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Exhibit 4.1
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ARGO-TECH CORPORATION
8 5/8% Senior Subordinated Notes due 2007
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INDENTURE
Dated as of September 26, 1997
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XXXXXX TRUST AND SAVINGS BANK,
Trustee
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TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitions........................................ 23
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act......................................... 23
SECTION 1.04. Rules of Construction.................................... 24
ARTICLE 2
The Securities
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SECTION 2.01. Form and Dating.......................................... 24
SECTION 2.02. Execution and Authentication............................. 26
SECTION 2.03. Registrar and Paying Agent............................... 27
SECTION 2.04. Paying Agent to Hold Money in Trust...................... 28
SECTION 2.05. Securityholder Lists..................................... 28
SECTION 2.06. Transfer and Exchange.................................... 29
SECTION 2.07. Replacement Securities................................... 30
SECTION 2.08. Outstanding Securities................................... 30
SECTION 2.09. Temporary Securities..................................... 31
SECTION 2.10. Cancelation.............................................. 31
SECTION 2.11. Defaulted Interest....................................... 31
SECTION 2.12. CUSIP Numbers............................................ 32
SECTION 2.13. Book-Entry Provisions for U.S. Global
Security............................................... 32
SECTION 2.14. Special Transfer Provisions.............................. 34
ARTICLE 3
Redemption
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SECTION 3.01. Notices to Trustee....................................... 39
SECTION 3.02. Selection of Securities
To Be Redeemed......................................... 39
SECTION 3.03. Notice of Redemption..................................... 40
SECTION 3.04. Effect of Notice of Redemption........................... 41
SECTION 3.05. Deposit of Redemption Price.............................. 41
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SECTION 3.06. Securities Redeemed in Part.............................. 41
SECTION 3.07. Optional Redemption...................................... 41
SECTION 3.08. No Sinking Fund.......................................... 42
ARTICLE 4
Covenants
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SECTION 4.01. Payment of Securities.................................... 42
SECTION 4.02. SEC Reports.............................................. 43
SECTION 4.03. Limitation on Indebtedness............................... 43
SECTION 4.04. Limitation on Restricted Payments........................ 46
SECTION 4.05. Limitation on Restrictions on
Distributions from Subsidiaries........................ 49
SECTION 4.06. Limitation on Sales of Assets and
Subsidiary Stock....................................... 51
SECTION 4.07. Limitation on Transactions with
Affiliates............................................. 54
SECTION 4.08. Change of Control........................................ 55
SECTION 4.09. Compliance Certificate................................... 57
SECTION 4.10. Further Instruments and Acts............................. 57
SECTION 4.11. Future Note Guarantors................................... 57
SECTION 4.12. Limitation on Lines of Business.......................... 57
SECTION 4.13. Limitation on Sale/Leaseback
Transactions........................................... 57
SECTION 4.14. Limitation on the Sale or Issuance of
Capital Stock or Restricted
Subsidiaries........................................... 58
ARTICLE 5
Successor Company
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SECTION 5.01. When Company May Merge or Transfer
Assets................................................. 58
ARTICLE 6
Defaults and Remedies
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SECTION 6.01. Events of Default........................................ 59
SECTION 6.02. Acceleration............................................. 62
SECTION 6.03. Other Remedies........................................... 62
SECTION 6.04. Waiver of Past Defaults.................................. 62
SECTION 6.05. Control by Majority...................................... 63
SECTION 6.06. Limitation on Suits...................................... 63
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SECTION 6.07. Rights of Holders to
Receive Payment........................................ 63
SECTION 6.08. Collection Suit by Trustee............................... 64
SECTION 6.09. Trustee May File Proofs of Claim......................... 64
SECTION 6.10. Priorities............................................... 64
SECTION 6.11. Undertaking for Costs.................................... 65
SECTION 6.12. Waiver of Stay or Extension Laws......................... 65
ARTICLE 7
Trustee
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SECTION 7.01. Duties of Trustee........................................ 65
SECTION 7.02. Rights of Trustee........................................ 67
SECTION 7.03. Individual Rights of Trustee............................. 68
SECTION 7.04. Trustee's Disclaimer..................................... 68
SECTION 7.05. Notice of Defaults....................................... 68
SECTION 7.06. Reports by Trustee to Holders............................ 68
SECTION 7.07. Compensation and Indemnity............................... 68
SECTION 7.08. Replacement of Trustee................................... 69
SECTION 7.09. Successor Trustee by Merger.............................. 70
SECTION 7.10. Eligibility; Disqualification............................ 71
SECTION 7.11. Preferential Collection of Claims
Against Company ....................................... 71
ARTICLE 8
Discharge of Indenture; Defeasance
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SECTION 8.01. Discharge of Liability on Securities;
Defeasance............................................. 71
SECTION 8.02. Conditions to Defeasance................................. 72
SECTION 8.03. Application of Trust Money............................... 74
SECTION 8.04. Repayment to Company..................................... 74
SECTION 8.05. Indemnity for Government
Obligations............................................ 74
SECTION 8.06. Reinstatement............................................ 74
ARTICLE 9
Amendments
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SECTION 9.01. Without Consent of Holders............................... 75
SECTION 9.02. With Consent of Holders.................................. 76
SECTION 9.03. Compliance with Trust Indenture Act...................... 77
SECTION 9.04. Revocation and Effect of Consents and
Waivers................................................ 77
SECTION 9.05. Notation on or Exchange
of Securities.......................................... 78
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SECTION 9.06. Trustee to Sign Amendments............................... 78
SECTION 9.07. Payment for Consent...................................... 78
ARTICLE 10
Subordination
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SECTION 10.01. Agreement To Subordinate................................ 78
SECTION 10.02. Liquidation, Dissolution, Bankruptcy.................... 79
SECTION 10.03. Default on Senior Indebtedness.......................... 79
SECTION 10.04. Acceleration of Payment of Securities................... 81
SECTION 10.05. When Distribution Must Be Paid Over..................... 81
SECTION 10.06. Subrogation............................................. 81
SECTION 10.07. Relative Rights......................................... 81
SECTION 10.08. Subordination May Not Be Impaired by
Company............................................... 81
SECTION 10.09. Rights of Trustee and Paying Agent...................... 82
SECTION 10.10. Distribution or Notice to
Representative........................................ 82
SECTION 10.11. Article 10 Not To Prevent Events
of Default or Limit
Right To Accelerate................................... 82
SECTION 10.12. Trust Moneys Not Subordinated........................... 82
SECTION 10.13. Trustee Entitled To Rely................................ 83
SECTION 10.14. Trustee to Effectuate Subordination..................... 83
SECTION 10.15. Trustee Not Fiduciary for Holders of
Senior Indebtedness................................... 83
SECTION 10.16. Reliance by Holders of Senior
Indebtedness on Subordination
Provisions............................................ 84
SECTION 10.17. Trustee's Compensation Not Prejudiced................... 84
ARTICLE 11
Subsidiary Guarantees
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SECTION 11.01. Subsidiary Guarantees................................... 84
SECTION 11.02. Limitation on Liability................................. 86
SECTION 11.03. Successors and Assigns.................................. 87
SECTION 11.04. No Waiver............................................... 87
SECTION 11.05. Modification............................................ 87
ARTICLE 12
Subordination of The Subsidiary Guarantees
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SECTION 12.01. Agreement to Subordinate................................ 88
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.................... 88
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SECTION 12.03. Default on Senior Indebtedness of a
Subsidiary Guarantor.................................. 88
SECTION 12.04. Demand for Payment...................................... 90
SECTION 12.05. When Distribution Must Be Paid Over..................... 90
SECTION 12.06. Subrogation............................................. 90
SECTION 12.07. Relative Rights......................................... 90
SECTION 12.08. Subordination May Note Be Impaired by a
Subsidiary Guarantor ................................. 91
SECTION 12.09. Rights of Trustee and Paying Agent...................... 91
SECTION 12.10. Distribution or Notice
to Representative..................................... 92
SECTION 12.11. Article 12 Not to Prevent Events of
Default or Limit Right
To Accelerate......................................... 92
SECTION 12.12. Trustee Entitled to Rely................................ 92
SECTION 12.13. Trustee To Effectuate Subordination..................... 92
SECTION 12.14. Trustee Not Fiduciary for Holders of
Senior Indebtedness of a Subsidiary
Guarantor............................................. 93
SECTION 12.15. Reliance by Holders of Senior
Indebtedness of a Subsidiary Guarantor
on Subordination Provisions........................... 93
ARTICLE 13
Miscellaneous
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SECTION 13.01. Trust Indenture Act Controls............................ 93
SECTION 13.02. Notices................................................. 94
SECTION 13.03. Communication by Holders with Other
Holders............................................... 94
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent............................................. 94
SECTION 13.05. Statements Required in Certificate or
Opinion............................................... 95
SECTION 13.06. When Securities Disregarded............................. 95
SECTION 13.07. Rules by Trustee, Paying Agent and
Registrar............................................. 96
SECTION 13.08. Legal Holidays.......................................... 96
SECTION 13.09. Governing Law........................................... 96
SECTION 13.10. No Recourse Against Others.............................. 96
SECTION 13.11. Successors.............................................. 96
SECTION 13.12. Multiple Originals...................................... 96
SECTION 13.13. Table of Contents; Headings............................. 96
Exhibit A - Form of Initial Security
Exhibit B - Form of Exchange Security
Exhibit C - Form of Certificate to be Delivered in
Connection with Transfers to Non-QIB
Institutional Accredited Investors
Exhibit D - Form of Certificate to be Delivered Upon
Termination of Restricted Period
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Exhibit E - Form of Certificate to be Delivered in
Connection with Transfers Pursuant to
Rule 144A
Exhibit F - Form of Certificate to be Delivered in
Connection with Transfers pursuant to
Regulation S
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) ............................. 7.10
(a)(2) ............................. 7.10
(a)(3) ............................. N.A.
(a)(4) ............................. N.A.
(b) ............................. 7.08; 7.10
(c) ............................. N.A.
311(a) ............................. 7.11
(b) ............................. 7.11
(c) ............................. N.A.
312(a) ............................. 2.05
(b) ............................. 13.03
(c) ............................. 13.03
313(a) ............................. 7.06
(b)(1) ............................. N.A.
(b)(2) ............................. 7.06
(c) ............................. 13.02
(d) ............................. 7.06
314(a) ............................. 4.02; 4.12;
11.02
(b) ............................. N.A.
(c)(1) ............................. 13.04
(c)(2) ............................. 13.04
(c)(3) ............................. N.A.
(d) ............................. N.A.
(e) ............................. 13.05
(f) ............................. 4.12
315(a) ............................. 7.01
(b) ............................. 7.05; 13.02
(c) ............................. 7.01
(d) ............................. 7.01
(e) ............................. 6.11
316(a)(last
sentence) ............................. 13.06
6.05
(a)(1)(A) ............................. 6.04
(a)(1)(B)
(a)(2) ............................. N.A.
(b) ............................. 6.07
317(a)(1) ............................. 6.08
(a)(2) ............................. 6.09
(b) ............................. 2.04
318(a) ............................. 13.01
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N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
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INDENTURE dated as of September 26, 1997,
among ARGO-TECH CORPORATION, a Delaware corporation
(the "Company"), ARGO-TECH CORPORATION (HBP), a
Delaware corporation, ARGO-TECH CORPORATION (OEM), a
Delaware corporation, ARGO-TECH CORPORATION
(AFTERMARKET), a Delaware corporation, and X.X.
XXXXXX COMPANY, INC., a California corporation
(collectively, the "Subsidiary Guarantors") and
XXXXXX TRUST AND SAVINGS BANK, a banking corporation
organized under the laws of the State of Illinois
(the "Trustee").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
8-5/8% Senior Subordinated Notes due 2007 (the "Initial Securities") and, if and
when issued as provided in the Exchange and Registration Rights Agreement of
even date herewith, the Company's 8-5/8% Senior Subordinated Series A Notes due
2007 (the "Exchange Securities", and together with the Initial Securities, the
"Securities").
ARTICLE 1
Definitions and Incorporation By Reference
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SECTION 1.01. DEFINITIONS.
"Additional Assets" means (i) any tangible property or assets
(other than Indebtedness and Capital Stock) to be used by the Company or a
Restricted Subsidiary in a Related Business; (ii) the Capital Stock of a Person
that becomes a Restricted Subsidiary as a result of the acquisition of such
Capital Stock by the Company or another Restricted Subsidiary; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary; PROVIDED, HOWEVER, that any such Restricted Subsidiary
described in clauses (ii) or (iii) above is primarily engaged in a Related
Business.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the
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ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of shares representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Asset Disposition" means any sale, lease, trans fer or other
disposition of shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares), property or other assets (each referred to for
the purposes of this definition as a "disposition") by the Company or any of its
Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) a disposition of inventory in the
ordinary course of business, (iii) dispositions with a fair value of less than
$250,000 in the aggregate in any fiscal year, (iv) an exchange of real estate
for other similar property structured on a tax-free like-kind basis and (v) for
purposes of Section 4.06 only, a disposition subject to Section 4.04.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments (other than rental payments in the
nature of supplemental rent for the lessee's proportional share of taxes,
maintenance and insurance and similar customary payments) during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Average Life" means, as of the date of determina tion, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multi plied by the amount of such payment by (ii) the sum of all
such payments.
"Bank Indebtedness" means any and all amounts payable under or
in respect of the Credit Agreement, the other Senior Credit Documents and any
Refinancing Indebtedness with respect thereto, as amended from time to
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time, including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company whether or not a claim for post-filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
"Board of Directors" means the Board of Directors of Parent or
the Company or any committee thereof duly authorized to act on behalf of such
Board. Unless the context otherwise requires, references to the Board of
Directors are to the Board of Directors of the Company.
"Borrowing Base" means, as of any date, an amount equal to the
sum of (i) 50% of the aggregate book value of inventory (adjusted to include any
LIFO reserves) and (ii) 85% of the aggregate book value of all accounts
receivable (net of bad debt reserves) of the Company and its Restricted
Subsidiaries on a Consolidated basis, as determined in accordance with GAAP
consistently applied. To the extent that information is not available as to the
amount of inventory or accounts receivable as of a specific date, the Company
shall use the most recent available information for purposes of calculating the
Borrowing Base.
"Business Day" means a day other than a Saturday, Sunday or
other day on which banking institutions in New York State are authorized or
required by law to close.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Capitalized Lease Obligations" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease.
