Exhibit 4.01
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FAIRFIELD MANUFACTURING COMPANY, INC.
and
FIRST UNION NATIONAL BANK,
as Trustee
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INDENTURE
Dated as of May 19, 1999
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$100,000,000
9-5/8% Senior Subordinated Notes due 2008
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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.
(a)(5)............................................................... N.A.
(b).................................................................. 7.08; 7.10; 12.02
(b)(1)............................................................... 7.10
(c).................................................................. N.A.
311 (a).................................................................. 7.11
(b).................................................................. 7.11
(c).................................................................. N.A.
312 (a).................................................................. 2.06
(b).................................................................. 12.03
(c).................................................................. 12.03
313 (a).................................................................. 7.06
(b)(1)............................................................... N.A.
(b)(2)............................................................... 7.06
(c).................................................................. 7.06; 12.02
(d).................................................................. 7.06
314 (a).................................................................. 4.02; 4.04; 12.02
(b).................................................................. N.A.
(c)(1)............................................................... 12.04
(c)(2)............................................................... 12.04
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e).................................................................. 12.05
(f).................................................................. N.A.
315 (a).................................................................. 7.01(b)
(b).................................................................. 7.05; 12.02
(c).................................................................. 7.01(a)
(d).................................................................. 7.01(c)
(e).................................................................. 6.12
316 (a) (last sentence).................................................. 2.10
(a)(1)(A)............................................................ 6.05
(a)(1)(B)............................................................ 6.04
(a)(2)............................................................... N.A.
(b).................................................................. 6.08
(c).................................................................. 8.04
317 (a)(1)............................................................... 6.09
(a)(2)............................................................... 6.10
(b).................................................................. 2.05; 7.12
318 (a).................................................................. 12.01
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..........................................................................1
SECTION 1.02. Other Definitions...................................................................39
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...................................40
SECTION 1.04. Rules of Construction...............................................................40
ARTICLE TWO
THE NOTES
SECTION 2.01. Amount of Notes.....................................................................41
SECTION 2.02. Form and Dating.....................................................................42
SECTION 2.03. Execution and Authentication........................................................42
SECTION 2.04. Registrar and Paying Agent..........................................................43
SECTION 2.05. Paying Agent To Hold Money in Trust.................................................44
SECTION 2.06. Noteholder Lists....................................................................45
SECTION 2.07. Transfer and Exchange...............................................................45
SECTION 2.08. Replacement Notes...................................................................46
SECTION 2.09. Outstanding Notes...................................................................46
SECTION 2.10. Treasury Notes......................................................................47
SECTION 2.11. Temporary Notes.....................................................................47
SECTION 2.12. Cancellation........................................................................47
SECTION 2.13. Defaulted Interest..................................................................48
SECTION 2.14. CUSIP Number........................................................................48
SECTION 2.15. Deposit of Moneys...................................................................48
SECTION 2.16. Book-Entry Provisions for Global Notes..............................................49
SECTION 2.17. Special Transfer Provisions.........................................................51
SECTION 2.18. Computation of Interest.............................................................53
ARTICLE THREE
REDEMPTION
SECTION 3.01. Election To Redeem; Notices to Trustee..............................................53
SECTION 3.02. Selection by Trustee of Notes To Be Redeemed........................................54
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SECTION 3.03. Notice of Redemption................................................................54
SECTION 3.04. Effect of Notice of Redemption......................................................55
SECTION 3.05. Deposit of Redemption Price.........................................................55
SECTION 3.06. Notes Redeemed in Part..............................................................56
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes....................................................................56
SECTION 4.02. Reports to Holders..................................................................56
SECTION 4.03. Waiver of Stay, Extension or Usury Laws.............................................57
SECTION 4.04. Compliance Certificate..............................................................57
SECTION 4.05. Taxes...............................................................................58
SECTION 4.06. Limitation on Additional Indebtedness...............................................58
SECTION 4.07. Limitation on Other Subordinated Indebtedness.......................................58
SECTION 4.08. Limitation on Restricted Payments...................................................59
SECTION 4.09. Limitation on Asset Sales...........................................................62
SECTION 4.10. Limitation on Transactions with Affiliates..........................................65
SECTION 4.11. Limitations on Liens................................................................66
SECTION 4.12. [Intentionally Omitted].............................................................67
SECTION 4.13. Limitation on Creation of Subsidiaries..............................................67
SECTION 4.14. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries..........................................................68
SECTION 4.15. [Intentionally Omitted].............................................................70
SECTION 4.16. Limitation on Preferred Stock of Restricted Subsidiaries............................70
SECTION 4.17. Limitation on Guarantees by Restricted Subsidiaries.................................70
SECTION 4.18. Maintenance of Office or Agency.....................................................71
SECTION 4.19. Legal Existence.....................................................................72
SECTION 4.20. Change of Control Offer.............................................................72
SECTION 4.21. Maintenance of Properties; Insurance; Compliance with Law...........................75
SECTION 4.22. Further Assurance to the Trustee....................................................76
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Limitation on Consolidation, Merger and Sale of Assets..............................76
SECTION 5.02. Successor Person Substituted........................................................77
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ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default...................................................................78
SECTION 6.02. Acceleration........................................................................80
SECTION 6.03. Other Remedies......................................................................81
SECTION 6.04. Waiver of Past Defaults and Events of Default.......................................81
SECTION 6.05. Control by Majority.................................................................81
SECTION 6.06. Limitation on Suits.................................................................82
SECTION 6.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.......................................................82
SECTION 6.08. Rights of Holders To Receive Payment................................................83
SECTION 6.09. Collection Suit by Trustee..........................................................83
SECTION 6.10. Trustee May File Proofs of Claim....................................................83
SECTION 6.11. Priorities..........................................................................84
SECTION 6.12. Undertaking for Costs...............................................................84
SECTION 6.13. Restoration of Rights and Remedies..................................................84
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee...................................................................85
SECTION 7.02. Rights of Trustee...................................................................86
SECTION 7.03. Individual Rights of Trustee........................................................87
SECTION 7.04. Trustee's Disclaimer................................................................87
SECTION 7.05. Notice of Defaults..................................................................87
SECTION 7.06. Reports by Trustee to Holders.......................................................88
SECTION 7.07. Compensation and Indemnity..........................................................88
SECTION 7.08. Replacement of Trustee..............................................................89
