offer and consent solicitation consummated by the Company on the Issue Date
pursuant to the terms of the Offering Memorandum and Consent Solicitation
Statement dated April 10, 2002, as amended by Supplement No. 1 thereto dated May
10, 2002.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, or the Secretary of such Person.
"Officers' Certificate" means a certificate signed by two Officers
of the Company or of a Guarantor, as applicable.
"Opinion of Counsel" means a written opinion from legal counsel.
14
"Option Plan" means the Option Plan adopted by the Company on June
9, 1998 with respect to an aggregate of 222,222 shares of the Company's Common
Stock.
"Paying Agent" has the meaning set forth in Section 2.3.
"Payment Blockage Period" has the meaning set forth in Section
10.2(b).
"Payment Default" has the meaning set forth in Section 10.2(a).
"Permitted Business" means the business of the Company and its
Restricted Subsidiaries as existing on the Issue Date and any other businesses
that are the same, similar or reasonably related, ancillary or complementary
thereto and reasonable extensions thereof.
"Permitted Holders" means Apollo Management, L.P. and its
Affiliates.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Initial Notes and the related
Guarantees thereof and under the Exchange Notes issued pursuant to an
Exchange Offer and the related Guarantees thereof;
(ii) Indebtedness incurred pursuant to the Credit Agreement in
an aggregate principal amount at any time outstanding not to exceed $360.0
million less the amount of all mandatory principal payments actually made
after the Issue Date by the Company under, and any permanent commitment
reductions actually made after the Issue Date in the revolving credit
portion of, the Credit Agreement with Net Cash Proceeds of Asset Sales
applied thereto as required by Section 4.16; provided, further, that the
aggregate principal amount of Indebtedness permitted to be incurred under
this clause (ii) shall be reduced dollar for dollar by the amount of any
Indebtedness outstanding under clause (xii) below;
(iii) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date;
(iv) Interest Swap Obligations of the Company or any of its
Restricted Subsidiaries covering Indebtedness of the Company or any of its
Restricted Subsidiaries; provided, however, that such Interest Swap
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on outstanding
Indebtedness incurred in accordance with this Indenture to the extent the
notional principal amount of such Interest Swap Obligation does not exceed
the principal amount of the Indebtedness to which such Interest Swap
Obligation relates;
(v) Indebtedness under Currency Agreements; provided that in
the case of Currency Agreements which relate to Indebtedness, such
Currency Agreements do not increase the Indebtedness of the Company and
its Restricted Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
15
(vi) Indebtedness of a Restricted Subsidiary of the Company to
the Company or to a Wholly Owned Restricted Subsidiary of the Company for
so long as such Indebtedness is held by the Company, a Wholly Owned
Restricted Subsidiary of the Company or the lenders under the Credit
Agreement and/or the holders of the Securities or any collateral agent or
trustee for such lenders and/or holders, in each case subject to no Lien
held by a Person other than the Company, a Wholly Owned Restricted
Subsidiary of the Company or the lenders under the Credit Agreement and/or
the holders of the Securities or any collateral agent or trustee for such
lenders and/or holders; provided that if as of any date any Person other
than the Company, a Wholly Owned Restricted Subsidiary of the Company or
the lenders under the Credit Agreement and/or the holders of the
Securities or any collateral agent or trustee for such lenders and/or
holders, owns or holds any such Indebtedness or holds a Lien in respect of
such Indebtedness, such date shall be deemed the incurrence of
Indebtedness not constituting Permitted Indebtedness under this clause
(vi) by the issuer of such Indebtedness;
(vii) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary of the Company for so long as such Indebtedness is held by a
Wholly Owned Restricted Subsidiary of the Company or the lenders under the
Credit Agreement and/or holders of the Securities or any collateral agent
or trustee for such lenders and/or holders and is subject to no Lien other
than a Lien in favor of the lenders under the Credit Agreement and/or
holders of the Securities or any collateral agent or trustee for such
lenders and/or holders; provided that (a) any Indebtedness of the Company
to any Wholly Owned Restricted Subsidiary of the Company is unsecured and
subordinated, pursuant to a written agreement, to the Company's
obligations under this Indenture and the Securities and (b) if as of any
date any Person other than a Wholly Owned Restricted Subsidiary of the
Company owns or holds any such Indebtedness or any Person holds a Lien
other than a Lien in favor of the lenders under the Credit Agreement
and/or the holders of the Securities or any collateral agent or trustee
for such lenders and/or holders in respect of such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness under this clause (vii) by the Company;
(viii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within two Business Days of
incurrence;
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries in respect of performance bonds, bankers' acceptances,
workers' compensation claims, surety or appeal bonds, payment obligations
in connection with self-insurance or similar obligations, bank overdrafts
and letters of credit in respect thereof;
(x) Indebtedness represented by Capitalized Lease Obligations,
Purchase Money Indebtedness or Acquired Indebtedness of the Company and
its Restricted Subsidiaries not to exceed $25.0 million in the aggregate
at any one time outstanding; provided that all or a portion of the $25.0
million permitted to be incurred under this clause (x) may, at the option
of the Company, be incurred under the Credit Agreement or
16
pursuant to clause (xvi) below instead of pursuant to Capitalized Lease
Obligations, Purchase Money Indebtedness or Acquired Indebtedness;
(xi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price or similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary, other than guarantees by the Company or a
Restricted Subsidiary of the Company of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or a
Subsidiary for the purpose of financing such acquisition; provided,
however, that (a) such Indebtedness is not reflected on the balance sheet
of the Company or any Restricted Subsidiary of the Company; provided,
however, that for purposes of this clause (a), contingent obligations
referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet, and (b) the maximum assumable liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds (including
the fair market value of non-cash proceeds, the fair market value of such
non-cash proceeds being measured at the time they are received as
determined in good faith by the Board of Managers or Directors of the
Company or the Restricted Subsidiary, as applicable, and without giving
effect to any subsequent changes in value) actually received by the
Company and its Restricted Subsidiaries in connection with such
disposition;
(xii) the incurrence by a Receivables Subsidiary of
Indebtedness in a Qualified Receivables Transaction that is without
recourse (other than pursuant to representations, warranties, covenants
and indemnities entered into in the ordinary course of business in
connection with a Qualified Receivables Transaction) to the Company or to
any Restricted Subsidiary of the Company or their assets (other than such
Receivables Subsidiary and its assets), and is not guaranteed by any such
Person; provided that any outstanding Indebtedness incurred under this
clause (xii) shall reduce (for so long as, and to the extent that, the
Indebtedness referred to in this clause (xii) remains outstanding) the
aggregate amount of Indebtedness permitted to be incurred under clause
(ii) above to the extent set forth therein;
(xiii) Refinancing Indebtedness;
(xiv) guarantees of Indebtedness (x) of any Restricted
Subsidiary of the Company by the Company and its Restricted Subsidiaries,
including agreements of the Company to keep well or maintain financial
statement conditions of any Restricted Subsidiary of the Company and (y)
incurred pursuant to the Credit Agreement or pursuant to clause (iv) or
(v) above by any Restricted Subsidiary of the Company;
(xv) Indebtedness of the Company or any of its Restricted
Subsidiaries consisting of (x) take-or-pay obligations contained in supply
arrangements entered into in the ordinary course of business and on a
basis consistent with past practice and (y) Indebtedness of the Company
incurred in connection with an insurance program whereby an insurance
financing company prepays on behalf of the Company and its Restricted
Subsidiaries insurance premiums on insurance policies of the Company and
its Restricted
17
Subsidiaries and the Company from time to time makes "premium" payments
directly to such insurance financing company to satisfy their obligations
to such insurance financing company; provided that Indebtedness referred
to in this clause (y) does not exceed $16.0 million in the aggregate at
any one time outstanding;
(xvi) additional Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed
$25.0 million at any one time outstanding (which amount may, but need not,
be incurred in whole or in part under the Credit Agreement) plus any
amounts incurred in accordance with the proviso to clause (x) above;
provided that any Indebtedness incurred in excess of $25.0 million in
accordance with the proviso to clause (x) above shall reduce the aggregate
amount permitted to be incurred under clause (x) above to the extent set
forth therein;
(xvii) Indebtedness under the guarantees of the QDI Inc.
Subordinated Notes that remain outstanding after the consummation of the
Offering; and
(xviii) Indebtedness consisting of recourse obligations of the
Company and its Restricted Subsidiaries to financial institutions in
connection with Permitted Program Affiliate Transactions for lease
obligations owing to such financial institutions by Program Affiliates in
an aggregate principal amount not to exceed $20.0 million at any one time
outstanding.
For purposes of determining compliance with Section 4.4,
(a) in the event that an item of Indebtedness meets the criteria
of more than one of the categories of Permitted Indebtedness
described in clauses (i) through (xviii) above or is entitled
to be incurred pursuant to the Consolidated Fixed Charge
Coverage Ratio provisions, the Company shall, in its sole
discretion, classify (or later reclassify) such item of
Indebtedness in any manner that complies with such provision,
(b) accrual of interest, accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms or in
the form of Capital Stock, the payment of dividends on
Disqualified Capital Stock in the form of additional shares of
the same class of Disqualified Capital Stock (or an increase
in the aggregate liquidation preference thereof) and increases
in the amount of Indebtedness outstanding solely as a result
of fluctuations in the exchange rate of currencies will not be
deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Capital Stock, as the case may be,
(c) guarantees of, or obligations in respect of letters of credit
relating to, Indebtedness which is otherwise included in the
determination of a particular amount of Indebtedness shall not
be included,
(d) if obligations in respect of letters of credit are incurred
pursuant to the Credit Agreement and are being treated as
incurred pursuant to clause (ii)
18
above and the letters of credit relate to other Indebtedness,
then such other Indebtedness shall not be included,
(e) if such Indebtedness is denominated in a currency other than
U.S. dollars, the U.S. dollar equivalent principal amount
thereof will be calculated based on the relevant currency
exchange rates in effect on the date such Indebtedness was
incurred, and
(f) Indebtedness need not be incurred solely by reference to one
category of Permitted Indebtedness or the Consolidated Fixed
Charge Coverage Ratio provisions of such covenant but may be
permitted to be incurred in part under any combination of
categories of Permitted Indebtedness and the Consolidated
Fixed Charge Coverage Ratio provisions.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Wholly Owned Restricted Subsidiary of the
Company or that will merge or consolidate into the Company or a Wholly Owned
Restricted Subsidiary of the Company; (ii) Investments in the Company by any
Restricted Subsidiary of the Company; provided that any Indebtedness evidencing
such Investment is unsecured and subordinated, pursuant to a written agreement,
to the Company's obligations under the Securities and this Indenture; (iii)
Investments in cash and Cash Equivalents; (iv) loans and advances to employees
and officers of the Company and its Restricted Subsidiaries made (a) in the
ordinary course of business for bona fide business purposes not to exceed $5.0
million in the aggregate at any one time outstanding or (b) to fund purchases of
Capital Stock of the Company under the Option Plan or similar employment
arrangements so long as no cash is actually advanced by the Company or any of
its Restricted Subsidiaries to such employees and officers to fund such
purchases; (v) Currency Agreements and Interest Swap Obligations entered into in
the ordinary course of the Company's or its Restricted Subsidiaries' businesses
and otherwise in compliance with this Indenture; (vi) additional Investments
(including joint ventures) not to exceed $20.0 million at any one time
outstanding; (vii) Investments in securities of trade creditors or customers
received (x) pursuant to any plan of reorganization or similar arrangement upon
the bankruptcy or insolvency of such trade creditors or customers or (y) in
settlement of delinquent obligations of, and other disputes with, customers,
suppliers and others, in each case arising in the ordinary course of business or
otherwise in satisfaction of a judgment; (viii) Investments (a) made by the
Company or its Restricted Subsidiaries consisting of consideration received in
connection with an Asset Sale made in compliance with Section 4.16, (b)
consisting of consideration received by the Company or any of its Restricted
Subsidiaries in connection with a transaction that would be an Asset Sale if it
consisted of aggregate consideration received by the Company or any of its
Restricted Subsidiaries of $1.5 million or more or (c) acquired in exchange for,
or out of the proceeds of, a substantially concurrent offering of Capital Stock
(other than Disqualified Capital Stock) of the Company (which proceeds of any
such offering of Capital Stock of the Company shall not have been, and shall not
be, included in clause (iii)(x) of the first paragraph of Section 4.3); (ix)
Investments of a Person or any of its Subsidiaries existing at the time such
Person becomes a Restricted Subsidiary of the Company or at the time such Person
merges or consolidates with the Company or any of its Restricted Subsidiaries,
in either case in compliance with this Indenture; provided that such Investments
were not made by such Person in connection with, or in
19
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
of the Company or such merger or consolidation; (x) Investments in the
Securities; (xi) Investments in existence on the Issue Date; (xii) guarantees of
indebtedness to the extent permitted pursuant to Section 4.4 and the creation of
liens on the assets of the Company or any Restricted Subsidiaries in compliance
with Section 4.14; and (xiii) the Company and its Restricted Subsidiaries may
make loans or advances to, prepay expenses of, make purchases on behalf of, or
otherwise extend credit to (other than extensions of trade credit which are
specifically excluded from the definition of "Investments"), Program Affiliates
so long as such amounts are used to fund expenses or purchases incurred in the
ordinary course of business and are being made on a basis consistent with past
practice and are deducted from the weekly settlement paid to such Program
Affiliates.
"Permitted Liens" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent, or (b) contested in good faith by
appropriate proceedings and as to which the Company or its Restricted
Subsidiaries shall have set aside on its books such reserves, if any, as
shall be required pursuant to generally accepted accounting principles in
effect from time to time in the applicable jurisdiction;
(ii) statutory and common law Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen,
customs and revenue authorities and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP shall have been made in respect
thereof;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, including any Lien securing
letters of credit issued in the ordinary course of business in connection
therewith, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have expired;
(v) licenses, sublicenses, leases, subleases, easements,
rights-of-way, zoning restrictions and other similar charges or
encumbrances in respect of property not interfering in any material
respect with the ordinary conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole;
(vi) any interest or title of a lessor under any Capitalized
Lease Obligation or operating lease; provided that such Liens do not
extend to any property or asset which is not leased property subject to
such Capitalized Lease Obligation or operating lease;
20
(vii) Liens securing Indebtedness permitted pursuant to clause
(x) of the definition of "Permitted Indebtedness"; provided, however, that
in the case of Purchase Money Indebtedness (a) the Indebtedness shall not
exceed the cost of such property or assets and shall not be secured by any
property or assets of the Company or any Restricted Subsidiary of the
Company other than the property and assets so acquired or constructed and
any improvements thereon and (b) the Lien securing such Indebtedness shall
be created within 180 days of such acquisition or construction or, in the
case of a refinancing of any Purchase Money Indebtedness, within 180 days
of such refinancing;
(viii) Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Person's obligations in respect
of bankers' acceptances or similar credit transactions issued or created
for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;
(ix) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(x) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty requirements
of the Company or any of its Restricted Subsidiaries, including rights of
offset and set-off;
(xi) Liens securing Interest Swap Obligations which Interest
Swap Obligations relate to Indebtedness that is otherwise permitted under
this Indenture;
(xii) Liens in the ordinary course of business not exceeding
$5.0 million at any one time outstanding that (a) are not incurred in
connection with borrowing of money and (b) do not materially detract from
the value of the property or materially impair its use;
(xiii) Liens by reason of a judgment or decree not otherwise
resulting in an Event of Default;
(xiv) Liens securing Indebtedness permitted to be incurred
pursuant to clauses (xii) and (xvi) of the definition of "Permitted
Indebtedness";
(xv) Liens securing Indebtedness under Currency Agreements
permitted under this Indenture;
(xvi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(xvii) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course
of business;
(xviii) Liens securing Acquired Indebtedness incurred in
accordance with Section 4.4 and clause (x) of the definition of "Permitted
Indebtedness" hereunder;
21
provided that (a) such Liens secured such Acquired Indebtedness at the
time of and prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company and were not granted in
connection with, or in anticipation of, the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company,
unless the related Indebtedness is incurred in connection with a
tax-advantaged Asset Acquisition and (b) such Liens do not extend to or
cover any property or assets of the Company or of any of its Restricted
Subsidiaries other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary of the Company and
are no more favorable to the lienholders than those securing the Acquired
Indebtedness prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company; and
(xix) Liens securing insurance premium financing arrangements,
provided that such Lien is limited to the applicable insurance contracts.
"Permitted Program Affiliate Transactions" shall mean a transaction
or series of transactions effected in the ordinary course of business of the
Company or any of its Restricted Subsidiaries and consistent with the past
practices of the Company and its Restricted Subsidiaries pursuant to which (i)
(a) the Company and/or one or more of its Restricted Subsidiaries leases
equipment from a third party financial institution, (b) transfers the lease (and
the equipment subject thereto) to a Program Affiliate and (c) guarantees a
portion of the lease payments owing by such Program Affiliate to such financial
institution and/or agrees to assume from the Program Affiliate the lease
initially so transferred to it upon the failure of such Program Affiliate to
make the lease payments owing by it thereunder to such financial institution,
(ii) (a) the Company and/or one or more of its Restricted Subsidiaries leases
equipment from a third party financial institution, (b) subleases such equipment
to a Program Affiliate, (c) transfers the account receivable related to the
sublease (together with all collateral rights to the equipment that is the
subject of the sublease) to a third party financial institution and (d)
guarantees the sublease payments owing by the Program Affiliate to such
financial institution, (iii) (a) the Company and/or one or more of its
Restricted Subsidiaries leases equipment to a Program Affiliate, (b) transfers
the account receivable related to such lease (together with all of the
collateral rights to the equipment that is the subject of the lease) to a third
party financial institution and (c) guarantees the lease payments owing by the
Program Affiliate to such financial institution or (iv) (a) the Company and/or
one or more of its Restricted Subsidiaries leases equipment to a Program
Affiliate, (b) transfers the lease (and the related account receivable and the
equipment that is the subject of the lease) to a third party financial
institution and (c) guarantees the lease payments owing by the Program Affiliate
to such financial institution and/or agrees to assume such equipment lease from
such Program Affiliate upon the failure of such Program Affiliate to make the
lease payments owing by it thereunder to such financial institution.
"Person" means an individual, partnership, limited liability
company, corporation, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Physical Securities" has the meaning provided in Section 2.1.
Physical Securities are sometimes referred to herein as certificated Securities.
22
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Program Affiliate" means each of the independently-owned entities
that operate under the name of the Company or any of its Restricted Subsidiaries
pursuant to an exclusive agreement with the Company or such Restricted
Subsidiary.
"Purchase Money Indebtedness" means Indebtedness of the Company and
its Restricted Subsidiaries incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment or other
related assets and any Refinancing thereof.
"QDI Inc." means Quality Distribution, Inc., a Florida corporation,
or any successor Person.
"QDI Inc. Subordinated Notes" means the 10% Senior Subordinated
Notes due 2006 and the Floating Interest Rate Subordinated Term Securities due
2006 (FIRSTSSM), each issued by QDI Inc. pursuant to the Indenture dated as of
June 9, 1998, as supplemented on August 28, 1998 and May 30, 2002, among QDI
Inc., the subsidiary guarantors party thereto, and The Bank of New York, as
successor to the corporate trust business of United States Trust Company of New
York, as trustee.
"QDI Inc. Junior PIK Notes" means the 12% Junior Subordinated PIK
Notes due 2009, issued by QDI Inc. pursuant to the Indenture dated as of May 30,
2002, between QDI Inc. and Wilmington Trust Company, as trustee.
"QIB" means any "qualified institutional buyer" (as defined under
the Securities Act).
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Receivables Transaction" means any transaction or series
of transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (i) a Receivables Subsidiary (in the
case of a transfer by the Company or any of its Restricted Subsidiaries) and
(ii) any other Person (in the case of a transfer by a Receivables Subsidiary),
or may grant a security interest in, any accounts receivable (whether now
existing or arising in the future) of the Company or any of its Restricted
Subsidiaries, and any assets related thereto including, without limitation, all
collateral securing such accounts receivable, all contracts and all guarantees
or other obligations in respect of such accounts receivable, proceeds of such
accounts receivable and other assets (including contract rights) which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Restricted Subsidiary
of the Company that engages in no activities other than in connection with the
financing of accounts
23
receivable and that is designated by the Board of Managers of the Company (as
provided below) as a Receivables Subsidiary (a) no portion of the Indebtedness
or any other Obligations (contingent or otherwise) of which (i) is guaranteed by
the Company or any Restricted Subsidiary of the Company (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Receivables
Transaction), (ii) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to representations,
warranties, covenants and indemnities entered into in the ordinary course of
business in connection with a Qualified Receivables Transaction or (iii)
subjects any property or asset of the Company or any Restricted Subsidiary of
the Company, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, other than pursuant to representations, warranties,
covenants and indemnities entered into in the ordinary course of business in
connection with a Qualified Receivables Transaction, (b) with which neither the
Company nor any Restricted Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms no less favorable to
the Company or such Restricted Subsidiary than those that might be obtained at
the time from Persons who are not Affiliates of the Company, other than fees
payable in the ordinary course of business in connection with servicing accounts
receivable and (c) with which neither the Company nor any Restricted Subsidiary
of the Company has any obligation to maintain or preserve such Restricted
Subsidiary's financial condition or cause such Restricted Subsidiary to achieve
certain levels of operating results. Any such designation by the Board of
Managers of the Company shall be evidenced to the Trustee by filing with the
Trustee a board resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Record Date" means the applicable record date specified in the
Securities.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"Reference Date" has the meaning set forth in Section 4.3.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or
any Restricted Subsidiary of the Company of (a) for the purposes of clause
(xiii) of the definition of "Permitted Indebtedness, hereunder, Indebtedness
incurred in accordance with Section 4.4 (other than pursuant to clause (ii),
(iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii) or (xvi) of the
definition of "Permitted Indebtedness") or (b) for any other purpose,
Indebtedness incurred in accordance with Section 4.4, in each case that does not
(1) result in an increase in the aggregate principal
24
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium, accrued interest and defeasance
costs, required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable fees, expenses, discounts and
commissions incurred by the Company in connection with such Refinancing) or (2)
create Indebtedness with, (a) if the Indebtedness being Refinanced was incurred
pursuant to clause (iii) of the definition of "Permitted Indebtedness," a
Weighted Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or a final maturity earlier than
the final maturity of the Indebtedness being Refinanced; or (b) if the
Indebtedness being Refinanced was otherwise incurred in accordance with the
definition of "Permitted Indebtedness" or pursuant to Section 4.4, a Weighted
Average Life to Maturity that is less than the Weighted Average Life to Maturity
of the Securities or a final maturity earlier than the final maturity of the
Securities; provided that (x) if such Indebtedness being Refinanced is
Indebtedness of the Company, then such Refinancing Indebtedness shall be
Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced
is subordinate or junior to the Securities, then such Refinancing Indebtedness
shall be subordinate to the Securities at least to the same extent and in the
same manner as the Indebtedness being Refinanced.
"Registrar" has the meaning set forth in Section 2.3.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of May 30, 2002, by and among the Company, the Guarantors
and The Bank of New York.
"Representative" means the trustee, agent or representative in
respect of any Designated Senior Debt; provided that if, and for so long as, any
Designated Senior Debt lacks such a representative, then the Representative for
such Designated Senior Debt shall at all times constitute the holders of a
majority in outstanding principal amount of such Designated Senior Debt.
"Responsible Officer" means, when used with respect to the Trustee,
any officer in the corporate trust office of the Trustee with direct
responsibility for the administration of this Indenture or to whom any corporate
trust matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
"Restricted Payment" has the meaning set forth in Section 4.3.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Security constitutes a Restricted Security.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a
25
Restricted Subsidiary of any property, whether owned by the Company or any
Restricted Subsidiary at the Issue Date or later acquired, which has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person or to any other Person from whom funds have been or are to be advanced by
such Person on the security of such property other than (a) arrangements between
the Company and a Wholly Owned Restricted Subsidiary of the Company or between
Wholly Owned Restricted Subsidiaries of the Company or (b) any arrangement
whereby the transfer involves fixed or capital assets and is consummated within
120 days after the date the Company or a Restricted Subsidiary of the Company
acquires or finishes construction of such fixed or capital assets.
"Securities" means the Initial Notes, the Exchange Notes, the
Additional Securities and any other 12-1/2% Senior Subordinated Notes due 2008
issued after the Issue Date in accordance with clause (iv) of the fourth
paragraph of Section 2.2, treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"Security Documents" means, collectively, the U.S. Security Agreement,
the Mortgages, and all other security agreements, mortgages, deeds of trust,
pledges, collateral assignments or other instruments evidencing or creating any
Security Interests in favor of the Collateral Agent in all or any portion of the
Collateral, in each case, as amended, amended and restated, supplemented,
replaced, extended or otherwise modified from time to time, in accordance with
the terms thereof.