"Change of Control" means the occurrence of any of the
following events:
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(i) prior to the earlier to occur of the first public offering
of Voting Stock of Parent or the Company, the Permitted Holders cease
to be the "benefi cial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of a majority in the
aggregate of the total voting power of the Voting Stock of the Company
or Parent, whether as a result of issuance of securities of the Company
or Parent, as the case may be, any merger, consolidation, liquidation
or dissolution of the Company or Parent as the case may be, any direct
or indirect transfer of securities by any Permitted Holder or otherwise
(for purposes of this clause (i) and clause (ii) below, the Permitted
Holders shall be deemed to own beneficially any Voting Stock of an
entity (the "specified entity") held by any other entity (the "parent
entity") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the
voting power of the Voting Stock of the parent entity);
(ii) (A) any "person" (as such term is used in Sec tions 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in clause (i)
above, except that such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 35% of the total voting
power of the Voting Stock of the Company or Parent, as the case may be
and (B) the Permitted Holders "beneficially own" (as defined in clause
(i) above), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Company
or Parent, as the case may be, than such other person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the
Company or Parent, as the case may be (for the purposes of this clause
(ii), such other person shall be deemed to own beneficially any Voting
Stock of a specified corporation held by a parent corporation, if such
other person "beneficially owns" (as defined in this clause (ii)),
directly or indirectly, more than 35% of the voting power of the Voting
Stock of such parent corporation and the Permitted Holders
"beneficially own" (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the voting power of
the Voting Stock of such parent corporation and do not have the right
or ability by voting power, contract or otherwise to elect or designate
for election a majority
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of the board of directors of such parent corporation); or
(iii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of
the Company or Parent, as the case may be (together with any new
directors whose election by such Board of Directors or whose nomination
for election by the shareholders of the Company or Parent, as the case
may be, was approved by a vote of 66-2/3% of the directors of the
Company or Parent, as the case may be, then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved), cease for any
reason to constitute a majority of the Board of Directors of the
Company or Parent, as the case may be, then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; PROVIDED, HOWEVER, that (A) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence
of Indebtedness, EBITDA and Consolidated Interest Expense for such period shall
be calculated after giving effect on a pro forma basis to such Indebtedness as
if such Indebtedness had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period, (B) if since the beginning of such
period the Company or any Restricted Subsidiary shall have made any Asset
Disposition, the EBITDA for such period shall be reduced by an amount equal to
the EBITDA (if positive) directly attributable to the assets that are the
subject of such Asset Disposition for such period or increased by an amount
equal to the EBITDA (if negative) directly attributable thereto for such period
and Consolidated
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Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale), (C) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
as if such Investment or acquisition occurred on the first day of such period
and (D) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (B) or (C) above if made by the
Company or a Restricted Subsidiary during such period, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition of assets
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the amount
of income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the
pro forma calculations shall be determined in accordance with GAAP. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term as at the
date of determination in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent
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Incurred by the Company and its Subsidiaries in such period but not included in
such interest expense, (i) interest expense attributable to Capitalized Lease
Obligations, (ii) amortization of debt discount and debt issuance cost, (iii)
capitalized interest, (iv) noncash interest expense, (v) commissions, discounts
and other fees and charges attributable to letters of credit and bankers'
acceptance financing, (vi) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by the Company or any
Restricted Subsidiary; PROVIDED that payment of such amounts by the Company or
any Restricted Subsidiary is being made to, or is sought by, the holders of such
Indebtedness pursuant to such guarantee, (vii) net costs associated with Hedging
Obligations (including amortization of fees), (viii) Preferred Stock dividends
in respect of all Preferred Stock of Subsidiaries of the Company and
Disqualified Stock of the Company held by Persons other than the Company or a
Wholly Owned Subsidiary, and (ix) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust;
PROVIDED, HOWEVER, that there shall be excluded therefrom any such interest
expense of any Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted Subsidiary.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its consolidated Subsidiaries; PROVIDED,
HOWEVER, that there shall not be included in such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not
a Restricted Subsidiary, except that (A) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income
of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (iii) below) and (B)
the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in
determining such Consolidated Net Income;
(ii) any net income (loss) of any person acquired by the
Company or a Subsidiary in a pooling of interests transaction for any
period prior to the date of such acquisition;
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(iii) any net income (loss) of any Restricted Subsidiary if
such Subsidiary is subject to restrictions, directly or indirectly, on
the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except
that (A) subject to the limitations contained in clause (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to
the aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend (subject, in the case of a dividend
that could have been made to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the Company's equity in a
net loss of any such Restricted Subsidiary for such period shall be
included in determining such Consolidated Net Income;
(iv) any gain (but not loss) realized upon the sale or other
disposition of any asset of the Company or its consolidated
Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
that is not sold or otherwise disposed of in the ordinary course of
business and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(v) any extraordinary gain or loss; and
(vi) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Company or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under such
section pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown
on the balance sheet of the Company and the Restricted Subsidiaries, determined
on a Consolidated basis, as of the end of the most recent fiscal quarter of the
Company ending at least 45 days prior to the taking of any action for the
purpose of which the determination is being made, as (i) the par or stated value
of all outstanding Capital Stock of the Company plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus
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(iii) any retained earnings or earned surplus less (A) any accumulated deficit
and (B) any amounts attributable to Disqualified Stock.
"Consolidation" means the consolidation of the amounts of each
of the Restricted Subsidiaries with those of the Company in accordance with GAAP
consistently applied; PROVIDED, HOWEVER, that "Consolidation" shall not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of the Company or any Restricted Subsidiary in a Unrestricted Subsidiary shall
be accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Agreement" means the credit agreement dated as of July
18, 1997, as amended and restated as of the Issue Date and as thereafter
amended, restated, waived or otherwise modified from time to time, among the
Company, Parent, the financial institutions from time to time party thereto and
The Chase Manhattan Bank, as administrative agent (except to the extent that any
such amendment, waiver or other modification thereto would be prohibited by the
terms of this Indenture, unless otherwise agreed to by the Holders of at least a
majority in aggregate principal amount of the Securities at the time
outstanding).
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"Definitive Securities" means Securities that are in the form
of Exhibit A or Exhibit B attached hereto that do not include the Global
Security Legend thereof.
"Depository" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.03
as the Depository with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depository" shall mean or include such successor.
"Designated Senior Indebtedness" means (i) the Bank
Indebtedness and (ii) any other Senior Indebtedness that, at the date of
determination, has an aggregate principal amount outstanding of, or under which,
at the date of determination, the holders thereof, are committed to lend up to,
at least $25,000,000 and is specifically designated by the Company in the
instrument evidencing or governing
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such Senior Indebtedness as "Designated Senior Indebtedness" for purposes of
this Indenture.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the first
anniversary of the Stated Maturity of the Securities.
"Domestic Subsidiary" means any Restricted Subsidiary of the
Company other than a Foreign Subsidiary.
"EBITDA" for any period means the Consolidated Net Income for
such period (adjusted to exclude any non-cash items attributable to purchase
accounting for any acquisition transactions consummated subsequent to the Issue
Date), plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense, (iv) amortization expense and (v) all
extraordinary charges and non-cash charges associated with ESOP compensation and
Management Put Options, in each case for such period. Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and the
depreciation and amortization of, a Subsidiary of the Company shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Subsidiary or
its stockholders.
"ESOP" means the employee stock ownership plan created
pursuant to the terms of the Argo-Tech Corporation Employee Stock Ownership Plan
and Trust Agreement, dated May 17, 1994, as amended from time to time, between
the Company and Society National Bank in its capacity as ESOP
Trustee.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Exchange and Registration Rights Agreement" means the
Exchange and Registration Rights Agreement dated as of the Issue Date, by and
among the Initial Purchaser, the Company and the Subsidiary Guarantors, as such
agreement may be amended, modified, or supplemented from time to time in
accordance with the terms thereof.
"Exchange Securities" means the 8-5/8% Senior Subordinated
Series A Notes due 2007 to be issued pursuant to this Indenture in connection
with the offer to exchange Securities for the Initial Securities that may be
made by the Company pursuant to the Exchange and Registration Rights Agreement.
"Existing Agreements" means the Distributorship Agreement
(1994) dated as of December 24, 1990, among the Company, Yamada Corporation and
Venture Capital Partners, Inc. and the Japan Distributorship Agreement dated as
of December 24, 1990, between the Company and Upsilon International Corporation,
in each case as in effect on the Issue Date.
"Foreign Subsidiary means any Restricted Subsidiary of the
Company that is not organized under the laws of the United States of America or
any state thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
"Global Security" means a Security that is in the form of
Exhibit A or Exhibit B hereto that includes the Global Security Legend thereof.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and any obligation, direct or indirect,
contingent or otherwise,
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of such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or by agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); PROVIDED,
HOWEVER, that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Indenture" means this Indenture as amended or
supplemented from time to time.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of
a Person existing at the time such person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Subsidiary at the time it becomes a Subsidiary.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication),
(i) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(iii) all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement
obligations with respect thereto);
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade Payables),
which purchase price
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is due more than six months after the date of placing such property in
service or taking delivery and title thereto or the completion of such
services;
(v) all Capitalized Lease Obligations and all
Attributable Debt of such Person;
(vi) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of the Company, any Preferred
Stock (but excluding, in each case, any accrued dividends);
(vii) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed
by such Person; PROVIDED, HOWEVER, that the amount of Indebtedness of
such Person shall be the lesser of (A) the fair market value of such
asset at such date of determination and (B) the amount of such
Indebtedness of such other Persons;
(viii) all Indebtedness of other Persons to the
extent Guaranteed by such Person; and
(ix) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Initial Purchaser" means Chase Securities Inc.
"Initial Securities" means the 8-5/8% Senior Subordinated
Notes due 2007, issued under this Indenture on or about the date hereof.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of such
Person) or other extension of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of
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any transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition of
Capital Stock, Indebtedness or other similar instruments issued by such Person.
For purposes of the definition of "Unrestricted Subsidiary" and Section 4.04,
(i) "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of any Subsidiary of the Company at the time that such Subsidiary is designated
an Unrestricted Subsidiary; PROVIDED, HOWEVER, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if
positive) equal to (x) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (y) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of such Subsidiary at the time of such redesignation; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors.
"Issue Date" means the date on which the Initial Securities
are originally issued.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Management Put Options" means the put option created pursuant
to Article IX of the Stockholders' Agreement.
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received (x) by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
or (y) in the case of REIT Securities, upon the sale, redemption, transfer or
other disposition of such REIT Securities, in each case only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred, and all federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP, as a consequence of such Asset
Disposition, (ii) all payments made on any
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Indebtedness that is secured by any assets subject to such Asset Disposition, in
accordance with the terms of any Lien upon such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or
by applicable law be repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (iv) appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
assets disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Parent" means AT Holdings Corporation, any successor
corporation and any corporation succeeding to the ownership of the Company.
"Permitted Holders" means (a) Xx. Xxxxxxx Xxxxxx and members
of his immediate family, (b) corporations and other entities that are Controlled
by one or more of the persons referred to in clause (a), (c) trusts for the sole
benefit of one or more of the persons referred to in clause (a), (d) the ESOP,
(e) individuals who are members of management of Parent or the Company as of the
Issue Date and (f) any Person acting in the capacity of an underwriting in
connection with a public or private offering of the Company's or Parent's
Capital Stock.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or a Person that will,
upon the making of such
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Investment, become a Restricted Subsidiary; PROVIDED, HOWEVER, that the primary
business of such Restricted Subsidiary is a Related Business; (ii) another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary; PROVIDED, HOWEVER, that such
Person's primary business is a Related Business; (iii) Temporary Cash
Investments; (iv) receivables owing to the Company or any Restricted Subsidiary,
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; PROVIDED, HOWEVER, that
such trade terms may include such concessionary trade terms as the Company or
any such Restricted Subsidiary deems reasonable under the circumstances; (v)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vi) loans or
advances to employees made in the ordinary course of business consistent with
past practices of the Company or such Restricted Subsidiary and not exceeding
$1,000,000 in the aggregate outstanding at any time; (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; and (viii) stock, obligations or securities received
in a transaction permitted under Section 4.06.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
that is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security that is due or overdue or is
to become due at the relevant time.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company or Parent pursuant to an effective
registration statement under the Securities Act.
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"Public Market" means any time after (i) a Public Equity
Offering has been consummated and (ii) at least 15% of the total issued and
outstanding common stock of the Company or Parent (as applicable) has been
distributed by means of an effective registration statement under the Securities
Act.
"Purchase Agreement" means the agreement for the purchase of
$140.0 million principal amount of senior subordinated Securities between the
Company and the Initial Purchaser dated September 23, 1997.
"Purchase Date" shall have the meaning set forth in Section
4.06(c).
"Purchase Money Indebtedness" means Indebtedness (i)
consisting of the deferred purchase price of property, conditional sale
obligations, obligations under any title retention agreement and other purchase
money obligations, in each case where the maturity of such Indebtedness does not
exceed the anticipated useful life of the asset being financed, and (ii)
incurred to finance the acquisition by the Company of such asset, including
additions and improvements; provided, however, that any Lien arising in
connection with any such Indebtedness shall be limited to the specified asset
being financed or, in the case of real property or fixtures, including additions
and improvements, the real property on which such asset is attached; and
provided further, that such Indebtedness is Incurred within 180 days after such
acquisition by the Company of such asset.
"Refinancing Indebtedness" means Indebtedness that is Incurred
to refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," and "refinanced"
shall have a correlative meaning) any Indebtedness existing on the date of this
Indenture or Incurred in compliance with this Indenture (including Indebtedness
of the Company that refinances Indebtedness of any Restricted Subsidiary (to the
extent permitted in this Indenture) and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Refinancing Indebtedness; PROVIDED,
HOWEVER, that (i) the Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being refinanced, (ii) the
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced (iii) such Refinancing Indebtedness is
Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than (x) the
aggregate
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principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being refinanced plus (y)
the amount of premium or other amounts paid and fees and expenses incurred in
connection with such refinancing and (iv) if the Indebtedness being refinanced
is subordinated in right of payment to the Securities, such Refinancing
Indebtedness is subordinated in right of payment to the Securities to the extent
of the Indebtedness being refinanced; PROVIDED FURTHER, HOWEVER, that
Refinancing Indebtedness shall not include (A) Indebtedness of a Restricted
Subsidiary that refinances Indebtedness of the Company or (B) Indebtedness of
the Company or a Restricted Subsidiary that refinances Indebtedness of an
Unrestricted Subsidiary.
"REIT" means a real estate investment trust under the Code.
"REIT Securities" means equity securities of a publicly traded
(either on a national securities exchange or on NASDAQ) REIT or equity
securities convertible into equity securities of a publicly traded (either on a
national securities exchange or on NASDAQ) REIT.
"Registered Exchange Offer" shall have the meaning set forth
in the Exchange and Registration Rights Agreement.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Representative" means the trustee, agent or representative
(if any) for an issue of Senior Indebtedness.
"Restricted Securities Legend" means the legend set forth in
Section 2.06 hereof.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Revolving Facility" means the revolving credit facility
provided to the Company under the Credit Agreement.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person, other than leases between the Company and
a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries.
"SEC" means the Securities and Exchange Commission.
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"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities" means, collectively, the Initial Securities and,
when and if issued as provided in the Exchange and Registration Rights
Agreement, the Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by the Depository), or any successor entity
thereto and shall initially be the Trustee.
"Senior Credit Documents" means the collective reference to
the Credit Agreement, the notes issued pursuant thereto (if any) and the
Guarantees thereof, and the Security Agreements, the Mortgages and the Pledge
Agreements (each as defined in the Credit Agreement).
"Senior Indebtedness" means the principal of, premium (if any)
and interest (including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization of the Company, regardless of whether or not
a claim for post-filing interest is allowed in such proceedings) on, and fees
and other amounts owing in respect of, Bank Indebtedness and all other
Indebtedness of the Company including interest thereon, whether outstanding on
the Issue Date or thereafter Incurred, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is provided
that such obligations are not superior in right of payment to the Securities;
PROVIDED, HOWEVER, that Senior Indebtedness shall not include (i) any obligation
of the Company to any Subsidiary, (ii) any liability for Federal, state, local
or other taxes owed or owing by the Company, (iii) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (iv)
any Indebtedness or obligation of the Company that by its terms is subordinate
or junior in any respect to any other Indebtedness or obligation of the
Company, including any Senior Subordinated Indebtedness and any Subordinated
Obligations, (v) any obligations with respect to any Capital Stock, or (vi) any
Indebtedness Incurred in violation of the Indenture. "Senior Indebtedness" of
any Subsidiary Guarantor has a correlative meaning.
"Senior Subordinated Indebtedness" means the Securities and
any other Indebtedness of the Company that
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specifically provides that such Indebtedness is to rank PARI PASSU with the
Securities and is not subordinated by its terms to any Indebtedness or other
obligation of the Company that is not Senior Indebtedness.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Specified Real Estate" means the real estate owned by
Argo-Tech Corporation (HBP) as of the Issue Date.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Stockholders' Agreement" means the AT Holdings Corporation
Stockholders' Agreement dated as of May 17, 1994, as amended by Amendment No. 1
thereto dated as of May 1, 1997, and Amendment No. 2 thereto dated as of July
18, 1997, by and among Parent, the Company, YC International Inc., Yamada
Corporation, Sunhorizon International Inc. and the other Persons party thereto,
as in effect on the Issue Date.
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person or (ii) one or
more Subsidiaries of such Person.
"Subsidiary Guarantee" means any Guarantee of the Securities
that may from time to time be executed and delivered by a Subsidiary Guarantor
pursuant to the terms of this Indenture.