SECTION 7.09. Successor Trustee by Consolidation, Merger, etc.....................................90
SECTION 7.10. Eligibility; Disqualification.......................................................90
SECTION 7.11. Preferential Collection of Claims Against Company...................................90
SECTION 7.12. Paying Agents.......................................................................90
ARTICLE EIGHT
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01. Without Consent of Holders..........................................................91
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SECTION 8.02. With Consent of Holders.............................................................92
SECTION 8.03. Compliance with Trust Indenture Act.................................................94
SECTION 8.04. Revocation and Effect of Consents...................................................94
SECTION 8.05. Notation on or Exchange of Notes....................................................94
SECTION 8.06. Trustee To Sign Amendments, etc.....................................................95
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Discharge of Indenture..............................................................95
SECTION 9.02. Legal Defeasance....................................................................96
SECTION 9.03. Covenant Defeasance.................................................................96
SECTION 9.04. Conditions to Defeasance or Covenant Defeasance.....................................97
SECTION 9.05. Deposited Money and U.S. Government Obligations
To Be Held in Trust; Other Miscellaneous Provisions..............................99
SECTION 9.06. Reinstatement.......................................................................99
SECTION 9.07. Moneys Held by Paying Agent........................................................100
SECTION 9.08. Moneys Held by Trustee.............................................................100
ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01. Guarantee..........................................................................101
SECTION 10.02. Execution and Delivery of Guarantee................................................102
SECTION 10.03. Limitation of Guarantee............................................................103
SECTION 10.04. Additional Guarantors..............................................................103
SECTION 10.05. Release of Guarantor...............................................................103
SECTION 10.06. Subordination of Subrogation and Other Rights; Subrogation.........................104
SECTION 10.07. Guarantee Obligations Subordinated to Guarantor Senior Indebtedness................105
SECTION 10.08. Payment Over of Proceeds upon Dissolution, etc., of a Guarantor....................105
SECTION 10.09. Suspension of Guarantee Obligations When Guarantor Senior
Indebtedness in Default.........................................................107
SECTION 10.10. Trustee's Relation to Guarantor Senior Indebtedness................................109
SECTION 10.11. Subrogation to Rights of Holders of Guarantor Senior Indebtedness..................109
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SECTION 10.12. Guarantee Subordination Provisions Solely To Define Relative Rights................110
SECTION 10.13. Trustee To Effectuate Subordination................................................110
SECTION 10.14. Notice to Trustee..................................................................111
SECTION 10.15. Rights of Trustee as a Holder of Guarantor Senior Indebtedness;
Preservation of Trustee's Rights................................................112
SECTION 10.16. Application of Certain Article Eleven Provisions...................................112
ARTICLE ELEVEN
SUBORDINATION OF NOTES
SECTION 11.01. Notes Subordinate to Senior Indebtedness...........................................113
SECTION 11.02. Payment Over of Proceeds upon Dissolution, etc.....................................113
SECTION 11.03. Suspension of Payment When Senior Indebtedness in Default..........................114
SECTION 11.04. Trustee's Relation to Senior Indebtedness..........................................116
SECTION 11.05. Subrogation to Rights of Holders of Senior Indebtedness............................117
SECTION 11.06. Provisions Solely To Define Relative Rights........................................117
SECTION 11.07. Trustee to Effectuate Subordination................................................118
SECTION 11.08. No Waiver of Subordination Provisions..............................................118
SECTION 11.09. Notice to Trustee..................................................................119
SECTION 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent.....................120
SECTION 11.11. Rights of Trustee as a Holder of Senior Indebtedness; Preservation
of Trustee's Rights.............................................................121
SECTION 11.12. Article Applicable to Paying Agents................................................121
SECTION 11.13. No Suspension of Remedies..........................................................121
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.......................................................121
SECTION 12.02. Notices............................................................................122
SECTION 12.03. Communications by Holders with Other Holders.......................................123
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.................................123
SECTION 12.05. Statements Required in Certificate and Opinion.....................................124
SECTION 12.06. Rules by Trustee and Agents........................................................124
SECTION 12.07. Business Days; Legal Holidays......................................................125
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SECTION 12.08. Governing Law......................................................................125
SECTION 12.09. No Adverse Interpretation of Other Agreements......................................125
SECTION 12.10. No Recourse Against Others.........................................................125
SECTION 12.11. Successors.........................................................................126
SECTION 12.12. Multiple Counterparts..............................................................126
SECTION 12.13. Table of Contents, Headings, etc...................................................126
SECTION 12.14. Separability.......................................................................126
EXHIBITS
Exhibit A. Form of Note.......................................................................A-1
Exhibit B. Form of Legend for Rule 144A Notes and Other Notes that are
Restricted Notes................................................................B-1
Exhibit C. Form of Legend for Regulation S Note...............................................C-1
Exhibit D. Form of Legend for Global Note.....................................................D-1
Exhibit E. Form of Certificate To Be Delivered in Connection with Transfers to
Non-QIB Accredited Investors....................................................E-1
Exhibit F. Form of Certificate To Be Delivered in Connection with Transfers
Pursuant to Regulation S........................................................F-1
Exhibit G. Form of Guarantee..................................................................G-1
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INDENTURE, dated as of May 19, 1999, between FAIRFIELD
MANUFACTURING COMPANY, INC., a Delaware corporation, as issuer (the "Company"),
and FIRST UNION NATIONAL BANK, a national banking association organized under
the laws of the United States of America, as trustee (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 Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person
(including an Unrestricted Subsidiary) existing at the time such Person becomes
a Restricted Subsidiary or is merged into or consolidated with any other Person
or which is assumed in connection with the acquisition of assets from such
Person and, in each case, not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
or such merger, consolidation or acquisition; provided that Indebtedness of such
Person which is redeemed, defeased, retired or otherwise repaid at the time of
or immediately upon consummation of such merger, consolidation or acquisition
shall not be Acquired Indebtedness.
"Additional Interest" has the meaning provided in Section 4(a)
of the Registration Rights Agreement.
"Additional Notes" means not less than $25.0 million per
series in aggregate principal amount of Notes (other than the Initial Notes)
issued under this Indenture from time to time in accordance with Sections 2.01,
2.02 and 4.06 hereof.
"Affiliate" means, with respect to any specific Person, any
other Person that directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by," and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided that, for purposes of the
covenant described under Section 4.10
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beneficial ownership of at least 10% of the voting securities of a Person,
either directly or indirectly, shall be deemed to be control.
"Agent" means any Registrar, Paying Agent, or agent for
service or notices and demands.
"amend" means amend, modify, supplement, restate or amend and
restate, including successively; and "amending" and "amended" have correlative
meanings.
"Asset Acquisition" means
(1) an Investment by the Company or any Restricted Subsidiary
of the Company in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of the Company, or shall be merged with
or into the Company or any Restricted Subsidiary of the Company, or
(2) the acquisition by the Company or any Restricted
Subsidiary of the Company of the assets of any person which constitute
all or substantially all of the assets of such person or any division
or line of business of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer,
lease or other disposition, other than to the Company or a Restricted Subsidiary
of the Company, in one or a series of related transactions, of:
(1) any Capital Stock in any Restricted Subsidiary of the
Company;
(2) all or substantially all of the properties and assets of
any division or line of business of the Company or any Restricted
Subsidiary of the Company; or
(3) any other properties or assets of the Company or any
Restricted Subsidiary (including proprietary brand names, whether
registered or otherwise) other than in the ordinary course of business
(it being understood that the sale or lease of any used or obsolete
equipment, damaged equipment or equipment unsuitable for the Company's
business or any sale of any of the Company's products is in the
ordinary course of business) thereof.