"Security Interests" means the Liens on the Collateral created by the
Security Documents in favor of the Collateral Agent for the benefit of the
Trustee and the holders of the Securities.
"Securityholder" or "Holder" means the Person in whose name a Security
is registered on the Registrar's books.
"Senior Debt" means the principal of, premium, if any, and interest
(including any accrued and unpaid interest accruing subsequent to the filing of
a petition of bankruptcy or other like proceeding at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of the Company, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities. Without limiting the generality of the foregoing, "Senior Debt"
shall also include the principal of, premium, if any, interest (including any
interest accruing and unpaid subsequent to the filing of a petition of
bankruptcy or other like proceeding at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law) on, and all other amounts owing by the Company in
respect of, (x) all monetary obligations of every nature of the Company
(including guarantees thereof) under, or with respect to, the Credit Agreement,
including, without limitation,
26
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities, (y) all Interest Swap
Obligations (including guarantees thereof) and (z) all obligations under
Currency Agreements (including guarantees thereof), in each case whether
outstanding on the Issue Date or thereafter incurred. Notwithstanding the
foregoing, "Senior Debt" shall not include (i) any Indebtedness of the Company
to a Subsidiary of the Company, (ii) Indebtedness to, or guaranteed on behalf
of, any manager, director, officer or employee of the Company or any manager,
director, officer or employee of any Subsidiary of the Company (including,
without limitation, amounts owed for compensation), (iii) Indebtedness to trade
creditors and other amounts incurred in connection with obtaining goods,
materials or services (excluding Indebtedness incurred, and amounts owing, under
the Credit Agreement), (iv) Indebtedness represented by Disqualified Capital
Stock, (v) any liability for federal, state, local or other taxes owed or owing
by the Company, (vi) that portion of any Indebtedness incurred in violation of
Section 4.4; provided that, (x) as to any such obligation, no such violation
shall be deemed to exist for purposes of this clause (vi) if the holder(s) of
such obligation or their representative shall have received an officer's
certificate of (or representation from) the Company to the effect that the
incurrence of such Indebtedness does not violate the provisions of this
Indenture or, in the case of revolving credit Indebtedness, that the incurrence
of the entire committed amount thereof at the date on which the initial
borrowing thereunder is made would not violate such provisions of this Indenture
and (y) any revolving Indebtedness under the Credit Agreement incurred in
violation of such covenant as a result of the application of the proviso
appearing in clause (ii) of the definition of "Permitted Indebtedness" shall not
be excluded from Senior Debt so long as such Indebtedness was extended in good
faith to the Company, (vii) with respect to the Company, Indebtedness which,
when incurred and without respect to any election under Section 1111(b) of Xxxxx
00, Xxxxxx Xxxxxx Code, is without recourse to the Company, (viii) with respect
to the Company, any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Company, and (ix) any
Obligations under, or relating to, the Securities which may be included (or
deemed to be included) under the Credit Agreement as a result of the inclusion
of security documents (which specifically cover such Obligations) in the
definition of Credit Agreement.
"Senior Leverage Ratio" means, on any date, the ratio of (i) the
Consolidated Senior Debt on such date to (ii) the Consolidated EBITDA of the
Company during the four full fiscal quarters for which financial statements are
available ending on or prior to such date.
"Shareholders' Agreement" means (a) the Amended and Restated
Shareholders' Agreement dated as of February 10, 1998 among certain Affiliates
of Apollo Management, L.P. and certain shareholders of QDI Inc., as amended from
time to time in accordance with its terms and (b) the Amended and Restated
Common and Preferred Stock Purchase and Shareholders' Agreement dated as of
August 28, 1998 among certain Affiliates of Apollo Management, L.P., BT
Investment Partners Inc., MTL Equity Investors, L.L.C. and QDI Inc., as amended
from time to time in accordance with its terms.
"Shareholder Subordinated Note" means an unsecured junior subordinated
note issued by QDI Inc. (and not guaranteed or supported in any way by QDI Inc.
or any of its Subsidiaries) to finance repurchases by QDI Inc. of Capital Stock
of QDI Inc., which repurchases are contemplated to be made pursuant to clause
(4) of the second paragraph of Section 4.3.
27
"Significant Subsidiary" with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.
"Subsidiary", with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or a
Subsidiary of such Person or (ii) any other Person of which at least a majority
of the voting interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person or a Subsidiary of such Person.
"Surviving Entity" has the meaning set forth in Section 5.1.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect on the date on which this Indenture is qualified under
the TIA, except as otherwise provided in Section 9.4.
"Total Leverage Ratio" means, on any date, the ratio of (i) the
Consolidated Debt on such date to (ii) the Consolidated EBITDA of the Company
during the four full fiscal quarters for which financial statements are
available ending on or prior to such date.
"Transactions" means the Offering and all of the transaction
contemplated thereby.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter shall mean such successor.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors or Managers of
such Person in the manner provided below, (ii) any Subsidiary of an Unrestricted
Subsidiary and (iii) Xxxxxxx.xxx, Inc. and any of its Subsidiaries (but only
until such time that the Board of Managers of the Company designates
Xxxxxxx.xxx, Inc. or any of its Subsidiaries a Restricted Subsidiary in the
manner provided below). The Board of Managers may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided that
(x) either (i) the Company certifies to the Trustee in an Officers' Certificate
that such designation complies with Section 4.3 or (ii) the Subsidiary to be so
designated at the time of designation has total consolidated assets of $1,000 or
less and (y) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Company or any of its Restricted Subsidiaries (other than the
assets of such Unrestricted Subsidiary). The Board of Managers may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary only
28
if (x) immediately after giving effect to such designation, the Company is able
to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.4 and (y) immediately before and
immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing. Any such designation by the Board
of Managers shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged and which
are not callable or redeemable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Security Agreement" means that certain U.S. Security Agreement,
dated as of June 9, 1998, amended and restated as of August 28, 1998 and further
amended and restated as of the Issue Date, among, QDI Inc., various Subsidiaries
of QDI Inc. and the Collateral Agent (as the same may be further amended,
restated, supplemented, replaced, extended and/or otherwise modified from time
to time).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly Owned Restricted Subsidiary" of any Person means any Restricted
Subsidiary of such Person of which all the outstanding voting securities (other
than in the case of a foreign Restricted Subsidiary, directors' qualifying
shares or an immaterial amount of shares required to be owned by other Persons
pursuant to applicable law) are owned by such Person and/or by one or more
Wholly Owned Restricted Subsidiaries of such Person.
1.2 INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
29
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, any Guarantor
or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
1.3 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE II
THE SECURITIES
2.1 FORM AND DATING.
The Initial Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A and the Exchange Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit B. The Additional Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A prior to the
issuance of the Exchange Notes and shall be substantially in the form of Exhibit
B following the issuance of the Exchange Notes. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Securities and
any notation, legend or endorsement on them. Each Security shall be dated the
date of its authentication. At the time of issuance, each Security shall have an
executed Guarantee from each of the then existing Guarantors endorsed thereon
substantially in the form of Exhibit C.
The terms and provisions contained in the Securities, annexed hereto as
Exhibits A and B, and the Guarantees shall constitute, and are hereby expressly
made, a part of this
30
Indenture and, to the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Securities issued in the Offering shall be issued initially in the form
of one or more permanent Global Securities in registered form, substantially in
the form set forth in Exhibit A, deposited with the Trustee, as custodian for
the Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided, and shall bear the legends set forth in Section 2.14. The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.
Securities issued in exchange for interests in the Global Securities
pursuant to Section 2.15 may be issued in the form of permanent certificated
Securities in registered form (the "Physical Securities") and shall bear the
first legend set forth in Section 2.14. All Securities offered and sold in
reliance on Regulation S shall remain in the form of a Global Security until the
consummation of the Exchange Offer pursuant to the Registration Rights
Agreement.
2.2 EXECUTION AND AUTHENTICATION.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall nevertheless be valid.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue on
the Issue Date in the aggregate principal amount not to exceed $54,535,000, (ii)
pursuant to the Exchange Offer, Exchange Notes from time to time for issue only
in exchange for a like principal amount of Initial Notes, (iii) the Additional
Securities in an unlimited aggregate principal amount and (iv) one or more
series of Notes for original issue after the Issue Date (such Securities to be
substantially in the form of Exhibits A or B, as the case may be) in an
aggregate principal amount not to exceed $16,665,000, in each case upon written
orders of the Company in the form of an Officers' Certificate, which Officers'
Certificate shall, in the case of any issuance pursuant to clause (iv) above,
certify that such issuance is in compliance with Section 4.4. In addition, each
such Officers' Certificate shall specify the amount of Securities to be
authenticated, the date on which the Securities are to be authenticated, whether
the Securities are to be Initial Notes or Exchange Notes or Securities issued
under clause (iv) of the preceding sentence and the aggregate principal amount
of Securities outstanding on the date of authentication, and shall further
specify the amount of such Securities to be issued as a Global Security or
Physical
31
Securities. Such Securities shall initially be in the form of one or more Global
Securities, which (i) shall represent, and shall be denominated in an amount
equal to the aggregate principal amount of, the Securities to be issued, (ii)
shall be registered in the name of the Depository for such Global Security or
Securities or its nominee and (iii) shall be delivered by the Trustee to the
Depository or pursuant to the Depository's instruction. The aggregate principal
amount of Securities outstanding at any time is unlimited.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and integral multiples thereof.
2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Securities may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York, for such purposes. The
Company may act as its own Registrar and Paying Agent except that for the
purposes of Articles III and VIII and Sections 4.15 and 4.16, neither the
Company nor any Affiliate of the Company shall act as Paying Agent. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company, upon notice to the Trustee, may have one or more
co-Registrars and one or more additional paying agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional paying agent. The
Company hereby initially appoints the Trustee as Registrar and Paying Agent
until such time as the Trustee has resigned or a successor has been appointed.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee, in advance, of the name and address of any such Agent. If the
Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that, subject to Article IV and Article XII, each Paying Agent
shall hold in trust for the
32
benefit of Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Securities (whether such assets
have been distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee of any Default or Event of Default by
the Company (or any other obligor on the Securities) in making any such payment.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate such
assets and hold them as a separate trust fund. The Company at any time may
require a Paying Agent to distribute all assets held by it to the Trustee and
account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default or payment Event of Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all assets
held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
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
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which list
may be conclusively relied upon by the Trustee.
2.6 TRANSFER AND EXCHANGE.
(a) Subject to the provisions of Sections 2.14 and 2.15, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations, the
Registrar or co-Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; provided, however,
that the Securities surrendered for registration of transfer or exchange shall
be duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar or co-Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.2, 2.10, 3.6, 4.15, 4.16 or 9.6).
The Registrar or co-Registrar shall not be required to register the transfer of
or exchange of any Security (i) during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Securities and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Security being redeemed in part, and (iii) during a Change of
Control Offer or an Net Proceeds Offer if such Security is tendered pursuant to
such Change of Control Offer or Net Proceeds Offer and not withdrawn. A Global
Security may be transferred, in whole but not in part, in the manner provided in
this Section 2.6(a), only to a nominee of the Depository for such
33
Global Security, or to the Depository, or a successor Depository for such Global
Security selected or approved by the Company, or to a nominee of such successor
Depository.
(b) If at any time the Depository for the Global Security or Securities
notifies the Company that it is unwilling or unable to continue as Depository
for such Global Security or Securities or the Company becomes aware that the
Depository has ceased to be a clearing agency registered under the Exchange Act,
the Company shall appoint a successor Depository with respect to such Global
Security or Securities. If a successor Depository for such Global Security or
Securities has not been appointed within 120 days after the Company receives
such notice or becomes aware of such ineligibility, the Company shall execute,
and the Trustee, upon receipt of an Officers' Certificate for the authentication
and delivery of Securities, shall authenticate and deliver, Securities in
definitive form, in an aggregate principal amount at maturity equal to the
principal amount at maturity of the Global Security representing such
Securities, in exchange for such Global Security. The Company shall reimburse
the Registrar, the Depository and the Trustee for expenses they incur in
documenting such exchanges and issuances of Securities in definitive form.
The Company may at any time and in its sole discretion determine that
the Securities shall no longer be represented by such Global Security or
Securities. In such event the Company will execute, and the Trustee, upon
receipt of a written order for the authentication and delivery of individual
Securities in exchange in whole or in part for such Global Security or
Securities, will authenticate and deliver individual Securities in definitive
form in an aggregate principal amount equal to the principal amount of such
Global Security or Securities in exchange for such Global Security or
Securities.
In any exchange provided for in any of the preceding two paragraphs,
the Company will execute and the Trustee will authenticate and deliver
individual Securities in definitive registered form in authorized denominations.
Upon the exchange of a Global Security for individual Securities, such Global
Security shall be cancelled by the Trustee. Securities issued in exchange for a
Global Security pursuant to this Section 2.6(b) shall be registered in such
names and in such authorized denominations as the Depository for such Global
Security, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities
to the Persons in whose names such Securities are so registered.
None of the Company, the Trustee, any Paying Agent or the Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
2.7 REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements are met. If required by the Trustee or
the Company, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Company and the Trustee, to protect the
34
Company, the Trustee or any Agent from any loss which any of them may suffer if
a Security is replaced. The Company may charge such Holder for its reasonable
out-of-pocket expenses in replacing a Security pursuant to this Section 2.7,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Company.
2.8 OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Company, the Guarantors or
any of their respective Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7.
If the principal amount of any Security is considered paid under Section 4.1, it
ceases to be outstanding and interest ceases to accrue.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or a Subsidiary) holds U.S. Legal Tender sufficient to pay all
of the principal and interest due on the Securities payable on that date, then
on and after that date such Securities cease to be outstanding and interest on
them ceases to accrue.
2.9 TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, any of its Subsidiaries or any of their respective Affiliates
shall be disregarded, except that, for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities that a Responsible Officer of the Trustee knows or has reason to
know are so owned shall be disregarded.
2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. Until
such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities. Notwithstanding the foregoing,
so long as the Securities are represented by a Global Security, such Global
Security may be in typewritten form.
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2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or a Subsidiary), and no one else, shall
cancel and shall dispose of all Securities surrendered for registration of
transfer, exchange, payment or cancellation. Subject to Section 2.7, the Company
may not issue new Securities to replace Securities that it has paid or delivered
to the Trustee for cancellation. If the Company or any Guarantor shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Securities, it
shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, in any lawful manner. The Company may pay the defaulted
interest to the Persons who are Holders on a subsequent special record date,
which date shall be the fifteenth day next preceding the date fixed by the
Company for the payment of defaulted interest or the next succeeding Business
Day if such date is not a Business Day. At least 15 days before any such
subsequent special record date, the Company shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
2.13 CUSIP NUMBER.
The Company in issuing the Securities may use a "CUSIP" number, and if
so, the Trustee shall use the CUSIP number in notices of redemption or exchange
as a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities. The
Company shall promptly notify the Trustee of any change in the CUSIP numbers.
2.14 RESTRICTIVE LEGENDS.
Each Global Security and Physical Security that constitutes a
Restricted Security or is sold in compliance with Regulation S shall bear the
following legend (the "Private Placement Legend") on the face thereof until
after the second anniversary of the later of the Issue Date and the last date on
which the Company or any Affiliate of the Company was the owner of such Security
(or any predecessor security) (or such shorter period of time as permitted by
Rule 144(k) under the Securities Act or any successor provision thereunder) (or
such longer period of time as may be required under the Securities Act or
applicable state securities laws in the opinion of counsel for the Company,
unless otherwise agreed by the Company and the Holder thereof):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U. S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"),
36
OR THE SECURITIES LAWS OF ANY STATE, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U. S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(l), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE
WHICH IS TWO YEARS AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF
THIS SECURITY AND THE LAST DATE ON WHICH QUALITY DISTRIBUTION, LLC (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (THE "RESALE RESTRICTION TERMINATION DATE") RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) IN THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) IN THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT PROVIDED THAT PRIOR
TO SUCH TRANSFER, THE INSTITUTIONAL ACCREDITED INVESTOR FURNISHES TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT; (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (G) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT IN
EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE
DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH ACCOUNT BE AT ALL
TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR THE TRANSFER IS MADE PURSUANT TO CLAUSES (C),
(D), (E) OR (G) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH
TO THE
37
TRUSTEE AND THE COMPANY, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE FOREGOING RESTRICTIONS ON RESALE WILL NOT APPLY
SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE."
Each Global Security shall also bear the following legend on
the face thereof:
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR
BY ANY SUCH NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE
OF SUCH SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO QUALITY
DISTRIBUTION, LLC (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE
INDENTURE GOVERNING THIS SECURITY."
2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) Each Global Security initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.14.
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Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under any
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of each Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in any Global Security may be
transferred or, subject to Section 2.1, exchanged for Physical Securities in
accordance with the rules and procedures of the Depository and the provisions of
Section 2.16. In addition, Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in any Global
Security if (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for the Global Securities and a successor
depositary is not appointed by the Company within 90 days of such notice or (ii)
the Trustee has received a written request from the Company to issue Physical
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in such Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to paragraph (b), such Global Security shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
such Global Security, an equal aggregate principal amount of Physical Securities
of authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (b) or
(c) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of
Section 2.16, bear the legend regarding transfer restrictions applicable to the
Physical Securities set forth in Section 2.14.
(f) The Holder of a Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
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2.16 SPECIAL TRANSFER PROVISIONS.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Security constituting a Restricted
Security to any institutional accredited investor (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) (an "Accredited Investor") which is
not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears
the Private Placement Legend, if (x) the transferee certifies that it
is not an Affiliate of the Company and the requested transfer is after
the second anniversary of the later of the (a) Issue Date and (b) the
last date on which the Company or an Affiliate of the Company was the
owner of such Security (or any predecessor Security) or such shorter
period of time as permitted by Rule 144(k) under the Securities Act or
any successor provision thereunder or (y) (1) in the case of a transfer
to an Accredited Investor which is not a QIB (excluding Non-U.S.
Persons), the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto or (2) in the
case of a transfer to a Non-U.S. Person, the proposed transferor has
delivered to the Registrar a certificate substantially in the form of
Exhibit E hereto and such other information that the Trustee may
reasonably request in order to confirm that such transaction is being
made pursuant to an exemption from or in a transaction not subject to
the registration requirements of the Securities Act; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Security, the Registrar shall
register the transfer of any Security constituting a Restricted
Security, whether or not such Security bears a Private Placement Legend
upon receipt by the Registrar of (x) the certificate, if any, required
by paragraph (i) above and (y) instructions given in accordance with
the Depository's and the Registrar's procedures, whereupon (a) the
Registrar shall reflect on its books and records the date and (if the
transfer does not involve a transfer of outstanding Physical
Securities) a decrease in the principal amount of the applicable Global
Security in an amount equal to the principal amount of the beneficial
interest in such Global Security to be transferred, and (b) the Company
shall execute and the Trustee shall authenticate and deliver one or
more Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security constituting
a Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Security stating, or has otherwise advised the
Company and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the form of Security stating,
or has otherwise advised the Company and the Registrar in writing, that
it is purchasing the Security for its own account or an account with
respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and is
aware
40
that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the
Company as it has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of Physical Securities which after
transfer are to be evidenced by an interest in a Global Security, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount of the applicable Global Security in an amount equal
to the principal amount of the Physical Securities to be transferred,
and the Trustee shall cancel the Physical Securities so transferred.
(c) Private Placement Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the circumstance
contemplated by paragraph (a)(i)(x) of this Section 2.16 exist or (ii) there is
delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(d) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16 in
accordance with its customary procedures. The Company shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
ARTICLE III
REDEMPTION
3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to Paragraph 6 of
the Securities or the Company is required to redeem Securities pursuant to
Paragraph 7 of the Securities, it shall notify the Trustee in writing of the
Redemption Date, the Redemption Price and the principal amount of the applicable
Securities to be redeemed. The Company shall give notice of redemption to the
Paying Agent and Trustee at least 30 days but not more than 60 days
41
before the Redemption Date (unless a shorter notice shall be agreed to by the
Trustee in writing), together with an Officers' Certificate stating that such
redemption will comply with the conditions contained herein.
3.2 SELECTION OF SECURITIES TO BE REDEEMED.
In the event that less than all of the Securities are to be redeemed at
any time pursuant to Paragraph 6 of the Securities, selection of such Securities
for redemption will be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which such Securities
are listed or, if such Securities are not then listed on a national securities
exchange, on a pro rata basis, by lot or by such method as the Trustee shall
deem fair and appropriate; provided, however, that no Securities of a principal
amount of $1,000 or less shall be redeemed in part.
3.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed at its registered
address. At the Company's request at least 40 days before a Redemption Date
(unless a shorter period shall be acceptable to the Trustee), the Trustee shall
give the notice of redemption in the Company's name and at the Company's
expense. Each notice of redemption shall identify the Securities, including the
applicable CUSIP numbers, to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest,
if any, to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price upon surrender to the
Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion thereof
will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities to be outstanding after such partial
redemption; and
42
(8) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
The notice, if mailed in a manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption in whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the Redemption Price (which shall include accrued interest thereon to the
Redemption Date), but installments of interest, the maturity of which is on or
prior to the Redemption Date, shall be payable to Holders of record at the close
of business on the relevant Record Dates.
3.5 DEPOSIT OF REDEMPTION PRICE.
On or before 11:00 a.m. New York time on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Securities to be
redeemed on that date.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Securities to be redeemed will cease to accrue on and
after such Redemption Date, whether or not such Securities are presented for
payment.
3.6 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part only, the
Trustee shall upon written instruction from the Company authenticate for the
Holder a new Security or Securities in a principal amount equal to the
unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
4.1 PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities. An installment of principal of or
interest on the Securities shall be considered paid on the date it is due if the
Trustee or Paying Agent holds on that date U.S. Legal Tender or, in the case of
an installment of interest payable in Additional Securities, Additional
Securities designated for and sufficient to pay the installment (upon issuance
of such
43
Additional Securities, whether or not physically issued). Interest on the
Securities will be computed on the basis of a 360-day year comprised of twelve
30-day months.
On June 15, 2002, the Company shall pay to QDI Inc. all interest owed
by QDI Inc. on those QDI Inc. Subordinated Notes that have been exchanged for
Initial Notes in the Offering in an amount equal to the accrued and unpaid
interest on such QDI Inc. Subordinated Notes from December 15, 2001 to the Issue
Date. Such interest shall be paid by QDI Inc. to the Persons who were the
registered holders of such QDI Inc. Subordinated Notes at the close of business
on the business day immediately preceding the Issue Date.
4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, The City of New
York, the office or agency required under Section 2.3. 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 address of the Trustee set forth in Section 13.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will 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 initially designates the Corporate Trust Office of
the Trustee located in the Borough of Manhattan, The City of New York, as such
office of the Company in accordance with Section 2.3.