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"Subsidiary Guarantors" means Argo-Tech Corporation (HBP),
Argo-Tech Corporation (OEM), Argo-Tech Corporation (Aftermarket), X.X. Xxxxxx
Company, Inc. and each Subsidiary of the Company acquired or organized after the
Issue Date that becomes a Subsidiary Guarantor in accordance with the terms of
the Indenture.
"Temporary Cash Investments" means any of the following: (i)
any investment in direct obligations of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or any
agency thereof, (ii) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company that is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America having capital, surplus and
undivided profits aggregating in excess of $250,000,000 (or the foreign currency
equivalent thereof) and whose long-term debt is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act), (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (i) above entered into with a bank
meeting the qualifications described in clause (ii) above, (iv) investments in
commercial paper, maturing not more than 90 days after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America or any foreign
country recognized by the United States of America with a rating at the time as
of which any investment therein is made of "P-1" (or higher) according to
Xxxxx'x Investors Service, Inc. or "A-1" (or higher) according to Standard and
Poor's Ratings Service, a division of The XxXxxx-Xxxx Companies, Inc. ("S&P"),
and (v) investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or "A" by Xxxxx'x
Investors Service, Inc.
"Term Loan Facilities" means the Tranche A Term Loans and the
Delayed Draw Acquisition Loans provided to the Company under the Credit
Agreement.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture.
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"Trade Payables" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary course of
business in connection with the acquisition of goods or services.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness 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, HOWEVER, that either (A) the Subsidiary to be so
designated has total consolidated assets of $1,000 or less or (B) if such
Subsidiary has consolidated assets greater than $1,000, then such designation
would be permitted under Section 4.04. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of additional Indebtedness under Section 4.03(a) and (y) no Default shall
have occurred and be continuing. Any such designation of a Subsidiary as a
Restricted Subsidiary or Unrestricted Subsidiary by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obliga tions (or
certificates representing an ownership interest in
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such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of
the United States of America is pledged and which are not callable or redeemable
at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Affiliate Transaction" ................ 4.07
"Bankruptcy Law" ....................... 6.01
"Blockage Notice" ...................... 10.03
"covenant defeasance option" ........... 8.01(b)
"Custodian" ............................ 6.01
"Event of Default" ..................... 6.01
"IAI" .................................. 2.01(b)
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 13.08
"Offer" ................................ 4.06
"Offer Amount" ......................... 4.06
"Offer Period" ......................... 4.06
"pay the Securities" ................... 10.03
"Paying Agent" ......................... 2.03
"Payment Blockage Period" .............. 10.03
"Purchase Date" ........................ 4.06
"QIB" .................................. 2.01(b)
"Registrar"............................. 2.03
"Restricted Payment" ................... 4.04
"Successor Company" .................... 5.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT. This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
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"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the
Company and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without
limitation;
(5) words in the singular include the plural and
words in the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP and accretion of principal on such
security shall be deemed to be the Incurrence of Indebtedness; and
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater.
ARTICLE 2
The Securities
--------------
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SECTION 2.01. FORM AND DATING. (a) The Initial Securities and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture, and as otherwise provided in this Article 2. Any Exchange Securities
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit B, which is incorporated in and expressly made a part of this
Indenture, and as otherwise provided in this Article 2. The Securities may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company or the Subsidiary Guarantors are subject
(PROVIDED that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Security shall be dated the date of its authentication.
The terms of the Securities set forth in Exhibit A and B are part of the terms
of this Indenture. The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and integral multiples
thereof.
(b) The Initial Securities are being offered and sold by the
Company pursuant to the Purchase Agreement. Initial Securities offered and sold
to "qualified institutional buyers" (as defined in Rule 144A under the
Securities Act ("Rule 144A")) ("QIBs") in accordance with Rule 144A as provided
in the Purchase Agreement, shall be issued on the Issue Date initially in the
form of a permanent Global Security substantially in the form set forth in
Exhibit A (the "QIB Global Security"). On the Issue Date, a similar Global
security (the "IAI Global Security" and, together with the QIB Global Security,
the "U.S. Global Securities") will also be issued to accommodate transfers of
Securities from QIBs to institutional "Accredited Investors" (within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) ("IAIs"). On the
Issue Date, each U.S. Global Security will be deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of each U.S.
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depositary or its
nominee, as hereinafter provided. Transfers of Initial Securities from QIBs to
IAIs, and from IAIs to QIBs, will be represented by appropriate increases and
decreases to the respective amounts of the appropriate U.S. Global Security, as
more fully provided in Section 2.13.
(c) Initial Securities offered and sold in reliance on
Regulation S, if any, shall be issued initially in the form of temporary
certificated Securities in registered form substantially in the form set forth
in Exhibit A (the "Temporary Offshore Physical Securities").
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The Temporary Offshore Physical Securities will be registered in the name of,
and held by, a temporary certificate holder designated by the Initial Purchaser
until the later of the completion of the distribution of the Initial Securities
and the termination of the "restricted period" (as defined in Regulation S) with
respect to the offer and sale of the Initial Securities (the "Offshore
Securities Exchange Date"). The Company shall promptly notify the Trustee in
writing of the occurrence of the Offshore Securities Exchange Date and, at any
time following the Offshore Securities Exchange Date, upon receipt by the
Trustee and the Company of a certificate substantially in the form set forth in
Exhibit D, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, one or more permanent certificated Securities in
registered form substantially in the form set forth in Exhibit A (the "Permanent
Offshore Physical Securities") in exchange for the Temporary Offshore Physical
Securities of like tenor and amount.
(d) Initial Securities offered and sold other than as
described in the preceding two paragraphs, if any, shall be issued in the form
of permanent certificated Securities in registered form in substantially the
form set forth in Exhibit A (the "U.S. Physical Securities").
(e) The Temporary Offshore Physical Securities,
Permanent Offshore Physical Securities and U.S. Physical
Securities are at times collectively herein referred to as
the "Physical Securities".
SECTION 2.02. EXECUTION AND AUTHENTICATION. One or more
Officers of the Company shall sign the Securities by manual or facsimile
signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
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 con clusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and make available for delivery
(1) Initial Securities for original issue in an aggregate principal amount of
$140,000,000 and (2) Exchange Securities for issue only in a Registered Exchange
Offer, pursuant to the Exchange and Registration Rights Agreement, for Initial
Securities for a like principal amount of Initial Securities exchanged pursuant
thereto, in each case
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upon a written order of the Company signed by two of its Officers. Such order
shall specify the amount of the Securities to be authenticated, the date on
which the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities or Exchange Securities. The aggregate
principal amount of Securities outstanding at any time may not exceed
$140,000,000 except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Any such appointment
shall be evidenced by an instrument signed by an authorized officer of the
Trustee, a copy of which shall be furnished to the Company. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.07. Either the Company or any domestically organized Wholly Owned Subsidiary
may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Securities, and the Trustee shall
initially be the Securities Custodian with respect to the Global Securities.
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The Company may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee, PROVIDED
that no such removal shall become effective until (1) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (2) notification to the Trustee that the Trustee
shall serve as Registrar or Paying Agent until the appointment of a successor in
accordance with clause (1) above. The Registrar or Paying Agent may resign at
any time upon written notice; PROVIDED, HOWEVER, that the Trustee may resign as
Paying Agent or Registrar only if the Trustee also resigns as Trustee in
accordance with Section 7.08.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent (or if the Company or a permitted Wholly Owned
Subsidiary is acting as Paying Agent, segregate and hold in trust for the
benefit of the Persons entitled thereto) a sum sufficient to pay such principal
and interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a permitted Wholly Owned Subsidiary acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
Any money deposited with any Paying Agent, or then held by the
Company or a permitted Wholly Owned Subsidiary in trust for the payment of
principal or interest on any Security and remaining unclaimed for two years
after such principal and interest has become due and payable shall be paid to
the Company at its request, or, if then held by the Company or a permitted
Wholly Owned Subsidiary, shall be discharged from such trust; and the
Securityholders shall thereafter, as unsecured general creditors, look only to
the Company for payment thereof, and all liability of the Paying Agent with
respect to such money, and all liability of the Company or such permitted Wholly
Owned Subsidiary as trustee thereof, shall thereupon cease.
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SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee is
not the Registrar, the Company shall furnish, or cause the Registrar to furnish,
to the Trustee, in writing at least five Business Days before each interest
payment date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section 8-401(l)
of the Uniform Commercial Code are met. When Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section. The Company shall not be required to make,
and the Registrar need not register, transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be redeemed in
part, the portion thereof not to be redeemed) or transfers or exchanges of any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and accrued and unpaid interest (if any) on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar shall be affected by notice to the contrary.
Any Holder of a U.S. Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Holder of
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such Global Security (or its agent), and that ownership of a beneficial interest
in such Global Security shall be required to be reflected in a book entry.
All Securities issued upon any transfer or exchange pursuant
to this Section 2.06 will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. REPLACEMENT SECURITIES. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i)
satisfies the Company or the Trustee within a reasonable time after he has
notice of such loss, destruction or wrongful taking and the Registrar does not
register a transfer prior to receiving such notification, (ii) makes such
request to the Company or the Trustee prior to the Security being acquired by a
bona fide purchaser and (iii) satisfies any other reasonable requirements of the
Trustee. If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Trustee to protect the Company,
the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss
that any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security. In
the event any such mutilated, lost, destroyed or wrongfully taken Security has
become or is about to become due and payable, the Company in its discretion may
pay such Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company.
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
SECTION 2.08. OUTSTANDING SECURITIES. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstand ing
because the Company or its Affiliate holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee
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and the Company receive proof satisfactory to them that the replaced Security is
held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by either of the Company or any of their 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 the Trustee knows are so owned shall be disregarded.
SECTION 2.09. TEMPORARY SECURITIES. Until Definitive
Securities and Global 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 and deliver them in exchange for temporary
Securities upon surrender of such temporary Securities at the office or agency
of the Company, without charge to the Holder.
SECTION 2.10. CANCELATION. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and deliver canceled Securities to the Company pursuant to written
direction by an Officer of the Company. The Company may not issue new Securities
to replace Securities they have redeemed, paid or delivered to the Trustee for
cancelation. The Trustee shall not authenticate Securities in place of canceled
Securities other than pursuant to the terms of this Indenture.
SECTION 2.11. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Securities, the
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Company shall pay the defaulted interest (plus interest on such defaulted
interest to the extent lawful) in any lawful manner. The Company may pay the
defaulted interest to the persons who are Securityholders on a subsequent
special record date. The Company shall fix or cause to be fixed any such special
record date and payment date to the reasonable satisfaction of the Trustee and
shall promptly mail or cause to be mailed to each Securityholder a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid.
The Company may make payment of any defaulted interest in any other
lawful manner not inconsistent with the requirements (if applicable) of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this paragraph, such manner of
payment shall be deemed practicable by the Trustee.
SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED,
HOWEVER, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 2.13. BOOK-ENTRY PROVISIONS FOR U.S. GLOBAL SECURITY.
(a) Each U.S. Global Security initially shall (i) be registered in the
name of the Depositary for such U.S. Global Security or the nominee of such
Depositary and (ii) be delivered to the Trustee as the initial Securities
Custodian for such Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any U.S. Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under such U.S. Global Security, and the Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such U.S. 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 Depositary or
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shall impair, as between the Depositary and its Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of a U.S. Global Security shall be limited to transfers
of such U.S. Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
U.S. Global Security may be transferred in accordance with the rules and
procedures of the Depositary and the provisions of Section 2.14. If required to
do so pursuant to any applicable law or regulation, beneficial owners may obtain
U.S. Physical Securities in exchange for their beneficial interests in a U.S.
Global Security upon written request in accordance with the Depositary's and the
Registrar's procedures. In addition, U.S. Physical Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in a U.S. Global Security if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such U.S. Global Security or
the Depositary ceases to be a clearing agency registered under the Exchange Act,
at a time when the Depositary is required to be so registered in order to act as
Depositary, and in each case a successor depositary is not appointed by the
Company within 90 days of such notice or, (ii) the Company executes and delivers
to the Trustee and Security Registrar an Officers' Certificate stating that such
U.S. Global Security shall be so exchangeable or (iii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depositary.
(c) In connection with any transfer of a portion of the beneficial
interest in a U.S. Global Security pursuant to subsection (b) of this Section to
beneficial owners who are required to hold U.S. Physical Securities, the
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of such U.S. Global Security in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more U.S. Physical Securities of like tenor and amount.
(d) In connection with the transfer of an entire U.S. Global Security
to beneficial owners pursuant to subsection (b) of this Section, such U.S.
Global Security shall be deemed to be surrendered to the Trustee for
cancelation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in such U.S. Global Security, an equal aggregate
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principal amount of U.S. Physical Securities of authorized denominations.
(e) Any U.S. Physical Security delivered in exchange for an interest
in a U.S. Global Security pursuant to subsection (c) or subsection (d) of this
Section shall, except as otherwise provided by paragraph (f) of Section 2.14,
bear the Restricted Securities Legend.
(f) The registered holder of a U.S. 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 that a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.14. SPECIAL TRANSFER PROVISIONS.
Unless and until an Initial Security is transferred or exchanged under
an effective registration statement under the Securities Act, the following
provisions shall apply:
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS. The
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Security to any IAI that is not a QIB (excluding
Non-U.S. Persons) that is consistent with the Restricted Securities Legend:
(i) The Registrar shall register the transfer of such Initial Security
if (x) the requested transfer is after the date that is two years after the
later of the Issue Date and the last date on which the Company or any of
its Affiliates was the owner of such Initial Security (such later date, the
"Resale Restriction Termination Date") or (y) the proposed transferee has
delivered to the Registrar a certificate substantially in the form set
forth in Exhibit C.
(ii) If the proposed transferee is an Agent Member, and the Initial
Security to be transferred consists of U.S. Physical Securities or an
interest in the QIB Global Security, upon receipt by the Registrar of (x)
the document, if any, required by paragraph (i) and (y) instructions given
in accordance with the Depositary's and the Registrar's procedures
therefor, the Registrar shall reflect on its books and records the date and
an increase in the principal amount of the IAI Global Security in an amount
equal to (x) the principal amount of the U.S. Physical Securities to be
transferred, and the Trustee shall cancel the U.S. Physical Security so
transferred or
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(y) the amount of the beneficial interest in the QIB Global Security to be
so transferred (in which case the Registrar shall reflect on its books and
records the date and an appropriate decrease in the principal amount of the
QIB Global Security).
(iii) If the proposed transferee is entitled to receive a U.S.
Physical Security as provided in Section 2.13 and the proposed transferor
is an Agent Member holding a beneficial interest in a U.S. Global Security,
upon receipt by the Registrar of (x) the documents, if any, required by
paragraph (i) and (y) instructions given in accordance with the
Depositary's and the Registrar's procedures therefor, the Registrar shall
reflect on its books and records the date and a decrease in the principal
amount of such U.S. Global Security in an amount equal to the principal
amount of the beneficial interest in such U.S. Global Security to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Securities of like
tenor and amount.
(iv) If the Initial Security to be transferred consists of U.S.
Physical Securities and the proposed transferee is entitled to receive a
U.S. Physical Security as provided in Section 2.13, upon receipt by the
Registrar of the document, if any, required by paragraph (i), the Registrar
shall register such transfer and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more U.S. 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 an Initial Security to a
QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of U.S. Physical
Securities, Temporary Offshore Physical Securities, Permanent Offshore
Physical Securities or an interest in the IAI Global Security, the
Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has provided the Registrar with a certificate
substantially in the form set forth in Exhibit E hereto.
(ii) If the proposed transferee is an Agent Member, and the Initial
Security to be transferred consists of U.S. Physical Securities, Temporary
Offshore Physical Securities, Permanent Offshore Physical Securities or an
interest in the IAI Global Security, upon receipt by the Registrar of (x)
the
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document, if any, required by paragraph (i) and (y) instructions given in
accordance with the Depositary's and the Registrar's procedures therefor,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the QIB Global Security in an amount
equal to (x) the principal amount of the U.S. Physical Securities,
Temporary Offshore Physical Securities or Permanent Offshore Physical
Securities, as the case may be, to be transferred, and the Trustee shall
cancel the Physical Security so transferred or (y) the amount of the
beneficial interest in the IAI Global Security to be so transferred (in
which case the Registrar shall reflect on its books and records the date
and an appropriate decrease in the principal amount of the IAI Global
Security).