For purposes of this definition, the term Asset Sales shall
not include:
(A) any sale, issuance, conveyance, transfer, lease or other
disposition, of properties or assets that is governed by the provisions
described under Section 5.01;
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(B) any sale, issuance, conveyance, transfer, lease or other
disposition of properties or assets, whether in one transaction or a
series of related transactions, involving assets with a fair market
value determined by the Company to be not in excess of $1.0 million;
(C) any Restricted Payment made in compliance with Section
4.08, and any disposition of any Permitted Investment;
(D) surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claims of any kind;
(E) the licensing of intellectual property;
(F) any Sale-Leaseback Transaction; and
(G) any Permitted Receivables Financing.
"Asset Sale Proceeds" means, with respect to any Asset Sale:
(1) cash received by the Company or any Restricted Subsidiary
of the Company from such Asset Sale, after
(a) provision for all income or other taxes measured
by or resulting from such Asset Sale,
(b) payment of all brokerage commissions,
underwriting and other fees and expenses, including, without
limitation, legal, accounting, investment advisory and
appraisal fees, related to such Asset Sale,
(c) provision for minority interest holders in any
Restricted Subsidiary of the Company as a result of such Asset
Sale,
(d) repayment of Indebtedness that is required to be
repaid in connection with such Asset Sale or is secured by a
Lien on the property or assets sold, and
(e) deduction of appropriate amounts to be provided
by the Company or a Restricted Subsidiary of the Company as a
reserve, in accordance with GAAP, against any liabilities
associated with the assets sold or disposed of in such Asset
Sale and retained by the Company or a Restricted Subsidiary
after such Asset Sale, including, without limitation, pension,
severance, relocation and other post-employment benefit
liabilities and liabilities related to
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environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in
such Asset Sale; and
(2) promissory notes and other noncash consideration received
by the Company or any Restricted Subsidiary of the Company from such
Asset Sale or other disposition upon the liquidation or conversion of
such notes or noncash consideration into cash, net of any fees,
discounts, commissions or taxes paid or payable as a result of such
conversion or liquidation.
"Available Asset Sale Proceeds" means, with respect to any
Asset Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have not
been applied in accordance with clauses (3)(a) or (3)(b), and which have not yet
been the basis for an Excess Proceeds Offer in accordance with clause (3)(c) of
the first paragraph of Section 4.09.
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy" or any other law relating to bankruptcy, insolvency,
winding up, liquidation, reorganization or relief of debtors, whether in effect
on the date hereof or hereafter.
"Board of Directors" means (i) in the case of a Person that is
a corporation, the board of directors of such Person or any committee authorized
to act therefor, (ii) in the case of a Person that is a limited partnership, the
board of directors of its corporate general partner or any committee authorized
to act therefor (or, if the general partner is itself a limited partnership, the
board of directors of such general partner's corporate general partner or any
committee authorized to act therefor) and (iii) in the case of any other Person,
the board of directors, management committee or similar governing body or any
authorized committee thereof responsible for the management of the business and
affairs of such Person.
"Board Resolution" means a copy of a resolution certified
pursuant to an Officers' Certificate to have been duly adopted by the Board of
Directors of the Company and to be in full force and effect, and delivered to
the Trustee.
"Capital Stock" means
(1) with respect to any Person that is a corporation, any and
all shares, interests, participations or other equivalents (however
designated) of capital stock, including each class of common stock and
preferred stock of such Person and
(2) with respect to any Person that is not a corporation, any
and all partnership or other equity interests.
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"Capital Lease Obligation" means, any obligation under a lease
of (or other agreement conveying the right to use) any property (whether real,
personal or mixed) that is required to be classified and accounted for as a
capital lease obligation under GAAP; and, for the purpose of this definition,
the amount of such obligation at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP consistently applied.
"Cash Equivalents" means at any time:
(1) any evidence of Indebtedness with a maturity of 365 days
or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of
America is pledged in support thereof);
(2) certificates of deposit, time deposits, Eurodollar time
deposits and bankers' acceptances with a maturity of 365 days or less
of any financial institution that is a member of the Federal Reserve
System having combined capital and surplus and undivided profits at the
time of investment of not less than $500,000,000;
(3) commercial paper with a maturity of 365 days or less
issued by a corporation that is not an Affiliate of the Company
organized under the laws of any state of the United States or the
District of Columbia and rated at the time of investment at least A-1
by S&P or at least P-1 by Xxxxx'x or at least an equivalent rating
category of another nationally recognized securities rating agency;
(4) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally
guaranteed by the government of the United States of America or issued
by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within 365 days from
the date of acquisition; provided that the terms of such agreements
comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions With Securities Dealers and
Others, as adopted by the Comptroller of the Currency on October 31,
1985; and
(5) investments in money market funds with assets of $5.0
million or greater.
"Certificate of Designation" means the certificate of
designation of the powers, preferences and relative, participating, optional and
other special rights of the Existing Preferred Stock.
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"Change of Control" means the occurrence of any of the
following events:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), excluding Permitted
Holders, is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly,
of more than 50% of the total Voting Stock of the Company;
(b) the Company consolidates with, or merges with or into,
another person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any
person, or any person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is converted into or exchanged
for cash, securities or other property, other than any such transaction
where (i) the outstanding Voting Stock of the Company is converted into
or exchanged for (1) Voting Stock (other than Disqualified Capital
Stock) of the surviving or transferee corporation or (2) cash,
securities and other property in an amount which could be paid by the
Company as a Restricted Payment under the Indenture and (ii)
immediately after such transaction no "person" or "group"(as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person shall be deemed
to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than
50% of the total Voting Stock of the surviving or transferee
corporation; or
(c) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board
of Directors or whose nomination for election by the stockholders of
the Company was approved by either (x) the Permitted Holders or (y) a
vote of 66-2/3% of the directors then still in office who were either
directors at the beginning of such period or persons whose election as
directors or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of
the Company then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Common Stock" with respect to any person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of, such person's common stock, whether
outstanding at the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
"Commission" means the Securities and Exchange Commission.
"Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces such party pursuant to Article Five
of this Indenture and thereafter means the successor.
"Company Request" means any written request signed in the name
of the Company by the Chairman of the Board of Directors, the Chief Executive
Officer, the President, any Vice President, the Chief Financial Officer or the
Treasurer of the Company and attested to by the Secretary or any Assistant
Secretary of the Company.