4.3 LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
in Qualified Capital Stock of the Company) on or in respect of shares of the
Company's Capital Stock to holders of such Capital Stock, (b) purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock of the Company, (c) make any principal payment on, or with respect
to, or purchase, defease, redeem, prepay or otherwise acquire or retire for
value, prior to any scheduled final maturity, scheduled repayment or scheduled
sinking fund payment, any Indebtedness of the Company that is subordinated or
junior in right of payment to the Securities or any Guarantee (other than
Indebtedness described in such clause (vii) of the definition of "Permitted
Indebtedness") or (d) make any Investment (other than Permitted Investments)
(each of the foregoing actions set forth in clauses (a), (b), (c) and (d) being
referred to as a "Restricted Payment"), unless at the time of or immediately
after giving effect to such Restricted Payment, (i) no Default or Event of
Default shall have occurred and be continuing or would occur as a result
thereof, (ii) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such
44
Restricted Payment has been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.4 or (iii) the
aggregate amount of Restricted Payments (including such proposed Restricted
Payment) made after the Issue Date (the amount expended for such purposes, if
other than in cash, being the fair market value of such property as determined
reasonably and in good faith by the Board of Managers) shall not exceed the sum
of: (v) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss) of the Company
earned after June 15, 1998 and on or prior to the date the Restricted Payment
occurs (the "Reference Date") (treating such period as a single accounting
period); plus (w) 100% of the aggregate Net Cash Proceeds and the fair market
value, as determined in good faith by the Board of Managers, of property other
than cash received by the Company from any Person (other than a Subsidiary of
the Company) from the issuance and sale of Qualified Capital Stock of the
Company after June 15, 1998 and on or prior to the Reference Date (other than
Excluded Contributions); plus (x) without duplication of any amounts included in
clause (iii)(w) above, 100% of the aggregate Net Cash Proceeds of any equity
contribution received by the Company from a holder of the Company's Capital
Stock after June 15, 1998 and on or prior to the Reference Date (other than
Excluded Contributions); plus (y) without duplication, the sum of (1) the
aggregate amount returned in cash on or with respect to Investments (other than
Permitted Investments) made after June 15, 1998 whether through interest
payments, principal payments, dividends or other distributions or payments, (2)
the Net Cash Proceeds received by the Company or any Restricted Subsidiary of
the Company from the disposition of all or any portion of such Investments
(other than to a Subsidiary of the Company) and (3) upon re-designation of an
Unrestricted Subsidiary of the Company as a Restricted Subsidiary of the
Company, the fair market value of such Subsidiary (valued in each case as
provided in the definition of "Investment"); provided, however, that the sum of
clauses (1), (2) and (3) above shall not exceed the aggregate amount of all such
Investments made by the Company or any Restricted Subsidiary of the Company in
the relevant Person or Unrestricted Subsidiary after June 15, 1998.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit: (1) the payment of any dividend
or other distribution within 60 days after the date of declaration of such
dividend or other distribution, if at said date of declaration such payment
would have complied with this Indenture; (2) so long as no Default or Event of
Default has occurred and is continuing or would be caused thereby, the
acquisition of any shares of Capital Stock of the Company, either (i) solely in
exchange for shares of Qualified Capital Stock of the Company or Qualified
Capital Stock of QDI Inc., or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of shares of Qualified Capital Stock of the Company or, to the extent
the proceeds therefrom are contributed by QDI Inc. to the Company, from the
shares of Capital Stock of QDI Inc.; (3) so long as no Default or Event of
Default has occurred and is continuing, or would be caused thereby, the
acquisition of any Indebtedness of the Company that is subordinate or junior in
right of payment to the Securities either (i) solely in exchange for (a) shares
of Qualified Capital Stock of the Company or QDI Inc. or (b) Refinancing
Indebtedness, or (ii) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of the Company) of (a)
shares of Qualified Capital Stock of the Company or QDI Inc. or (b) Refinancing
Indebtedness; (4) so long as no Default or Event of Default has occurred and is
continuing, or would be caused thereby, repurchases by the Company or any
45
Restricted Subsidiary of the Company of Capital Stock of the Company, or
dividends, distributions or advances to QDI Inc. to allow QDI Inc. to repurchase
securities of QDI Inc. from (i) employees, managers, directors of or consultants
to the Company, QDI Inc. or any Subsidiaries of the Company or any of their
authorized representatives (a) upon the death, disability or termination of
employment of such employees, managers, directors or consultants or to the
extent required pursuant to employee benefit plans, employment agreements or
consulting agreements, (b) pursuant to any other agreements with such employees,
managers, directors of or consultants to the Company, QDI Inc. or any
Subsidiaries of the Company, in an aggregate amount not to exceed $2.5 million
in any calendar year (with unused amounts in any calendar year being carried
over to succeeding years subject to a maximum of $5.0 million in any calendar
year) or (c) to the extent required pursuant to the Shareholders' Agreement or
the Option Plan or (ii) Xxxxx Xxxxxxx; provided that the cancellation of
Indebtedness owing to the Company, QDI Inc. or any Restricted Subsidiary of the
Company from such employees, managers, directors of or consultants to the
Company, any of its Restricted Subsidiaries or QDI Inc. in connection with a
repurchase of Capital Stock of the Company will not be deemed to constitute a
Restricted Payment; (5) the declaration and payment of dividends to holders of
any class or series of Preferred Stock (other than Disqualified Capital Stock)
of the Company issued after the Issue Date, if the Consolidated Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date of issuance of such Preferred Stock, after giving effect to such issuance
on a pro forma basis, would have been at least 1.75 to 1.00; (6) (i) the payment
of dividends on the Company's Common Stock, following the first public offering
of the Company's Common Stock after the Issue Date, or (ii) the payment of
dividends, distributions or advances to QDI Inc. to allow QDI Inc. to pay
dividends on QDI Inc.'s Common Stock following the first public offering of QDI
Inc.'s Capital Stock after the Issue Date, in either case of up to 6% per annum
of the net proceeds received by the Company (directly or as a contribution from
QDI Inc.) in such public offering, other than public offerings with respect to
the Common Stock of the Company or the Common Stock of QDI Inc. registered on
Form S-8 (or any successor form); (7) the payment of dividends, distributions or
advances to QDI Inc. to allow QDI Inc. to repurchase, retire or otherwise
acquire or retire for value equity interests of QDI Inc. in existence on the
Issue Date and from the Persons holding such equity interests on the Issue Date
and which are not held by Apollo or any of its Affiliates or members of
management of the Company and its Subsidiaries on the Issue Date (including any
equity interests issued in respect of such equity interests as a result of a
stock split, recapitalization, merger, combination, consolidation or similar
transaction), provided, however, that after giving effect thereto, the Company
would be permitted to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 4.4; (8) other Restricted
Payments in an aggregate amount not to exceed $7.5 million; (9) payments or
distributions to, or dividends, distributions or advances to QDI Inc. to allow
QDI Inc. to make payments or distributions to, dissenting shareholders pursuant
to applicable law, pursuant to or in connection with a consolidation, merger or
transfer of assets that complies with the provisions of this Indenture
applicable to mergers, consolidations and transfers of all or substantially all
of the property and assets of the Company; (10) Investments that are made with
Excluded Contributions; (11) repurchases of Capital Stock of the Company deemed
to occur upon the exercise of stock options, warrants or other convertible
securities, to the extent such Capital Stock of the Company represents a portion
of the consideration for such exercise; (12) the acquisition of any shares of
Disqualified Capital Stock of the Company either
46
(a) solely in exchange for shares of Disqualified Capital Stock of the Company
or Capital Stock of QDI Inc. or (b) through the application of the net proceeds
of a substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of shares of Disqualified Capital Stock of the Company, or to the
extent the proceeds therefrom are contributed by QDI Inc. to the Company, from
shares of Capital Stock of QDI Inc.; (13) any purchase or redemption of
Indebtedness that ranks junior to Securities utilizing any Net Cash Proceeds
remaining after the Company has complied with the requirements of Sections 4.15
and 4.16; (14) payments of dividends, other distributions or other amounts by
the Company to QDI Inc. in amounts required for QDI Inc. to pay franchise taxes
and other fees required to maintain its existence and provide for all other
operating expenses (excluding amounts specified in clauses (16)-(19) of this
Section 4.3) of QDI Inc. incurred by QDI Inc. in the ordinary course of
business, either for its own benefit or for the benefit of the Company or any
Restricted Subsidiary of the Company, including without limitation, in respect
of director/manager fees and expenses, administrative, legal, insurance and
accounting costs, and costs and expenses with respect to filings with the
Commission or furnishing to holders of the securities of QDI Inc. the
information to be provided pursuant to Rule 144A under the Securities Act; (15)
the payment of dividends, other distributions or amounts by the Company to QDI
Inc. in amounts required to pay the tax obligations of the Company and its
Subsidiaries and the tax obligations of QDI Inc. or any of its direct or
indirect parents attributable to the Company and its Subsidiaries; provided that
(x) the amount of dividends paid pursuant to this clause (15) to enable QDI Inc.
or any of its direct or indirect parents to pay Federal and state income taxes
at any time shall not exceed the amount of such Federal and state income taxes
actually owing by QDI Inc. or any of its direct or indirect parents at such time
for the respective period and (y) any refunds received by QDI Inc. or any of its
direct or indirect parents attributable to the Company and its Subsidiaries
shall promptly be returned by QDI Inc. or any of its direct or indirect parents
to the Company; (16) any payments of cash, or dividends, distributions or
advances to QDI Inc. to allow QDI Inc. to make payments of cash, in lieu of the
issuance of fractional shares upon the exercise of warrants or upon the
conversion or exchange of, or issuance of Capital Stock in lieu of cash
dividends on, any Capital Stock of QDI Inc., the Company or any Restricted
Subsidiary of the Company, which in the aggregate do not exceed $5.0 million;
(17) so long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the payment of dividends, distributions or other
amounts by the Company to QDI Inc. in amounts required for QDI Inc. to pay cash
interest as and when due on the QDI Inc. Subordinated Notes and the QDI Inc.
Junior PIK Notes (or any Refinancing Indebtedness in respect thereof) then
outstanding; provided that the amount payable by the Company pursuant to this
clause (17) shall not exceed the amount necessary to pay the cash interest owing
with respect to the QDI Inc. Subordinated Notes and the QDI Inc. Junior PIK
Notes (or any Refinancing Indebtedness in respect thereof, as the case may be);
(18) so long as no Default or Event of Default has occurred and is continuing or
would be caused thereby, the payment of dividends, distributions or other
amounts by the Company to QDI Inc. in amounts required for QDI Inc. to pay cash
interest as and when due on the Shareholder Subordinated Notes (or any
Refinancing Indebtedness in respect thereof) then outstanding; provided that the
amount payable by the Company pursuant to this clause (18) shall not exceed the
amount necessary to pay the cash interest owing with respect to the Shareholder
Subordinated Notes (or any Refinancing Indebtedness in respect thereof, as the
case may be); (19) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, the payment of dividends, distributions
or other amounts by the Company to QDI Inc. in
47
amounts required for QDI Inc. to pay cash interest as and when due on the
Convertible Subordinated Notes (or any Refinancing Indebtedness in respect
thereof) then outstanding; provided that the amount payable by the Company
pursuant to this clause (19) shall not exceed the amount necessary to pay the
cash interest owing with respect to the Convertible Subordinated Notes (or any
Refinancing Indebtedness in respect thereof, as the case may be); and (20) any
payments or dividends, distributions or other amounts by the Company to QDI Inc.
to allow QDI Inc. to satisfy its obligations under the Management Agreement and
the Shareholders' Agreement. In determining the aggregate amount of Restricted
Payments made after the Issue Date in accordance with clause (iii) of the
immediately preceding paragraph, amounts expended pursuant to clauses (1),
(2)(ii), (4), (5), (6), (7), (8), (9), (13) and (16) shall be included in such
calculation.
The amount of all Restricted Payments other than cash shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
required calculations were computed.
4.4 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, or otherwise become directly or indirectly liable, contingently or
otherwise (collectively, "incur"), with respect to any Indebtedness (other than
Permitted Indebtedness); provided, however, that if no Default or Event of
Default has occurred and is continuing at the time of or as a consequence of the
incurrence of any such Indebtedness, the Company and its Restricted Subsidiaries
may incur Indebtedness which is junior in right of payment to, or pari passu
with, the Securities, including, without limitation, Acquired Indebtedness, if
on the date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company
is 2.25 to 1.0 or greater.
4.5 CORPORATE EXISTENCE.
Except as otherwise permitted by Article V, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each such Restricted Subsidiary and the rights
(charter and statutory) and material franchises of the Company and each of its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, franchise or corporate existence with
respect to each such Restricted Subsidiary if the Board of Managers of the
Company shall determine that the loss thereof is not, and will not be, adverse
in any material respect to the Holders.
48
4.6 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of its Subsidiaries or
upon the income, profits or property of it or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, materials and supplies which, in each case,
if unpaid, might by law become a material liability or Lien upon the property of
it or any of its Restricted Subsidiaries; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, (i) the applicability or
validity is being contested in good faith by appropriate proceedings and for
which appropriate provision has been made or (ii) where the failure to effect
such payment or discharge is not adverse in any material respect to the Holders.
4.7 MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall cause all material properties owned by or leased
by it or any of its Restricted Subsidiaries used or useful to the conduct of its
business or the business of any of its Restricted Subsidiaries, taken as a
whole, to be maintained and kept in normal condition, repair and working order
(ordinary wear and tear and damage by casualty excepted) and supplied with all
necessary equipment and shall cause to be made all repairs, renewals,
replacements, and betterments thereof, all as in its judgment may be necessary,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section 4.7 shall prevent the Company or any of its Restricted Subsidiaries from
discontinuing the use, operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is, (i) in the
judgment of the Board of Managers or Directors of the Company or any such
Restricted Subsidiary desirable in the conduct of the business of the Company or
any such Restricted Subsidiary and (ii) to the extent involving Collateral, is
otherwise permitted by this Indenture and the applicable Security Documents.
(b) The Company shall maintain, and shall cause its Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are, in the Company's reasonable judgment,
customarily carried by similar businesses of similar size, including property
and casualty loss, workers' compensation and interruption of business insurance.
4.8 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT, ETC.
(a) The Company and each Guarantor shall deliver to the Trustee, within
120 days after the close of each fiscal year of the Company (currently December
31) an Officers' Certificate stating that a review of the activities of the
Company or the applicable Guarantor has been made under the supervision of the
signing officers with a view to determining whether it 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 knowledge the Company or the applicable Guarantor during such preceding
fiscal year has kept, observed, performed and fulfilled each and every such
covenant and no Default or Event of Default
49
occurred during such year and at the date of such certificate there is no
Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe its status with particularity. The applicable Officers' Certificate
shall also notify the Trustee should the Company or any Guarantor elect to
change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered pursuant to Section 4.10
shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Articles IV, V or VI insofar as they relate to accounting matters
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) The Company shall deliver to the Trustee, forthwith upon becoming
aware of any Default or Event of Default in the performance of any covenant,
agreement or condition contained in this Indenture, an Officers' Certificate
specifying the Default or Event of Default and describing its status with
particularity.
(d) With respect to the determination of both the Total Leverage Ratio
and the Senior Leverage Ratio, at least 10 days prior to any Interest Payment
Date the Company shall deliver to the Trustee an Officers' Certificate setting
forth such Total Leverage Ratio and such Senior Leverage Ratio, each measured as
of the last day of the most recent fiscal quarter for which financial statements
are available ending prior to the immediately preceding Interest Payment Date.
4.9 COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Company and
its Subsidiaries taken as a whole.
4.10 REPORTS TO HOLDERS.
The Company will deliver to the Trustee within 15 days after the filing
of the same with the Commission, copies of the quarterly and annual reports and
of the information, documents and other reports, if any, which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
will file with the Commission, to the extent permitted, and provide the Trustee
and Holders with such annual reports and such information, documents and other
reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will
upon request provide to
50
prospective purchasers of the Securities the foregoing reports. Following the
qualification of this Indenture under the TIA, the Company will also comply with
the other provisions of TIA Section 314(a).
Delivery of such reports, information and documents to the Trustee is
for information purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
4.11 WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and each Guarantor covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive the
Company or such Guarantor from paying all or any portion of the principal of
and/or interest on the Securities or the Guarantee of any such Guarantor as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture, and (to the
extent that it may lawfully do so) each hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
4.12 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that could reasonably have been obtained in a comparable transaction at such
time on an arms'-length basis by the Company or such Restricted Subsidiary from
a Person that is not an Affiliate of the Company or such Restricted Subsidiary,
and (ii) the Company delivers to the Trustee (A) with respect to any Affiliate
Transactions (or series of related Affiliate Transactions which are similar or
part of a common plan) involving aggregate payments or other property with a
fair market value in excess of $1.0 million, an Officers' Certificate certifying
that such Affiliate Transactions shall have been approved by the Board of
Managers of the Company or the Board of Directors of such Restricted Subsidiary,
as the case may be, such approval to be evidenced by a Board Resolution stating
that such Board of Managers or Board of Directors, as the case may be, has
determined that such transaction complies with the provisions of this Section
4.12 and (B) with respect to any Affiliate Transactions (or series of related
Affiliate Transactions related to a common plan) involving aggregate payments or
other property with a fair market value in excess of $10.0 million, prior to the
consummation thereof, a favorable opinion as to the fairness of such transaction
or series of related transactions to the Company or such Restricted Subsidiary,
as the case may be, from a financial point of view, issued by an Independent
Financial Advisor.
51
(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to and indemnity provided on behalf of,
officers, managers, directors, employees or consultants (including Apollo) of
the Company or any Restricted Subsidiary of the Company as determined in good
faith by the Company's Board of Managers; (ii) transactions exclusively between
or among the Company and any of its Restricted Subsidiaries or exclusively
between or among such Restricted Subsidiaries, provided such transactions are
not otherwise prohibited by this Indenture; (iii) any agreement as in effect or
entered into as of the Issue Date or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Holders of the Securities in any
material respect than the original agreement as in effect on the Issue Date;
(iv) Restricted Payments and Permitted Investments permitted by this Indenture;
(v) transactions in which the Company or any of its Restricted Subsidiaries, as
the case may be, delivers to the Trustee a letter from an Independent Financial
Advisor stating that such transaction is fair to the Company or such Restricted
Subsidiary from a financial point of view or meets the requirements of clause
(i) of paragraph (a) above; (vi) the existence of, or the performance by the
Company or any of its Restricted Subsidiaries of its obligations under the terms
of, any shareholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the Issue Date
and any similar agreements which it may enter into thereafter; provided,
however, that the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of obligations under, any future amendment to any such
existing agreement or under any similar agreement entered into after that Issue
Date shall only be permitted by this clause to the extent that the terms of any
such, amendment or new agreement are not otherwise disadvantageous to the
holders of the Securities in any material respect; (vii) the issuance of
securities or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans or similar employee benefit plans approved by Board of Managers
in good faith and loans to employees of the Company and its Subsidiaries which
are approved by the Board of Managers in good faith; (viii) the payment of all
fees and expenses related to the Offering and the Lock-Up Agreements; (ix)
transactions with customers, clients, suppliers, or purchasers or sellers of
goods or services, in each case on ordinary business terms and otherwise in
compliance with the terms of this Indenture, which are fair to the Company or
its Restricted Subsidiaries, in the reasonable determination of the Board of
Managers or the senior management thereof, or are on terms at least as favorable
as could reasonably have been obtained at such time from an unaffiliated party;
(x) any contribution to the capital of the Company by QDI Inc., or any sales of
Capital Stock of the Company to QDI Inc.; and (xi) any tax sharing agreement or
arrangement and payments pursuant thereto among the Company and its Subsidiaries
and any other Person with which the Company or its Subsidiaries is required or
permitted to file a consolidated tax return or with which the Company or any of
its Restricted Subsidiaries is or could be part of a consolidated group for tax
purposes in amounts not otherwise prohibited by this Indenture.
4.13 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any encumbrance or restriction on the ability of any Restricted
Subsidiary of the Company to (a) pay dividends or make any other distributions
on its Capital Stock (it being understood that the
52
priority of any Preferred Stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on
Common Stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock); (b) make loans or advances or to pay any
Indebtedness or other obligation owed to the Company or any other Restricted
Subsidiary of the Company; or (c) transfer any of its property or assets to the
Company or any other Restricted Subsidiary of the Company, except for such
encumbrances or restrictions existing under or by reason of: (1) applicable law,
rule, regulation, order, grant or governmental permit; (2) this Indenture; (3)
the Credit Agreement; (4) customary non-assignment provisions of any contract,
license or any lease governing a leasehold interest of any Restricted Subsidiary
of the Company; (5) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person or the properties or assets of the
Person so acquired; (6) agreements existing or entered into on the Issue Date to
the extent and in the manner such agreements are in effect on the Issue Date;
(7) purchase money obligations for property acquired in the ordinary course of
business or Capitalized Lease Obligations that impose restrictions of the nature
discussed in clause (c) above on the property so acquired; (8) contracts for the
sale of assets, including, without limitation, customary restrictions with
respect to a Restricted Subsidiary of the Company pursuant to an agreement that
has been entered into for the sale or disposition of all or substantially all of
the Capital Stock or assets of such Restricted Subsidiary; (9) secured
Indebtedness otherwise permitted to be incurred pursuant to Section 4.4 and
Section 4.14 that limit the right of the debtor to dispose of the assets
securing such Indebtedness; (10) customary provisions in joint venture
agreements and other similar agreements entered into in the ordinary course of
business; (11) customary net worth provisions and restrictions on transfer,
assignment or subletting provisions contained in leases and other agreements
entered into by the Company or any Restricted Subsidiary of the Company; (12)
any restriction in any agreement or instrument of a Receivables Subsidiary
governing a Qualified Receivables Transaction; (13) an agreement governing
Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clauses (1) through (12) above;
provided, however, that the provisions relating to such encumbrance or
restriction contained in any such Indebtedness are no less favorable to the
Company or the respective Restricted Subsidiary in any material respect as
determined by the Board of Managers in their reasonable and good faith judgment
than the provisions relating to such encumbrance or restriction contained in
agreements referred to in such clauses; or (14) an agreement governing
Indebtedness permitted to be incurred pursuant to Section 4.4; provided that the
provisions relating to such encumbrance or restriction contained in such
Indebtedness, taken as a whole, are no less favorable to the Company or the
respective Restricted Subsidiary in any material respect as determined by the
Board of Managers in their reasonable and good faith judgment than the
provisions contained in the Credit Agreement or in this Indenture as in effect
on the Issue Date.
4.14 LIMITATION ON LIENS.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien of any kind against or upon any property or assets of
the Company or any of its Restricted Subsidiaries whether owned on the Issue
Date or acquired after the Issue Date, or any proceeds therefrom, or assign or
otherwise convey any right to receive income or profits therefrom unless (i) in
the case of Liens securing Indebtedness that is expressly subordinate or junior
in right of payment to the
53
Securities, the Securities are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Liens and (ii) in all other cases,
the Securities are equally and ratably secured, except for the following Liens
which are expressly permitted: (a) Liens existing as of the Issue Date; (b)
Liens securing Senior Debt, Guarantor Senior Debt and any other Indebtedness
(including any guarantees) incurred by a Restricted Subsidiary of the Company
under the Credit Agreement; (c) Liens securing the Securities and the
Guarantees; (d) Liens in favor of the Company or a Wholly Owned Restricted
Subsidiary of the Company on assets of any Restricted Subsidiary of the Company;
(e) Liens securing Refinancing Indebtedness which is incurred to Refinance any
Indebtedness, including, without limitation, Acquired Indebtedness, which has
been secured by a Lien permitted under this Indenture and which has been
incurred in accordance with the provisions of this Indenture; provided, however,
that such Liens (x) are no less favorable to the Holders of the Securities and
are not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being Refinanced and (y) do not extend to
or cover any property or assets of the Company or any of its Restricted
Subsidiaries not securing the Indebtedness so Refinanced; (f) Liens securing
Indebtedness of Restricted Subsidiaries of the Company so long as such
Indebtedness is otherwise permitted under this Indenture; and (g) Permitted
Liens.
4.15 CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (the "Change of Control Offer"), and
shall purchase, on a Business Day (the "Change of Control Payment Date") as
described below, all of the then outstanding Securities at a purchase price
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, thereon to the Change of Control Payment Date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date). The Change of Control Offer shall remain open
for at least 20 Business Days and until the close of business on the Change of
Control Payment Date.
(b) Prior to the mailing of the notice referred to below, but in any
event within 30 days following any Change of Control, the Company covenants to
(i) prepay in full and terminate all commitments under Indebtedness under the
Credit Agreement and all other Senior Debt the terms of which require repayment
upon a Change of Control or offer to repay in full and terminate all commitments
under all Indebtedness under the Credit Agreement and all other such Senior Debt
and to repay the Indebtedness owed to each lender which has accepted such offer;
or (ii) obtain the requisite consents under the Credit Agreement and all other
Senior Debt to permit the repurchase of the Securities as provided in this
Section 4.15. The Company shall first comply with the covenant in the
immediately preceding sentence before it shall be required to repurchase
Securities pursuant to a Change of Control Offer. The Company's failure to
comply with the covenant described in the second preceding sentence (and any
failure to send the notice referred to in clause (c) below as a result of the
prohibition in this paragraph) may (with notice and lapse of time) constitute an
Event of Default described in clause (c) of Section 6.1, but shall not
constitute an Event of Default described in clause (b) of Section 6.1.
(c) Within 30 days following the date upon which a Change of Control
occurs (the "Change of Control Date"), the Company shall send, by first class
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control
54
Offer. The notice to the Holders shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Change of
Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Securities tendered
and not withdrawn will be accepted for payment;
(2) the purchase price (including the amount of
accrued interest) and the Change of Control Payment Date,
which shall be a Business Day, that is not earlier than 30
days or later than 60 days from the date such notice is
mailed;
(3) that any Security not tendered will continue to
accrue interest;
(4) that, unless the Company defaults in making
payment therefor, any Security accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;
(5) that Holders electing to have a Security
purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the
third Business Day prior to the Change of Control Payment
Date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the
second Business Day prior to the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
the Securities the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have
such Security purchased;
(7) that Holders whose Securities are purchased only
in part will be issued new Securities in a principal amount
equal to the unpurchased portion of the Securities
surrendered; and
(8) the circumstances and relevant facts regarding
such Change of Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Securities so tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities or portions
thereof being
56
purchased by the Company. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price plus
accrued interest, if any, and upon written order of the Company the Trustee
shall promptly authenticate and mail to such Holders new Securities equal in
principal amount to any unpurchased portion of the Securities surrendered. Any
Securities not so accepted shall be promptly mailed by the Company to the Holder
thereof. For purposes of this Section 4.15, the Trustee shall act as the Paying
Agent.