(iii) If the proposed transferee is entitled to receive a U.S.
Physical Security as provided in Section 2.13 and the proposed transferor
is an Agent Member holding a beneficial interest in a U.S. Global Security,
upon receipt by the Registrar of (x) the documents, if any, required by
paragraph (i) and (y) instructions given in accordance with the
Depositary's and the Registrar's procedures therefor, the Registrar shall
reflect on its books and records the date and a decrease in the principal
amount of such U.S. Global Security in an amount equal to the principal
amount of the beneficial interest in such U.S. Global Security to be
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Securities of like
tenor and amount.
(iv) If the Initial Security to be transferred consists of U.S.
Physical Securities, Temporary Offshore Physical Securities or Permanent
Offshore Physical Securities and the proposed transferee is entitled to
receive a U.S. Physical Security as provided in Section 2.13, upon receipt
by the Registrar of the document, if any, required by paragraph (i), the
Registrar shall register such transfer and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more U.S. Physical
Securities of like tenor and amount.
(c) TRANSFERS BY NON-U.S. PERSONS PRIOR TO NOVEMBER 5, 1997. The
following provisions shall apply with respect to registration of any proposed
transfer of an Initial Security by a Non-U.S. Person prior to November 5, 1997.
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(i) The Registrar shall register the transfer of any Initial Security
(x) if the proposed transferee is a Non-U.S. Person and the proposed
transferor has provided the Registrar with a certificate substantially in
the form set forth in Exhibit F hereto or (y) if the proposed transferee is
a QIB and the proposed transferor has provided the Registrar with a
certificate substantially in the form set forth in Exhibit E hereto. Unless
clause (ii) below is applicable, the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Temporary Offshore Physical
Securities of like tenor and amount.
(ii) If the proposed transferee is an Agent Member in connection with
a proposed transfer of an Initial Security to a QIB, upon receipt by the
Registrar of (x) the document, if any, required by paragraph (i) and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the QIB Global Security
in an amount equal to the principal amount of the Temporary Offshore
Physical Security to be transferred, and the Registrar shall cancel the
Temporary Offshore Physical Securities so transferred.
(d) TRANSFERS BY NON-U.S. PERSONS ON OR AFTER NOVEMBER 5, 1997. The
following provisions shall apply with respect to any transfer of an Initial
Security by a Non-U.S. Person on or after November 5, 1997:
(i) (x) If the Initial Security to be transferred is a Permanent
Offshore Physical Security, the Registrar shall register such transfer, (y)
if the Initial Security to be transferred is a Temporary Offshore Physical
Security, upon receipt of a certificate substantially in the form set forth
in Exhibit D from the proposed transferor, the Registrar shall register
such transfer and (z) in the case of either clause (x) or (y), unless
clause (ii) below is applicable, the Company shall execute, and the Trustee
shall authenticate and deliver, one or more Permanent Offshore Physical
Securities of like tenor and amount.
(ii) If the proposed transferee is an Agent Member in connection with
a proposed transfer of an Initial Security to a QIB, upon receipt by the
Registrar of instructions given in accordance with the Depositary's and the
Registrar's procedures therefor, the Registrar shall reflect on its books
and records the date and an increase in the principal amount of the QIB
Global Security in an amount equal to the principal amount of the Temporary
Offshore Physical Security or of the
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Permanent Offshore Physical Security to be transferred, and the Trustee
shall cancel the Physical Security so transferred.
(e) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of an Initial Security to a
Non-U.S. Person:
(i) Prior to November 5, 1997, the Registrar shall register any
proposed transfer of an Initial Security to a Non-U.S. Person upon receipt
of a certificate substantially in the form set forth in Exhibit F from the
proposed transferor and the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery, one or more Temporary
Offshore Physical Securities.
(ii) On and after November 5, 1997, the Registrar shall register any
proposed transfer to any Non-U.S. Person (w) if the Initial Security to be
transferred is a Permanent Offshore Physical Security, (x) if the Initial
Security to be transferred is a Temporary Offshore Physical Security, upon
receipt of a certificate substantially in the form set forth in Exhibit D
from the proposed transferor, (y) if the Initial Security to be transferred
is a U.S. Physical Security or an interest in a U.S. Global Security, upon
receipt of a certificate substantially in the form set forth in Exhibit D
from the proposed transferor and (z) in the case of either clause (w), (x)
or (y), the Company shall execute, and the Trustee shall authenticate and
deliver, one or more Permanent Offshore Physical Securities of like tenor
and amount.
(iii) If the proposed transferor is an Agent Member holding a
beneficial interest in a U.S. Global Security, upon receipt by the
Registrar of (x) the document, if any, required by paragraph (i), and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures therefor, the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of such U.S. Global
Security in an amount equal to the principal amount of the beneficial
interest in the U.S. Global Security to be transferred and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Permanent Offshore Physical Securities of like tenor and amount.
(f) RESTRICTED SECURITIES LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear the Restricted Securities
Legend. Upon the transfer, exchange or
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replacement of Securities bearing the Restricted Securities Legend, the
Registrar shall deliver only Securities that bear the Restricted Securities
Legend unless either (i) such transfer, exchange or replacement of such
Securities occurs after the Resale Restriction Termination Date 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.
(g) GENERAL. By its acceptance of any Security bearing the Restricted
Securities Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Restricted
Securities 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 2.13 or this Section 2.14.
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.
Interest payable on the Securities shall be computed on the basis of a
360-day year comprised of 30-day months.
ARTICLE 3
Redemption
----------
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not fewer than 15 days after the date of notice to the Trustee. Any such notice
may be canceled
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at any time prior to notice of such redemption being mailed to any Holder and
shall thereby be void and of no effect.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions of them the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(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;
(5) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and principal amounts of the particular Securities
to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or portion
thereof) called for redemption ceases to accrue on and after the redemption
date;
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(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest (if any) to the redemption
date, PROVIDED that if the redemption date is after a regular record date and on
or prior to the interest payment date, the accrued interest shall be payable to
the Securityholder of the redeemed Securities registered on the relevant record
date. Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m. on the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a permitted Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of and
accrued interest (if any) on all Securities to be redeemed on that date other
than Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancelation.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
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SECTION 3.07. OPTIONAL REDEMPTION. (a) Except as set forth in the next
paragraph, the Securities may not be redeemed prior to October 1, 2002. On and
after that date, the Company may redeem the Securities in whole at any time or
in part from time to time at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest (if any) to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date), if
redeemed during the 12-month period beginning on or after October 1, of the
years set forth below:
Redemption
Period Price
------ ----------
2002........................................... 104.313
2003........................................... 102.875
2004........................................... 101.438
2005 and thereafter............................ 100.000%
(b) Notwithstanding the foregoing, at any time prior to October 1,
2000, the Company may redeem in the aggregate up to 33-1/3% of the original
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 108.625% plus accrued
interest (if any) to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption); PROVIDED,
HOWEVER, that at least 66-2/3% of the original aggregate principal amount of the
Securities must remain outstanding after each such redemption.
SECTION 3.08. NO SINKING FUND. There shall be no sinking fund for the
payment of principal on the Securities to the Securityholders.
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ARTICLE 4
Covenants
---------
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (but only if other than the Company or a Wholly Owned Subsidiary) holds by
11:00 a.m., New York City time, in accordance with this Indenture available
funds sufficient to pay all principal and interest then due and the Trustee or
the Paying Agent, as the case may be, is not prohibited from paying such money
to the Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. Notwithstanding that the Company may not be
required to be subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, the Company shall file with the SEC, and provide the Trustee
and Securityholders and prospective Securityholders (upon request) within 15
days after it files them with the SEC, copies of its annual report and the
information, documents and other reports that are specified in Section 13 or
15(d) of the Exchange Act. In addition, following a Public Equity Offering, the
Company shall furnish to the Trustee and the Securityholders, promptly upon
their becoming available, copies of the annual report to shareholders and any
other information provided by the Company or Parent to its public shareholders
generally. The Company also shall comply with the other provisions of TIA ss.
314(a).
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company shall not,
and shall not permit any Restricted Subsidiary to, Incur any Indebtedness;
PROVIDED, HOWEVER, that the Company may Incur Indebtedness if on the date
thereof the Consolidated Coverage Ratio would be greater than 2.00:1.00 if such
Indebtedness is Incurred on or prior to September 30, 1999, and 2.25:1.00 if
such Indebtedness is Incurred thereafter. Notwithstanding the foregoing, the
Company shall not permit any Subsidiary to issue, to any party other than the
Company, any Preferred Stock.
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(b) Notwithstanding Section 4.03(a), the Company and its Restricted
Subsidiaries may Incur the following Indebtedness:
(i) Bank Indebtedness relating to the Term Loan Facilities in an
aggregate principal amount not to exceed $110,000,000 less the aggregate
amount of all prepayments of principal applied permanently to reduce any
such Indebtedness;
(ii) Bank Indebtedness relating to the Revolving Facility provided to
the Company under the Credit Agreement or Indebtedness Incurred pursuant to
other revolving credit, working capital or letter of credit financings in
an aggregate principal amount outstanding not in excess of the greater of
$20,000,000 million and the Borrowing Base in effect from time to time;
(iii) Indebtedness of the Company owing to and held by any Subsidiary
or Indebtedness of a Restricted Subsidiary owing to and held by the Company
or any Subsidiary; PROVIDED, HOWEVER, that any subsequent issuance or
transfer of any Capital Stock or any other event that results in any such
Subsidiary ceasing to be a Subsidiary or any subsequent transfer of any
such Indebtedness (except to the Company or a Restricted Subsidiary) will
be deemed, in each case, to constitute the Incurrence of such Indebtedness
by the issuer thereof;
(iv) Indebtedness represented by the Securities, the Subsidiary
Guarantees, any Indebtedness (other than the Indebtedness described in
clauses (i) through (iii) above) outstanding on the date of this Indenture
and any Refinancing Indebtedness Incurred in respect of any Indebtedness
described in this clause (iv) or Section 4.03(a);
(v) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as consideration
in, in contemplation of or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Subsidiary or was otherwise acquired by the Company); PROVIDED, HOWEVER,
that at the time such Restricted Subsidiary is acquired by the Company, the
Company would have been able to Incur $1.00 of additional Indebtedness
pursuant to Section 4.03(a) after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (v) and
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(B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect
of Indebtedness Incurred by such Restricted Subsidiary pursuant to this
clause (v);
(vi) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by the
Company and the Restricted Subsidiaries to their customers in the ordinary
course of their business and which do not secure other Indebtedness, and
(B) under Currency Agreements and Interest Rate Agreements, in each case
entered into for bona fide hedging purposes of the Company in the ordinary
course of business; PROVIDED, HOWEVER, that, in the case of Currency
Agreements and Interest Rate Agreements, such Currency Agreements and
Interest Rate Agreements do not increase the Indebtedness of the Company
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities
and compensation payable thereunder;
(vii) Purchase Money Indebtedness and Capitalized Lease Obligations in
an aggregate principal amount not to exceed $10,000,000 at any time
outstanding;
(viii) Indebtedness of Restricted Subsidiaries (other than
Indebtedness permitted to be Incurred pursuant to any other clause of this
Section 4.03(b)) in an aggregate principal amount on the date of Incurrence
that, when added to all other Indebtedness Incurred pursuant to this clause
(viii) and then outstanding, will not exceed $5,000,000; or
(ix) Indebtedness (other than Indebtedness permitted to be Incurred
pursuant to Section 4.03(a) or any other clause of this Section 4.03(b)) in
an aggregate principal amount on the date of Incurrence that, when added to
all other Indebtedness Incurred pursuant to this clause (ix) and then
outstanding, will not exceed $10,000,000.
(c) Notwithstanding the foregoing, the Company shall not Incur any
Indebtedness pursuant to paragraph (b) above if the proceeds thereof are used,
directly or indirectly, to repay, prepay, redeem, defease, retire, refund or
refinance any Subordinated Obligations unless such Indebtedness shall be
subordinated to the Securities to at least the same extent as such Subordinated
Obligations. The Company shall not Incur any Indebtedness if such Indebtedness
is subordinate or junior in ranking in any respect to any Senior Indebtedness
unless such Indebtedness is Senior Subordinated Indebtedness or is expressly
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subordinated in right of payment to Senior Subordinated Indebtedness. In
addition, the Company shall not Incur any Secured Indebtedness that is not
Senior Indebtedness unless contemporaneously therewith effective provision is
made to secure the Securities equally and ratably with (or on a senior basis to,
in the case of Indebtedness subordinated in right of payment to the Securities)
such Secured Indebtedness for so long as such Secured Indebtedness is secured by
a Lien. A Subsidiary Guarantor may not Incur any Indebtedness if such
Indebtedness is by its terms expressly subordinate or junior in ranking in any
respect to any Senior Indebtedness of such Subsidiary Guarantor unless such
Indebtedness is Senior Subordinated Indebtedness of such Subsidiary Guarantor or
is expressly subordinated in right of payment to Senior Subordinated
Indebtedness of such Subsidiary Guarantor. In addition, a Subsidiary Guarantor
may not Incur any Secured Indebtedness that is not Senior Indebtedness of such
Subsidiary Guarantor unless contemporaneously therewith effective provision is
made to secure the Subsidiary Guarantee of such Subsidiary Guarantor equally and
ratably with (or on a senior basis to, in the case of Indebtedness subordinated
in right of payment to such Subsidiary Guarantee) such Secured Indebtedness for
so long as such Secured Indebtedness is secured by a Lien.
(d) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that the Company or any Restricted Subsidiary may
Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as
a result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03, (i) Indebtedness Incurred pursuant to
the Credit Agreement prior to or on the date of this Indenture shall be treated
as Incurred pursuant to Section 4.03(b)(i), (ii) Indebtedness permitted by this
Section 4.03 need not be permitted solely by reference to one provision
permitting such Indebtedness but may be permitted in part by one such provision
and in part by one or more other provisions of this Section permitting such
Indebtedness and (iii) in the event that Indebtedness or any portion thereof
meets the criteria of more than one of the types of Indebtedness described in
this Section, the Company, in its sole discretion, shall classify such
Indebtedness and only be required to include the amount of such Indebtedness in
one of such clauses.