"Consolidated EBITDA" means, with respect to any person for
any period, (i) the sum of, without duplication, the amount for such period,
taken as a single accounting period, of (a) Consolidated Net Income, (b)
Consolidated Non-cash Charges, (c) Consolidated Interest Expense, (d)
Consolidated Income Tax Expense and (e) all non-cash accruals or cash expenses
relating to the Equity Incentive Plan (to the extent such accruals or expenses
reduce net income), less (ii) non-cash items increasing Consolidated Net Income
(other than in the ordinary course of business); provided, however, that if,
during such period, such person or any of its Restricted Subsidiaries shall have
consummated any Asset Sale or Asset Acquisition, Consolidated EBITDA for such
person and its Restricted Subsidiaries for such period shall be adjusted (in the
manner set forth in the definition of the term "Consolidated Fixed Charge
Coverage Ratio") to give pro forma effect to the Consolidated EBITDA directly
attributable to the assets which are the subject of such Asset Sales or Asset
Acquisitions during such period.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any Person, the ratio of the aggregate amount of Consolidated EBITDA of such
Person during the four full fiscal quarters for which financial information is
available (the "Four Quarter Period") ending on or prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio (the "Transaction Date") to the aggregate amount of Consolidated
Fixed Charges of such person for the Four Quarter Period. In addition to and
without limitation of the foregoing, for purposes of this definition
"Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma basis for the period of such calculation to
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(1) the incurrence of any Indebtedness of such person or any
of its Restricted Subsidiaries, or the repayment of any Indebtedness of
such person or its Restricted Subsidiary (other than the incurrence and
repayment of Indebtedness under a revolving credit facility) during the
period commencing on the first day of the Four Quarter Period to and
including the Transaction Date (the "Reference Period") and the
discharge of any other Indebtedness repaid, repurchased or otherwise
discharged with as if the discharge had occurred on the first day of
the Reference Period, including, without limitation, the incurrence of
the Indebtedness giving rise to the need to make such calculation, as
if such incurrence occurred on the first day of the Reference Period,
and
(2) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary
as a result of the Asset Acquisition) incurring, assuming or otherwise
being liable for Acquired Indebtedness) occurring during the Reference
Period, as if such Asset Sale or Asset Acquisition (including any
Consolidated EBITDA associated with such Asset Acquisition and
including any pro forma expense and cost reductions determined in
accordance with Article 11 of Regulation S-X relating to such Asset
Acquisition) occurred on the first day of the Reference Period.
Furthermore, in calculating "Consolidated Fixed Charges" for
purposes of determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio":
(1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to
be so determined thereafter shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date;
(2) if interest on any Indebtedness actually incurred on the
Transaction Date may optionally be determined at an interest rate based
upon a factor of a prime or similar rate, a eurocurrency interbank
offered rate, or other rates, then the interest rate in effect on the
Transaction Date will be deemed to have been in effect during the
Reference Period;
(3) notwithstanding clauses (1) and (2) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by Interest Rate Agreements, shall be deemed to
have accrued at the rate per annum resulting after giving effect to the
operation of such agreements; and
-9-
(4) interest on any Indebtedness incurred pursuant to a
revolving credit facility will be based on the average monthly
principal amount outstanding under such facility during such Four
Quarter Period. In calculating the Consolidated Fixed Charge Coverage
Ratio, and giving pro forma effect to any incurrence of Indebtedness
during a Reference Period, pro forma effect shall be given to the use
of proceeds thereof to permanently repay or retire Indebtedness.
If such Person or any of its Restricted Subsidiaries directly
or indirectly guaranteed Indebtedness of a third person, the above clauses shall
give effect to the incurrence of such guaranteed Indebtedness as if such person
or such Restricted Subsidiary had directly incurred or otherwise assumed such
guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the sum, without duplication, of
(i) Consolidated Interest Expense, plus
(ii) the aggregate amount of cash dividends and other
distributions paid or accrued during such period in respect of
Disqualified Capital Stock of such Person and its Restricted
Subsidiaries on a consolidated basis, plus
(iii) the product of (a) all dividend accruals, whether or not
paid or payable in cash, during such period on any Disqualified Capital
Stock of the Company or any of its Restricted Subsidiaries, and on any
Preferred Stock of Restricted Subsidiaries of the Company, times (b) a
fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory
tax rate of the Company, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP, plus
(iv) the product of (a) all dividends actually paid, whether
paid in cash or in any other consideration (but excluding any dividends
to the extent paid through the issuance of additional shares of
Qualified Capital Stock of the Company), during such period with
respect to any Designated Preferred Stock of the Company, times (b) a
fraction, the numerator of which is one and the denominator of which is
one minus the then current combined federal, state and local statutory
tax rate of the Company, expressed as a decimal, in each on a
consolidated basis in accordance with GAAP.
"Consolidated Income Tax Expense" means, with respect to any
Person for any period, the provision for federal, state, local and foreign
income taxes of such person
-10-
and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, with respect to any
Person, for any period, without duplication,
(1) the sum of
(a) the interest expense of such Person and its
Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP consistently
applied, including, without limitation,
(i) any amortization of debt discount,
(ii) the net cost under Interest Rate Agreements
(including any amortization of discounts),
(iii) the interest portion of any deferred payment
obligation which in accordance with GAAP is required to be
reflected on an income statement,
(iv) all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers'
acceptance financing,
(v) all accrued interest,
(vi) interest-equivalent costs associated with any
Permitted Receivables Financing, whether accounted for as
interest expense or loss on the sale of Receivables and
Related Assets, and
(b) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such person and
its Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP consistently applied, minus,
(2) any non-cash interest expense of the Company in respect of
Permitted Indebtedness incurred in connection with the Equity Incentive
Plan, minus
(3) any amortization of deferred financing discount costs and
expenses.