Any amounts remaining with the Paying Agent after the purchase of
Securities pursuant to a Change of Control Offer shall be returned by the
Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.15, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.15 by virtue thereof.
4.16 LIMITATION ON ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value of the assets sold or
otherwise disposed of (as determined in good faith by the Company's senior
management, or in the case of an Asset Sale in excess of $5.0 million, the Board
of Managers), and (ii) at least 75% of the consideration received by the Company
or such Restricted Subsidiary, as the case may be, from such Asset Sale is in
the form of (x) cash or Cash Equivalents, (y) properties and assets to be owned
by the Company or any of its Restricted Subsidiaries and used in a Permitted
Business or (z) Capital Stock in one or more Persons engaged in a Permitted
Business that are or thereby become Restricted Subsidiaries of the Company, and,
in each case, such consideration is received at the time of such disposition;
provided that the amount of (a) any liabilities of the Company or any such
Restricted Subsidiary which are shown on the Company's or such Restricted
Subsidiary's most recent balance sheet (other than liabilities that are
subordinated to the Securities) that are assumed by the transferee of any such
assets, and (b) any notes or other securities received by the Company or any
such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash within 180 days after such Asset
Sale (to the extent of the cash received in the conversion) shall be deemed to
be cash for the purposes of this provision only; and (iii) upon the consummation
of an Asset Sale, the Company will apply, or cause such Restricted Subsidiary to
apply, the Net Cash Proceeds relating to such Asset Sale within 360 days of
receipt thereof either (a) to prepay any Senior Debt, Guarantor Senior Debt or
any Indebtedness of a Restricted Subsidiary of the Company and, in the case of
any Senior Debt, Guarantor Senior Debt or Indebtedness of a Restricted
Subsidiary of the Company under any revolving credit facility, effect a
permanent reduction in the availability under such revolving credit facility (or
effect a permanent reduction in availability under such revolving credit
facility regardless of the fact that no prepayment is required), (b) to make an
Investment (x) in properties and assets that replace the properties and assets
that were the subject of such Asset Sale, (y) in properties and assets that will
be used in a
56
Permitted Business or (z) permitted by clause (i) of the definition of
"Permitted Investments" or (c) a combination of prepayment and investment
permitted by the foregoing clauses (iii)(a) and (iii)(b). Pending the final
application of the Net Cash Proceeds, the Company or such Restricted Subsidiary
may temporarily reduce Indebtedness or otherwise invest such Net Cash Proceeds
in any manner not prohibited by this Indenture. On the 361st day after an Asset
Sale or such earlier date, if any, as the senior management, Board of Managers
or Board of Directors of such Restricted Subsidiary determines not to apply the
Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(a),
(iii)(b) and/or (iii)(c) of the next preceding sentence (each, a "Net Proceeds
Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not
been applied on or before such Net Proceeds Offer Trigger Date as permitted in
clauses (iii)(a), (iii)(b) and (iii)(c) of the next preceding sentence (each a
"Net Proceeds Offer Amount") shall be applied by the Company or such Restricted
Subsidiary to make an offer to repurchase (the "Net Proceeds Offer") on a date
(the "Net Proceeds Offer Payment Date") not less than 30 nor more than 60 days
following the applicable Net Proceeds Offer Trigger Date, from all Holders of
Securities on a pro rata basis, that amount of Securities equal to the Net
Proceeds Offer Amount at a price equal to 100% of the principal amount of the
Securities to be repurchased, plus accrued and unpaid interest thereon, if any,
to the date of purchase; provided, however, that if the Company so elects (or is
required by the terms of any Indebtedness that ranks pari passu with the
Securities), such Net Proceeds Offer may be made ratably to purchase the
Securities and other Indebtedness of the Company that ranks pari passu with the
Securities. If at any time any non-cash consideration received by the Company or
any Restricted Subsidiary of the Company, as the case may be, in connection with
any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder as of the date of such conversion or disposition and the Net Cash
Proceeds thereof shall be applied in accordance with this covenant. The Company
may defer the Net Proceeds Offer until there is an aggregate unutilized Net
Proceeds Offer Amount equal to or in excess of $5.0 million resulting from one
or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer
Amount, and not just the amount in excess of $5.0 million, shall be applied as
otherwise required pursuant to this paragraph).
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted by Section 5.1, which
transaction does not constitute a Change of Control, the successor corporation
shall be deemed to have sold the properties and assets of the Company and its
Restricted Subsidiaries not so transferred for purposes of this covenant, and
shall comply with the provisions of this covenant with respect to such deemed
sale as if it were an Asset Sale. In addition, the fair market value of such
properties and assets of the Company or its Restricted Subsidiaries deemed to be
sold shall be deemed to be Net Cash Proceeds for purposes of this covenant.
Notice of each Net Proceeds Offer pursuant to this Section 4.16
shall be mailed or caused to be mailed, by first class mail, by the Company
within 45 days following the applicable Net Proceeds Offer Trigger Date to all
Holders of Securities at their last registered addresses, with a copy to the
Trustee. A Net Proceeds Offer shall remain open for a period of 20 Business Days
or such longer period as may be required by law. The notice shall contain all
instructions
57
and materials necessary to enable such Holders to tender Securities pursuant to
the Net Proceeds Offer and shall state the following terms:
(1) that Holders may elect to have their Securities
purchased by the Company either in whole or in part (subject
to prorationing as hereinafter described in the event the Net
Proceeds Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price;
(2) that the Net Proceeds Offer is being made pursuant
to this Section 4.16 and that all Securities tendered will be
accepted for payment; provided, however, that if the principal
amount of Securities tendered in the Net Proceeds Offer
exceeds the aggregate amount of Net Proceeds Offer Amount, the
Company shall select the Securities to be purchased on a pro
rata basis (based on amounts tendered);
(3) the purchase price (including the amount of
accrued interest, if any) and the purchase date (which shall
be no earlier than 30 days nor later than 60 days from the Net
Proceeds Offer Trigger Date, other than as may be required by
applicable law);
(4) that any Security not tendered will continue to
accrue interest;
(5) that, unless the Company defaults in making
payment therefor, any Security accepted for payment pursuant
to the Net Proceeds Offer shall cease to accrue interest after
the Net Proceeds Offer Payment Date;
(6) that Holders electing to have a Security purchased
pursuant to the Net Proceeds Offer will be required to
surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security
completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Net Proceeds
Offer Payment Date;
(7) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the
second Business Day prior to the Net Proceeds Offer Payment
Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the
Holder delivered for purchase and a statement that such Holder
is withdrawing his election to have such Security purchased;
and
(8) that Holders whose Securities are purchased only
in part will be issued new Securities in a principal amount at
maturity equal to the unpurchased portion of the Securities
surrendered.
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On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Net Proceeds Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price, plus accrued interest, if any, of all
Securities to be purchased and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to the Holders of Securities so accepted payment in an amount equal to the
purchase price, plus accrued interest, if any, thereon set forth in the notice
of such Net Proceeds Offer. Any Security not so accepted shall be promptly
mailed by the Company to the Holder thereof. For purposes of this Section 4.16,
the Trustee shall act as the Paying Agent. Any amounts remaining after the
purchase of Securities pursuant to a Net Proceeds Offer shall be returned by the
Trustee to the Company. To the extent that the aggregate amount of the
Securities tendered pursuant to a Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company may use such excess Net Proceeds Offer Amount
for general corporate purposes or for any other purposes not prohibited by this
Indenture. Upon completion of any such Net Proceeds Offer, the Net Proceeds
Offer Amount shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.16, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.16 by virtue thereof.
4.17 PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT.
The Company and the Guarantors shall not incur or suffer to exist
Indebtedness that is senior in right of payment to the Securities or the
Guarantees, as the case may be, and subordinate in right of payment by its terms
to any other Indebtedness of the Company or such Guarantor, as the case may be.
4.18 ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any domestic Restricted Subsidiary that is not a
Guarantor, or if the Company or any of its Restricted Subsidiaries shall
organize, acquire or otherwise invest in another domestic Restricted Subsidiary
having total equity value in excess of $1.0 million, then such transferee or
acquired or other Restricted Subsidiary shall (i) execute and deliver to the
Trustee (x) a supplemental indenture pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Company's Obligations
under the Securities and this Indenture on the terms set forth in this Indenture
and (y) unless the Collateral has been released in accordance with the
provisions of the Security Documents, Security Documents pursuant to which such
Restricted Subsidiary shall grant to the Collateral Agent for the benefit of the
Trustee (on behalf of the Trustee and the Holders of the Securities) a Lien on
all of its properties and assets of the type constituting the Collateral (on
substantially the same terms as the Lien securing the Guarantees granted by the
59
Guarantors on the Issue Date having the priority as set forth in the U.S.
Security Agreement); (ii) execute a Guarantee; and (iii) deliver to the Trustee
an Opinion of Counsel that such supplemental indenture and Security Documents,
if any, have been duly authorized, executed and delivered by such Restricted
Subsidiary and constitute the legal, valid, binding and enforceable Obligations
of such Restricted Subsidiary. Thereafter, such Restricted Subsidiary shall be a
Guarantor for all purposes of this Indenture, until such Restricted Subsidiary
is otherwise released from its Guarantee as provided in this Indenture.
ARTICLE V
SUCCESSOR CORPORATION
5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS.
(a) The Company shall not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis) whether as an entirety or substantially as
an entirety to any Person, unless: (i) either (1) the Company shall be the
surviving corporation, partnership, trust or limited liability company or (2)
the Person (if other than the Company) formed by or surviving any such
consolidation or merger or to which such sale, assignment, transfer, lease,
conveyance or other disposition (the "Surviving Entity") shall have been made
(x) shall be a corporation, partnership, trust or limited liability company
organized and existing under the laws of the United States, any state thereof or
the District of Columbia (y) shall expressly assume, by supplemental indenture
(in form and substance reasonably satisfactory to the Trustee), executed and
delivered to the Trustee, the due and punctual payment of the principal of, and
premium, if any, and interest on all of the Securities and the performance of
every covenant of the Securities and this Indenture on the part of the Company
to be performed or observed; and (z) unless the Collateral has been released in
accordance with the provisions of the Security Documents, shall expressly
assume, by Security Documents specified by the Collateral Agent, executed and
delivered to the Trustee, the due and punctual performance of every covenant and
obligation under the Security Documents on the part of the Company to be
performed or observed; (ii) immediately after giving effect to such transaction
on a pro forma basis and the assumption contemplated by clause (i)(2)(y) above
(including giving effect to any Indebtedness and Acquired Indebtedness incurred
or anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, shall be
able to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.4; (iii) immediately before and immediately
after giving effect to such transaction on a pro forma basis and the assumption
contemplated by clause (i)(2)(y) above (including, without limitation, giving
effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to
be incurred or repaid and any Lien granted or to be released in connection with
or in respect of the transaction), no Default or Event of Default shall have
occurred or be continuing; (iv) the Company or the Surviving Entity, as the case
may be, shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that (x) such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the
60
applicable provisions of this Indenture and (y) all conditions precedent in this
Indenture relating to such transaction have been satisfied; and (v) unless the
Collateral has been released in accordance with the provisions of the Security
Documents, the Company or the Surviving Entity, as the case may be, shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that (x) any Security Documents to be executed and delivered comply
with the applicable provisions of this Indenture and (y) all conditions
precedent in this Indenture and the Security Documents relating to such
transaction have been satisfied.
Notwithstanding the foregoing, (i) the merger of the Company with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction shall be permitted so long as such Affiliate (x) shall
comply with clauses (i)(2)(x), (y) and (z) of the preceding paragraph and (y)
such Affiliate shall comply with clauses (iv) and (v) of the preceding paragraph
and (ii) the merger of any Restricted Subsidiary of the Company into the Company
or the transfer, lease, conveyance or other disposition of all or substantially
all of the assets of a Restricted Subsidiary of the Company to the Company shall
be permitted so long as the Company delivers to the Trustee an Officers'
Certificate stating that the purpose of such merger, transfer, lease, conveyance
or other disposition is not to consummate a transaction that would otherwise be
prohibited by this Indenture.
(b) No Guarantor (other than any Guarantor whose Guarantee is to be
released (x) in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.16 or
(y) in accordance with the terms of the Credit Agreement and the Security
Documents in the event of any sale, foreclosure, realization or other
disposition of or on any Capital Stock issued by any Guarantor or otherwise as
permitted under Section 14.3) shall, and the Company shall not cause or permit
any Guarantor to, consolidate with or merge with or into any Person or sell,
assign, transfer, lease, convey, or otherwise dispose of all or substantially
all of its assets to any Person other than the Company or any other Guarantor
unless: (i) the entity formed by or surviving any such consolidation or merger
(if other than the Guarantor) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation or
limited liability company organized and existing under the laws of the United
States, any state thereof or the District of Columbia; (ii) such entity assumes
by supplemental indenture all of the Obligations of the Guarantor under its
Guarantee and the Security Documents; (iii) immediately after giving effect to
such transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; (iv) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis, the
Company could satisfy the provisions of clause (ii) of the first paragraph of
Section 5.1(a); and (v) the Company or the Surviving Entity, as the case may be,
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that (x) such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture and Security Documents, if any, comply with the applicable provisions
of this Indenture and (y) all conditions precedent in this Indenture and the
Security Documents, if any, relating to such transaction have been satisfied.
Any merger or consolidation of a Guarantor with and into the Company (with the
Company being the Surviving Entity) or another Guarantor that is a Wholly Owned
Restricted Subsidiary of the Company need only comply with clauses (iv) and (v)
of the first paragraph of Section 5.1(a).
61
(c) For purposes of the foregoing paragraph (a), the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with Section 5.1
in which the Company or any Guarantor, as applicable, is not the continuing
corporation, the successor Person formed by such consolidation or into which the
Company or such Guarantor is merged or to which such conveyance, lease or
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company or such Guarantor under this Indenture and
the Securities or the Guarantee, as applicable, with the same effect as if such
Surviving Entity had been named as such.
ARTICLE VI
DEFAULT AND REMEDIES
6.1 EVENTS OF DEFAULT.
Each of the following shall be an "Event of Default":
(a) the failure to pay interest on any Securities when the same becomes
due and payable and the default continues for a period of 30 days (whether or
not such payment shall be prohibited by Article X or XII);
(b) the failure to pay the principal on any Securities when such
principal becomes due and payable at maturity, upon repurchase, redemption or
otherwise (including the failure to make a payment to repurchase Securities
tendered pursuant to a Change of Control Offer or a Net Proceeds Offer of
principal of the Securities, whether or not such payment shall be prohibited by
Article X or XII);
(c) failure by the Company to observe or perform any other covenant or
agreement contained in this Indenture, which failure continues for a period of
30 days (or in the event of a failure to observe or perform any covenant or
agreement set forth in Section 14.1(c), 60 days) after the Company receives
written notice specifying such failure (and demanding that such failure be
remedied) from the Trustee or from the Holders of at least 25% of the
outstanding principal amount of the Securities;
(d) failure to pay at final stated maturity (after giving effect to any
applicable grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Restricted Subsidiary of the Company, or the
acceleration of the final stated maturity of any such Indebtedness by the
holders thereof (which acceleration is not rescinded or otherwise cured within
30 days of receipt by the Company or such Restricted Subsidiary of such
62
notice of acceleration) if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in default for
failure to pay principal at final stated maturity or which has been accelerated
(in each case with respect to which the 30-day period described above has
elapsed), aggregates $7.5 million or more at any time;
(e) failure by the Company or any of its Significant Subsidiaries to pay
judgments aggregating in excess of $7.5 million (exclusive of amounts covered by
insurance other than self-insurance) which judgments have not been discharged,
paid or stayed for a period of 60 days after such judgment or judgments become
final and non-appealable;
(f) the Company or any of its Significant Subsidiaries (i) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to itself,
(ii) consents to the entry of a judgment, decree or order for relief against it
in an involuntary case or proceeding under any Bankruptcy Law, (iii) consents to
the appointment of a custodian of it or for substantially all of its property,
(iv) consents to or acquiesces in the institution of a bankruptcy or an
insolvency proceeding against it, (v) makes a general assignment for the benefit
of its creditors or (vi) takes any corporate action to authorize or effect any
of the foregoing;
(g) a court of competent jurisdiction enters a judgment, decree or order
for relief in respect of the Company or any of its Significant Subsidiaries in
an involuntary case or proceeding under any Bankruptcy Law, which shall (i)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any of its Significant
Subsidiaries, (ii) appoint a Custodian of the Company or any of its Significant
Subsidiaries or for substantially all of any of its property or (iii) order the
winding-up or liquidation of its affairs; and such judgment, decree or order
shall remain unstayed and in effect for a period of 60 consecutive days;
(h) except as permitted in this Indenture, any of the Guarantees made by
any Significant Subsidiary ceases to be in full force and effect, any of the
Guarantees made by any Significant Subsidiary is declared to be null and void
and unenforceable, any of the Guarantees of any Significant Subsidiary is found
to be invalid or any of the Significant Subsidiaries denies its liability under
its Guarantee; or
(i) unless the Collateral has been released in accordance with the terms
of the Security Documents, the default by the Company or any Guarantor which is
a Significant Subsidiary of the Company in the performance of the Security
Documents which materially and adversely affects the enforceability, validity,
perfection or priority of the Lien on the Collateral granted to the Collateral
Agent for the benefit of the Trustee and the holders of the Securities, the
repudiation or disaffirmation by the Company or any Guarantor which is a
Significant Subsidiary of the Company of its material obligations under the
Security Documents or the determination in a judicial proceeding that the
Security Documents are unenforceable or invalid against the Company or any
Guarantor which is a Significant Subsidiary of the Company for any reason (which
default, repudiation, disaffirmation or determination is not rescinded, stayed,
waived or otherwise cured within 90 days (in the case of Collateral consisting
of motor vehicles, including, without limitation, tractors, trailers or tractor
trailers) or 60 days (in the case of all other Collateral) after the Company
receives written notice thereof specifying such occurrence from the Trustee or
the holders of at least 25% of the outstanding principal amount of the
Securities;
63
including, for such purpose, any waiver of any such default during such 90 day
or 60 day period, as applicable, by the Required Secured Creditors (as defined
in the Security Documents) by written instrument delivered to the Company and
the applicable defaulting party).
If, pursuant to clause (c) above, the Holders of at least 25% of the
then outstanding principal amount of Securities notify the Company as specified
in such clause, such Holders shall similarly notify the Trustee. Any notice
given pursuant to clause (c) above or the immediately preceding sentence shall
be given by registered or certified mail, return receipt requested.
6.2 ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (f) or (g) of Section 6.1 above with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Securities may declare the principal of and
accrued interest on all the Securities to be due and payable by notice in
writing to the Company (and the Trustee if given by the Holders) specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Agreement,
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Agreement or five (5) Business Days after receipt
by the Company and the Representative under the Credit Agreement of such
Acceleration Notice, but only if such Event of Default is then continuing. If an
Event of Default specified in clause (f) or (g) of Section 6.1 above with
respect to the Company occurs and is continuing, then all unpaid principal of,
and premium, if any, and accrued and unpaid interest on all of the outstanding
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount of the Securities may rescind and cancel such declaration and
its consequences (i) if the rescission would not conflict with any judgment or
decree, (ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration, (iii) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal, which has
become due otherwise than by such declaration of acceleration, has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances, and any
other amounts due to the Trustee under Section 7.7 and (v) in the event of the
cure or waiver of an Event of Default of the type described in clause (f) or (g)
of Section 6.1, the Trustee shall have received an Officers' Certificate and an
Opinion of Counsel that such Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or Event of Default or impair any
right consequent thereto.
6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may,
subject to Article XIV, pursue any available remedy by proceeding at law or in
equity to collect the
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payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
6.4 WAIVER OF PAST DEFAULTS.
Subject to Sections 2.9, 6.7 and 9.2, the Holders of not less than a
majority in principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its consequences,
except a Default or Event of Default in the payment of principal of or interest
on any Security as specified in clauses (a) and (b) of Section 6.1. The Company
shall deliver to the Trustee an Officers' Certificate stating that the requisite
percentage of Holders have consented to such waiver and attaching copies of such
consents. When a Default or Event of Default is waived, it is cured and ceases.
6.5 CONTROL BY MAJORITY.
The Holders of not less than a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. Subject to Section 7.1, however, the Trustee may refuse
to follow any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to reasonable
indemnification satisfactory to it in its sole discretion against any loss or
expense caused by taking such action or following such direction.
6.6 LIMITATION ON SUITS.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of
a continuing Event of Default;
(2) the Holder or Holders of at least 25% in principal
amount of the outstanding Securities make a written request to
the Trustee to pursue the remedy;
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(3) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable indemnity satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request
within 45 days after receipt of the request and the offer and,
if requested, the provision of indemnity; and
(5) during such 45-day period the Holder or Holders of
a majority in principal amount of the outstanding Securities
do not give the Trustee a direction which, in the opinion of
the Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over such other
Securityholder.
6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Security, on or
after the respective due dates expressed in such Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder.
6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified
in clause (a) or (b) of Section 6.1 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of principal
and accrued interest and fees remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per annum
borne by the Securities 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, and
any other amounts due to the Trustee under Section 7.7.
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due to the Trustee under Section 7.7) and the Securityholders allowed in
any judicial proceedings relating to the Company, its creditors or its property
and shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other
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amounts due the Trustee under Section 7.7. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Securityholder any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding.
6.10 PRIORITIES.
If the Trustee collects any money or property pursuant to this
Article VI, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: subject to Articles X and XII, to Holders for interest
accrued on the Securities, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for interest;
Third: subject to Articles X and XII, to Holders for principal
amounts due and unpaid on the Securities, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
for principal; and
Fourth: to the Company or, if applicable, the Guarantors, as their
respective interests may appear.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, 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 pursuant to Section 6.7, or a suit by a Holder or Holders of more than
10% in principal amount of the outstanding Securities.
6.12 ENFORCEMENT OF REMEDIES UNDER THE SECURITY DOCUMENTS.
Notwithstanding any of the foregoing, any enforcement of the
remedies under the Security Documents and any remedies with respect to the
Collateral are subject to the provisions of the applicable Security Document.
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ARTICLE VII
TRUSTEE
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 and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth herein or in the TIA and no duties,
covenants, responsibilities or obligations shall be implied in
this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates (including Officers' Certificates)
or opinions (including Opinions of Counsel) furnished to the
Trustee and conforming to the requirements of this Indenture.
However, in the case of certificates and opinions specifically
required by any provision herein to be furnished to it, the
Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(c) Notwithstanding anything to the contrary herein, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1.
(2) 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.
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.5.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it.
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(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to this Section 7.1.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) In the absence of bad faith, negligence or willful misconduct
on the part of the Trustee, the Trustee shall not be responsible for the
application of any money by any Paying Agent other than the Trustee.
7.2 RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may conclusively rely on any document (whether in
its original or facsimile form) believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and an Opinion of Counsel, which shall conform
to the provisions of Section 13.5. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent (other than an
agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel of its own selection and
the advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.
(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, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby.
(g) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any Opinion of
Counsel), notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon
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reasonable notice to the Company, to examine the books, records, and premises of
the Company, personally or by agent or attorney, at the expense of the Company
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation.
(h) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as duties.
(j) The Trustee shall not be charged with knowledge of any Default
or Event of Default, of the identity of any Restricted Subsidiary or the
existence of any Change of Control or Asset Sale unless either (i) a Responsible
Officer shall have actual knowledge thereof or (ii) the Trustee shall have
received written notice thereof from the Company or any Holder.
(k) 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 and each
agent, custodian and other Person employed by the Trustee to act hereunder.
(l) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries (including the Guarantors), or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
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 Guarantees or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication. The Trustee makes no representations with respect
to the effectiveness or adequacy of this Indenture.
7.5 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such Default or Event of Default, the Trustee
shall mail to each
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Securityholder notice of the uncured Default or Event of Default within 60 days
after such Default or Event of Default occurs. Except in the case of a Default
or an Event of Default in payment of principal of, or interest on, any Security,
including an accelerated payment and the failure to make payment on the Change
of Control Payment Date pursuant to a Change of Control Offer or the Net
Proceeds Offer Payment Date pursuant to a Net Proceeds Offer, the Trustee may
withhold the notice if and so long as a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determines that withholding
the notice is in the interest of the Securityholders.
7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15, beginning with the first May 15
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Securityholder a brief report
dated as of such date that complies with TIA Section 313(a). The Trustee also
shall comply with TIA Sections 313(b), 313(c) and 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the Commission and each securities
exchange, if any, on which the Securities are listed.
The Company shall notify the Trustee if the Securities become listed
on any securities exchange or of any delisting thereof and the Trustee shall
comply with TIA Section 313(d).