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SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to
(i) declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving the Company) except dividends or distributions payable
solely in its Capital Stock (other than Disqualified Stock) and except dividends
or distributions payable to the Company or another Restricted Subsidiary (and,
if such Restricted Subsidiary is not wholly owned, to its other shareholders on
a pro rata basis), (ii) purchase, redeem, retire or otherwise acquire for value
any Capital Stock of the Company or any Restricted Subsidiary held by Persons
other than the Company or another Restricted Subsidiary, (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition) or (iv) make any Investment
(other than a Permitted Investment) in any Person (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment being herein referred to as a "Restricted Payment") if
at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution of the Board of
Directors) declared or made subsequent to the Issue Date would exceed the
sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter in which the Issue Date occurs to the end of the most recent
fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income shall be
a deficit, minus 100% of such deficit);
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(B) the aggregate Net Cash Proceeds received by the Company from
the issue or sale of its Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date (other than an issuance or sale to a
Subsidiary of the Company or an employee stock ownership plan or other
trust established by the Company or any of its Subsidiaries); and
(C) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Subsidiary) subsequent to
the Issue Date of any Indebtedness of the Company or its Restricted
Subsidiaries convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of the Company (less the amount of any cash or
other property distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange); and
(D) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) payments of dividends,
repayments of the principal of loans or advances or other transfers of
assets to the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries or (ii) the redesignation of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as provided in the
definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made by
the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount was included in the calculation of the amount
of Restricted Payments.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Company or
Subordinated Obligations made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Capital Stock of the Company (other
than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary or an employee stock ownership plan or other trust established
by the Company or any of its Subsidiaries); PROVIDED, HOWEVER, that (A)
such purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from such sale
applied in the manner set forth in this clause (i) shall be excluded from
clause (3)(B) of Section 4.04(a);
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(ii) any purchase or redemption of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company that is permitted to be Incurred pursuant
to Section 4.03; PROVIDED, HOWEVER, that such purchase or redemption shall
be excluded in the calculation of the amount of Restricted Payments;
(iii) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 4.06; PROVIDED, HOWEVER,
that such purchase or redemption shall be excluded in the calculation of
the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.04(a); PROVIDED, HOWEVER, that such dividend shall be
included in the calculation of the amount of Restricted Payments; or
(v) payment of dividends, other distributions or other amounts by the
Company for the purposes set forth in clauses (A) through (D) below;
PROVIDED, HOWEVER, that such dividend, distribution or amount set forth in
clauses (A) through (D) shall be included in the calculation of the amount
of Restricted Payments for the purposes of Section 4.04(a):
(A) to Parent in amounts equal to the amounts required for Parent
to pay franchise taxes and other fees required to maintain its
corporate existence and provide for other operating costs of up to
$100,000 per fiscal year;
(B) to Parent in amounts equal to amounts required for Parent to
pay federal, state and local income taxes to the extent such income
taxes are attributable to the income of the Company and its Restricted
Subsidiaries (and, to the extent of amounts actually received from its
Unrestricted Subsidiaries, in amounts required to pay such taxes to
the extent attributable to the income of such Unrestricted
Subsidiaries);
(C) to Parent in amounts equal to amounts expended by Parent to
repurchase Capital Stock of Parent owned by former employees of the
Company or its Subsidiaries or their assigns, estates and heirs;
PROVIDED, HOWEVER, that the aggregate amount paid, loaned or advanced
to Parent pursuant to this clause (C) shall not, in the aggregate,
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exceed (1) for each fiscal year prior to the 2000 fiscal year,
$1,000,000 per fiscal year and (2) for all other fiscal years,
$2,000,000, in each case plus any amounts contributed by Parent to the
Company as a result of resales of such repurchased shares of Capital
Stock; and
(D) in amounts equal to amounts expended by the Company to
repurchase shares of its Capital Stock from deceased or retired
employees in accordance with the terms of the ESOP as in effect on the
Issue Date and from employees whose employment with the Company or any
of its Subsidiaries has terminated for any other reason but only to
the extent mandatorily required by the ESOP as in effect on the Issue
Date, the Code or ERISA; PROVIDED that in each case the Company has
deferred making any cash payments in respect of such repurchase
obligations to the maximum extent possible under the ESOP as in effect
on the Issue Date;
SECTION 4.05. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock or pay any Indebtedness owed to the Company, (ii) make any
loans or advances to the Company or (iii) transfer any of its property or assets
to the Company, except:
(1) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the date of this Indenture;
(2) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness Incurred as
consideration in, in contemplation of, or to provide all or any portion of
the funds or credit support utilized to consummate, the transaction or
series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company) and
outstanding on such date;
(3) any encumbrance or restriction pursuant to an agreement
constituting Refinancing Indebtedness of Indebtedness Incurred pursuant to
an agreement referred
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to in clause (1) or (2) of this Section or this clause (3) or contained in
any amendment to an agreement referred to in clause (1) or (2) of this
Section or this clause (3); PROVIDED, HOWEVER, that the encumbrances and
restrictions contained in any such refinancing agreement or amendment are
no less favorable to the Securityholders than encumbrances and
restrictions contained in such agreements;
(4) in the case of clause (iii), any encumbrance or restriction (A)
that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is subject to a lease, license or similar
contract, (B) by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets of the Company
or any Restricted Subsidiary not otherwise prohibited by this Indenture or
(C) contained in security agreements or mortgages securing Indebtedness of
a Restricted Subsidiary to the extent such encumbrance or restrictions
restrict the transfer of the property subject to such security agreements
or mortgages; and
(5) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition.
SECTION 4.06. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to, make
any Asset Disposition unless (i) the Company or such Restricted Subsidiary
receives consideration (including by way of relief from, or by any other Person
assuming sole responsibility for, any liabilities, contingent or otherwise) at
the time of such Asset Disposition at least equal to the fair value of the
shares and assets subject to such Asset Disposition, (ii) at least 75% (or 50%
in the case of an Asset Disposition relating to the Specified Real Estate) of
the consideration thereof received by the Company or such Restricted Subsidiary
is in the form of cash and (iii) an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) (A) FIRST, within one year from the later of
such Asset Disposition or the receipt of such Net Cash Proceeds, either (1) to
the extent the Company elects (or is required by the terms of any Senior
Indebtedness or Indebtedness (other than Preferred Stock) of a Wholly Owned
Subsidiary), to prepay, repay, redeem, defease or purchase Senior Indebtedness
or such Indebtedness (in each case other than Indebtedness owed to
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the Company or an Affiliate of the Company) or (2) to the extent the Company or
such Restricted Subsidiary elects, to reinvest in Additional Assets (including
by means of an Investment in Additional Assets by a Restricted Subsidiary with
Net Available Cash received by the Company or another Restricted Subsidiary), or
(3) a combination of the foregoing; (B) SECOND, to the extent of the balance of
such Net Available Cash after application in accordance with clause (A), to make
an Offer to purchase Securities pursuant to and subject to the conditions of
Section 4.06(b), PROVIDED that if the Company elects (or is required by the
terms of any Senior Subordinated Indebtedness), such Offer may be made to
ratably purchase the Securities and other Senior Subordinated Indebtedness and
(C) THIRD, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A) and (B), to prepay, repay, redeem,
defease or purchase Indebtedness of the Company (other than Indebtedness owed to
an Affiliate of the Company and other than Disqualified Stock of the Company) or
Indebtedness of any Restricted Subsidiary (other than Indebtedness owed to the
Company or an Affiliate of the Company), in each case described in this clause
(C) within one year from the receipt of such Net Available Cash or, if the
Company has made an Offer pursuant to clause (B), six months from the date such
Offer is consummated; PROVIDED, HOWEVER that in connection with any prepayment,
repayment, redemption, defeasance or purchase of Indebtedness pursuant to clause
(A), (B) or (C) above, the Company or such Restricted Subsidiary shall retire
such Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid, redeemed, defeased or purchased. Notwithstanding the foregoing
provisions of this covenant, the Company and the Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accordance with this Section
except to the extent that the aggregate Net Available Cash from all Asset
Dispositions that is not applied in accordance with this Section 4.06 exceeds
$10,000,000.
For the purposes of this Section 4.06, the following are deemed to be
cash: (x) the assumption of Indebtedness of the Company (other than Disqualified
Stock of the Company) or any Restricted Subsidiary and the release of the
Company or such Restricted Subsidiary from all liability on such Indebtedness in
connection with such Asset Disposition, (y) securities received by the Company
or any Restricted Subsidiary from the transferee that are promptly converted by
the Company or such Restricted Subsidiary into cash and (z) in the case of an
Asset Disposition relating to the Specified Real Estate, REIT Securities.
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(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to Section 4.06(a)(iii)(B), the Company shall be required to
purchase Securities tendered pursuant to an offer by the Company for the
Securities (the "Offer") at a purchase price of 100% of their principal amount
plus accrued interest (if any) to the Purchase Date in accordance with the
procedures (including prorationing in the event of oversubscription) set forth
in Section 4.06(c). If the aggregate purchase price of Securities tendered
pursuant to the Offer is less than the Net Available Cash allotted to the
purchase of the Securities, the Company shall apply the remaining Net Available
Cash in accordance with Section 4.06(a)(iii)(C). The Company shall not be
required to make an Offer for Securities pursuant to this Section if the Net
Available Cash available therefor (after application of the proceeds as provided
in clause (A) of Section 4.06(a)(iii)) is less than $5,000,000 for any
particular Asset Disposition (which lesser amount shall be carried forward for
purposes of determining whether an Offer is required with respect to the Net
Available Cash from any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, a written notice
stating that the Holder may elect to have his Securities purchased by the
Company either in whole or in part (subject to prorationing as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain such information
concerning the business of the Company that the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum shall
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of the Company filed subsequent to such Quarterly Report, other than Current
Reports describing Asset Dispositions otherwise described in the offering
materials (or corresponding successor reports), (ii) a description of material
developments in the Company's business subsequent to the date of the latest of
such Reports, and (iii) if material, appropriate pro forma financial
information) and all instructions and materials necessary to tender Securities
pursuant to the Offer, together with the address referred to in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided
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above, the Company shall deliver to the Trustee an Officers' Certificate as to
(i) the amount of the Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Dispositions pursuant to which such Offer is being
made and (iii) the compliance of such allocation with the provisions of Section
4.06(a). On such date, the Company shall also irrevocably deposit with the
Trustee or with a paying agent (or, if the Company is acting as its own paying
agent, segregate and hold in trust) an amount equal to the Offer Amount to be
invested in Temporary Cash Investments and to be held for payment in accordance
with the provisions of this Section. Upon the expiration of the period for which
the Offer remains open (the "Offer Period"), the Company shall deliver to the
Trustee for cancelation the Securities or portions thereof that have been
properly tendered to and are to be accepted by the Company. The Trustee (or the
Paying Agent, if not the Trustee) shall, on the Purchase Date, mail or deliver
payment to each tendering Holder in the amount of the purchase price. In the
event that the aggregate purchase price of the Securities delivered by the
Company to the Trustee is less than the Offer Amount, the Trustee shall deliver
the excess to the Company immediately after the expiration of the Offer Period
for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
Purchase Date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security that was delivered
by the Holder for purchase and a statement that such Holder is withdrawing his
election to have such Security purchased. If at the expiration of the Offer
Period the aggregate principal amount of Securities surrendered by Holders
exceeds the Offer Amount, the Company shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part will be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee that
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an
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agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.07. LIMITATION ON TRANSACTIONS WITH AFFILIATES. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, enter into or conduct any transaction (including, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Company (an "Affiliate Transaction") on terms (i) that are
less favorable to the Company or such Restricted Subsidiary, as the case may be,
than those that could be obtained at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate and (ii) that,
in the event such Affiliate Transaction involves an aggregate amount in excess
of $10,000,000, are not in writing and have not been approved by a majority of
the members of the Board of Directors having no personal stake in such Affiliate
Transaction and who are not employed by or otherwise associated with such
Affiliate. In addition, if such Affiliate Transaction involves an amount in
excess of $15,000,000, a fairness opinion must be provided by a nationally
recognized appraisal or investment banking firm.
(b) The provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors, (iii)
loans or advances to employees in the ordinary course of business in accordance
with past practices of the Company, but in any event not to exceed $2,000,000 in
the aggregate outstanding at any one time, (iv) the payment of reasonable fees
to directors of the Company and its Subsidiaries who are not employees of the
Company or its Subsidiaries, (v) any transaction between the Company and a
Wholly Owned Subsidiary or between Wholly Owned Subsidiaries or (vi)
transactions pursuant to the Existing Agreements, as in effect on the date of
this Indenture.
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SECTION 4.08. CHANGE OF CONTROL. (a) Upon a Change of Control, each
Holder shall have the right to require that the Company repurchase all or any
part of such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest (if any) to the
date of purchase (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.08(b). In the event that at
the time of such Change of Control the terms of the Bank Indebtedness restrict
or prohibit the repurchase of Securities pursuant to this Section, then prior to
the mailing of the notice to Holders provided for in Section 4.08(b) below but
in any event within 30 days following any Change of Control, the Company shall
(i) repay in full all Bank Indebtedness or offer to repay in full all Bank
Indebtedness and repay the Bank Indebtedness of each lender who has accepted
such offer or (ii) obtain the requisite consent under the agreements governing
the Bank Indebtedness to permit the repurchase of the Securities as provided for
in Section 4.08(b).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest (if any) to the date of purchase (subject to
the right of Holders of record on the relevant record date to receive
interest on the relevant interest payment date);
(2) the circumstances and relevant facts and financial information
regarding such Change of Control;
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not
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later than one Business Day prior to the purchase date a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security that was delivered for purchase by the Holder
and a statement that such Holder is withdrawing his election to have such
Security purchased.
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered to the Trustee for cancelation, and the
Company shall pay the purchase price plus accrued and unpaid interest (if any)
to the Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 4.09. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with Section 314(a)(4) of
the TIA.
SECTION 4.10. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. FUTURE SUBSIDIARY GUARANTORS. The Company shall cause
(a) each Restricted Subsidiary that is a Domestic Subsidiary that Incurs
Indebtedness or that is a guarantor of Indebtedness Incurred pursuant to clause
(b)(i), (b)(ii) or (b)(ix) of Section 4.03 and (b) each Restricted Subsidiary
that is not a Domestic Subsidiary that enters into a Guarantee of any of the
obligations of the Company, Parent or any of the Company's Subsidiaries pursuant
to the Credit Agreement to execute and deliver to the Trustee a supplemental
indenture pursuant to which such Subsidiary shall Guarantee payment of the
Securities. Each Subsidiary Guarantee shall be limited to an amount not to
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exceed the maximum amount that can be Guaranteed by that Subsidiary without
rendering the Subsidiary Guarantee, as it relates to such Subsidiary Guarantor,
voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer or similar laws affecting the rights of creditors generally.
SECTION 4.12. LIMITATION ON LINES OF BUSINESS. The Company shall not,
and shall not permit any Restricted Subsidiary to, engage in any material
respect in any line of business, other than a Related Business. The Company
shall not be deemed to be engaged in the line of business associated with assets
held for sale.
SECTION 4.13. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale/Leaseback Transaction with respect to any property unless (a) the net cash
proceeds received by the Company or any Restricted Subsidiary in connection with
such Sale/Leaseback Transaction are at least equal to the fair value (as
determined in good faith by the Board of Directors) of such property, (b) the
transfer of such property is permitted by, and the Company applies the proceeds
of such transaction in compliance with Section 4.06 and (c) the Company or such
Subsidiary would be entitled to (i) in the case of a Sale/ Leaseback Transaction
involving the Specified Real Estate, Incur $1.00 of additional Indebtedness
pursuant to Section 4.03(a) and (ii) in all other cases (A) Incur Indebtedness
in an amount equal to the Attributable Debt with respect to such Sale/Leaseback
Transaction pursuant to Section 4.03(a) and (B) create a Lien on such property
securing such Attributable Debt without equally and ratably securing the
Securities pursuant to Section 4.03.
SECTION 4.14. LIMITATION ON THE SALE OR ISSUANCE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not sell any shares of Capital Stock
of a Restricted Subsidiary, and shall not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of its Capital Stock except
(i) to the Company or a Wholly Owned Subsidiary or (ii) if, immediately after
giving effect to such issuance or sale, such Restricted Subsidiary would no
longer constitute a Restricted Subsidiary. The proceeds of any sale of such
Capital Stock permitted hereby shall be treated as Net Available Cash from an
Asset Disposition and shall be applied in accordance with Section 4.06.
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ARTICLE 5
Successor Company
-----------------
SECTION 5.01. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. The Company
shall not consolidate with or merge with or into, or convey, transfer or lease
all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia
and the Successor Company (if not the Company) shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under
the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness that becomes an obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Restricted Subsidiary at the time
of such transaction), no Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a);
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that is
not less than the Consolidated Net Worth of the Company immediately prior
to such transaction; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, but the
predecessor Company in the case of a conveyance, transfer or lease of all or
substantially all its assets shall not be released from the obligation to pay
the principal of and interest on the Securities.
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Notwithstanding the foregoing clauses (ii), (iii) and (iv), any
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company.