-11-
"Consolidated Net Income" means, with respect to any Person,
for any period, the consolidated net income (or loss) of such Person and its
Restricted Subsidiaries for such period determined in accordance with GAAP
consistently applied, adjusted:
(a) to the extent included in calculating such net income, by
excluding, without duplication,
(1) all extraordinary gains and losses, non-recurring
cumulative effect of accounting changes and, without
duplication, non-recurring or unusual gains and losses and all
restructuring charges,
(2) the portion of net income (or loss) of such
person and its Restricted Subsidiaries allocable to minority
interests in unconsolidated persons to the extent that cash
dividends or distributions have not actually been received by
such person or one of its Restricted Subsidiaries,
(3) solely for purposes of determining the aggregate
amount available for Restricted Payments under clause (3) of
Section 4.08, net income (or loss) of any person combined with
such person or one of its Restricted Subsidiaries on a
"pooling of interests" basis attributable to any period prior
to the date of combination,
(4) one time unusual non-cash charges,
(5) any gain or loss realized upon the termination of
any employee pension benefit plan, on an after-tax basis,
(6) gains or losses in respect of any Asset Sales
(without giving effect to clause (B) under the definition of
Asset Sale) by such person or one of its Restricted
Subsidiaries (net of fees and expenses relating to the
transaction giving rise thereto), on an after-tax basis,
(7) the net income of any Restricted Subsidiary that
is not a Guarantor of such person to the extent that the
declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulations applicable to
that Subsidiary or its stockholders, and
(8) the amount of any Consolidated Non-cash Charges
attributable to applying the purchase method of accounting in
accordance with GAAP; and
-12-
(b) by adding, in the case of the Company,
(1) without duplication, capital contributions made
by Lancer to the Company pursuant to the Tax Sharing Agreement
to the extent such capital contributions represent a return to
the Company of amounts which had been included as income taxes
in computing the Company's Consolidated Net Income and
(2) 100% (without duplication) of all non-cash
accruals or cash expenses relating to the Equity Participation
Plan or Equity Incentive Plan (to the extent such accruals or
expenses reduce net income).
"Consolidated Non-cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization and other
non-cash expenses (including, without limitation, non-cash reserves and non-cash
charges) of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied.
"Corporate Trust Office" means the corporate trust office of
the Trustee designated by the Trustee for purposes of this Indenture. The
Trustee initially designates its Charlotte, North Carolina office for purposes
of transfers and exchanges.
"Credit Agreement" means:
(a) the Senior Credit Facility, together with all amendments,
documents and instruments from time to time delivered in connection
with the Senior Credit Facility (including, without limitation, any
guaranty agreements and security documents), as in effect on the date
hereof and as the Senior Credit Facility and such other agreements,
documents and instruments may be amended, amended and restated,
refunded, refinanced, replaced, repaid, renewed, extended,
restructured, supplemented or otherwise modified from time to time; and
(b) any credit agreement, loan agreement, note purchase
agreement, indenture or other agreement, document or instrument
refinancing, refunding or otherwise replacing the Senior Credit
Facility or any other agreement deemed a Credit Agreement under clause
(a) hereof or under this clause (b) whether or not with the same agent,
trustee, representative lenders or holders, and irrespective of any
changes in the terms and conditions thereof.
-13-
Without limiting the generality of the foregoing, the term
"Credit Agreement" shall include any amendment, amendment and restatement,
renewal, extension, restructuring, supplement or modification to any agreement
deemed a Credit Agreement under clause (a) or (b) hereof, and all refundings,
refinancings and replacements of any Credit Agreement, including any agreement
(i) changing the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (ii) adding or deleting borrowers or guarantors
thereunder, so long as borrowers and guarantors include one or more of the
Company and its Subsidiaries and their respective successors and assigns, and
(iii) increasing the amount of Indebtedness incurred thereunder or available to
be borrowed thereunder.
"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"Depository" means, with respect to the Notes issued in the
form of one or more Global Notes, The Depository Trust Company or another Person
designated as Depository by the Company, which Person must be a clearing agency
registered under the Exchange Act.
"Designated Preferred Stock" means Preferred Stock (not
constituting Disqualified Capital Stock) of the Company (excluding the Existing
Preferred Stock, any other Preferred Stock issued on or prior to the Issue Date
and any Preferred Stock issued in exchange or substitution for any of the
foregoing) that is designated as Designated Preferred Stock pursuant to an
officer's certificate executed by the principal executive officer or the
principal financial officer of the Company, on the issuance date thereof, the
cash proceeds of which are excluded from the calculation set forth in the clause
(3)(b) of Section 4.08.
"Designated Senior Indebtedness" as to the Company or any
Guarantor, as the case may be, means:
(1) any Senior Indebtedness under the Credit Agreement; and
(2) any other Senior Indebtedness which at the time of
determination exceeds $15.0 million in aggregate principal amount (or
accreted value in the case of Indebtedness issued at a discount)
outstanding or available under a committed facility, which is
specifically designated in the instrument evidencing such Senior
Indebtedness as "Designated Senior Indebtedness" by such Person and as
to which the Trustee has been given written notice of such designation.
"Disinterested Director" means a member of the Board of
Directors of the Company who does not have any direct or indirect financial
interest in or with respect to the transaction being considered.
-14-
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Capital Stock" means any Capital Stock of a
Person or a Restricted Subsidiary thereof which, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable at
the option of the holder), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable solely at the option of the holder thereof, in whole or in part,
on or prior to the maturity date of the Notes, for cash or securities
constituting Indebtedness; provided, however, that Capital Stock of a Person or
any Restricted Subsidiary thereof that is issued with the benefit of provisions
requiring an offer to be made for such Preferred Stock in the event of a change
of control of or asset sale by such Person or Restricted Subsidiary, which
provisions have substantially the same effect as the provisions of this
Indenture described under Section 4.20 and Section 4.09, shall not be deemed to
be Disqualified Capital Stock solely by virtue of such provisions; provided,
further, that if such Capital Stock is issued pursuant to any plan for the
benefit of employees of the Company or its Subsidiaries or by any such plan to
such employees, such Capital Stock shall not constitute Disqualified Capital
Stock solely because it may be required to be repurchased by the Company in
order to satisfy applicable statutory or regulatory obligations.
"Equity Incentive Plan" means any long-term incentive
compensation plan (other than the Equity Participation Plan) adopted by the
Company covering the Company's executives and selected other key management
employees, as such plans may be amended from time to time by the Board of
Directors of the Company pursuant to their terms.
"Equity Participation Plan" means the Fairfield Manufacturing
Company, Inc. Equity Participation Plan, as such plan may be amended from time
to time.
"Exchange Act" means the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder.
"Exchange Date" means the date of original issuance of the
Exchange Debentures.
"Exchange Notes" has the meaning provided in the Registration
Rights Agreement.
"Exchange Debentures" means the Company's 11 1/4% Subordinated
Exchange Debentures due 2009 issuable in exchange for the Existing Preferred
Stock.
-15-
"Existing Indenture" means the indenture pursuant to which the
Existing Notes were issued.
"Existing Notes" means the Company's 11 3/8% Senior
Subordinated Notes due 2001.
"Existing Preferred Stock" means the Company's 11 1/4%
Cumulative Exchangeable Preferred Stock, par value $.01 per share.
"Event of Default" has the meaning set forth under Section
6.01.
"fair market value" means, with respect to any asset or
property, the price, taking into account any liabilities, which could be
negotiated in an arm's-length, free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair market value shall be
determined by the Board of Directors of the Company acting reasonably and in
good faith and shall be evidenced by a resolution of the Board of Directors of
the Company delivered to the Trustee.
"Final Maturity Date" means October 15, 2008.
"Financing Documents" means this Indenture, the Registration
Rights Agreement and the Notes.