7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances (including reasonable fees and expenses of counsel)
incurred or made by it in addition to the compensation for its services, except
any such disbursements, expenses and advances as shall be determined by a court
of competent jurisdiction to have been caused by the Trustee's own negligence,
bad faith or willful misconduct. Such expenses shall include the reasonable fees
and expenses of the Trustee's agents and counsel.
The Company and the Guarantors, jointly and severally, shall fully
indemnify the Trustee and its agents, employees, officers, stockholders and
directors for, and hold them harmless against, any and all loss, liability,
claim, damage or expense incurred by them except for such actions to the extent
as shall be determined by a court of competent jurisdiction to have been caused
by the Trustee's own negligence, bad faith or willful misconduct on their part,
arising out of or in connection with the acceptance or administration of this
trust including the reasonable costs and expenses of defending themselves
against or investigating any claim or liability in connection with the exercise
or performance of any of the Trustee's rights, powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee or any of its agents, employees, officers, stockholders and directors
for which it may seek indemnity. The Company may, subject to the approval of the
Trustee, defend the claim and
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the Trustee shall cooperate in the defense. The Trustee and its agents,
employees, officers, stockholders and directors subject to the claim may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel; provided, however, that the Company will not be required to pay
such fees and expenses if, subject to the approval of the Trustee, it assumes
the Trustee's defense and there is no conflict of interest between the Company
and the Trustee and its agents, employees, officers, stockholders and directors
subject to the claim in connection with such defense as reasonably determined by
the Trustee. The Company need not pay for any settlement made without its
written consent, which consent shall not be unreasonably withheld. The Company
need not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a senior claim prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as Trustee. The
obligations of the Company and the Guarantors under this Section shall not be
subordinated to the payment of Senior Debt pursuant to Article X or Article XII
except assets or money held in trust to pay principal of or interest on
particular Securities.
When the Trustee incurs expenses or renders services after an Event
of Default specified in clause (f) or (g) of Section 6.1 occurs, such expenses
and the compensation for such services shall be paid to the extent allowed under
any Bankruptcy Law.
Notwithstanding any other provision in this Indenture, the foregoing
provisions of this Section 7.7 shall survive the satisfaction and discharge of
this Indenture or the appointment of a successor Trustee.
7.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee
and may appoint a successor Trustee. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) 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 notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.7, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.7, 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. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition at the expense of the Company any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided that such
corporation shall be otherwise qualified and eligible under this Article VII.
7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. In addition, if
the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of the bank holding company, shall meet the capital
requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA Section
310(b); provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Company
and any other obligor of the Securities.
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee, in its capacity as Trustee hereunder, shall comply with
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated.
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ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
8.1 TERMINATION OF THE COMPANY'S OBLIGATIONS.
The Company may terminate its obligations under the Securities
(including the obligations under the Security Documents with respect to the
obligations hereunder only) and this Indenture, except those obligations
referred to in the penultimate paragraph of this Section 8.1, if all Securities
previously authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid or Securities for whose payment U.S.
Legal Tender has theretofore been deposited with the Trustee or the Paying Agent
in trust or segregated and held in trust by the Company and thereafter repaid to
the Company, as provided in Section 8.5) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(a) either (i) pursuant to Article III, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of the
redemption of all of the Securities in accordance with the provisions hereof or
(ii) all Securities have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under the
terms of an irrevocable trust agreement in form and substance satisfactory to
the Trustee, as trust funds in trust solely for the benefit of the Holders of
that purpose, U.S. Legal Tender in such amount as is sufficient without
consideration of reinvestment of such interest, to pay principal of, premium, if
any, and interest on the outstanding Securities to maturity or redemption;
provided that the Trustee shall have been irrevocably instructed to apply such
U.S. Legal Tender to the payment of said principal, premium, if any, and
interest with respect to the Securities; and provided, further, that from and
after the time of deposit, the money deposited shall not be subject to the
rights of holders of Senior Debt or Guarantor Senior Debt pursuant to the
provisions of Article X or XII, as the case may be;
(c) no Default or Event of Default with respect to this Indenture or the
Securities 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 or
agreement (including, without limitation, the Credit Agreement) to which the
Company is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it hereunder;
and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of the Company's
obligations under the Securities and this Indenture have been complied with.
Such Opinion of Counsel shall also state that such satisfaction and discharge
does not result in a default under the Credit Agreement or any other material
agreement or instrument then known to such counsel that binds or affects the
Company.
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Subject to the next sentence and notwithstanding the foregoing
paragraph, the Company's obligations in Sections 2.6, 2.7, 2.8, 2.10, 4.1, 4.2,
7.7, 8.5 and 8.6 shall survive until the Securities are no longer outstanding
pursuant to the last paragraph of Section 2.8. After the Securities are no
longer outstanding, the Company's obligations in Sections 7.7, 8.5 and 8.6 shall
survive such satisfaction and discharge.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
8.2 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) The Company may, at its option by Board Resolution of the Board of
Managers of the Company, at any time, elect to have either paragraph (b) or (c)
below be applied to all outstanding Securities upon compliance with the
conditions set forth in Section 8.3.
(b) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (b), the Company and each of the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.3, be
deemed to have been discharged from their respective obligations with respect to
all outstanding Securities and the corresponding Guarantees 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
Securities, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.4 and the other Sections of this Indenture referred to in
(i) and (ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), and
Holders of the Securities and any amounts deposited under Section 8.3 shall
cease to be subject to any obligations to, or the rights of, any holder of
Senior Debt under Article X or otherwise, except for the following provisions,
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Securities to receive solely from the trust
fund described in Section 8.4, and as more fully set forth in such Section,
payments in respect of the principal of and interest on such Securities when
such payments are due, (ii) the Company's obligations with respect to such
Securities under Article II and Section 4.2, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (iv) this Article VIII. Subject to compliance with this
Article VIII, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), the Company and each of the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.3, be
released from their obligations, if any, under the covenants contained in
Sections 4.3, 4.4, 4.10 and Sections 4.12 through 4.18 and Articles V and XIV
with respect to the outstanding Securities and the corresponding Guarantees and
the Collateral on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences
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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 Securities shall not be deemed outstanding for accounting purposes) and
Holders of the Securities and any amounts deposited under Section 8.3 shall
cease to be subject to any obligations to, or the rights of, any holder of
Senior Debt under Article X or otherwise. For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Securities, 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(c), but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected thereby. In
addition, upon the Company's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), subject to the satisfaction of the conditions
set forth in Section 8.3, Sections 6.1(c), 6.1(d) and 6.1(e) shall not
constitute Events of Default.
8.3 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2(b) or 8.2(c) to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, U.S. Legal Tender or non-callable U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms, will provide, not later than one
day before the due date of any payment on the Securities, U.S. Legal Tender, 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 the
principal of, premium, if any, and interest on the Securities on the stated date
for payment thereof or on the applicable redemption date, as the case may be;
(b) in the case of an election under Section 8.2(b), the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
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 the execution 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
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 8.2(c), the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
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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
on the date of such deposit (other than a Default or Event of Default resulting
from the incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Securities pursuant to this Article VIII
concurrently with such incurrence) or insofar as Sections 6.1(f) and 6.1(g) are
concerned, at any time in the period ending on the 91st day after the date of
such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under this Indenture, the Credit
Agreement, or any other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or 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 any holders of Senior Debt, including, without limitation, those arising
under this Indenture, and (ii) assuming no intervening bankruptcy or insolvency
of the Company between the date of deposit and the 91st day following the
deposit and that no Holder is an insider of the Company, after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (b) above of this Section 8.3 need not be delivered if all Securities not
theretofore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) will become due and payable on the Maturity Date within one year
or (iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
8.4 APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to this Article VIII, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of and
interest on the Securities.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations
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deposited pursuant to Section 8.3 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 Securities.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.3 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
8.5 REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest that
remains unclaimed for two years; provided that the Trustee or such Paying Agent,
before being required to make any payment, may at the expense of the Company
cause to be published once in a newspaper of general circulation in the City of
New York or mail to each Holder entitled to such money notice that such money
remains unclaimed and that after a date specified therein which shall be at
least 30 days from the date of such publication or mailing any unclaimed balance
of such money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to such money must look to the Company for payment as
general creditors unless an applicable law designates another Person.
8.6 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with this Article VIII by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article VIII until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with this Article VIII; provided that if the Company has made any
payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.1 WITHOUT CONSENT OF HOLDERS.
The Company, the Guarantors and the Trustee, together, may amend or
supplement this Indenture, the Security Documents (in accordance with the terms
thereof), the Securities or the Guarantees without notice to or consent of any
Securityholder:
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(1) to cure any ambiguity, defect or inconsistency, so
long as such change does not, in the opinion of the Trustee,
adversely affect the rights of any of the Holders in any
material respect. In formulating its opinion on such matters,
the Trustee will be entitled to rely on such evidence as it
deems appropriate, including, without limitation, solely an
Opinion of Counsel;
(2) to provide for the assumption by a successor
Person of the Obligations and covenants of the Company or any
Guarantor under this Indenture, the Securities and the
Security Documents in accordance with Article V;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(4) to make any other change that does not adversely
affect the rights of any Securityholders hereunder in any
material respect;
(5) to comply with any requirements of the Commission
in connection with the qualification of this Indenture under
the TIA;
(6) to add or release any Guarantor pursuant to the
terms of this Indenture;
(7) to add any additional assets as Collateral;
(8) to release Collateral from the Lien of this
Indenture and the Security Documents when permitted or
required by the Security Documents or this Indenture; or
(9) to provide for issuance of the Exchange Notes,
which will have terms substantially identical in all material
respects to the Initial Notes (except that the transfer
restrictions contained in the Initial Notes will be modified
or eliminated, as appropriate), and which will be treated
together with any outstanding Initial Notes, as a single issue
of securities, provided that for purposes of this clause (9),
the terms Initial Notes and Exchange Securities, shall include
any other Securities issued in accordance with clause (iv) of
the fourth paragraph of Section 2.2 or Securities issued in
exchange therefor which are identical in all material respects
to such Securities (except that the transfer restrictions on
the Securities issued in exchange for Securities issued in
accordance with clause (iv) of the fourth paragraph of Section
2.2 shall be modified or eliminated, as appropriate);
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.1.
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9.2 WITH CONSENT OF HOLDERS.
Subject to Section 6.7, the Company, the Guarantors and the
Trustee, together, with the written consent of the Holder or Holders of at least
a majority in aggregate principal amount of the outstanding Securities, may
amend or supplement this Indenture, the Securities, the Guarantees or the
Security Documents (including any amendment of this Indenture or the Security
Documents which waives, amends or supplements any provision regarding the
release of any Collateral thereunder), without notice to any other
Securityholders. Subject to Section 6.7, the Holder or Holders of a majority in
aggregate principal amount of the outstanding Securities may waive compliance by
the Company with any provision of this Indenture, the Securities, the Guarantees
or the Security Documents (in accordance with the terms thereof) without notice
to any other Securityholder. Notwithstanding anything to the contrary contained
herein, the Security Documents may only be amended or supplemented in accordance
with the provisions set forth in the Security Documents. Without the consent of
each Securityholder affected, however, no amendment, supplement or waiver,
including a waiver pursuant to Section 6.4, may:
(1) reduce the amount of Securities whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the rate of or change or have the effect
of changing the time for payment of interest, including
default interest, on any Security;
(3) reduce the principal of or change or have the
effect of changing the fixed maturity of any Security, or
change the date on which any Securities may be subject to
redemption or repurchase, or reduce the redemption or purchase
price therefor;
(4) make any Securities payable in money other than
that stated in the Securities;
(5) make any change in provisions of this Indenture
protecting the right of each Holder to receive payment of
principal of and interest on such Security on or after the due
date thereof or to bring suit to enforce such payment, or
permitting Holders of a majority in principal amount of the
Securities to waive Defaults or Events of Default;
(6) make any changes in Section 6.4, 6.7 or this
Section 9.2;
(7) modify or change any provision of this Indenture
or the related definitions affecting the subordination or
ranking of the Securities or any Guarantee, in a manner which
adversely affects the Holders of the Securities; or
(8) release any Guarantor from any of its obligations
under its Guarantee or this Indenture otherwise than in
accordance with the terms of this Indenture.
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It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement 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 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 supplemental indenture.
9.3 EFFECT ON SENIOR DEBT.
Notwithstanding anything contained herein to the contrary, no
amendment of, or supplement or waiver to, this Indenture shall adversely affect
the rights of any holder of Senior Debt or Guarantor Senior Debt (including the
lenders under the Credit Agreement) under Article X or Article XII, as the case
may be, without the consent of the requisite lenders under the Credit Agreement.
9.4 COMPLIANCE WITH TIA.
From the date on which this Indenture is qualified under the
TIA, every amendment, waiver or supplement of this Indenture, the Securities or
the Guarantees shall comply with the TIA as then in effect.
9.5 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then notwithstanding
the last sentence of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to revoke any consent previously given, whether or
not such Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (9) of Section 9.2, in which case, the amendment, supplement
or waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided that any such
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waiver shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
9.6 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Company may require the Holder of the Security to deliver it to
the Trustee. The Company shall provide the Trustee with an appropriate notation
on the Security about the changed terms and cause the Trustee to return it to
the Holder at the Company's expense. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
9.7 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided that the Trustee may, but shall
not be obligated to, execute any such amendment, supplement or waiver which
affects the Trustee's own rights, duties or immunities under this Indenture. The
Trustee shall be provided with, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each complying with Sections
13.4 and 13.5 and stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article IX is authorized or permitted by this
Indenture and constitutes the legal, valid and binding obligations of the
Company enforceable in accordance with its terms. Such Opinion of Counsel shall
be at the expense of the Company.
ARTICLE X
SUBORDINATION OF SECURITIES
10.1 SECURITIES SUBORDINATED TO SENIOR DEBT.
Anything herein to the contrary notwithstanding, the Company,
for itself and its successors, and each Holder, by his or her acceptance of
Securities, agrees that the payment of all Obligations owing to the Holders in
respect of the Securities is subordinated, to the extent and in the manner
provided in this Article X, to the prior payment in full in cash or Cash
Equivalents (as used in this Article X, excluding Cash Equivalents of the type
described in clause (vi) of the definition thereof and Cash Equivalents in local
foreign currencies other than Canadian Dollars and Euros), of all Obligations on
existing and future Senior Debt (including the Obligations with respect to the
Credit Agreement). As used in this Article X, the phrases "Obligations in
respect of the Securities" and "Obligations under, or relating to, the
Securities", and similar phrases, shall be deemed to include all unpaid interest
on those QDI Inc. Subordinated Notes that have been exchanged for Initial Notes
in the Offering which accrued from December 15, 2001 through the Issue Date but
which becomes payable on June 15, 2002.
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This Article X shall constitute a continuing offer to all
Persons who become holders of, or continue to hold, Senior Debt, and such
provisions are made for the benefit of the holders of Senior Debt and such
holders are made obligees hereunder and any one or more of them may enforce such
provisions.
10.2 SUSPENSION OF PAYMENT WHEN SENIOR DEBT IS IN DEFAULT.
(a) Unless Section 10.3 shall be applicable, if any default occurs and
is continuing in the payment when due, whether at maturity, upon any redemption,
by declaration or otherwise, of any principal of, premium (if any) or interest
on, unpaid drawings for letters of credit issued in respect of, or regularly
accruing fees with respect to, any Senior Debt (a "Payment Default"), then no
payment or distribution of any kind or character shall be made by or on behalf
of the Company or any other Person on its or their behalf with respect to any
Obligations on or relating to the Securities or to acquire any of the Securities
for cash or property or otherwise and until such Payment Default shall have been
cured or waived or shall have ceased to exist or such Senior Debt as to which
such Payment Default relates shall have been paid in full in cash or Cash
Equivalents, after which the Company shall (subject to the other provisions of
this Article X) resume making any and all required payments in respect of the
Securities, including any missed payments.
(b) Unless Section 10.3 shall be applicable, if any other event of
default (other than a Payment Default) occurs and is continuing with respect to
any Designated Senior Debt (as such event of default is defined in the
instrument creating or evidencing such Designated Senior Debt) permitting the
holders of such Designated Senior Debt then outstanding to accelerate the
maturity thereof (a "Non-payment Default") and if the Representative for the
respective issue of Designated Senior Debt gives written notice of the event of
default to the Trustee (a "Default Notice"), then, unless and until all events
of default have been cured or waived or have ceased to exist or the Trustee
receives notice thereof from the Representative for the respective issue of
Designated Senior Debt terminating the Payment Blockage Period (as defined
below), during the 180 days after the delivery of such Default Notice (the
"Payment Blockage Period"), neither the Company nor any other Person on its
behalf shall (x) make any payment of any kind or character with respect to any
Obligations on or with respect to the Securities or (y) acquire any of the
Securities for cash or property or otherwise. Notwithstanding anything herein to
the contrary, (x) in no event will a Payment Blockage Period extend beyond 180
days from the date the applicable Default Notice is received by the Trustee and
(y) only one such Payment Blockage Period may be commenced within any 360
consecutive days. For all purposes of this Section 10.2(b), no event of default
which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt shall be, or be made,
the basis for the commencement of a second Payment Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a
period commencing after the date of commencement of such Payment Blockage Period
that, in either case, would give rise to an event of default pursuant to any
provisions under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose).
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(c) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by the
foregoing provisions of this Section 10.2, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Debt (pro rata to such holders on the basis of the respective amount of
Senior Debt held by such holders) or their respective Representatives, as their
respective interests may appear. The Trustee shall be entitled to rely on
information regarding amounts then due and owing on the Senior Debt, if any,
received from the holders of Senior Debt (or their Representatives) or, if such
information is not received from such holders or their Representatives, from the
Company and only amounts included in the information provided to the Trustee
shall be paid to the holders of Senior Debt.
Nothing contained in this Article X shall limit the right of
the Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Section 6.2 or to pursue any rights or
remedies hereunder (subject, however, to the rights, if any, under this Article
X, of the holders of Senior Debt in respect of cash or other property of the
Company received upon the exercise of any such remedy); provided that all Senior
Debt thereafter due or declared to be due shall first be paid in full in cash or
Cash Equivalents before the Holders are entitled to receive any payment of any
kind or character with respect to Obligations on, or with respect to, the
Securities.
10.3 SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR DEBT ON
DISSOLUTION, LIQUIDATION OR REORGANIZATION OF COMPANY.
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
the Company or its property, whether voluntary or involuntary, all Obligations
due or to become due upon all Senior Debt shall first be paid in full in cash or
Cash Equivalents (including interest after the commencement of any bankruptcy or
other like proceeding at the rate specified in the applicable Senior Debt,
whether or not such interest is an allowed claim in any such proceeding), before
any payment or distribution of any kind or character is made on account of any
Obligations on, or with respect to, the Securities, or for the acquisition of
any of the Securities for cash or property or otherwise. Upon any such
dissolution, winding-up, liquidation, reorganization, receivership or similar
proceeding, any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee under this Indenture would be entitled, except for the
provisions hereof, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them, directly to the holders of Senior Debt (pro rata to such
holders on the basis of the respective amounts of Senior Debt held by such
holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of Senior Debt remaining unpaid until all such Senior Debt has been paid in full
in cash or Cash Equivalents after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of Senior Debt.
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(b) To the extent any payment of Senior Debt (whether by or on behalf
of the Company, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Holder when such
payment or distribution is prohibited by this Section 10.3, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt (pro rata to such holders on the
basis of the respective amount of Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of Senior Debt
remaining unpaid until all such Senior Debt has been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(d) The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of all or substantially all of its
assets, to another corporation upon the terms and conditions provided in Article
V and as long as permitted under the terms of the Senior Debt shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article V.
10.4 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION.
Nothing contained in this Article X or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions described
in Sections 10.2 and 10.3, from making payments at any time for the purpose of
making payments of principal of and interest on the Securities, or from
depositing with the Trustee any moneys for such payments, or (ii) in the absence
of actual knowledge by the Trustee that a given payment would be prohibited by
Section 10.2, 10.3, 12.2 or 12.3, the application by the Trustee of any moneys
deposited with it for the purpose of making such payments of principal of, and
interest on, the Securities to the Holders entitled thereto unless at least two
Business Days prior to the date upon which such payment would otherwise become
due and payable a Responsible Officer shall have actually received the written
notice provided for in the first sentence of Section 10.2(b) or in Section 10.7
or in the last sentence of this Section 10.4 (provided that, notwithstanding the
foregoing, the Holders of the Securities receiving any payments made in
contravention of Section 10.2 and/or Section 10.3 (and the respective payments)
shall otherwise be subject to the provisions of Section 10.2 and Section 10.3).
The Company shall give prompt written notice to the Trustee of any dissolution,
85
winding-up, liquidation or reorganization of the Company, although any delay or
failure to give any such notice shall have no effect on the subordination
provisions contained herein.
10.5 HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of
all Senior Debt, the Holders of the Securities shall be subrogated to the rights
of the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Debt until the
Securities shall be paid in full; and, for the purposes of such subrogation, no
such payments or distributions to the holders of the Senior Debt by or on behalf
of the Company, or by or on behalf of the Holders by virtue of this Article X,
which otherwise would have been made to the Holders shall, as between the
Company and the Holders, be deemed to be a payment by the Company to or on
account of the Senior Debt, it being understood that the provisions of this
Article X are and are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of Senior Debt, on the
other hand.
10.6 OBLIGATIONS OF COMPANY UNCONDITIONAL.
Nothing contained in this Article X or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Debt, and the Holders,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders the principal of and any interest on the Securities as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of the
Company other than the holders of the Senior Debt, nor shall anything herein or
therein prevent the Holder of any Security or the Trustee on its behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
10.7 NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Securities pursuant to the provisions of
this Article X, although any delay or failure to give any such notice shall have
no effect on the subordination provisions contained herein. Regardless of
anything to the contrary contained in this Article X or elsewhere in this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any default or event of default with respect to any Senior Debt or of any other
facts which would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received notice in writing from the Company, or
from a holder of Senior Debt or a Representative therefor, and, prior to the
receipt of any such written notice, the Trustee shall be entitled to assume (in
the absence of actual knowledge to the contrary) that no such facts exist. The
Trustee shall be entitled to rely on the delivery to it of any notice pursuant
to this Section 10.7 to establish that such notice has been given by a holder of
Senior Debt (or a Representative therefor).
In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or
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distribution pursuant to this Article X, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amounts
of Senior Debt held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article X, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
10.8 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company
referred to in this Article X, the Trustee, subject to the provisions of Article
VII, and the Holders of the Securities shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
or similar case or proceeding is pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or the Holders of the Securities, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of the Senior Debt and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article X.
10.9 TRUSTEE'S RELATION TO SENIOR DEBT.
The Trustee and any agent of the Company or the Trustee shall
be entitled to all the rights set forth in this Article X with respect to any
Senior Debt which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Debt and nothing in
this Indenture shall deprive the Trustee or any such agent of any of its rights
as such holder.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article X, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to
holders or owners of Senior Debt, the distribution may be made and the notice
may be given to their Representative, if any.
10.10 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF COMPANY OR
HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
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Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Trustee or the Holders of
the Securities and without impairing or releasing the subordination provided in
this Article X or the obligations hereunder of the Holders of the Securities to
the holders of the Senior Debt, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Debt, or otherwise amend or supplement in any manner Senior
Debt, or any instrument evidencing the same or any agreement under which Senior
Debt is outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any
Person liable in any manner for the payment or collection of Senior Debt; and
(iv) exercise or refrain from exercising any rights against the Company and any
other Person.
10.11 SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
SECURITIES.
Each Holder of Securities by its acceptance of them authorizes
and expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior Debt
and the Holders of Securities, the subordination provided in this Article X, and
appoints the Trustee its attorney-in-fact for 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) tending towards liquidation of the business and/or assets of the
Company, the filing of a claim for the unpaid balance of its Securities and
accrued interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt
in the form required in such proceeding prior to 30 days before the expiration
of the time to file such claim or claims, then the holders of the Senior Debt or
their Representative are or is hereby authorized to have the right to file and
are or is hereby authorized to file an appropriate claim for and on behalf of
the Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt or their Representative to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
10.12 THIS ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article X will not
be construed as preventing the occurrence of an Event of Default.
10.13 TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article X will apply to amounts due to the
Trustee pursuant to other sections of this Indenture.