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, whether or not such payment shall be
prohibited by Article 10, and such default continues for a period of 30
days;
(2) the Company (i) defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon declaration or otherwise, whether or not such
payment shall be prohibited by Article 10 or (ii) fails to redeem or
purchase Securities when required pursuant to this Indenture or the
Securities, whether or not such redemption or purchase shall be prohibited
by Article 10;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.11, 4.12 or 4.13 (other than a failure to purchase
Securities when required under Section 4.06 or 4.08) and such failure
continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2), (3)
or (4) above) and such failure continues for 60 days after the notice
specified below;
(6) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or the
acceleration by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5,000,000 or its
foreign currency equivalent at the time;
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(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$5,000,000 or its foreign currency equivalent at the time is entered
against the Company or any Significant Subsidiary and is not discharged,
waived or stayed and either (A) an enforcement proceeding has been
commenced by any creditor upon such judgment or decree or (B) there is a
period of 60 days following the entry of such judgment or decree during
which such judgment or decree is not discharged, waived or the execution
thereof stayed; or
(10) any Subsidiary Guarantee shall cease to be in full force and
effect (except as contemplated by the terms thereof) or any Subsidiary
Guarantor or person acting by or on behalf of such Guarantor shall deny or
disaffirm its obligations under this Indenture or any Subsidiary Guarantee
and such Default continues for 10 days after the notice specified below.
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The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, XXXXXX XXXXXX CODE, or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the outstanding
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified in clauses (4) or (5) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) and any event that with the giving of
notice or the lapse of time would become an Event of Default under clause (4),
(5) or (9), its status and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the outstanding Securities by
notice to the Company, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest on all the 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 Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such
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rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security or (ii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee may determine is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; PROVIDED, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
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SECTION 6.06. 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 stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during such
60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and liquidated damages and interest on the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, any Subsidiary or
Subsidiary Guarantor, their creditors or their property and, unless prohibited
by law or applicable
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regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. PRIORITIES. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness to the extent required by
Article 10;
THIRD: to Securityholders for amounts due and unpaid on the Securities
for principal and interest, ratably, and any liquidated damages without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal, any liquidated damages and
interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
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SECTION 6.12. WAIVER OF STAY OR EXTENSION LAWS. Neither the Company
nor any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Company and each Subsidiary Guarantor (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7
Trustee
-------
SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(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 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. RIGHTS OF TRUSTEE. Subject to Section 7.01: (a) The
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
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(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its rights or
powers; PROVIDED, HOWEVER, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Securities at the
time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney.
(g) The Trustee shall not be required to give any note, bond or surety
in respect of the execution of the trusts and powers under this Indenture.
(h) The permissive rights of the Trustee to take any action enumerated
in this Indenture shall not be construed as a duty to take such action.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Secur-
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ities, it shall not be accountable for the Company's use of the proceeds from
the Securities, and it shall not be responsible for any statement of the Company
in this Indenture or in any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee's certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within the earlier of 90 days after it
occurs or 30 days after it is known to a trust officer. Except in the case of a
Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security, if
any), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with Section 313(a) of the TIA. The Trustee shall also comply with
Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each Subsidiary Guarantor, jointly and severally shall
indemnify the Trustee against any and all loss, liability or expense (including
reasonable attorneys' fees) incurred by them without negligence or bad faith on
their part in connection with the administration of this trust and the
performance of their duties hereunder. The Trustee shall notify the Company of
any claim for which it may seek indemnity promptly upon obtaining actual
knowledge thereof;
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PROVIDED that any failure so to notify the Company shall not relieve the Company
or any Subsidiary Guarantor of its indemnity obligations hereunder. The Company
shall defend the claim and the indemnified party shall provide reasonable
cooperation at the Company's expense in the defense. Such indemnified parties
may have separate counsel and the Company shall pay the fees and expenses of
such counsel; PROVIDED that the Company shall not be required to pay such fees
and expenses if it assumes such indemnified parties' defense and, in such
indemnified parties' reasonable judgment, there is no conflict of interest
between the Company and such parties in connection with such defense. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by an indemnified party through such party's own wilful
misconduct, negligence or bad faith. The Company shall also pay the fees and
expenses (including reasonable attorneys' fees) incurred by any indemnified
party in enforcing this right of indemnity.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest and any liquidated damages on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(7) or (8) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking associa-
tion, the resulting, surviving or transferee corporation without any further act
shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the
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name of the successor to the Trustee; and in all such cases such certificates
shall have the full force that it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with
TIAss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIAss. 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA ss. 310(b)(1) are met.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shalL be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE. (a)
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancelation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article 3 hereof and
the Company irrevocably deposits with the Trustee funds or U.S. Government
Obligations on which payment of principal and interest when due will be
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all of its obligations under the Securities and this Indenture
("legal defeasance
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option") or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.11, 4.12, 4.13, 4.14, 4.15, 5.01(iii) and 5.01(iv) and the
operation of Section 6.01(4), 6.01(6), 6.01(7) (with respect to Subsidiaries of
the Company only), 6.01(9) (with respect to Subsidiaries of the Company only)
and 6.01(10) ("covenat defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section 6.01(4),
6.01(6), 6.01(7) (with respect to Subsidiaries of the Company only), 6.01(9)
(with respect to Subsidiaries of the Company only) and 6.01(10) or because of
the failure of the Company to comply with (iii) and (iv) of Section 5.01.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.04, 8.05 and
8.06 shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
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(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(6) in the case of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for federal income
tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Xxxxxx-
00
00
tions deposited with it pursuant to this Article 8. It shall apply the deposited
money and the money from U.S. Government Obligations through the Paying Agent
and in accordance with this Indenture to the payment of principal of and
interest on the Securities. Money and securities so held in trust are not
subject to Article 10.
SECTION 8.04. REPAYMENT TO COMPANY. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; PROVIDED, HOWEVER, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE 9
Amendments
----------
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee
may amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; PROVIDED, HOWEVER, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article 10 that would limit or terminate the
benefits available to any holder of Senior Indebtedness (or Representatives
therefor) under Article 10;
(5) to add further Guarantees with respect to the Securities or to
secure the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(7) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the rights of
any Securityholder; or
(9) to provide for the issuance of the Exchange Securities, which
shall have terms substantially identical in all material respects to the
Initial Securities (except that the transfer restrictions contained in the
Initial Securities shall be modified or eliminated, as appropriate), and
which shall be treated, together with any outstanding Initial Securities,
as a single issue of securities.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless
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the holders of such Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to any Securityholder but with the written consent of the Holders of at
least a majority in principal amount of the Securities. However, without the
consent of each Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest or
any liquidated damages on any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption of any Security or
change the time at which any Security may be redeemed in accordance with
Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Article 10 that adversely affects the rights of
any Securityholder under Article 10;
(7) make any change in Section 6.04 or 6.07 or the second sentence of
this Section; or
(8) modify or affect in any manner adverse to the Holders the terms
and conditions of the obligation of any Subsidiary Guarantor for the due
and punctual payment of the principal of or any liquidated damages or
interest on Securities.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
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An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder. An amendment or
waiver becomes effective once the requisite number of consents are received by
the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an
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appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make the
appropriate notation or to issue a new Security shall not affect the validity of
such amendment.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture that such amendment is
the legal, valid and binding obligation of the Company and the Subsidiary
Guarantors enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including Section
9.03).
SECTION 9.07. PAYMENT FOR CONSENT. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Subordination
-------------
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SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment in full of all Senior
Indebtedness and that the subordination is for the benefit of and enforceable by
the holders of Senior Indebtedness. The Securities shall in all respects rank
PARI PASSU with all other Senior Subordinated Indebtedness of the Company and
only Indebtedness of the Company that is Senior Indebtedness shall rank senior
to the Securities in accordance with the provisions set forth herein. For
purposes of these subordination provisions, the Indebtedness evidenced by the
Securities is deemed to include the liquidated damages payable pursuant to the
provisions set forth in the Securities and the Exchange and Registration Rights
Agreement. All provisions of this Article 10 shall be subject to Section 10.12.
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full of the Senior Indebtedness before Securityholders shall be
entitled to receive any payment of principal of or interest on the
Securities; and
(2) until the Senior Indebtedness is paid in full, any payment or
distribution to which Securityholders would be entitled but for this
Article 10 shall be made to holders of Senior Indebtedness as their
interests may appear, except that Securityholders may receive shares of
stock and any debt securities that are subordinated to Senior Indebtedness
to at least the same extent as the Securities.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS. The Company may not pay
the principal of, premium (if any) or interest on the Securities or make any
deposit pursuant to Section 8.01 and may not repurchase, redeem or otherwise
retire any Securities (collectively, "pay the Securities") if (i) any Senior
Indebtedness is not paid when due or (ii) any other default on Senior
Indebtedness occurs and the maturity of such Senior Indebtedness is accelerated
in accordance with its terms unless, in either case, (x) the default has been
cured or waived and any such acceleration has been rescinded or (y) such Senior
Indebtedness has been
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paid in full; PROVIDED, HOWEVER, that the Company may pay the Securities without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of the Designated Senior
Indebtedness with respect to which either of the events in clause (i) or (ii) of
this sentence has occurred and is continuing. During the continuance of any
default (other than a default described in clause (i) or (ii) of the preceding
sentence) with respect to any Designated Senior Indebtedness pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the
Securities for a period (a "Payment Blockage Period") commencing upon the
receipt by the Trustee (with a copy to the Company) of written notice (a
"Blockage Notice") of such default from the Representative of such Designated
Senior Indebtedness specifying an election to effect a Payment Blockage Period
and ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (i) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice, (ii) by repayment in full of such
Designated Senior Indebtedness or (iii) because the default giving rise to such
Blockage Notice is no longer continuing). Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this Section), unless the holders of such
Designated Senior Indebtedness or the Representative of such holders shall have
accelerated the maturity of such Designated Senior Indebtedness, the Company may
resume payments on the Securities after the end of such Payment Blockage Period,
including any missed payments. Not more than one Blockage Notice may be given in
any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness during such period; PROVIDED, HOWEVER,
that if any Blockage Notice within such 360-day period is given by or on behalf
of any holders of Designated Senior Indebtedness other than the Bank
Indebtedness, the Representative of the Bank Indebtedness may give another
Blockage Notice within such period; PROVIDED FURTHER, HOWEVER, that in no event
may the total number of days during which any Payment Blockage Period or Periods
is in effect exceed 179 days in the aggregate during any 360 consecutive day
period. For purposes of this Section, no default or event of default that
existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis of the commencement
of a subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
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unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.
SECTION 10.04. ACCELERATION OF PAYMENT OF SECURITIES. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify known holders of the Designated Senior
Indebtedness (or their Representative) of the acceleration. If any Designated
Senior Indebtedness is outstanding, the Company may not pay the Securities until
five Business Days after such holders (or their Representative) of the
Designated Senior Indebtedness receive notice of such acceleration and,
thereafter, may pay the Securities only if this Article 10 otherwise permits
payment at that time.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a distribution
is made to Securityholders that because of this Article 10 should not have been
made to them, the Securityholders who receive the distribution shall hold it in
trust for holders of Senior Indebtedness and pay it over to them as their
interests may appear.
SECTION 10.06. SUBROGATION. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article 10 to holders of Senior Indebtedness that otherwise would have been made
to Securityholders is not, as between the Company and Securityholders, a payment
by the Company on Senior Indebtedness.
SECTION 10.07. RELATIVE RIGHTS. This Article 10 defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
SECTION 10.08. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. No right
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced
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by the Securities shall be impaired by any act or failure to act by the Company
or by its failure to comply with this Indenture.
SECTION 10.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article 10. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; PROVIDED,
HOWEVER, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Senior Indebtedness (or a Representative of such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Indebtedness that may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE. The failure to make a payment pursuant to the Securities by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 10 shall have any effect on
the right of the Securityholders or the Trustee to accelerate the maturity of
the Securities.
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SECTION 10.12. TRUST MONEYS NOT SUBORDINATED. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article 8 by the Trustee for the
payment of principal of and interest on the Securities shall not be subordinated
to the prior payment of any Senior Indebtedness or subject to the restrictions
set forth in this Article 10, and none of the Securityholders shall be obligated
to pay over any such amount to the Company or any holder of Senior Indebtedness
of the Company or any other creditor of the Company.
SECTION 10.13. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
10.02 are pending, (ii) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
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SECTION 10.15. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article 10 or otherwise.
SECTION 10.16. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
SECTION 10.17. TRUSTEE'S COMPENSATION NOT PREJUDICED. Nothing in this
Article shall apply to amounts due to the Trustee pursuant to other sections of
this Indenture.
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ARTICLE 11
Subsidiary Guarantees
---------------------
SECTION 11.01. SUBSIDIARY GUARANTEES. Each Subsidiary Guarantor hereby
jointly and severally unconditionally and irrevocably guarantees, as a primary
obligor and not merely as a surety, to each Holder and to the Trustee and its
successors and assigns (a) the full and punctual payment of principal of and
interest on the Securities when due, whether at maturity, by acceleration, by
redemption or otherwise, and all other monetary obligations of the Company under
this Indenture (including obligations to the Trustee) and the Securities and (b)
the full and punctual performance within applicable grace periods of all other
obligations of the Company whether for expenses, indemnification or otherwise
under this Indenture and the Securities (all the foregoing being hereinafter
collectively called the "Obligations"). Each Subsidiary Guarantor further agrees
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from each such Subsidiary Guarantor, and that each such
Subsidiary Guarantor shall remain bound under this Article 11 notwithstanding
any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any right or
remedy against the Company or any other Person under this Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or Trustee to exercise
any right or remedy against any other guarantor of the Obligations; or (f) any
change in the ownership of such Subsidiary Guarantor, except as provided in
Section 11.02(b).
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
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The obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing that may or might in any
manner or to any extent vary the risk of any Subsidiary Guarantor or would
otherwise operate as a discharge of any Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, each Subsidiary Guarantor hereby
promises to and shall, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal
to the sum of (i) the unpaid principal amount of such Obligations, (ii) accrued
and unpaid interest on such Obligations (but only to the extent not prohibited
by law) and (iii) all other monetary Obligations of the Company to the Holders
and the Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby until payment in full of all Obligations. Each Subsidiary
Guarantor further agrees that, as between it, on the one
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hand, and the Holders and the Trustee, on the other hand, (x) the maturity of
the Obligations guaranteed hereby may be accelerated as provided in Article VI
for the purposes of any Subsidiary Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article VI, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
SECTION 11.02. LIMITATION ON LIABILITY. (a) Any term or provision of
this Indenture to the contrary notwithstanding, the maximum, aggregate amount of
the obligations guaranteed hereunder by any Subsidiary Guarantor shall not
exceed the maximum amount that can be hereby guaranteed without rendering this
Indenture, as it relates to any Subsidiary Guarantor, voidable under applicable
law relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally.
(b) This Subsidiary Guarantee as to any Subsidiary Guarantor shall
terminate and be of no further force or effect upon the sale (including through
merger or consolidation) of the Capital Stock, or all or substantially all the
assets, of the applicable Subsidiary Guarantor if (a) such sale is made in
compliance with the covenant described under Section 4.06 and (b) such
Subsidiary Guarantor is released from its guarantees of, and all pledges and
security granted in connection with, the Credit Agreement and any other
Indebtedness of Parent, the Company or any Restricted Subsidiary. A Subsidiary
Guarantee also will be automatically released upon the applicable Subsidiary
Guarantor ceasing to be a Subsidiary of the Company as a result of any
foreclosure of any pledge or security interest securing Bank Indebtedness or
other exercise of remedies in respect thereof if such Subsidiary Guarantor is
released from its guarantees of, and all pledges and security interests granted
in connection with, the Credit Agreement.
SECTION 11.03. SUCCESSORS AND ASSIGNS. This Article 11 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and
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privileges conferred upon that party in this Indenture and in the Securities
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 11.04. NO WAIVER. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 11 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits that either may have under this Article 11 at law,
in equity, by statute or otherwise.
SECTION 11.05. MODIFICATION. No modification, amendment or waiver of
any provision of this Article 11, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
ARTICLE 12
Subordination of the Subsidiary Guarantees
------------------------------------------
SECTION 12.01. AGREEMENT TO SUBORDINATE. Each Subsidiary Guarantor
agrees, and each Securityholder by accepting a Security agrees, that the
Obligations of a Subsidiary Guarantor are subordinated in right of payment, to
the extent and in the manner provided in this Article 12, to the prior payment
in full of all Senior Indebtedness of such Subsidiary Guarantor and that the
subordination is for the benefit of and enforceable by the holders of Senior
Indebtedness of such Subsidiary Guarantor. The Obligations with respect to a
Subsidiary Guarantor shall in all respects rank PARI PASSU with all other Senior
Subordinated Indebtedness of such Subsidiary Guarantor, and only Indebtedness of
such Subsidiary Guarantor that is Senior Indebtedness of such Subsidiary
Guarantor shall rank senior to the Obligations of such Subsidiary Guarantor in
accordance with the provisions set forth herein.