"GAAP" means generally accepted accounting principles in the
United States applicable as of the Issue Date.
"Governmental Authority" shall mean any government or
political subdivision of the United States or any other country or any agency,
authority, board, bureau, central bank, securities exchange, commission,
department or instrumentality thereof or therein, including any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic, or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to such government or political subdivision.
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
-16-
"Guarantee" means the guarantee of the Obligations of the
Company with respect to the Notes by each Guarantor.
"Guarantor" means the issuer at any time of a Guarantee (so
long as such Guarantee remains outstanding).
"Guarantor Senior Indebtedness" means, with respect to any
Guarantor, the principal of and premium, if any, and interest on, and any and
all other fees, expense reimbursement obligations and other amounts due pursuant
to the terms of all agreements, documents and instruments providing for,
creating, securing or evidencing or otherwise entered into in connection with:
(1) all Indebtedness of such Guarantor owed to lenders under
the Credit Agreement or Designated Senior Indebtedness;
(2) all obligations of such Guarantor with respect to any
Hedging Obligations;
(3) all obligations of such Guarantor to reimburse any bank or
other person in respect of amounts paid under letters of credit,
acceptances or other similar instruments;
(4) all other Indebtedness of such Guarantor which does not
provide that it is to rank pari passu with or subordinate to the
Guarantee of such Guarantor; and
(5) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any of the Guarantor
Senior Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing,
Guarantor Senior Indebtedness will not include, with respect to any Guarantor:
(A) Indebtedness of such Guarantor to any of its Subsidiaries,
or to any Affiliate of such Guarantor (other than in connection with
customary commercial banking services);
(B) Indebtedness represented by the Guarantees;
(C) Indebtedness of such Guarantor under the Exchange
Debentures, if issued in accordance with the Exchange Indenture;
-17-
(D) any Indebtedness which by the express terms of the
agreement or instrument creating, evidencing or governing the same is
junior or subordinate in right of payment to any item of Guarantor
Senior Indebtedness;
(E) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business;
(F) that portion of any Indebtedness of such Guarantor that at
the time of incurrence is incurred in violation of the Indenture,
unless such Indebtedness consists of Designated Senior Indebtedness,
and the holder(s) of such Indebtedness and their agents and
representatives (i) had no actual knowledge at the time of incurrence
that the incurrence of such Indebtedness violated the Indenture and
(ii) shall have received a certificate from an officer of such
Guarantor to the effect that the incurrence of such Indebtedness does
not violate the provisions of the Indenture;
(G) Indebtedness represented by Disqualified Capital Stock;
and
(H) any Indebtedness to or guaranteed on behalf of any
shareholders of the Company or any Subsidiary of such Guarantor or any
of its subsidiaries.
"Hedging Obligations" means, with respect to any Person, the
net payment obligations of such Person under (a) Interest Rate Agreements and
(b) other agreements or arrangements entered into in order to protect such
Person against fluctuations in commodity prices, interest rates or currency
exchange rates.
"Holder" or "Noteholder" means the Person in whose name a Note
is registered on the Registrar's books.
"incur" means, with respect to any Indebtedness of any Person,
to create, issue, incur (by conversion, exchange or otherwise), assume, enter
into any guarantee of, or otherwise become liable in respect of such
Indebtedness or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness on the balance sheet of such Person (and "incurrence,"
"incurred," "incurrable," and "incurring" shall have meanings correlative to the
foregoing); provided that a change in GAAP that results in an obligation of such
Person that exists at such time becoming Indebtedness shall not be deemed an
incurrence of such Indebtedness.
"Indebtedness" means, with respect to any Person, without
duplication:
(1) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services, excluding any
trade payables and other accrued current liabilities incurred in the
ordinary course of business, but including,
-18-
without limitation, all obligations, including reimbursement and
similar obligations, of such Person in connection with any letters of
credit, banker's acceptance or other similar credit transaction;
(2) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments;
(3) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller
or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade accounts
payable arising in the ordinary course of business;
(4) all Capitalized Lease Obligations and Purchase Money
Indebtedness of such Person;
(5) all Indebtedness referred to in the preceding clauses of
other Persons, the payment of which is secured by any Lien upon
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness (the amount of such
obligations being deemed to be the lesser of the value of such property
or asset or the amount of the obligation so secured);
(6) all guarantees of Indebtedness referred to in this
definition by such Person;
(7) all Disqualified Capital Stock valued at its mandatory
maximum redemption price or liquidation preference plus accrued
dividends;
(8) all net obligations under or in respect of Hedging
Obligations of such Person; and
(9) any amendment, supplement, modification, deferral,
renewal, extension or refunding of any liability of the types referred
to in clauses (1) through (8) above.
For purposes hereof, Indebtedness is deemed to be incurred
pursuant to a revolving credit facility each time an advance is made thereunder;
provided, however, that, with respect to the Company, Indebtedness referred to
in this definition shall exclude all obligations of the Company to Lancer under
the Tax Sharing Agreement and any liability for federal, state, local or other
taxes owed or owing by the Company.
-19-
For purposes of determining compliance with, and the
outstanding principal amount of any particular Indebtedness:
(1) any other obligation of the obligor of such Indebtedness
(or of any other Person who could have incurred such Indebtedness under
this Section) arising under any guarantee, Lien, or letter of credit
supporting such Indebtedness shall be disregarded to the extent that
such guarantee, Lien or letter of credit secures the principal amount
of such Indebtedness;
(2) in the event that Indebtedness meets the criteria of more
than one type of Indebtedness, the Company, in its sole discretion,
shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such
clauses;
(3) Indebtedness which provides that an amount less than the
principal amount thereof shall be due upon any declaration of
acceleration thereof shall be deemed to be incurred or outstanding in
an amount equal to the accreted value thereof at the date of
determination; and
(4) for purposes of determining compliance with any U.S.
dollar-denominated restrictions on the incurrence of Indebtedness
denominated in a foreign currency, the U.S. dollar-equivalent principal
amount of such Indebtedness incurred pursuant thereto shall be
calculated based on the relevant currency exchange rate in effect on
the date that such Indebtedness was incurred if such Indebtedness is
incurred to refinance other Indebtedness denominated in a foreign
currency, and such refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the
relevant currency exchange rate in effect on the date of such
refinancing, such U.S. dollar-denominated restriction shall be deemed
not to have been exceeded so long as the principal amount of such
refinancing Indebtedness does not exceed the principal amount of such
Indebtedness being refinanced.
"Indenture" means this Indenture as amended, restated or
supplemented from time to time.
"Independent Financial Advisor" means an accounting, valuation
or investment banking firm of national reputation in the United States which, in
the judgment of the Board of Directors of the Company, is otherwise independent
and qualified to perform the task for which it is to be engaged.