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ARTICLE XI
GUARANTEE OF SECURITIES
11.1 UNCONDITIONAL GUARANTEE.
Subject to the provisions of this Article XI, each of the
Guarantors hereby, jointly and severally, unconditionally and irrevocably
guarantees, on a senior subordinated basis (such guarantees to be referred to
herein as a "Guarantee") to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Company or any other Guarantors to the
Holders or the Trustee hereunder or thereunder, that: (a) the principal of,
premium, if any, and interest on the Securities shall be duly and punctually
paid in full when due, whether at maturity, upon redemption at the option of
Holders pursuant to the provisions of the Securities relating thereto, by
acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Securities and all other
obligations of the Company or the Guarantors to the Holders or the Trustee
hereunder or thereunder (including amounts due the Trustee under Section 7.7)
and all other obligations shall be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Securities or any of such other
obligations, the same shall be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed,
or failing performance of any other obligation of the Company to the Holders
under this Indenture or under the Securities, for whatever reason, each
Guarantor shall be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture or the Securities
shall constitute an event of default under the Guarantees, and shall entitle the
Holders of Securities to accelerate the obligations of the Guarantors hereunder
in the same manner and to the same extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, any release of any other Guarantor,
the recovery of any judgment against the Company, any action to enforce the
same, whether or not a Guarantee is affixed to any particular Security, or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each of the Guarantors hereby waives the
benefit of diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that its Guarantee shall not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture and the Guarantees. Each Guarantee is a guarantee of payment and not
of collection.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or such Guarantor, any amount paid by the Company or such
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Guarantor to the Trustee or such Holder, each Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
of Securities and the Trustee, on the other hand, (a) subject to this Article
XI, the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article VI for the purposes of the Guarantees, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (b) in the event of any acceleration of
such obligations as provided in Article VI, such obligations (whether or not due
and payable) shall forthwith become due and payable by the Guarantors for the
purpose of the Guarantees.
No stockholder, officer, director, manager or employee, past,
present or future, of any Guarantor, as such, shall have any personal liability
under such Guarantor's Guarantee by reason of his, her or its status as such
stockholder, officer, director, manager or employee.
The obligations of each Guarantor to the Holders of the
Securities and to the Trustee pursuant to the Guarantee of such Guarantor and
this Indenture are expressly subordinate and subject in right of payment to the
prior payment in full in cash or Cash Equivalents of all Guarantor Senior Debt
of such Guarantor, to the extent and in the manner provided in Article XII.
11.2 LIMITATIONS ON GUARANTEES.
The obligations of each Guarantor under its Guarantee are
limited to the maximum amount which, after giving effect to all other contingent
and fixed liabilities of such Guarantor (including, without limitation, all
Guarantor Senior Debt of such Guarantor) and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to its contribution obligations under this Indenture, will result in
the obligations of such Guarantor under its Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in an amount pro rata,
based on the net assets of each Guarantor, determined in accordance with GAAP.
11.3 EXECUTION AND DELIVERY OF GUARANTEE.
To further evidence the Guarantees set forth in Section 11.1,
each Guarantor hereby agrees that a notation of its Guarantee, substantially in
the form of Exhibit C hereto, shall be endorsed on each Security authenticated
and delivered by the Trustee. The Guarantee of any Guarantor shall be executed
on behalf of such Guarantor by either manual or facsimile signature of two
Officers of such Guarantor, each of whom, in each case, shall have been duly
authorized to so execute by all requisite corporate action. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security.
Each of the Guarantors hereby agrees that its Guarantee set
forth in Section 11.1 shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Guarantee.
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If an Officer of a Guarantor whose signature is on this
Indenture or a Guarantee no longer holds that office at the time the Trustee
authenticates the Security on which such Guarantee is endorsed or at any time
thereafter, such Guarantor's Guarantee of such Security shall nevertheless be
valid.
The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Indenture on behalf of each Guarantor.
11.4 RELEASE OF A GUARANTOR.
(a) If no Default or Event of Default exists or would exist under this
Indenture, upon the sale or disposition of all of the Capital Stock of a
Guarantor by the Company, in a transaction or series of related transactions
that either (i) does not constitute an Asset Sale or (ii) constitutes an Asset
Sale the Net Cash Proceeds of which are applied in accordance with Section 4.16,
or upon the consolidation or merger of a Guarantor with or into any Person in
compliance with Article V (in each case, other than to the Company or an
Affiliate of the Company), or if any Guarantor is dissolved or liquidated in
accordance with this Indenture, such Guarantor's Guarantee will be automatically
discharged and such Guarantor shall be released from all Obligations under this
Article XI without any further action required on the part of the Trustee or any
Holder. Any Guarantor not so released or the entity surviving such Guarantor, as
applicable, shall remain or be liable under its Guarantee as provided in this
Article XI.
(b) If any Guarantor ceases to be a Subsidiary of the Company as a
result of any foreclosure on any pledge or security interest securing
Obligations with respect to the Credit Agreement and/or any interest rate
protection or other hedging agreement permitted thereunder or as a result of the
exercise of any other remedies in respect of the Credit Agreement in which the
Guarantor is released from its guarantee of Obligations with respect to the
Credit Agreement and/or any interest rate protection or other hedging agreement
permitted thereunder, then such Guarantor's Guarantee will be automatically
discharged and such Guarantor shall be released from all Obligations under this
Article XI without any further action required on the part of the Trustee or any
Holder. Any Guarantor not so released shall remain liable under its Guarantee as
provided in this Article XI.
(c) The Trustee shall deliver an appropriate instrument evidencing the
release of a Guarantor upon receipt of a request by the Company or such
Guarantor accompanied by an Officers' Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 11.4; provided, however, that
the legal counsel delivering such Opinion of Counsel may rely as to matters of
fact on one or more Officers' Certificates of the Company.
The Trustee shall execute any documents reasonably requested
by the Company or a Guarantor in order to evidence the release of such Guarantor
from its obligations under its Guarantee endorsed on the Securities and under
this Article XI.
Except as set forth in Articles IV and V and this Section
11.4, nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Guarantor or shall prevent any sale or
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conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
11.5 WAIVER OF SUBROGATION.
Until this Indenture is discharged and all of the Securities
are discharged and paid in full, each Guarantor hereby irrevocably waives and
agrees not to exercise any claim or other rights which it may now or hereafter
acquire against the Company that arise from the existence, payment, performance
or enforcement of the Company's obligations under the Securities or this
Indenture and such Guarantor's obligations under its Guarantee and this
Indenture, in any such instance, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, and any
right to participate in any claim or remedy of the Holders against the Company,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim
or other rights. If any amount shall be paid to any Guarantor in violation of
the preceding sentence and any amounts owing to the Trustee or the Holders of
Securities under the Securities, this Indenture, or any other document or
instrument delivered under or in connection with such agreements or instruments,
shall not have been paid in full, such amount shall have been deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Trustee or the Holders and shall, subject to the provisions of
Articles X and XII, forthwith be paid to the Trustee for the benefit of itself
or such Holders to be credited and applied to the obligations in favor of the
Trustee or the Holders, as the case may be, whether matured or unmatured, in
accordance with the terms of this Indenture. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
11.5 is knowingly made in contemplation of such benefits.
11.6 IMMEDIATE PAYMENT.
Each Guarantor agrees to make immediate payment to the
Trustee, on behalf of the Holders or itself, of all Obligations due and owing or
payable to the respective Holders or the Trustee upon receipt of a demand for
payment therefor by the Trustee to such Guarantor in writing.
11.7 NO SET-OFF.
Each payment to be made by a Guarantor hereunder in respect of
the Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without set-off, counterclaim,
reduction or diminution of any kind or nature.
11.8 OBLIGATIONS ABSOLUTE.
The obligations of each Guarantor hereunder are and shall be
absolute and unconditional and any monies or amounts expressed to be owing or
payable by each Guarantor hereunder which may not be recoverable from such
Guarantor on the basis of a Guarantee shall be recoverable from such Guarantor
as a primary obligor and principal debtor in respect thereof.
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11.9 OBLIGATIONS CONTINUING.
The obligations of each Guarantor hereunder shall be
continuing and shall remain in full force and effect until all the obligations
have been paid and satisfied in full. Each Guarantor agrees with the Trustee
that it will from time to time deliver to the Trustee suitable acknowledgments
of its continued liability hereunder and under any other instrument or
instruments in such form as counsel to the Trustee may advise and as will
prevent any action brought against it in respect of any default hereunder being
barred by any statute of limitations now or hereafter in force and, in the event
of the failure of a Guarantor so to do, it hereby irrevocably appoints the
Trustee the attorney and agent of such Guarantor to make, execute and deliver
such written acknowledgment or acknowledgments or other instruments as may from
time to time become necessary or advisable, in the judgment of the Trustee on
the advice of counsel, to fully maintain and keep in force the liability of such
Guarantor hereunder and under its Guarantee.
11.10 OBLIGATIONS NOT REDUCED.
The obligations of each Guarantor hereunder shall not be
satisfied, reduced or discharged solely by the payment of such principal,
premium, if any, interest, fees and other monies or amounts as may at any time
prior to discharge of this Indenture pursuant to Article VIII be or become owing
or payable under or by virtue of or otherwise in connection with the Securities
or this Indenture.
11.11 OBLIGATIONS REINSTATED.
The obligations of each Guarantor hereunder shall continue to
be effective or shall be reinstated, as the case may be, if at any time any
payment which would otherwise have reduced the obligations of any Guarantor
hereunder (whether such payment shall have been made by or on behalf of the
Company or by or on behalf of a Guarantor) is rescinded or reclaimed from any of
the Holders upon the insolvency, bankruptcy, liquidation or reorganization of
the Company or any Guarantor or otherwise, all as though such payment had not
been made. If demand for, or acceleration of the time for, payment by the
Company is stayed upon the insolvency, bankruptcy, liquidation or reorganization
of the Company, all such Indebtedness otherwise subject to demand for payment or
acceleration shall nonetheless be payable by each Guarantor as provided herein.
11.12 OBLIGATIONS NOT AFFECTED.
The obligations of each Guarantor hereunder shall not be
affected, impaired or diminished in any way by any act, omission, matter or
thing whatsoever, occurring before, upon or after any demand for payment
hereunder (and whether or not known or consented to by any Guarantor or any of
the Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Holders or otherwise, including, without limitation:
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(a) any limitation of status or power, disability, incapacity or other
circumstance relating to the company or any other Person, including any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding-up or other proceeding involving or affecting the Company
or any other Person;
(b) any irregularity, defect, unenforceability or invalidity in respect
of any indebtedness or other obligation of the Company or any other Person under
this Indenture, the Securities or any other document or instrument;
(c) any failure of the Company, whether or not without fault on its
part, to perform or comply with any of the provisions of this Indenture or the
Securities, or to give notice thereof to a Guarantor;
(d) the taking or enforcing or exercising or the refusal or neglect to
take or enforce or exercise any right or remedy from or against the Company or
any other Person or their respective assets or the release or discharge of any
such right or remedy;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the Company
or any other Person;
(f) any change in the time, manner or place of payment of, or in any
other term of, any of the Securities, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from, any of
the Securities or this Indenture, including, without limitation, any increase or
decrease in the principal amount of or premium, if any, or interest on any of
the Securities;
(g) any change in the ownership, control, name, objects, businesses,
assets, capital structure or constitution of the Company or a Guarantor;
(h) any merger or amalgamation of the Company or a Guarantor with any
Person or Persons;
(i) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Obligations or the obligations of a Guarantor under its Guarantee; and
(j) any other circumstance, including release of a Guarantor pursuant
to Section 11.4 (other than by complete, irrevocable payment) that might
otherwise constitute a legal or equitable discharge or defense of the Company
under this Indenture or the Securities or of another Guarantor in respect of its
Guarantee hereunder;
provided that the provisions of this Section 11.12 are not intended to affect in
any way any release of a Guarantor in accordance with the provisions of Section
11.4.
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11.13 WAIVER.
Without in any way limiting the provisions of Section 11.1,
each Guarantor hereby waives notice of acceptance hereof, notice of any
liability of any Guarantor hereunder, notice or proof of reliance by the Holders
upon the obligations of any Guarantor hereunder, and diligence, presentment,
demand for payment on the Company, protest, notice of dishonor or non-payment of
any of the Obligations, or other notice or formalities to the Company or any
Guarantor of any kind whatsoever.
11.14 NO OBLIGATION TO TAKE ACTION AGAINST COMPANY.
Neither the Trustee nor any other Person shall have any
obligation to enforce or exhaust any rights or remedies or to take any other
steps under any security for the Obligations or against the Company or any other
Person or any property of the Company or any other Person before the Trustee is
entitled to demand payment and performance by any or all Guarantors of their
liabilities and obligations under their Guarantees or under this Indenture.
11.15 DEALING WITH THE COMPANY AND OTHERS.
The Holders, without releasing, discharging, limiting or
otherwise affecting in whole or in part the obligations and liabilities of any
Guarantor hereunder and without the consent of or notice to any Guarantor, may
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any other
Person;
(b) take or abstain from taking security or collateral from the Company
or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or otherwise deal
with or do any act or thing in respect of (with or without consideration) any
and all collateral, mortgages or other security given by the Company or any
third party with respect to the obligations or matters contemplated by this
Indenture or the Securities;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from any
security upon such part of the Obligations as the Holders may see fit or change
any such application in whole or in part from time to time as the Holders may
see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
the Company and all other Persons and any security as the Holders or the Trustee
may see fit.
11.16 DEFAULT AND ENFORCEMENT.
If any Guarantor fails to pay in accordance with Section 11.6,
the Trustee may proceed in its name as trustee hereunder in the enforcement of
the Guarantee of any such Guarantor and such Guarantor's obligations thereunder
and hereunder by any remedy provided
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by law, whether by legal proceedings or otherwise, and to recover from such
Guarantor the obligations.
11.17 AMENDMENT, ETC.
No amendment, modification or waiver of any provision of this
Indenture relating to any Guarantor or consent to any departure by any Guarantor
or any other Person from any such provision will in any event be effective
unless it is signed by such Guarantor and the Trustee.
11.18 ACKNOWLEDGMENT.
Each Guarantor hereby acknowledges communication of the terms
of this Indenture and the Securities and consents to and approves of the same.
11.19 COSTS AND EXPENSES.
Each Guarantor shall pay on demand by the Trustee any and all
costs, fees and expenses (including, without limitation, legal fees on a
solicitor and client basis) incurred by the Trustee, its agents, advisors and
counsel or any of the Holders in enforcing any of their rights under any
Guarantee.
11.20 NO MERGER OR WAIVER; CUMULATIVE REMEDIES.
No Guarantee shall operate by way of merger of any of the
obligations of a Guarantor under any other agreement, including, without
limitation, this Indenture. No failure to exercise and no delay in exercising,
on the part of the Trustee or the Holders, any right, remedy, power or privilege
hereunder or under this Indenture or the Securities, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or under this Indenture or the Securities preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges in the Guarantee and
under this Indenture, the Securities and any other document or instrument
between a Guarantor and/or the Company and the Trustee are cumulative and not
exclusive of any rights, remedies, powers and privilege provided by law.
11.21 SURVIVAL OF OBLIGATIONS.
Without prejudice to the survival of any of the other
obligations of each Guarantor hereunder, the obligations of each Guarantor under
Section 11.1 shall survive the payment in full of the Obligations under the
Securities, but only if and to the extent such payment is avoided, and in such
case shall be enforceable against such Guarantor to the same extent as prior to
any such payment and without regard to and without giving effect to any defense,
right of offset or counterclaim available to or which may be asserted by the
Company or any Guarantor.
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11.22 GUARANTEE IN ADDITION TO OTHER OBLIGATIONS.
The Obligations of each Guarantor under its Guarantee and this
Indenture are in addition to and not in substitution for any other Obligations
to the Trustee or to any of the Holders in relation to this Indenture or the
Securities and any guarantees or security at any time held by or for the benefit
of any of them.
11.23 SEVERABILITY.
Any provision of this Article XI which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction
unless its removal would substantially defeat the basic intent, spirit and
purpose of this Indenture and this Article XI.
11.24 SUCCESSORS AND ASSIGNS.
Each Guarantee shall be binding upon and inure to the benefit
of each Guarantor and the Trustee and the other Holders and their respective
successors and permitted assigns, except that no Guarantor may assign any of its
obligations hereunder or thereunder.
ARTICLE XII
SUBORDINATION OF GUARANTEE
12.1 GUARANTEE OBLIGATIONS SUBORDINATED TO GUARANTOR SENIOR DEBT.
Anything herein to the contrary notwithstanding, each of the
Guarantors, for itself and its successors, and each Holder, by his or her
acceptance of Guarantees, agrees that the payment of all Obligations owing to
the Holders in respect of its Guarantee (collectively, as to any Guarantor, its
"Guarantee Obligations") is subordinated, to the extent and in the manner
provided in this Article XII, to the prior payment in full in cash or Cash
Equivalents (as used in this Article XII, excluding Cash Equivalents of the type
described in clause (vi) of the definition thereof and Cash Equivalents in local
foreign currencies other than Canadian Dollars and Euros), of all Obligations on
existing and future Guarantor Senior Debt of such Guarantor (including the
Obligations with respect to the Credit Agreement). As used in this Article XII,
the phrases "Guarantee Obligations in respect of the Guarantees" and "Guarantee
Obligations under, or relating to, the Guarantees", and similar phrases, shall
be deemed to include all guarantee Obligations of each Guarantor with respect to
all unpaid interest on those QDI Inc. Subordinated Notes exchanged for Initial
Notes in the Offering which accrued from December 15, 2001 through the Issue
Date but which becomes payable on June 15, 2002.
This Article XII shall constitute a continuing offer to all
Persons who become holders of, or continue to hold, Guarantor Senior Debt, and
such provisions are made for the benefit of the holders of Guarantor Senior Debt
and such holders are made obligees hereunder and any one or more of them may
enforce such provisions.
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12.2 SUSPENSION OF GUARANTEE OBLIGATIONS.
When Guarantor Senior Debt Is in Default.
(a) Unless Section 12.3 shall be applicable, if any payment default
occurs and is continuing with respect to any Guarantor Senior Debt, then no
payment or distribution of any kind or character shall be made by or on behalf
of such Guarantor or any other Person on its behalf with respect to any
Guarantee Obligations or to acquire any of the Securities for cash or property
or otherwise and until such payment default shall have been cured or waived or
shall have ceased to exist or such Guarantor Senior Debt shall have been paid in
full in cash or Cash Equivalents, after which such Guarantor shall (subject to
the other provisions of this Article XII) resume making any and all required
payments in respect of its obligations under this Guarantee, including any
missed payments.
(b) At any time while any Payment Blockage Period is in existence,
neither any Guarantor nor any other Person on any Guarantor's behalf shall (x)
make any payment of any kind or character with respect to any Guarantee
Obligations or (y) acquire any of the Securities for cash or property or
otherwise.
(c) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by the
foregoing provisions of this Section 12.2, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Guarantor Senior Debt (pro rata to such holders on the basis of the respective
amount of Guarantor Senior Debt held by such holders) or their respective
Representatives, as their respective interests may appear. The Trustee shall be
entitled to rely on information regarding amounts then due and owing on the
Guarantor Senior Debt, if any, received from the holders of Guarantor Senior
Debt (or their Representatives) or, if such information is not received from
such holders or their Representatives, from a Guarantor and only amounts
included in the information provided to the Trustee shall be paid to the holders
of Guarantor Senior Debt.
12.3 GUARANTEE OBLIGATIONS SUBORDINATED TO PRIOR PAYMENT OF ALL GUARANTOR
SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF SUCH
GUARANTOR.
(a) Upon any payment or distribution of assets of any Guarantor of any
kind or character, whether in cash, property or securities, to creditors upon
any liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets of such Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to such Guarantor or its property, whether voluntary or involuntary,
all Obligations due or to become due upon all Guarantor Senior Debt shall first
be paid in full in cash or Cash Equivalents, before any payment or distribution
of any kind or character is made on account of any Guarantee Obligations or for
the acquisition of any of the Securities for cash or property or otherwise. Upon
any such dissolution, winding-up, liquidation, reorganization, receivership or
similar proceeding, any payment or distribution of assets of such Guarantor of
any kind or character, whether in cash, property or securities, to which the
Holders or the Trustee under this Indenture would be entitled, except for the
provisions hereof, shall be paid by such Guarantor or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person
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making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them, directly to the holders of Guarantor Senior
Debt (pro rata to such holders on the basis of the respective amounts of
Guarantor Senior Debt held by such holders) or their respective Representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Guarantor Senior Debt may have been issued, as their respective interests may
appear, for application to the payment of Guarantor Senior Debt remaining unpaid
until all such Guarantor Senior Debt has been paid in full in cash or Cash
Equivalents after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Guarantor Senior Debt.
(b) To the extent any payment of Guarantor Senior Debt (whether by or
on behalf of a Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Guarantor Senior Debt or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Holder when such
payment or distribution is prohibited by this Section 12.3(c), such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Guarantor Senior Debt (pro rata to such holders
on the basis of the respective amount of Guarantor Senior Debt held by such
holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Guarantor Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Guarantor Senior Debt remaining unpaid until all such Guarantor
Senior Debt has been paid in full in cash or Cash Equivalents, after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(d) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
a Guarantor following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article V and as long as permitted under the terms of the Guarantor Senior Debt
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assumes the Guarantee of such
Guarantor hereunder in accordance with Article V.
12.4 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION.
Nothing contained in this Article XII or elsewhere in this
Indenture shall prevent (i) any Guarantor, except under the conditions described
in Sections 12.2 and 12.3, from making payments at any time for the purpose of
making payments on Guarantee Obligations, or from depositing with the Trustee
any moneys for such payments, or (ii) in the absence of actual
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knowledge by the Trustee that a given payment would be prohibited by Section
12.2 or 12.3, the application by the Trustee of any moneys deposited with it for
the purpose of making such payments on Guarantee Obligations to the Holders
entitled thereto unless at least two Business Days prior to the date upon which
such payment would otherwise become due and payable a Responsible Officer shall
have actually received the written notice provided for in the first sentence of
Section 12.2(b) or in Section 12.7 or in the last sentence of this Section 12.4
(provided that, notwithstanding the foregoing, the Holders receiving any
payments made in contravention of Sections 12.2 and/or 12.3 (and such respective
payments) shall otherwise be subject to the provisions of Section 12.2 and
Section 12.3). Each Guarantor shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of such Guarantor,
although any delay or failure to give any such notice shall have no effect on
the subordination provisions contained herein.
12.5 HOLDERS OF GUARANTEE OBLIGATIONS TO BE SUBROGATED TO RIGHTS OF HOLDERS
OF GUARANTOR SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of
all Guarantor Senior Debt, the Holders of Guarantee Obligations of any Guarantor
shall be subrogated to the rights of the holders of Guarantor Senior Debt of
such Guarantor to receive payments or distributions of cash, property or
securities of such Guarantor applicable to such Guarantor Senior Debt until all
amounts owing on or in respect of the Guarantee Obligations shall be paid in
full; and, for the purposes of such subrogation, no such payments or
distributions to the holders of such Guarantor Senior Debt by or on behalf of
such Guarantor, or by or on behalf of the Holders by virtue of this Article XII,
which otherwise would have been made to the Holders shall, as between such
Guarantor and the Holders, be deemed to be a payment by such Guarantor to or on
account of such Guarantor Senior Debt, it being understood that the provisions
of this Article XII are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Guarantor
Senior Debt, on the other hand.
12.6 OBLIGATIONS OF GUARANTORS UNCONDITIONAL.
Nothing contained in this Article XII or elsewhere in this
Indenture or in the Guarantees is intended to or shall impair, as among the
Guarantors, their creditors other than the holders of Guarantor Senior Debt, and
the Holders, the obligation of the Guarantors, which is absolute and
unconditional, to pay to the Holders all amounts due and payable under the
Guarantees as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Guarantors other than the holders of the Guarantor
Senior Debt, nor shall anything herein or therein prevent any Holder or the
Trustee on its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
in respect of cash, property or securities of the Guarantors received upon the
exercise of any such remedy.
12.7 NOTICE TO TRUSTEE.
Each Guarantor shall give prompt written notice to the Trustee
of any fact known to such Guarantor which would prohibit the making of any
payment to or by the Trustee in respect of the Guarantees pursuant to the
provisions of this Article XII, although any delay or
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failure to give any such notice shall have no effect on the subordination
provisions contained herein. Regardless of anything to the contrary contained in
this Article XII or elsewhere in this Indenture, the Trustee shall not be
charged with knowledge of the existence of any default or event of default with
respect to any Guarantor Senior Debt or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing from a Guarantor, or from a holder of
Guarantor Senior Debt or a Representative therefor, and, prior to the receipt of
any such written notice, the Trustee shall be entitled to assume (in the absence
of actual knowledge to the contrary) that no such facts exist. The Trustee shall
be entitled to rely on the delivery to it of any notice pursuant to this Section
12.7 to establish that such notice has been given by a holder of Guarantor
Senior Debt (or a Representative therefor).