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SECTION 12.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY. Upon any payment
or distribution of the assets of a Subsidiary Guarantor to creditors upon a
total or partial liquidation or a total or partial dissolution of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Subsidiary Guarantor and its
properties:
(1) holders of Senior Indebtedness of such Subsidiary Guarantor shall
be entitled to receive payment in full of such Senior Indebtedness before
Securityholders shall be entitled to receive any payment of any Obligations
from such Subsidiary Guarantor; and
(2) until the Senior Indebtedness of such Subsidiary Guarantor is paid
in full, any payment or distribution to which Securityholders would be
entitled but for this Article 12 shall be made to holders of such Senior
Indebtedness as their respective interests may appear.
SECTION 12.03. DEFAULT ON SENIOR INDEBTEDNESS OF A SUBSIDIARY
GUARANTOR. A Subsidiary Guarantor may not make any payment pursuant to any of
the Obligations or repurchase, redeem or otherwise retire any Securities
(collectively, "pay its Guarantee") if (i) any Senior Indebtedness of such
Subsidiary Guarantor is not paid when due or (ii) any other default on Senior
Indebtedness of such Subsidiary Guarantor occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in either case,
(x) the default has been cured or waived and any such acceleration has been
rescinded or (y) such Senior Indebtedness has been paid in full; PROVIDED,
HOWEVER, that such Subsidiary Guarantor may pay its Subsidiary Guarantee without
regard to the foregoing if such Subsidiary Guarantor and the Trustee receive
written notice approving such payment from the Representative of the holders of
such Senior Indebtedness with respect to which either of the events in clause
(i) or (ii) of this sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the preceding sentence) with respect to any Designated Senior Indebtedness of
a Subsidiary Guarantor pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
such Subsidiary Guarantor may not pay its Guarantee for a period (a "Subsidiary
Guarantor Payment Blockage Period") commencing upon the receipt by the Trustee
(with a copy to such Subsidiary Guarantor and the Company) of written notice (a
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"Subsidiary Guarantor Blockage Notice") of such default from the Representative
of the holders of the Designated Senior Indebtedness of such Subsidiary
Guarantor specifying an election to effect a Subsidiary Guarantor Payment
Blockage Period and ending 179 days thereafter (or earlier if such Subsidiary
Guarantor Payment Blockage Period is terminated (i) by written notice to the
Trustee (with a copy to such Subsidiary Guarantor and the Company) from the
Person or Persons who gave such Subsidiary Guarantor Blockage Notice, (ii)
because such Designated Senior Indebtedness has been repaid in full or (iii)
because the default giving rise to such Subsidiary Guarantor Blockage Notice is
no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in the
first sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, such Subsidiary Guarantor may
resume to pay its Guarantee after such Subsidiary Guarantor Payment Blockage
Period, including any missed payments. Not more than one Subsidiary Guarantor
Blockage Notice may be given with respect to a Subsidiary Guarantor in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness of such Subsidiary Guarantor during such
period; PROVIDED, HOWEVER, that if any Subsidiary Guarantor Blockage Notice
within such 360-day period is given by or on behalf of any holders of Designated
Senior Indebtedness of such Subsidiary Guarantor (other than the Bank
Indebtedness), the Representative of the Bank Indebtedness may give another
Subsidiary Guarantor Blockage Notice within such period; PROVIDED FURTHER,
HOWEVER, that in no event may the total number of days during which any
Subsidiary Guarantor Payment Blockage Period or Periods is in effect exceed 179
days in the aggregate during any 360 consecutive day period.
SECTION 12.04. DEMAND FOR PAYMENT. If payment of the Securities is
accelerated because of an Event of Default and a demand for payment is made on a
Subsidiary Guarantor pursuant to Article 11 the Trustee shall promptly notify
known holders of the Designated Senior Indebtedness of such Subsidiary Guarantor
(or the Representative of such holders) of such demand. If any Designated Senior
Indebtedness of such Subsidiary Guarantor is outstanding, such Subsidiary
Guarantor may not pay its Guarantee until five Business Days after such holders
or the Representative of the holders of the Designated Senior Indebtedness of
such Subsidiary Guarantor receive notice of such demand and, thereafter, may pay
its Guarantee only if this Article 12 otherwise permits payment at that time.
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SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER. If a payment or
distribution is made to Securityholders that because of this Article 12 should
not have been made to them, the Securityholders who receive the payment or
distribution shall hold such payment or distribution in trust for holders of the
Senior Indebtedness of the relevant Subsidiary Guarantor and pay it over to them
as their respective interests may appear.
SECTION 12.06. SUBROGATION. After all Senior Indebtedness of a
Subsidiary Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Senior
Indebtedness of such Subsidiary Guarantor to receive distributions applicable to
Senior Indebtedness of such Subsidiary Guarantor. A distribution made under this
Article 12 to holders of Senior Indebtedness of such Subsidiary Guarantor which
otherwise would have been made to Securityholders is not, as between such
Subsidiary Guarantor and Securityholders, a payment by such Subsidiary Guarantor
on Senior Indebtedness of such Subsidiary Guarantor.
SECTION 12.07. RELATIVE RIGHTS. This Article 12 defines the relative
rights of Securityholders and holders of Senior Indebtedness of a Subsidiary
Guarantor. Nothing in this Indenture shall:
(1) impair, as between a Subsidiary Guarantor and Securityholders, the
obligation of a Subsidiary Guarantor that is absolute and unconditional, to
pay its Obligations to the extent set forth in Article 11; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by a Subsidiary Guarantor under its
Obligations, subject to the rights of holders of Senior Indebtedness of
such Subsidiary Guarantor to receive distributions otherwise payable to
Securityholders.
SECTION 12.08. SUBORDINATION MAY NOT BE IMPAIRED BY ASUBSIDIARY
GUARANTOR. No right of any holder of Senior Indebtedness of a Subsidiary
Guarantor to enforce the subordination of the Obligations of such Subsidiary
Guarantor shall be impaired by any act or failure to act by such Subsidiary
Guarantor or by its failure to comply with this Indenture.
SECTION 12.09. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding
Section 12.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments
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unless, not less than two Business Days prior to the date of such payment, a
Trust Officer of the Trustee receives notice satisfactory to it that payments
may not be made under this Article 12. A Subsidiary Guarantor, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of a Subsidiary Guarantor may give the notice; PROVIDED, HOWEVER,
that, if an issue of Senior Indebtedness of a Subsidiary Guarantor has a
Representative, only the Representative may give the notice. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Indebtedness of a
Subsidiary Guarantor (or a Representative of such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or Representative
thereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of a Subsidiary Guarantor with the same rights it would have if it
were not Trustee. The Registrar and co-registrar and the Paying Agent may do the
same with like rights. The Trustee shall be entitled to all the rights set forth
in this Article 12 with respect to any Senior Indebtedness of a Subsidiary
Guarantor which may at any time be held by it, to the same extent as any other
holder of Senior Indebtedness of such Subsidiary Guarantor; and nothing in
Article VII shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article 12 shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 7.07.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of a Subsidiary Guarantor, the distribution may be made and the notice given to
their Representative (if any).
SECTION 12.11. ARTICLE 12 NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT
RIGHT TO ACCELERATE. The failure of a Subsidiary Guarantor to make a payment on
any of its Obligations by reason of any provision in this Article 12 shall not
be construed as preventing the occurrence of a default by such Subsidiary
Guarantor under its Obligations. Nothing in this Article 12 shall have any
effect on the right of the Securityholders or the Trustee to make a demand for
payment on a Subsidiary Guarantor pursuant to Article 11.
SECTION 12.12. TRUSTEE ENTITLED TO RELY. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
12.02 are pending, (ii) upon a certificate of the
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liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Securityholders or (iii) upon the Representatives for
the holders of Senior Indebtedness of a Subsidiary Guarantor for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness of a Subsidiary Guarantor
and other Indebtedness of a Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 12. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of a Subsidiary Guarantor to
participate in any payment or distribution pursuant to this Article 12, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Subsidiary Guarantor held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 12, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.13. TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to acknowledge
or effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness of each of the Subsidiary Guarantor as provided in this
Article 12 and appoints the Trustee as attorney-in-fact for any and all such
purposes.
SECTION 12.14. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF A SUBSIDIARY GUARANTOR. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness of a Subsidiary
Guarantor and shall not be liable to any such holders if it shall mistakenly pay
over or distribute to Securityholders or the relevant Subsidiary Guarantor or
any other Person, money or assets to which any holders of Senior Indebtedness of
such Subsidiary Guarantor shall be entitled by virtue of this Article 12 or
otherwise.
SECTION 12.15. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF A
SUBSIDIARY GUARANTOR ON SUBORDINATION PROVISIONS. Each Securityholder by
accepting a Security acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a
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consideration to each holder of any Senior Indebtedness of a Subsidiary
Guarantor, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE 13
Miscellaneous
-------------
SECTION 13.01. TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. NOTICES. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or any Subsidiary Guarantor:
Argo-Tech Corporation
00000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention of:
Chief Financial Officer
if to the Trustee:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attention of:
Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Security holder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
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Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Subsidiary Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA ss. 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
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(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. WHEN SECURITIES DISREGARDED. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 13.09. GOVERNING LAW. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 13.10. NO RECOURSE AGAINST OTHERS. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company or any
Subsidiary Guarantor under the Securities or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 13.11. SUCCESSORS. All agreements of the Company and each
Subsidiary Guarantor in this Indenture and
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the Securities shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 13.12. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 13.13. TABLE OF CONTENTS; HEADINGS. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ARGO-TECH CORPORATION,
by /s/ Xxxxxx Xxxxxx
----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
ARGO-TECH CORPORATION (HBP),
by /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
ARGO-TECH CORPORATION (OEM),
by /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
ARGO-TECH CORPORATION
(AFTERMARKET),
by /s/ Xxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
X.X. XXXXXX COMPANY, INC.,
by /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
XXXXXX BANK, as Trustee,
by /s/ Xxxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
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STATE OF OHIO )
) SS
COUNTY OF CUYAHOGA )
On September 26, 1997, before me personally came Xxxxxx Xxxxxx, to me
known, who, being by me duly sworn, did depose and say that he is the Vice
President and Treasurer of Argo-Tech Corporation, Argo-Tech Corporation (OEM),
Argo-Tech Corporation (Aftermarket), Argo-Tech Corporation (HBP), and XX Xxxxxx
Co., Inc., a Delaware corporation and that he signed his name thereto on
behalf of such corporation.
/s/ Xxxxx X. Xxxx
-----------------------------
Notary Public in and for the
State of Ohio
Name:
My commission expires:
August 19, 2001
-----------------------------
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STATE OF ILLINOIS )
) SS
COUNTY OF XXXX )
On September 24, 1997, before me personally came X. Xxxxxxxxx, to
me known, who, being by me duly sworn, did depose and say that she is Vice
President of Xxxxxx Trust and Savings Bank, a [state; nation] banking
corporation and that she signed her name thereto on behalf of such corporation.
/s/ X. Xxxxxxxxx
-----------------------------
Notary Public in and for the
State of New York
Name:
My commission expires:
5-21-01
-----------------------------
111
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
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 A NOMINEE OF THE
DEPOSITORY TO THE 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 ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR 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. (1)
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF
---------------------
(1) This paragraph should only be added if the Security is issued in global
form.
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2
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 FOR
SUCH SECURITIES FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR
SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN THE CASE OF ANY OF THE FOREGOING CLAUSES
(A) THROUGH (F), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
ARGO-TECH CORPORATION
8_% SENIOR SUBORDINATED NOTE DUE 2007
No. CUSIP No.
------- ---------
$
---------
ARGO-TECH CORPORATION, a Delaware corporation (the "Company"),
promises to pay to _________, or registered
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3
assigns, the principal sum of on October 1, 2007.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
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4
Additional provisions of this Security are set forth on the
other side of this Security.
Dated: September ___, 1997
ARGO-TECH CORPORATION,
by
-------------------------------------
Name:
Title:
by
-------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
XXXXXX TRUST AND SAVINGS BANK,
as Trustee, certifies that
this is one of the Securities [Seal]
referred to in the Indenture,
by
----------------------------
Authorized Signatory
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5
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
8_% Senior Subordinated Note due 2007
1. Interest
--------
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6
ARGO-TECH CORPORATION, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will use its best efforts to have the
Exchange Offer Registration Statement or, if applicable, the Shelf Registration
Statement (each a "Registration Statement") declared effective by the Commission
as promptly as practicable after the filing thereof. If (i) the Shelf
Registration Statement or the Exchange Offer Registration Statement, as
applicable, under the Exchange and Registration Rights Agreement is not filed
with the Commission on or prior to 30 days after the Issue Date, (ii) the
Exchange Offer Registration Statement or, as the case may be, the Shelf
Registration Statement, is not declared effective within 105 days after the
Issue Date (or in the case of a Shelf Registration Statement required to be
filed in response to a change in law or the applicable interpretation of the
Commission's staff, if later, within 30 days after publication of the law or
interpretation), (iii) the Exchange Offer is not consummated on or prior to 135
days after the Issue Date, or (iv) the Shelf Registration Statement is filed and
declared effective within 105 days after the Issue Date (or in the case of a
Shelf Registration Statement required to be filed in response to a change in law
or the applicable interpretation of the Commission's staff, if later, within 30
days after publication of the law or interpretation) but shall thereafter cease
to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 30 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company will pay
liquidated damages to each holder of Transfer Restricted Securities, during the
period of such Registration Default, in an amount equal to $0.192 per week per
$1,000 principal amount of the Securities constituting Transfer Restricted
Securities held by such holder until the applicable Registration Statement is
filed or declared effective, the Exchange Offer is consummated or the Shelf
Registration Statement again becomes effective, as the case may be. All accrued
liquidated damages shall be paid to holders in the same manner as interest
payments on the Securities on semi-annual payment dates that correspond to
interest payment dates for the Securities. Following the cure of all
Registration Defaults, the accrual of liquidated damages will cease. The Trustee
shall have no responsibility with respect to the
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determination of the amount of any such liquidated damages. For purposes of the
foregoing, "Transfer Restricted Securities" means each Initial Security until
(i) the date on which such Initial Security has been exchanged for a freely
transferable Exchange Security in the Exchange Offer, (ii) the date on which
such Initial Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iii) the
date on which such Initial Security is distributed to the public pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act.
The Company will pay interest and liquidated damages, if any,
semiannually on April 1 and October 1 of each year. Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from September 26, 1997. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) on
and liquidated damages, if any, in respect of the Securities to the Persons who
are registered holders of Securities at the close of business on the March 15 or
September 15 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, XXXXXX TRUST AND SAVINGS BANK, ("Trustee"), will
act as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar
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8
or co-registrar without notice to the Holders. The Company or any domestically
organized Wholly Owned Subsidiary may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as
of September 26, 1997 (the "Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the Act for a statement of those terms.
The Securities are unsecured senior subordinated obligations
of the Company limited to $140,000,000 aggregate principal amount at any one
time outstanding (subject to Section 2.07 of the Indenture). This Security is
one of the Initial Securities referred to in the Indenture. The Securities
include the Initial Securities and any Exchange Securities issued in exchange
for the Initial Securities pursuant to the Indenture. The Initial Securities and
the Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company and its Restricted
Subsidiaries and the redemption of certain Subordinated Obligations of the
Company and its Restricted Subsidiaries; Investments; sales of assets and
Capital Stock of Restricted Subsidiaries; certain transactions with Affiliates
of the Company; the sale or issuance of Capital Stock of the Restricted
Subsidiaries; the lines of business in which the Company and its Restricted
Subsidiaries may operate; Sale/Leaseback Transactions; and consolidations,
mergers and transfers of all or substantially all of the Company's assets. In
addition, the Indenture prohibits certain restrictions on distributions and
dividends from Restricted Subsidiaries.