-20-
"Initial Notes" means $100.0 million in aggregate principal
amount of 9 5/8% Senior Subordinated Notes due 2008 of the Company issued on the
Issue Date for so long as such securities constitute Restricted Notes.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as that term is defined in Rule 501 (a)(1), (2), (3)
or (7) promulgated under the Securities Act.
"interest" means, with respect to the Notes, the sum of any
interest and any Additional Interest on the Notes.
"Interest Payment Dates" means each April 15 and October 15,
commencing October 15, 1999.
"Interest Rate Agreement" means the obligations of any person
pursuant to any arrangement with any other person whereby, directly or
indirectly, such person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit, guarantee of or capital contribution
to (by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, any other Person. For
the purpose of making any calculations under the Indenture (i) Investment shall
include the fair market value of the net assets of any Subsidiary at the time
that such Subsidiary is designated an Unrestricted Subsidiary and shall exclude
the fair market value of the net assets of any Unrestricted Subsidiary that is
designated a Restricted Subsidiary and (ii) any property transferred to an
Unrestricted Subsidiary shall be valued at fair market value at the time of such
transfer; provided that in each case, the fair market value of an asset or
property shall be as determined by the Board of Directors of the Company in good
faith. For the purpose of the Indenture, the change in designation of a
Restricted Subsidiary to an Unrestricted Subsidiary shall be an Investment.
"Investments" shall exclude extensions of trade credit on commercially
reasonable terms consistent with the normal course of business of the Company
and the Restricted Subsidiaries.
"Issue Date" means the date the Initial Notes are first issued
by the Company and authenticated by the Trustee under this Indenture.
-21-
"Lancer" means Lancer Industries Inc., a Delaware corporation.
"Lien" means, with respect to any property or assets of any
Person, any mortgage or deed of trust, pledge, hypothecation, assignment,
deposit arrangement, security interest, lien, charge, easement, encumbrance,
preference, priority, or other security agreement of any kind on or with respect
to such property or assets (including without limitation, any Capitalized Lease
Obligation, conditional sales, or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Majority Holders" means at any time, the Holders of more than
50% in aggregate principal amount of the Notes outstanding at such time.
"Maturity Date" when used with respect to any Note, means the
date on which the principal of such Note becomes due and payable as therein or
herein provided, whether at the Final Maturity Date or by declaration of
acceleration, call for redemption or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. and its
successors.
"Net Cash Proceeds" means:
(1) in the case of any sale of Capital Stock by or equity
contribution to any Person, the aggregate net proceeds received by such
Person, after payment of expenses, commissions and the like incurred in
connection therewith, whether such proceeds are in cash or in property
(valued at the fair market value thereof, as determined in good faith
by the Board of Directors of such Person, at the time of receipt);
(2) in the case of any exchange, exercise, conversion or
surrender of outstanding securities of any kind for or into shares of
Capital Stock of the Company which is not Disqualified Capital Stock,
the net book value of such outstanding securities on the date of such
exchange, exercise, conversion or surrender (plus any additional amount
required to be paid by the holder to such Person upon such exchange,
exercise, conversion or surrender, less any and all payments made to
the holders, e.g., on account of fractional shares and less all
expenses incurred by such Person in connection therewith); and
(3) in the case of any issuance of any Indebtedness by the
Company or any Restricted Subsidiary, the aggregate net cash proceeds
received by such Person after the payments of expenses, commissions,
underwriting discounts and the like incurred in connection therewith.
-22-
"Non-Payment Event of Default" means any event (other than a
Payment Default) the occurrence of which entitles, or, after passage of time,
would entitle one or more Persons to accelerate the maturity of any Designated
Senior Indebtedness.
"Non-U.S. Person" means a Person who is not a U.S. person, as
defined in Regulation S.
"Notes" means, collectively, the Initial Notes, the Additional
Notes, if any, the Private Exchange Notes, if any, and the Exchange Notes,
treated as a single class of securities, as amended from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating to,
any Indebtedness.
"Obligor" means the Company.
"Offering Memorandum" means the Offering Memorandum dated May
12, 1999 pursuant to which the Initial Notes were offered.
"Officer", with respect to any Person (other than the
Trustee), means the Chairman of the Board of Directors, Chief Executive Officer,
the President, any Vice President, the Chief Financial Officer, the Treasurer or
the Secretary of such Person, or any other officer of such Person designated by
the Board of Directors of such Person and set forth in an Officers' Certificate
delivered to the Trustee.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, the Chief Operating Officer,
Chief Financial Officer, the President, any Vice President or any Treasurer or
Secretary of such Person that shall comply with applicable provisions of this
Indenture.
"Opinion of Counsel" means a written opinion from legal
counsel, which counsel is not unacceptable to the Trustee, stating the matters
required by Section 12.05 and delivered to the Trustee.
"Payment Default" means any default, whether or not any
requirement for the giving of notice, the lapse of time or both, or any other
condition to such default becoming an Event of Default has occurred in the
payment of principal of (or premium, if any) or interest on or any other amount
payable in connection with Designated Senior Indebtedness.
-23-
"Permitted Holders" means (i) Lancer and its Affiliates, (ii)
any "group" (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) comprised solely of Lancer and its Affiliates (it being understood that a
"group" that includes any other Person shall not be a Permitted Holder), (iii)
CIBC World Markets Corp. and its Affiliates, and (iv) Xxxx X. Xxxx and his
Affiliates.