In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Debt to participate in any payment or distribution pursuant to
this Article XII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Guarantor Senior
Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XII, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
12.8 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of a Guarantor
referred to in this Article XII, the Trustee, subject to the provisions of
Article VII, and the Holders shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, dissolution, winding-up, liquidation, reorganization or similar
case or proceeding is pending, or upon a certificate of the trustee in
bankruptcy, liquidating trustee, receiver, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or the Holders, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Guarantor Senior Debt and other Indebtedness of such Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XII.
12.9 TRUSTEE'S RELATION TO GUARANTOR SENIOR DEBT.
The Trustee and any agent of a Guarantor or the Trustee shall
be entitled to all the rights set forth in this Article XII with respect to any
Guarantor Senior Debt which may at any time be held by it in its individual or
any other capacity to the same extent as any other holder of Guarantor Senior
Debt and nothing in this Indenture shall deprive the Trustee or any such agent
of any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XII, and no implied
covenants or obligations with respect to the holders of Guarantor
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Senior Debt shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Debt.
Whenever a distribution is to be made or a notice given to
holders or owners of Guarantor Senior Debt, the distribution may be made and the
notice may be given to their Representative, if any.
12.10 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF GUARANTORS OR
HOLDERS OF GUARANTOR SENIOR DEBT.
No right of any present or future holders of any Guarantor
Senior Debt to enforce subordination as provided herein shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of any
Guarantor or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by any Guarantor with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Guarantor Senior Debt may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Trustee or the Holders of
the Securities and without impairing or releasing the subordination provided in
this Article XII or the obligations hereunder of the Holders of the Securities
to the holders of Guarantor Senior Debt, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Guarantor Senior Debt, or otherwise amend or supplement
in any manner Guarantor Senior Debt, or any instrument evidencing the same or
any agreement under which Guarantor Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Debt; (iii) release any Person liable in any
manner for the payment or collection of Guarantor Senior Debt; and (iv) exercise
or refrain from exercising any rights against the Guarantors and any other
Person.
12.11 HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF GUARANTEE
OBLIGATIONS.
Each Holder of Guarantee Obligations by its acceptance of them
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate, as between the holders of
Guarantor Senior Debt and the Holders, the subordination provided in this
Article XII, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of credits or otherwise) tending towards liquidation of the business
and assets of any Guarantor, the filing of a claim for the unpaid balance under
its Guarantee Obligations and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof of debt
in the form required in such proceeding prior to 30 days before the expiration
of the time to file such claim or claims, then the holders of the Guarantor
Senior Debt or their Representative are or is hereby authorized
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to have the right to file and are or is hereby authorized to file an appropriate
claim for and on behalf of the Holders of said Guarantee Obligations. Nothing
herein contained shall be deemed to authorize the Trustee or the holders of
Guarantor Senior Debt or their Representative to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Guarantee Obligations or the rights of
any Holder thereof, or to authorize the Trustee or the holders of Guarantor
Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
12.12 THIS ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of or
interest on the Guarantees by reason of any provision of this Article XII will
not be construed as preventing the occurrence of an Event of Default.
12.13 TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article XII will apply to amounts due to the
Trustee pursuant to other sections of this Indenture.
ARTICLE XIII
MISCELLANEOUS
13.1 TIA CONTROLS.
Following qualification of this Indenture under the TIA, if
any provision of this Indenture limits, qualifies, or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
required provision shall control.
13.2 NOTICES.
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
if to the Company or a Guarantor:
Quality Distribution, Inc.
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Trustee:
The Bank of New York
0 Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Division
Telecopy: (000) 000-0000
Each of the Company and the Trustee by written notice to each
other such Person (and to each Representative of Designated Senior Debt known to
it to be then outstanding) may designate additional or different addresses for
notices to such Person. Any notice or communication to the Company and the
Trustee, shall be deemed to have been given or made as of the date so delivered
if personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Securityholder shall
be mailed to him by first class mail or other equivalent means at his address as
it appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
13.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture,
the Securities or the Guarantees. The Company, the Trustee, the Registrar and
any other Person shall have the protection of TIA Section 312(c).
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 at the request of the Trustee:
(1) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion of
the signers, all conditions precedent to be performed or
effected by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied
with; and
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(2) an Opinion of Counsel stating that, in the
opinion of such counsel, any and all such conditions precedent
have been complied with.
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 the Officers'
Certificate required by Section 4.8, shall include:
(1) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion
of each such Person, such condition or covenant has been
complied with; provided, however, that with respect to matters
of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
13.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee, Paying Agent or Registrar may make reasonable
rules for its functions.
13.7 LEGAL HOLIDAYS.
If a payment date is not a Business Day, payment may be made
on the next succeeding day that is a Business Day.
13.8 GOVERNING LAW.
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture, the Securities or
the Guarantees.
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13.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of any of the Company or any of its Subsidiaries. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
13.10 NO RECOURSE AGAINST OTHERS.
No manager, director, officer, employee, unitholder or
shareholder of the Company or any of its Subsidiaries, as such, shall have any
liability for any obligations of the Company under the Securities, this
Indenture or the Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Securities.
13.11 SUCCESSORS.
All agreements of the Company and the Guarantors in this
Indenture, the Securities and the Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successor.
13.12 DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture.
Each signed copy or counterpart shall be an original, but all of them together
shall represent the same agreement.
13.13 SEVERABILITY.
In case any one or more of the provisions in this Indenture,
in the Securities or in the Guarantees shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.
ARTICLE XIV
COLLATERAL AND SECURITY DOCUMENTS
14.1 COLLATERAL AND SECURITY DOCUMENTS.
(a) In order to secure the due and punctual payment of the
Securities, the Company has entered into the U.S. Security Agreement and the
other Security Documents to create the Liens on the Collateral in accordance
with the terms thereof. Subject to the provisions in the U.S. Security
Agreement, the other Security Documents and this Indenture, the rights and
remedies of the Trustee and the Holders of the Securities in the Collateral
shall be subordinate to the rights and remedies of the holders of secured Senior
Debt and secured Guarantor Senior Debt in accordance with the terms of the U.S.
Security Agreement and the other Security Documents.
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(b) Each Holder of a Security, by accepting such Security, agrees to
all of the terms and provisions of the U.S. Security Agreement and the other
Security Documents.
(c) Neither the Company nor any of the Guarantors shall intentionally
xxxxx x Xxxx on any of its Collateral to the Collateral Agent under the Security
Documents for the benefit of the lenders under the Credit Agreement unless a
Lien is created in favor of the Collateral Agent for the benefit of the Trustee
(on behalf of the Trustee and the Holders of the Securities) with respect to
such property or assets.
14.2 APPLICATION OF PROCEEDS OF COLLATERAL.
Upon any realization upon the Collateral, the proceeds thereof shall be
applied in accordance with the terms of the U.S. Security Agreement.
14.3 POSSESSION, USE AND RELEASE OF COLLATERAL.
(a) Unless an Event of Default shall have occurred and be continuing,
subject to the terms of the Security Documents, the Company and the Guarantors
will have the right to remain in possession and retain exclusive control of the
Collateral securing the Securities and the Guarantees (other than any cash,
securities, obligations and Cash Equivalents constituting part of the Collateral
and deposited with the Collateral Agent in accordance with the provisions of the
Security Documents and other than as set forth in the Security Documents), to
freely operate the Collateral and to collect, invest and dispose of any income
thereon.
(b) Each Holder of a Security, by accepting such Security, acknowledges
that the Security Documents shall provide that so long as the Credit Agreement
is in effect, the lenders under the Credit Agreement shall have the exclusive
right and authority to determine the release, sale, or other disposition with
respect to the Collateral. Subject to the terms of the Security Documents, if at
any time or from time to time Collateral which also secures the Senior Debt or
Guarantor Senior Debt evidenced by the Credit Agreement and/or the interest rate
protection and other hedging agreements permitted thereunder is released or
otherwise disposed of pursuant to the terms of the Credit Agreement and/or the
interest rate protection and other hedging agreements permitted thereunder, as
applicable, such Collateral securing the Securities and the Guarantees shall be
automatically released or disposed of; provided, however, that if an Event of
Default under this Indenture exists as of the date on which the Credit Agreement
and the interest rate protection and other hedging agreements permitted
thereunder are repaid in full, the Collateral securing the Securities and the
Guarantees shall not be released except to the extent it was disposed of in
order to repay obligations under the Credit Agreement and the interest rate
protection and other hedging agreements permitted thereunder until such Event of
Default shall have been cured or otherwise waived.
(c) At such time as (i) the obligations under the Credit Agreement and
all interest rate protection and other hedging agreements permitted thereunder
have been paid in full in cash or Cash Equivalents, and all commitments and
letters of credit thereunder have been terminated, and all interest rate
protection and other hedging agreements permitted under the Credit Agreement
have been terminated or (ii) the lenders under the Credit Agreement and the
interest rate protection and other hedging agreements permitted thereunder have
released their Liens on
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all of the Collateral, the Liens on the Collateral securing the Securities and
the Guarantees shall also be automatically released; provided, however, that (x)
in the case of clause (i) of this sentence, if an Event of Default under this
Indenture exists when the Credit Agreement and the interest rate protection and
other hedging agreements permitted thereunder are repaid in full or terminated
in accordance with the terms thereof, the Collateral securing the Securities and
the Guarantees shall not be released except to the extent it was disposed of in
order to repay obligations under the Credit Agreement and the interest rate
protection and other hedging agreements permitted thereunder and (y) in the case
of clause (ii) of this sentence, if the Credit Agreement is thereafter secured
by assets that would constitute Collateral, the Securities and the Guarantees
shall then be secured by a Lien on such Collateral, to the same extent provided
pursuant to the Security Documents as then in effect immediately prior to the
release of the Liens on the Collateral. If the Company subsequently enters into
a new Credit Agreement which is secured by all or substantially all of the
assets of the Company and the Guarantors (of the type constituting Collateral)
then the Securities shall be secured at such time by the collateral securing
such new Credit Agreement (other than the Excluded Collateral) to the same
extent (in all material respects) and with the same (in all material respects)
priorities, consent rights and provisions regarding release of Collateral and
other provisions set forth in the Security Documents as then in effect
immediately prior to the release of the Liens on the Collateral.
(d) Notwithstanding the provisions set forth in this Section 14.3, the
Company and its Subsidiaries may, without any release or consent by the
Collateral Agent or the Trustee, perform a number of activities in the ordinary
course in respect of the Collateral to the extent permitted pursuant to the
Security Documents and this Indenture.
14.4 OPINION OF COUNSEL.
Following qualification of this Indenture under the TIA, the
Company shall deliver to the Trustee, so long as such delivery is required by
Section 314(b) of the TIA, at least annually, within 30 days of May 1 of each
year (commencing with the year ending December 31, 2003), an Opinion of Counsel
either stating that in the opinion of such counsel, such action has been taken
with respect to the recording, filing, recording and refiling of the Indenture
or any Security Document as is necessary to maintain the Security Interests, and
reciting the details of such action, or stating that in the opinion of such
counsel, no such action is necessary to maintain such Security Interests.
14.5 ADDITIONAL COLLATERAL.
If at any time and from time to time after the Non-Senior Subordinated
Secured Notes Obligation Termination Date (as defined in the U.S. Security
Agreement) and during the continuance of an Event of Default (such Event of
Default being in existence at the time of the Non-Senior Subordinated Secured
Notes Obligation Termination Date), the Company or any other Guarantor acquires
additional Collateral which is not subject to a Security Interest under the
Security Documents at such time, then the Company or such Guarantor, as
applicable, shall grant to the Collateral Agent a Security Interest in such
additional Collateral to the same extent that the Company or such Guarantor
would otherwise have been required to so grant a Security Interest in such
additional Collateral pursuant to the provisions of the Credit Agreement as in
effect on the Non-Senior Subordinated Secured Notes Obligation Termination Date
(without
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giving effect to the termination thereof), such provisions being incorporated
herein by reference mutatis mutandis. The Company and any such Guarantor shall
deliver to the Trustee each of the documents, instruments, opinions and consents
as it may be required to deliver to the Collateral Agent with respect to such
additional Collateral.
14.6 TRUST INDENTURE ACT REQUIREMENTS.
The release of any Collateral pursuant to Article V, XI, XIV
or XV, from the Lien of any of the Security Documents or the release of, in
whole or in part, the Liens created by any of the Security Documents, will not
be deemed to impair the Security Interests in contravention of the provisions
hereof if and to the extent the Collateral or Liens are released pursuant to the
applicable Security Documents and pursuant to the terms hereof. The Trustee and
each of the Holders of the Securities acknowledge that a release of Collateral
or Liens strictly in accordance with the terms of the Security Documents and the
terms hereof will not be deemed for any purpose to be an impairment of the
Security Documents or otherwise contrary to the terms of this Indenture. So long
as the Credit Agreement is in effect, the Company and the Guarantors shall cause
TIA Section 314(d) relating to the release of property or securities from the
Liens hereof and of the Security Documents to be disregarded to the maximum
extent permitted by law.
14.7 SUITS TO PROTECT THE COLLATERAL.
Subject to the provisions of the Security Documents, from and
after the Non-Senior Subordinated Secured Notes Obligation Termination Date, the
Trustee shall have the authority to direct the Collateral Agent to institute and
to maintain such suits and proceedings as the Trustee may deem expedient to
prevent any impairment of the Collateral by any acts which may be unlawful or in
violation of any of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders of the Securities in the Collateral
(including 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 Interests or be
prejudicial to the interests of the Holders of the Securities).
14.8 PURCHASER PROTECTED.
In no event shall any purchaser in good faith or other
transferee of any property purported to be released hereunder be bound to
ascertain the authority of the Trustee to direct the Collateral Agent to execute
the release or to inquire as to the satisfaction of any conditions required by
the provisions hereof for the exercise of such authority or to see to the
application of any consideration given by such purchaser or other transferee;
nor shall any purchaser or other transferee of any property or rights permitted
to be sold by this Article XIV, be under obligation to ascertain or inquire into
the authority of the Company or any other Guarantor, as applicable, to make any
such sale or other transfer.
14.9 POWERS EXERCISABLE BY RECEIVER OR TRUSTEE.
In case the Collateral shall be in the possession of a
receiver or trustee, lawfully appointed, the powers conferred in this Article
XIV upon the Company or any Guarantor, as
109
applicable, with respect to the release, sale or other disposition of such
property may be exercised by such receiver or trustee, and an instrument signed
by such receiver or trustee shall be deemed the equivalent of any similar
instrument of the Company or any Guarantor, as applicable, or of any officer or
officers thereof required by the provisions of this Article XIV.
14.10 RELEASE UPON TERMINATION OF COMPANY'S OBLIGATIONS.
In the event that the Company delivers an Officers'
Certificate certifying that its obligations under this Indenture have been
satisfied and discharged by complying with the provisions of Article VIII, the
Trustee shall (i) execute and deliver such releases, termination statements and
other instruments (in recordable form, where appropriate) as the Company or any
Guarantor, as applicable, may reasonably request evidencing the termination of
the Security Interests created by the Security Documents and (ii) not be deemed
to hold the Security Interests for its benefit and the benefit of the Holders of
the Securities.
ARTICLE XV
APPLICATION OF TRUST MONEYS
15.1 "TRUST MONEYS" DEFINED.
The provisions of this Article XV shall apply only after the
Non-Senior Subordinated Secured Notes Obligation Termination Date and during the
continuance of an Event of Default (such default being in existence at the time
of the Non-Senior Subordinated Secured Notes Obligation Termination Date) and at
such times as the Collateral Agent otherwise (for the benefit of itself and the
Holders of the Securities) maintains a Lien on any of the Collateral (for the
benefit of the Holders and the Trustee hereunder) pursuant to the terms of the
U.S. Security Agreement.
All cash and Cash Equivalents of the Company and its
Restricted Subsidiaries received by the Trustee, as the case may be, in
accordance with the terms of this Indenture and the Security Documents shall
constitute "Trust Moneys"; provided, however, that Trust Moneys shall not
include any property deposited with the Trustee pursuant to Article III or VIII.
All Trust Moneys shall be held by or delivered to the Trustee, for its benefit
and the benefit of the Holders of Securities as a part of the Collateral in
accordance with the provisions of this Indenture and the applicable Security
Documents and, upon any entry upon or sale or other disposition of the
Collateral or any part thereof pursuant to any of the Security Documents, said
Trust Moneys shall be applied in accordance with Section 6.10; but, prior to any
such entry, sale or other disposition, all or any part of the Trust Moneys may
be withdrawn, and shall be released, paid or applied by the Trustee, from time
to time as provided in Sections 15.2 through 15.6, inclusive, and the U.S.
Security Agreement.
On the Non-Senior Subordinated Secured Notes Obligation
Termination Date there shall be established and, at all times thereafter until
this Indenture shall have terminated, there shall be maintained with the Trustee
an account which shall be entitled the "Collateral Account" (the "Collateral
Account"). The Collateral Account shall be established and maintained by the
Trustee at its corporate trust offices located in New York. All Trust Moneys
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that are received by the Trustee shall be held, applied and/or disbursed by the
Trustee in accordance with the provisions of this Article XV.
15.2 RETIREMENT OF SECURITIES.
The Trustee shall apply Trust Moneys from time to time to the
payment of the principal of and interest on any Securities, when due or to the
redemption or purchase thereof upon tender or in the open market or at private
sale or upon any exchange or in any one or more of such ways, including, without
limitation, pursuant to a Change of Control Offer under Section 4.15 or a Net
Proceeds Offer under Section 4.16, or as the Company shall request in writing,
upon receipt by the Trustee of the following:
(a) Board Resolutions of the Company directing the application pursuant
to this Section 15.2 of a specified amount of Trust Moneys and, in case any such
moneys are to be applied to payment, designating the Securities so to be paid
and, in case any such moneys are to be applied to the purchase of Securities,
prescribing the method of purchase, the price or prices to be paid and the
maximum principal amount of Securities to be purchased and any other provisions
of this Indenture governing such purchase;
(b) cash in the maximum amount of the accrued interest, if any,
required to be paid in connection with any such purchase, which cash shall be
held by the Trustee in trust for such purpose; and
(c) an Officers' Certificate of the Company, dated not more than five
Business Days prior to the date of the relevant application, stating that all
conditions precedent and covenants herein provided for relating to such
application of Trust Moneys have been complied with.
Upon compliance with the foregoing provisions of this Section,
the Trustee shall apply Trust Moneys as directed and specified by such Board
Resolution, up to, but not exceeding, the principal amount of the Securities so
paid or purchased, using the cash deposited pursuant to paragraph (b) of this
Section 15.2, to the extent necessary, to pay any accrued interest required in
connection with such purchase.
A Board Resolution expressed to be irrevocable directing the
application of Trust Moneys under this Section 15.2 to the payment of the
principal of particular Securities shall for all purposes of this Indenture be
deemed the equivalent of the deposit of money with the Trustee in trust for such
purpose. Such Trust Moneys and any cash deposited with the Trustee pursuant to
paragraph (b) of this Section 15.2 for the payment of accrued interest shall
not, after compliance with the foregoing provisions of this Section, be deemed
to be part of the Collateral or Trust Moneys.
15.3 POWERS EXERCISABLE NOTWITHSTANDING EVENT OF DEFAULT.
The Company or any Guarantor, as applicable, while in
possession of Collateral, may do any of the things not expressly provided for in
this Indenture if the Holders of a majority in aggregate principal amount of the
Securities outstanding, by appropriate action of such
111
holders, shall consent to such action. This Section 15.3 shall not apply,
however, during the continuance of an Event of Default of the type specified in
Section 6.1(a) or (b).
15.4 POWERS EXERCISABLE BY RECEIVER.
In case the Collateral shall be in the possession of a
receiver or trustee lawfully appointed, the powers hereinbefore in this Article
XV conferred upon the Company and any Guarantor, as applicable, with respect to
the withdrawal or application of Trust Moneys may be exercised by such receiver
or trustee, in which case a certificate signed by such receiver or trustee shall
be deemed the equivalent of any Officers' Certificate required by this Article
XV.
15.5 DISPOSITION OF SECURITIES RETIRED.
All Securities received by the Trustee and for whose purchase
Trust Moneys are applied under this Article XV, if not otherwise cancelled,
shall be promptly delivered to the Trustee for cancellation and destruction
unless the Trustee shall be otherwise directed in writing by the Company. Upon
destruction of any Securities, the Trustee shall issue a certificate of
destruction to the Company.
15.6 INVESTMENT OF TRUST MONEYS.
All or any part of any Trust Moneys held by the Trustee
hereunder (except such as may be held for the account of any particular
Securities) shall from time to time be invested or reinvested by the Trustee in
any Cash Equivalents pursuant to the written direction of the Company which
shall specify the Cash Equivalents in which such Trust Moneys shall be invested.
Such Cash Equivalents shall be held by the Trustee, as the case may be, as a
part of the Collateral, subject to the same provisions hereof as the cash used
by it to purchase such Cash Equivalents.
The Trustee shall not be liable or responsible for any loss
resulting from such investments or sales except only for its own grossly
negligent action, its own grossly negligent failure to act or its own willful
misconduct in complying with this Section 15.6.
* * * * *
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the date first written above.
TRUSTEE:
THE BANK OF NEW YORK
By:/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Title: Assistant Vice President
ISSUER:
QUALITY DISTRIBUTION, LLC
By:/s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Title: President and Chief
Executive Officer
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GUARANTORS:
AMERICAN TRANSINSURANCE GROUP, INC.
CAPACITY MANAGEMENT SYSTEMS, INC.
CHEMICAL XXXXXX CORPORATION
CHEMICAL XXXXXX TANK LINES, INC.
CHEMICAL PROPERTIES, INC.
CLM, INC.
CLT SERVICES, INC.
ENVIROPOWER, INC.
FLEET TRANSPORT COMPANY, INC.
LAKESHORE LEASING, INC.
LLI, INC.
MEXICO INVESTMENTS, INC.
XXXXXXXXX WAY FUNDING CORP.
POWER PURCHASING, INC.
QUALITY CARRIERS, INC.
QSI SERVICES, INC.
By:/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: President
QUALA SYSTEMS, INC.
TRANSPLASTICS, INC.
By:/s/ Xxxxxx Xxxxxxxxxx
---------------------------------
Title: Vice President/Treasurer
CLTL OF NEVADA
M T L OF NEVADA
By: /s/ Xxx Xxxxxx
---------------------------------
Title: President
S-2
EXHIBIT A
[FORM OF INITIAL NOTE]
[FACE OF SECURITY]
QUALITY DISTRIBUTION, LLC
12-1/2% Senior Subordinated Secured Note due 2008
CUSIP No. 74756R AA 9 $____________
No.
QUALITY DISTRIBUTION, LLC, a Delaware limited liability
company (the "Company", which term includes any successor corporation), for
value received promises to pay to or registered assigns, the principal sum of
$[ ] Dollars, on June 15, 2008.
Interest Payment Dates: June 15 and December 15, commencing
June 15, 2002.
Record Dates: June 1 and December 1.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
QUALITY DISTRIBUTION, LLC
By:
---------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12-1/2% Senior Subordinated Secured Notes
due 2008 described in the within-mentioned Indenture.
Dated:
The Bank of New York, as Trustee
By:
----------------------------------
Authorized Signatory
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[FORM OF INITIAL NOTE]
[REVERSE OF SECURITY]
QUALITY DISTRIBUTION, LLC
12-1/2% Senior Subordinated Secured Note due 2008
1. Interest.
QUALITY DISTRIBUTION, LLC, a Delaware limited liability company (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
June 15 and December 15 of each year (the "Interest Payment Date"), commencing
June 15, 2002. Interest on this Security will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from and
including May 30, 2002. Interest on this Security will be computed on the basis
of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to time
on demand at the rate borne by this Security plus 2% and on overdue installments
of interest (without regard to any applicable grace periods) to the extent
lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
(including pursuant to an Exchange Offer) after such Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal and interest that is payable in cash in money of the
United States that at the time of payment is legal tender for payment of public
and private debts ("U.S. Legal Tender"). The Securities will bear interest at a
rate of 12-1/2% per annum, of which 7-1/4% per annum shall be paid in U.S. Legal
Tender, and 5-1/4% per annum shall be paid solely through the issuance of
additional securities, whether or not physically issued (the "Additional
Securities"); provided, however, that during any period (i) when (x) the Total
Leverage Ratio (measured as of the last day of the most recent fiscal quarter
for which financial statements are available ending prior to the immediately
preceding Interest Payment Date) is less than 4.0 to 1.0 but greater than or
equal to 3.5 to 1.0 or (y) the Senior Leverage Ratio (measured as of the last
day of the most recent fiscal quarter for which financial statements are
available ending prior to the immediately preceding Interest Payment Date) is
less than 3.0 to 1.0 but greater than or equal to 2.5 to 1.0, then that portion
of the interest rate payable on the Securities in U.S. Legal Tender for such
period shall be 9 7/8% per annum and that portion of the interest rate payable
on the Securities in Additional Securities for such period shall be 2 5/8% per
annum or (ii) when (x) the Total Leverage Ratio (measured as of the last day of
the most recent fiscal quarter for which financial statements are available
ending prior to the immediately preceding Interest Payment Date) is less than
3.5 to 1.0 or (y) the Senior Leverage Ratio (measured as of the last day of the
most recent fiscal quarter for which financial statements are available ending
prior to the immediately
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preceding Interest Payment Date) is less than 2.5 to 1.0, then that portion of
the interest rate payable on the Securities in U.S. Legal Tender for such period
shall be 12-1/2% per annum and that portion of the interest rate payable on the
Securities in Additional Securities for such period shall be zero; provided
further, however, that in connection with any redemption or repurchase of the
Securities as permitted or required by this Indenture and upon acceleration of
payment of the Securities, all accrued and unpaid interest thereon shall be
payable solely in cash. Such Additional Securities shall be in an aggregate
principal amount equal to the amount of interest that would be payable with
respect to this Security on such Interest Payment Date (less all cash payments,
if any, made in respect of interest payable on such Interest Payment Date) and
such Additional Securities shall be identical to the Securities otherwise
issued. Except as expressly provided herein, the term "Securities" shall include
all Additional Securities that may be issued pursuant to this paragraph.