119
9
5. Optional Redemption
-------------------
Except as set forth in the next paragraph, the Securities may
not be redeemed prior to October 1, 2002. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued interest (if any) to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date that is on or prior to the date of redemption),
if redeemed during the 12-month period beginning on or after October 1 of the
years set forth below:
Redemption
Period Price
------ ----------
2002......................................................... 104.313%
2003......................................................... 102.875%
2004......................................................... 101.438%
2005 and thereafter.......................................... 100.000%
Notwithstanding the foregoing, at any time prior to October
1, 2000, the Company may redeem in the aggregate up to 33_% of the original
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings by the Company following which there is a Public Market at a
redemption price (expressed as a percentage of principal amount) of 108.625%
plus accrued and unpaid interest (if any) to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date that is on or prior to the date of
redemption); PROVIDED, HOWEVER, that at least 66_% of the original aggregate
principal amount of the Securities must remain outstanding after each such
redemption.
6. Notice of Redemption
--------------------
120
10
Notice of redemption will 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 its registered address. In case of any
partial redemption, the Trustee shall select the Securities to be redeemed pro
rata or by lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee in its sole discretion
considers fair and appropriate and in accordance with methods generally used at
the time of selection by fiduciaries in similar circumstances. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest (if any) on all Securities (or portions thereof) to be redeemed
on the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Securities (or such portions thereof)
called for redemption.
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions set forth in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest (if any) to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of repurchase) as provided in, and subject to the terms of, the
Indenture.
121
11
8. Subordination
-------------
The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the
owner of it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
122
12
12. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of their obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any past default or noncompliance with any provision may be waived with
the consent of the Holders of a majority in principal amount then outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to make any change in Article 10 that would limit or terminate the benefits
available to any holder of Senior Indebtedness (or representative thereof) under
Article 10, or to add guarantees with respect to the Securities or to secure the
Securities, or to add additional covenants or surrender rights and powers
conferred on the Company, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any other change that
does not adversely affect the rights of any Securityholder or to provide for the
issuance and authorization of the Exchange Securities.
123
13
14. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities (whether or not such payment is
prohibited by Article 10); (ii) default in payment of principal on the
Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, or failure by the Company to redeem or purchase, upon declaration or
otherwise (whether or not such payment is prohibited by Article 10), Securities
when required; (iii) failure by the Company to comply with other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company or any
Significant Subsidiary if the amount accelerated (or so unpaid) exceeds
$5,000,000 or its foreign currency equivalent; (v) certain events of bankruptcy,
insolvency or reorganization with respect to the Company and the Significant
Subsidiaries; (vi) certain judgments or decrees for the payment of money in
excess of $5,000,000 or its foreign currency equivalent against the Company or a
Significant Subsidiary; and (vii) a Subsidiary Guarantee ceasing to be in full
force and effect (other than in accordance with its terms) or any Subsidiary
Guarantor denies or disaffirms its obligations under the Indenture or its
Subsidiary Guarantee and such Default continues for 30 days. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default that will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal, premium, if any, or interest)
if and so long as a committee of its Trust Officers in good faith determines
that withholding notice is in the interest of the Holders.
124
14
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, 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 and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, partner (including any general partner),
employee, incorporator or equityholder of the Company, as such, shall not have
any liability for any obligations 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. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. Governing Law
-------------
THE SECURITIES 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 LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. Authentication
--------------
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
125
15
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. CUSIP Numbers
--------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company have caused CUSIP numbers
to be printed on the Securities and have directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
ARGO-TECH CORPORATION
00000 XXXXXX XXXXXX
XXXXXXXXX, XX 00000-0000
ATTENTION OF CHIEF FINANCIAL OFFICER
126
16
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
-------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
-------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date: ________________ Your Signature: ________________________________________
Signature Guarantee:___________________________________________________________
(Signature must be guaranteed by a guarantee medallion
program)
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
127
17
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SECURITIES
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated
above);
[ ] has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration
statement under the Securities Act of 1933;
or
(3) [ ] inside the United States to a "qualified
institutional buyer" (as defined in Rule
144A under the Securities Act of 1933) that
purchases for its own account or for the
account of a qualified institutional buyer
to whom notice is given that such transfer
is being made
128
18
in reliance on Rule 144A under the
Securities Act, in each case pursuant to
and in compliance with Rule 144A under the
Securities Act of 1933; or
(4) [ ] outside the United States in an offshore
transaction within the meaning of Regulation
S under the Securities Act in compliance
with Rule 904 under the Securities Act of
1933; or
(5) [ ] to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933) that
has furnished to the Trustee a signed letter
containing certain representations and
agreements (the form of which letter is
attached to this Indenture as Exhibit F and
which may be obtained from the Trustee); or
(6) [ ] pursuant to another available exemption from
registration provided by Rule 144 under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate
in the name of any person other than the registered holder
thereof; PROVIDED, HOWEVER, that if box (4), (5) or (6) is
checked, the Trustee may require, prior to registering any
such transfer of the Securities, such legal opinions,
certifications and other information as 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 of 1933, such as the exemption provided by Rule 144 under
such Act.
------------------------
Signature
129
19
Signature Guarantee:
----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
130
20
TO BE COMPLETED BY PURCHASER IF (3) 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 of 1933 ("Rule 144A"), and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon 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
131
21
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal in Principal Amount this Global Security authorized officer
Amount of this of this Global following such of Trustee or
Global Security Security decrease or increase Securities Custodian
132
22
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture,
state the amount: $ .
------------------
Date: Your Signature:
-------------------- ---------------------------------------
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
133
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]
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 A NOMINEE OF THE
DEPOSITORY TO THE 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 ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR 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. (1)
ARGO-TECH CORPORATION
8_% SENIOR SUBORDINATED NOTE DUE 2007
No. # CUSIP No.
$
ARGO-TECH CORPORATION, a Delaware corporation (the "Company"),
promises to pay to , or registered assigns,
the principal sum of $ on October 1, 2007.
--------------------------
(1) This paragraph should only be added if the Security is issued in global
form.
134
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
135
3
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
ARGO-TECH CORPORATION,
by
---------------------------------------
Name:
Title:
by
---------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
XXXXXX TRUST AND SAVINGS
BANK, as Trustee,
certifies that this is [Seal]
one of the Securities
referred to in the
Indenture,
by
---------------------------
Authorized Signatory
136
4
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
8_% Senior Subordinated Note due 2007
1. Interest
--------
ARGO-TECH CORPORATION, a Delaware corporation (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 and liquidated damages, if any,
semiannually on April 1 and October 1 of each year. Interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from September 26, 1997. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) to
the Persons who are registered holders of Securities at the close of business on
the March 15 or September 15 next preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by check
payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, XXXXXX TRUST AND SAVINGS BANK ("Trustee"), will act
as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice to the Holders. The Company or
any domestically organized Wholly Owned Subsidiary may act as Paying Agent,
Registrar or co-registrar.
137
5
4. Indenture
---------
The Company issued the Securities under an Indenture dated as
of September 26, 1997 (the "Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the Act for a statement of those terms.
The Securities are unsecured senior subordinated obligations
of the Company limited to $140,000,000 aggregate principal amount at any one
time outstanding (subject to Section 2.07 of the Indenture). This Security is
one of the Exchange Securities referred to in the Indenture. The Securities
include the Initial Securities and any Exchange Securities issued in exchange
for the Initial Securities pursuant to the Indenture. The Initial Securities and
the Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries; the payment of
dividends on, and redemption of, Capital Stock of the Company and its Restricted
Subsidiaries and the redemption of certain Subordinated Obligations of the
Company and its Restricted Subsidiaries; Investments; sales of assets and
Capital Stock of Restricted Subsidiaries; certain transactions with Affiliates
of the Company; the sale or issuance of Capital Stock of the Restricted
Subsidiaries; the lines of business in which the Company and its Restricted
Subsidiaries may operate; Sale/Leaseback Transactions; and consolidations,
mergers and transfers of all or substantially all of the Company's assets. In
addition, the Indenture prohibits certain restrictions on distributions and
dividends from Restricted Subsidiaries.
5. Optional Redemption
-------------------
138
6
Except as set forth in the next paragraph, the Securities may
not be redeemed prior to October 1, 2002. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued interest (if any) to the redemption date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date that is on or prior to the date of redemption),
if redeemed during the 12-month period beginning on or after October 1 of the
years set forth below:
Redemption
Period Price
------ -----------
2002..................................................... 104.313%
2003..................................................... 102.875%
2004..................................................... 101.438%
2005 and thereafter...................................... 100.000%
Notwithstanding the foregoing, at any time prior to October
1, 2000, the Company may redeem in the aggregate up to 33_% of the original
aggregate principal amount of Securities with the proceeds of one or more Public
Equity Offerings by the Company following which there is a Public Market at a
redemption price (expressed as a percentage of principal amount) of 108.625%
plus accrued and unpaid interest (if any) to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date that is on or prior to the date of
redemption); PROVIDED, HOWEVER, that at least 66_% of the original aggregate
principal amount of the Securities must remain outstanding after each such
redemption.
6. Notice of Redemption
--------------------
139
7
Notice of redemption will 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 its registered address. In case of any
partial redemption, the Trustee shall select the Securities to be redeemed pro
rata or by lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee in its sole discretion
considers fair and appropriate and in accordance with methods generally used at
the time of selection by fiduciaries in similar circumstances. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest (if any) on all Securities (or portions thereof) to be redeemed
on the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Securities (or such portions thereof)
called for redemption.
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions set forth in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest (if any) to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of repurchase) as provided in, and subject to the terms of, the
Indenture.
140
8
8. Subordination
-------------
The Securities are subordinated to Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness of the Company must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements or transfer documents and to pay any
taxes required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to a selection of Securities to be redeemed or 15 days
before an interest payment date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the
owner of it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at their written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
141
9
12. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of their obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
------------------
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any past default or noncompliance with any provision may be waived with
the consent of the Holders of a majority in principal amount then outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to make any change in Article 10 that would limit or terminate the benefits
available to any holder of Senior Indebtedness (or representative thereof) under
Article 10, or to add guarantees with respect to the Securities or to secure the
Securities, or to add additional covenants or surrender rights and powers
conferred on the Company, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make certain changes in the
subordination provisions, or to make any change that does not adversely affect
the rights of any Securityholder.
142
10
14. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest on the Securities (whether or not such payment is
prohibited by Article 10); (ii) default in payment of principal on the
Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, or failure by the Company to redeem or purchase, upon declaration or
otherwise (whether or not such payment is prohibited by Article 10), Securities
when required; (iii) failure by the Company to comply with other agreements in
the Indenture or the Securities, in certain cases subject to notice and lapse of
time; (iv) certain accelerations (including failure to pay within any grace
period after final maturity) of other Indebtedness of the Company if the amount
accelerated (or so unpaid) exceeds $5,000,000 or its foreign currency
equivalent; (v) certain events of bankruptcy, insolvency or reorganization with
respect to the Company and the Significant Subsidiaries; (vi) certain judgments
or decrees for the payment of money in excess of $5,000,000 or its foreign
currency equivalent against the Company or a Significant Subsidiary; (vii) a
Subsidiary Guarantee ceasing to be in full force and effect (other than in
accordance with its terms) or any Subsidiary Guarantor denies or disaffirms its
obligations under the Indenture or its Subsidiary Guarantee and such Default
continues for 30 days. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default that will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal, premium, if any, or interest)
if and so long as a committee of its Trust Officers in good faith determines
that withholding notice is in the interest of the Holders.
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15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, 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 and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
--------------------------
A director, officer, partner (including any general partner),
employee, incorporator or equityholder of the Company, as such, shall not have
any liability for any obligations 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. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. Governing Law
-------------
THE SECURITIES 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 LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. Authentication
--------------
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
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Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company have caused CUSIP numbers
to be printed on the Securities and have directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
ARGO-TECH CORPORATION
00000 XXXXXX XXXXXX
XXXXXXXXX, XX 00000-0000
ATTENTION OF CHIEF FINANCIAL OFFICER
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13
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
-------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
-------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date: Your Signature:
----------------- -----------------------------------------
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
146
14
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Security authorized officer
of this Global of this Global following such of Trustee or
Security Security decrease or increase Securities Custodian
147
15
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased
by the Company pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 4.06 or 4.08 of the
Indenture, state the amount: $ _________.
Date: Your Signature:
-------------------- --------------------------------------
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
-----------------------------------------------------------
(Signature must be guaranteed by a participant in a
recognized signature guarantee medallion program)
148
EXHIBIT C
[FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS]
Transferee Letter of Representation
ARGO-TECH CORPORATION
c/o HARRIS TRUST AND SAVINGS BANK
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
This certificate is delivered to request a transfer of
$___,___,___ principal amount of the 8_% Senior Subordinated Notes due 2007 (the
"Securities") issued by Argo-Tech Corporation (the "Company").
Upon transfer, the Securities would be registered in the name
of the new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")) purchasing for our own account or for the account of
such an institutional "accredited investor" at least $250,000 principal amount
of the Securities and we are acquiring the Securities not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in
149
2
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities and invest in or purchase securities
similar to the Securities in the normal course of our business. We and any
accounts for which we are acting are each able to bear the economic risk of our
or its investment.
150
3
2. We understand that the Securities have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date that is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to
either of the Issuers, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) in a transaction complying with
the requirements of Rule 144A ("Rule 144A") under the Securities Act to a person
we reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB and to
whom notice is given that the transfer is being made in reliance on Rule 144A,
(d) pursuant to offers and sales that occur outside the United States within the
meaning of Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor", in each case in a
minimum principal amount of Securities of $250,000 or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Issuers and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to the offer, sale or other transfer
151
4
prior to the Resale Termination Date of the Securities pursuant to clause (d),
(e) or (f) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and the
Trustee.
TRANSFEREE:___________________
by _________________________
152
EXHIBIT D
[FORM OF CERTIFICATE TO BE DELIVERED
UPON TERMINATION OF RESTRICTED PERIOD]
[For use on or after _____________]
XXXXXX TRUST AND SAVINGS BANK
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
Re: Argo-Tech Corporation 8_% Senior Subordinated Notes due 2007 (the
"Securities").
Ladies and Gentlemen:
This letter relates to Securities represented by a temporary
global note certificate (the "Temporary Certificate"). Pursuant to Section 2.01
of the Indenture dated as of September 26, 1997 relating to the Securities (the
"Indenture"), we hereby certify that (1) we are the beneficial owner of $
principal amount of Initial Securities represented by the Temporary Certificate
and (2) we are a person outside the United States to whom the Initial Securities
could be transferred in accordance with Rule 904 of Regulation S promulgated
under the Securities Act of 1933, as amended. Accordingly, you are hereby
requested to issue a Certificated Security representing the undersigned's
interest in the principal amount of Initial Securities represented by the
Temporary Certificate, all in the manner provided by the Indenture.
153
2
The Company and you 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 Holder]
by
---------------------------------
Authorized Signatory
154
EXHIBIT E
[FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
PURSUANT TO RULE 144A]
XXXXXX TRUST AND SAVINGS BANK
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
Re: Argo-Tech Corporation (the "Company)
8_% Senior Subordinated Notes
due 2007 (the "Securities").
Ladies and Gentlemen:
In connection with our proposed sale of $_______ aggregate
principal amount at maturity of the Securities, we hereby certify that such
transfer is being effected pursuant to and in accordance with Rule 144A ("Rule
144A") under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we hereby further certify that the
Securities are being transferred to a person that we reasonably believe is
purchasing the Securities for its own account, or for one or more accounts with
respect to which such person exercises sole investment discretion, and such
person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Securities are being transferred in compliance with any applicable blue sky
or securities laws of any state of the United States.
155
2
The Company and you 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.
Very truly yours,
---------------------------------
[Name of Transferor]
by
-------------------------------
Authorized Signatory
156
EXHIBIT F
[FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S]
XXXXXX TRUST AND SAVINGS BANK
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
Re: Argo-Tech Corporation (the "Company") 8_% Senior
Subordinated Notes due 2007 (the "Securities").
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
157
2
(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; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
The Company and you 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 Signatory