With respect to the determination of both the Total Leverage Ratio and
the Senior Leverage Ratio, at least 10 days prior to any Interest Payment Date
the Company shall deliver to The Bank of New York, as trustee (the "Trustee"),
an officers' certificate setting forth such Total Leverage Ratio and such Senior
Leverage Ratio, each measured as of the last day of the most recent fiscal
quarter for which financial statements are available ending prior to the
immediately preceding Interest Payment Date.
The Company may pay principal and interest by wire transfer of Federal
funds, or interest by check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
3. Paying Agent and Registrar.
Initially, The Bank of New York will act as Paying Agent and Registrar.
The Company may change any Paying Agent, Registrar or co-Registrar without
notice to the Holders. The Company or any of its Subsidiaries may, subject to
certain exceptions, act as Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of May
30, 2002 (the "Indenture"), among the Company, the Guarantors named therein and
the Trustee. This Security is one of a duly authorized issue of Initial Notes of
the Company designated as its 12-1/2% Senior Subordinated Secured Notes due 2008
(the "Securities" or the "Initial Notes"). Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture until such
time as the Indenture is qualified under the TIA, and thereafter as in effect on
the date on which the Indenture is qualified under the TIA. Notwithstanding
anything to the contrary herein, the Securities are subject to all such terms,
and Holders of Securities are referred to the Indenture and the TIA for a
statement of them. The Securities are general obligations of the Company
unlimited in amount, of which an aggregate principal amount of $54,535,000 is
being issued on the Issue Date.
A-4
5. Subordination.
All Obligations on, or relating to, the Securities are subordinated in
right of payment, in the manner and to the extent set forth in the Indenture, to
the prior payment in full in cash or Cash Equivalents of all Obligations on
Senior Debt of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed (including the Obligations
with respect to the Credit Agreement). Each Holder by his acceptance hereof
agrees to be bound by such provisions and authorizes and expressly directs the
Trustee, on his behalf, to take such action as may be necessary or appropriate
to effectuate the subordination provided for in the Indenture and appoints the
Trustee his attorney-in-fact for such purposes.
6. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole at
any time or in part from time to time, on and after June 15, 2002, upon not less
than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on December 15 of the years set forth below,
plus, in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
Year Percentage
2001.................................................... 106.25%
2002.................................................... 104.17%
2003.................................................... 102.08%
2004 and thereafter..................................... 100.00%
7. Mandatory Redemption.
The Company shall redeem, at any time after the fifth anniversary of
the Issue Date (provided that no default or event of default has occurred and is
continuing under the Credit Agreement or would result therefrom), that portion
of each of the Securities as is sufficient to prevent the Securities from having
been issued with "significant original issue discount" as that term is defined
in Section 163(i) of the Internal Revenue Code of 1986, as amended, and the
rules and regulations issued thereunder, as from time to time in effect, or any
successor thereto. The Securities will be partially redeemed, on a pro rata
basis, at a redemption price equal to 100% of the principal amount of that
portion of the Securities required to be redeemed.
8. Notice of Redemption.
Notice of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at such Holder's registered address. Securities in
denominations of $1,000 may be redeemed only in whole. The Trustee may select
for redemption portions (equal to $1,000 or any integral multiple thereof) of
the principal of Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the
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name of the Holder thereof upon cancellation of the original Security. On and
after the Redemption Date, interest will cease to accrue on Securities or
portions thereof called for redemption, subject to the provisions of the
Indenture.
9. Guarantees; Security.
The Guarantors have, subject to certain limitations, jointly and
severally guaranteed the due and punctual payment of the principal and interest
on the Securities and all other amounts payable by the Company under the
Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture (the "Guarantees"). All Guarantee Obligations on,
or relating to, the Guarantees are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Obligations on Guaranteed Senior Debt of
the Guarantors, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed (including the Obligations with respect
to the Credit Agreement).
The Company's Obligations under the Securities and the Guarantors'
Obligations under the Guarantees are secured by a Lien on the Collateral
pursuant to the terms of the Security Documents. The actions of the Trustee and
the Holders of the Securities secured by such Lien and the application of
proceeds from the enforcement of any remedies with respect to such Collateral
are limited pursuant to the terms of the Security Documents.
10. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required, subject to the terms and conditions set forth in the Indenture, to
offer to purchase all of the outstanding Securities at a purchase price equal to
101.0% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of purchase.
11. Limitation on Asset Sales.
The Company is, subject to certain conditions, obligated to make an
offer to purchase Securities at 100.0% of their principal amount, plus accrued
and unpaid interest, if any, thereon to the date of repurchase with certain net
cash proceeds of certain sales or other dispositions of assets in accordance
with the Indenture.
12. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Security shall have the right to exchange this Security for the Company's
12-1/2% Senior Subordinated Secured Notes due 2008 (the "Exchange Notes"), which
shall have been registered under the Securities Act, in like principal amount
and having terms identical in all material respects to the Initial Notes. The
Holders of the Initial Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
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13. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
14. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
15. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed for
one year, the Trustee and the Paying Agent will repay the funds to the Company
at its request. After that, all liability of the Trustee and such Paying Agent
with respect to such funds shall cease.
16. Discharge Prior to Redemption or Maturity.
The Company and the Guarantors may be discharged from their obligations
under the Indenture, the Securities, the Guarantees and the Security Documents
except for certain provisions thereof, and may be discharged from obligations to
comply with certain covenants contained in the Indenture, the Securities, the
Guarantees and the Security Documents, in each case upon satisfaction of certain
conditions specified in the Indenture.
17. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Securities and the Guarantees to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
18. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
of the Company to the Company, to consolidate, merge or sell all or
substantially all
A-7
of its assets, to engage in transactions with affiliates or to release the
Collateral. The limitations are subject to a number of important qualifications
and exceptions. The Company must annually report to the Trustee on compliance
with such limitations.
19. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received reasonable
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
20. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
21. No Recourse Against Others.
No manager, director, officer, employee, unitholder or shareholder of
the Company or any of its Subsidiaries, as such, shall have any liability for
any obligation of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Security by accepting a Security waives and releases
all such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
22. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
23. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
Capitalized terms used but not otherwise defined herein shall have the
meaning ascribed to such terms in the Indenture.
A-8
24. Governing Law.
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to applicable principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
25. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
26. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture which has the text of this
Security in larger type. Requests may be made to: Quality Distribution, LLC (c/o
Quality Distribution, Inc.), 0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
Attn: General Counsel.
A-9
ASSIGNMENT FORM
I or we assign and transfer this Security to
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: _________________ Signed: _______________________________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee: ______________________________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
In connection with any transfer of this Security occurring
prior to the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the Securities
Act of 1933, as amended (the "Securities Act") covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) the Resale Restriction Termination Date, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Security is being
transferred:
[Check One]
(1)__ to the Company or a Subsidiary thereof; or
(2)__ pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3)__ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished
to the Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the Trustee);
or
(4)__ outside the United states to a "foreign person" in compliance with Rule
904 of Regulation S under the Securities Act; or
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(5)__ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6)__ pursuant to an effective registration statement under the Securities
Act; or
(7)__ pursuant to another available exemption from the registration
requirements of the Securities Act; and unless the box below is
checked, the undersigned confirms that such Security is not being
transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[_] The transferee is an Affiliate of the Company.
Unless one of the items is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided that if box (3), (4),
(5) or (7) is checked, the Company or the Trustee may require, prior to
registering any such transfer of the Securities, in its sole discretion, such
legal opinions, certifications (including an investment letter in the case of
box (3) or (4)) and other information as the Trustee or the Company has
reasonably requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or
Registrar shall not be obligated to register this Security in the name of any
person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.17 of the Indenture
shall have been satisfied.
Dated: __________________ Signed: _________________________________________
(Sign exactly as name appears on the other side
of this Security)
Signature Guarantee: __________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: __________________ ______________________________________
NOTICE: To be executed by an
executive officer
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, check the
appropriate box:
Section 4.15 [ ] Section 4.16 [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.15 or Section 4.16 of the
Indenture, state the amount: $___________
Dated: _________________ Signed: _______________________________________
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee: ______________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
A-12
EXHIBIT B
[FORM OF EXCHANGE NOTE]
[FACE OF SECURITY]
QUALITY DISTRIBUTION, LLC
12-1/2% Senior Subordinated Secured Note due 2008
CUSIP No. $____________
No.
QUALITY DISTRIBUTION, LLC, a Delaware limited liability
company (the "Company", which term includes any successor corporation), for
value received promises to pay to or registered assigns, the principal sum of
$[ ] Dollars, on June 15, 2008.
Interest Payment Dates: June 15 and December 15, commencing
June 15, 2002.
Record Dates: June 1 and December 1.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
QUALITY DISTRIBUTION, LLC
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
B-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12-1/2% Senior Subordinated Secured Notes
due 2008 described in the within-mentioned Indenture.
Dated:
The Bank of New York, as Trustee
By:
-------------------------------
Authorized Signatory
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[FORM OF EXCHANGE NOTE]
[REVERSE OF SECURITY]
QUALITY DISTRIBUTION, LLC
12-1/2% Senior Subordinated Secured Note due 2008
1. Interest.
QUALITY DISTRIBUTION, LLC, a Delaware limited liability company (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
June 15 and December 15 of each year (the "Interest Payment Date"), commencing
June 15, 2002. Interest on this Security will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from and
including May 30, 2002. Interest on this Security will be computed on the basis
of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to time
on demand at the rate borne by this Security plus 2% and on overdue installments
of interest (without regard to any applicable grace periods) to the extent
lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest that is
payable in cash in money of the United States that at the time of payment is
legal tender for payment of public and private debts ("U.S. Legal Tender"). The
Securities will bear interest at a rate of 12-1/2% per annum, of which 7-1/4%
per annum shall be paid in U.S. Legal Tender, and 5-1/4% per annum shall be paid
solely through the issuance of additional securities, whether or not physically
issued (the "Additional Securities"); provided, however, that during any period
(i) when (x) the Total Leverage Ratio (measured as of the last day of the most
recent fiscal quarter for which financial statements are available ending prior
to the immediately preceding Interest Payment Date) is less than 4.0 to 1.0 but
greater than or equal to 3.5 to 1.0 or (y) the Senior Leverage Ratio (measured
as of the last day of the most recent fiscal quarter for which financial
statements are available ending prior to the immediately preceding Interest
Payment Date) is less than 3.0 to 1.0 but greater than or equal to 2.5 to 1.0,
then that portion of the interest rate payable on the Securities in U.S. Legal
Tender for such period shall be 9-7/8% per annum and that portion of the
interest rate payable on the Securities in Additional Securities for such period
shall be 2-5/8% per annum or (ii) when (x) the Total Leverage Ratio (measured as
of the last day of the most recent fiscal quarter for which financial statements
are available ending prior to the immediately preceding Interest Payment Date)
is less than 3.5 to 1.0 or (y) the Senior Leverage Ratio (measured as of the
last day of the most recent fiscal quarter for which financial statements are
available ending prior to the immediately preceding Interest Payment Date) is
less than 2.5 to
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1.0, then that portion of the interest rate payable on the Securities in U.S.
Legal Tender for such period shall be 12-1/2% per annum and that portion of the
interest rate payable on the Securities in Additional Securities for such period
shall be zero; provided further, however, that in connection with any redemption
or repurchase of the Securities as permitted or required by this Indenture and
upon acceleration of payment of the Securities, all accrued and unpaid interest
thereon shall be payable solely in cash. Such Additional Securities shall be in
an aggregate principal amount equal to the amount of interest that would be
payable with respect to this Security on such Interest Payment Date (less all
cash payments, if any, made in respect of interest payable on such Interest
Payment Date) and such Additional Securities shall be identical to the
Securities otherwise issued. Except as expressly provided herein, the term
"Securities" shall include all Additional Securities that may be issued pursuant
to this paragraph.
With respect to the determination of both the Total Leverage Ratio and
the Senior Leverage Ratio, at least 10 days prior to any Interest Payment Date
the Company shall deliver to The Bank of New York, as trustee (the "Trustee") an
Officers' Certificate setting forth such Total Leverage Ratio and such Senior
Leverage Ratio, each measured as of the last day of the most recent fiscal
quarter for which financial statements are available ending prior to the
immediately preceding Interest Payment Date.
The Company may pay principal and interest by wire transfer of Federal
funds, or interest by check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's address on record with the Registrar.
3. Paying Agent and Registrar.
Initially, The Bank of New York will act as Paying Agent and Registrar.
The Company may change any Paying Agent, Registrar or co-Registrar without
notice to the Holders. The Company or any of its Subsidiaries may, subject to
certain exceptions, act as Registrar or co-Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of May
30, 2002 (the "Indenture"), among the Company, the Guarantors named therein and
the Trustee. This Security is one of a duly authorized issue of Exchange Notes
of the Company designated as its 12-1/2% Senior Subordinated Secured Notes due
2008 (the "Securities" or the "Exchange Notes"). The Exchange Notes and the
Initial Notes are treated as a single class of securities under the Indenture.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. SectionSection 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are general obligations of the Company unlimited in amount, of which
an aggregate principal amount of $54,535,000 was issued on the Issue Date.
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5. Subordination.
All Obligations on, or relating to, the Securities are subordinated in
right of payment, in the manner and to the extent set forth in the Indenture, to
the prior payment in full in cash or Cash Equivalents of all Obligations on
Senior Debt of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed (including the Obligations
with respect to the Credit Agreement). Each Holder by his acceptance hereof
agrees to be bound by such provisions and authorizes and expressly directs the
Trustee, on his behalf, to take such action as may be necessary or appropriate
to effectuate the subordination provided for in the Indenture and appoints the
Trustee his attorney-in-fact for such purposes.
6. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole at
any time or in part from time to time, on and after June 15, 2002, upon not less
than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed during the
twelve-month period commencing on December 15 of the years set forth below,
plus, in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
Year Percentage
2001 ................................................... 106.25%
2002 ................................................... 104.17%
2003 ................................................... 102.08%
2004 and thereafter .................................... 100.00%
7. Mandatory Redemption.
The Company shall redeem, at any time after the fifth anniversary of
the Issue Date (provided that no default or event of default has occurred and is
continuing under the Credit Agreement or would result therefrom), that portion
of each of the Securities as is sufficient to prevent the Securities from having
been issued with "significant original issue discount" as that term is defined
in Section 163(i) of the Internal Revenue Code of 1986, as amended, and the
rules and regulations issued thereunder, as from time to time in effect, or any
successor thereto. The Securities will be partially redeemed, on a pro rata
basis, at a redemption price equal to 100% of the principal amount of that
portion of the Securities required to be redeemed.
8. Notice of Redemption.
Notice of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at such Holder's registered address. Securities in
denominations of $1,000 may be redeemed only in whole. The Trustee may select
for redemption portions (equal to $1,000 or any integral multiple thereof) of
the principal of Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the
B-5
name of the Holder thereof upon cancellation of the original Security. On and
after the Redemption Date, interest will cease to accrue on Securities or
portions thereof called for redemption, subject to the provisions of the
Indenture.
9. Guarantees; Security.
The Guarantors have, subject to certain limitations, jointly and
severally guaranteed the due and punctual payment of the principal and interest
on the Securities and all other amounts payable by the Company under the
Indenture and the Securities when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture (the "Guarantees"). All Guarantee Obligations on,
or relating to, the Guarantees are subordinated in right of payment, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full in cash or Cash Equivalents of all Obligations on Guaranteed Senior Debt of
the Guarantors, whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed (including the Obligations with respect
to the Credit Agreement).
The Company's Obligations under the Securities and the Guarantors'
Obligations under the Guarantees are secured by a Lien on the Collateral
pursuant to the terms of the Security Documents. The actions of the Trustee and
the Holders of the Securities secured by such Lien and the application of
proceeds from the enforcement of any remedies with respect to such Collateral
are limited pursuant to the terms of the Security Documents.
10. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required, subject to the terms and conditions set forth in the Indenture, to
offer to purchase all of the outstanding Securities at a purchase price equal to
101.0% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of purchase.
11. Limitation on Asset Sales.
The Company is, subject to certain conditions, obligated to make an
offer to purchase Securities at 100.0% of their principal amount, plus accrued
and unpaid interest, if any, thereon to the date of repurchase with certain net
cash proceeds of certain sales or other dispositions of assets in accordance
with the Indenture.
12. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
13. Persons Deemed Owners.
B-6
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
14. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed for
one year, the Trustee and the Paying Agent will repay the funds to the Company
at its request. After that, all liability of the Trustee and such Paying Agent
with respect to such funds shall cease.
15. Discharge Prior to Redemption or Maturity.
The Company and the Guarantors may be discharged from their obligations
under the Indenture, the Securities, the Guarantees and the Security Documents
except for certain provisions thereof, and may be discharged from obligations to
comply with certain covenants contained in the Indenture, the Securities, the
Guarantees and the Security Documents, in each case upon satisfaction of certain
conditions specified in the Indenture.
16. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without notice
to or consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Securities and the Guarantees to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
17. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
of the Company to the Company, to consolidate, merge or sell all or
substantially all of its assets, to engage in transactions with affiliates or to
release the Collateral. The limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
18. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received reasonable
indemnity satisfactory to it. The Indenture
B-7
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of certain continuing Defaults or Events of Default
if it determines that withholding notice is in their interest.
19. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
20. No Recourse Against Others.
No manager, director, officer, employee, unitholder or shareholder of
the Company or any of its Subsidiaries, as such, shall have any liability for
any obligation of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Security by accepting a Security waives and releases
all such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
21. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
Capitalized terms used but not otherwise defined herein shall have the
meaning ascribed to such terms in the Indenture.
23. Governing Law.
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to applicable principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
24. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the
B-8
accuracy of such numbers as printed on the Securities and reliance may be placed
only on the other identification numbers printed hereon.
25. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture which has the text of this
Security in larger type. Requests may be made to: Quality Distribution, LLC (c/o
Quality Distribution, Inc.), 0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
Attn: General Counsel.
B-9
ASSIGNMENT FORM
I or we assign and transfer this Security to
__________________________________________________________________________
__________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
__________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: _________________ Signed: _______________________________________
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee: ______________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, check the
appropriate box:
Section 4.15 [ ] Section 4.16 [ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.15 or Section 4.16 of the
Indenture, state the amount: $___________
Dated: _________________ Signed: _______________________________________
(Sign exactly as name appears on the other
side of this Security)
Signature Guarantee: ______________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
B-11
EXHIBIT C
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees,
as principal obligor and not only as a surety, to the Holder of this Security
the cash payments in United States dollars of principal of, premium, if any, and
interest on this Security in the amounts and at the times when due and interest
on the overdue principal, premium, if any, and interest, if any, of this
Security, if lawful, and the payment or performance of all other obligations of
the Company under the Indenture (as defined below) or the Securities, to the
Holder of this Security and the Trustee, all in accordance with and subject to
the terms and limitations of this Security, Article XI of the Indenture and this
Guarantee. This Guarantee will become effective in accordance with Article XI of
the Indenture and its terms shall be evidenced therein. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of May 30, 2002, among Quality
Distribution, LLC, a Delaware limited liability company, as issuer (the
"Company"), the Guarantors named therein and The Bank of New York, as trustee
(the "Trustee"), as it may be amended or supplemented (the "Indenture").
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article XI of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW. The undersigned Guarantor hereby agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
C-1
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to
be duly executed.
Date:
AMERICAN TRANSINSURANCE GROUP, INC.,
as Guarantor
By:
--------------------------------
Name:
Title:
CAPACITY MANAGEMENT SYSTEMS, INC.,
as Guarantor
By:
--------------------------------
Name:
Title:
CHEMICAL XXXXXX CORPORATION,
as Guarantor
By:
--------------------------------
Name:
Title:
CHEMICAL XXXXXX TANK LINES, INC.,
as Guarantor
By:
--------------------------------
Name:
Title:
CHEMICAL PROPERTIES, INC. ,
as Guarantor
By:
--------------------------------
Name:
Title:
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CLM, INC., as Guarantor
By:
--------------------------------
Name:
Title:
CLTL OF NEVADA, as Guarantor
By:
--------------------------------
Name:
Title:
CLT SERVICES, INC., as Guarantor
By:
--------------------------------
Name:
Title:
ENVIROPOWER, INC., as Guarantor
By:
--------------------------------
Name:
Title:
FLEET TRANSPORT COMPANY, INC.,
as Guarantor
By:
--------------------------------
Name:
Title:
LAKESHORE LEASING, INC.,
as Guarantor
By:
--------------------------------
Name:
Title:
C-3
LLI, INC, as Guarantor
By:
--------------------------------
Name:
Title:
MEXICO INVESTMENTS, INC,
as Guarantor
By:
--------------------------------
Name:
Title:
MTL OF NEVADA, as Guarantor
By:
--------------------------------
Name:
Title:
XXXXXXXXX WAY FUNDING CORP.,
as Guarantor
By:
--------------------------------
Name:
Title:
POWER PURCHASING, INC.,
as Guarantor
By:
--------------------------------
Name:
Title:
QUALA SYSTEMS, INC., as Guarantor
By:
--------------------------------
Name:
Title:
C-4
QUALITY CARRIERS, INC., as Guarantor
By:
--------------------------------
Name:
Title:
QSI SERVICES, INC., as Guarantor
By:
--------------------------------
Name:
Title:
TRANSPLASTICS, INC., as Guarantor
By:
--------------------------------
Name:
Title:
C-5
EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[ ], [ ]
Attention:
Re: QUALITY DISTRIBUTION, LLC 12-1/2% Senior Subordinated
Secured Notes due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of 12-1/2% Senior
Subordinated Secured Notes due 2008 of Quality Distribution, LLC (the
"Company"), we confirm that:
1. We have received a copy of the Offering Memorandum and
Consent Solicitation Statement (the "Offering Memorandum"), dated April 10,
2002, as amended by Supplement No. 1 thereto, dated May 10, 2002, relating to
the Securities and such other information as we deem necessary in order to make
our investment decision. We acknowledge that we have read and agreed to the
matters stated on pages (i) - (iii) of the Offering Memorandum and in the
section entitled "Notice to Investors" of the Offering Memorandum, including the
restrictions on duplication and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in the
Indenture relating to the Securities (as described in the Offering Memorandum)
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the Securities may
not be offered or sold except as permitted in the following sentence. We agree,
on our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell or otherwise transfer any Securities
prior to the date which is two years after the original issuance of the
Securities, we will do so only (i) to the Company or any of its subsidiaries,
(ii) inside the United States in accordance with Rule 144A under the Securities
Act to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act), (iii) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to the Trustee (as defined in
the Indenture relating to the Securities), a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Securities, (iv) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (v) pursuant to the exemption from
registration
D-1
provided by Rule 144 under the Securities Act (if available), or (vi) pursuant
to an effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing any of the Securities from us a notice
advising such purchaser that resales of the Securities are restricted as stated
herein.
4. We are not acquiring the Securities for or on behalf of,
and will not transfer the Securities to, any pension or welfare plan (as defined
in Section 3 of the Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any
Securities, we will be required to furnish to the Trustee and the Company such
certification, legal opinions and other information as the Trustee and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Securities purchased
by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or their investment, as the case may be.
7. We are acquiring the Securities purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
By: ________________________________
Name:
Title:
D-2
Exhibit E
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[ ], [ ]
Attention:
Re: QUALITY DISTRIBUTION, LLC (the "Company") 12-1/2% Senior
Subordinated Secured Notes due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $_________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been prearranged with a buyer in the
United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
E-1
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ______________________________
Authorized Signature
E-2