"Permitted Indebtedness" means each and all of the following:
(1) Indebtedness of the Company or any Guarantor under the
Credit Agreement in an aggregate principal amount at any time
outstanding not to exceed the sum of (A) the greater of (x) $60,000,000
and (y) the amount equal to the sum of 85% of the net book value of
accounts receivable and 60% of the net book value of inventory
(determined on a first-in-first-out basis) of the Company and its
Restricted Subsidiaries on a consolidated basis at the time such
Indebtedness is incurred, as determined in accordance with GAAP and (B)
any amounts outstanding under the Senior Credit Facility that utilize
subclause (13) of this definition (less the amount of net proceeds
which have been received in connection with the applicable Permitted
Receivables Financing; provided that such reduction shall apply only
for so long as a Permitted Receivables Financing is in effect);
(2) Indebtedness of the Company and its Restricted
Subsidiaries pursuant to the Initial Notes, the Exchange Notes issued
in exchange for the Initial Notes and any Notes issued in exchange for
or replacement of the Initial Notes or the Exchange Notes and any
Guarantees of the foregoing;
(3) Indebtedness of the Company outstanding on the date of the
Indenture; provided, a notice of redemption for the Existing Notes
shall be given in accordance with Article Eleven of the Existing
Indenture on or prior to June 30, 1999;
(4) Hedging Obligations entered into in the ordinary course of
the Company's or its Restricted Subsidiaries' business and not for
speculative purposes;
(5) Indebtedness of a Restricted Subsidiary of the Company (x)
to the Company or (y) to another Restricted Subsidiary of the Company;
provided, however, that any such Indebtedness of a Restricted
Subsidiary of the Company that is not a Guarantor is not subordinated
in right of payment to any other Indebtedness of such Restricted
Subsidiary (other than Permitted Indebtedness of such Restricted
Subsidiary);
(6) Indebtedness of the Company to a Restricted Subsidiary of
the Company which is unsecured and, unless owing to a Guarantor,
subordinated in right of
-24-
payment from and after such time as the Notes shall become due and
payable (whether at a Stated Maturity, by acceleration or otherwise) to
the payment and performance of the Company's obligations under the
Indenture and the Notes; provided, however, that any subsequent
issuance or transfer of Capital Stock that results in such Restricted
Subsidiary ceasing to be such, or any subsequent transfer of such
Indebtedness (other than to the Company or a Restricted Subsidiary)
will be deemed, in each case, to constitute the issuance of such
Indebtedness by the Company or of such Indebtedness by such Restricted
Subsidiary;
(7) Indebtedness of the Company to T-H Licensing which
complies with Section 4.10;
(8) Indebtedness of the Company or any Guarantor representing
Capitalized Lease Obligations and Purchase Money Indebtedness so long
as such Indebtedness does not exceed 6.0% of the amount of the gross
property, plant and equipment of the Company and its Restricted
Subsidiaries determined on a consolidated basis, as shown on the
balance sheet of the Company as of the end of the most recent fiscal
quarter, in accordance with GAAP consistently applied;
(9) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, that such Indebtedness is extinguished
within 5 business days of incurrence;
(10) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of
purchase price adjustments (including adjustments in the purchase price
related to the performance or results of any acquired business) in
connection with the acquisition or disposition of assets permitted
under the Indenture;
(11) Any Indebtedness or other obligations of the Company
issued to participants in the Equity Incentive Plan or Equity
Participation Plan, provided that such Indebtedness is subordinated in
right of payment to the Notes;
(12) Indebtedness arising by reason of any Lien created or
permitted to exist in compliance with Section 4.11;
(13) Indebtedness of a Receivables Subsidiary pursuant to a
Permitted Receivables Financing; provided that after giving effect to
the incurrence thereof, the
-25-
Company could incur at least $1.00 of Indebtedness under subclause (1)
of this definition in compliance with Section 4.06;
(14) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, issued in
the ordinary course of business of the Company or such Restricted
Subsidiary, including, without limitation, in order to provide security
for worker's compensation claims or payment obligations in connection
with self-insurance or similar requirements in the ordinary course of
business and other Indebtedness with respect to workers' compensation
claims, self-insurance obligations, insurance purposes, performance,
surety and similar bonds and completion guarantees provided by the
Company or any Restricted Subsidiary in the ordinary course of
business;
(15) Guarantees of Indebtedness otherwise permitted under the
Indenture;
(16) Obligations in respect of trade letters of credit,
performance and surety bonds and completion guarantees provided by the
Company or any Restricted Subsidiary in the ordinary course of
business;
(17) Indebtedness of the Company or any Guarantor (which may
but is not required to be incurred under the Credit Agreement) in
addition to that described in clauses (1) through (16) above not to
exceed $20 million outstanding at any time in the aggregate;
Indebtedness may be incurred under the Credit Agreement; or
(18) (i) Indebtedness of the Company or any Guarantor, the
proceeds of which are used solely to refinance (whether by amendment,
renewal, extension or refunding) Indebtedness of the Company (including
all or a portion of the Notes but excluding the Existing Notes) or any
of its Restricted Subsidiaries and (ii) Indebtedness of any Restricted
Subsidiary of the Company the proceeds of which are used solely to
refinance (whether by amendment, renewal, extension or refunding)
Indebtedness of such Restricted Subsidiary; provided, however, that (A)
the principal amount of Indebtedness incurred pursuant to this clause
(18) (or, if such Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof, the original issue price of such
Indebtedness) shall not exceed the sum of the principal amount of
Indebtedness so refinanced (or, if the Indebtedness so refinanced
provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the maturity thereof,
the original issue price of such Indebtedness plus any accretion value
attributable thereto since the original issuance of such Indebtedness)
plus accrued and unpaid interest thereon plus the amount of any
-26-
premium required to be paid in connection with such refinancing
pursuant to the terms of such Indebtedness or the amount of any premium
reasonably determined by the Company as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated
purchase, plus the amount of expenses (including discounts and
commissions) in connection therewith and (B) in the case of any
refinancing of Indebtedness that is not Senior Indebtedness, (1) such
new Indebtedness is made subordinated to or pari passu with the Notes
in the same manner and at least to the same extent as the Indebtedness
being refinanced and (2) such new Indebtedness has a Weighted Average
Life to Maturity and final Stated Maturity of principal that exceeds
the Weighted Average Life to Maturity and final Stated Maturity of
principal, respectively, of the Indebtedness being refinanced.
For purposes of determining compliance with Section 4.06, in
the event an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness, or is entitled to be incurred pursuant to
the second sentence of Section 4.06, the Company shall, at its sole discretion,
classify such item of Indebtedness as any of the appropriate items of Permitted
Indebtedness or as Indebtedness being incurred pursuant to the second sentence
of Section 4.06 and thereafter may, at its sole discretion, reclassify such item
of Indebtedness from time to time in any manner that complies with the
definition of Permitted Indebtedness and/or the second sentence of Section 4.06.
"Permitted Investment" means any of the following:
(1) Investments by the Company or any Restricted Subsidiary of
the Company in 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 of its assets to the Company or such
Restricted Subsidiary;
(2) Investments in obligations of, or guaranteed by, the
United States government or any agency or political subdivision
thereof, maturing within one year of the date of purchase;
(3) Investments in commercial paper issued by corporations,
each of which shall have a consolidated net worth of at least
$100,000,000 maturing within 365 days from the date of the original
issue thereof, and rated "P-1" or better by Moody's or "A-1" or better
by S&P or an equivalent rating or better by any other nationally
recognized securities rating agency;
(4) Investments in certificates of deposit issued or
acceptances accepted by or guaranteed by any bank or trust company
organized under the laws of the United States of America or any state
thereof or the District of Columbia, in each case
-27-
having capital, surplus and undivided profits totaling more than
$100,000,000 maturing within one year of the date of purchase;
(5) Investments representing Capital Stock or obligations
issued to the Company or any of its Restricted Subsidiaries in
settlement claims against any other person by reason of a composition
or readjustment of debt or a reorganization of any debtor of the
Company or of such Restricted Subsidiary;
(6) Investments in cash and Cash Equivalents;
(7) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility and workers compensation,
performance and similar deposits entered into as a result of the
operations of the business in the ordinary course;
(8) loans and advances to officers of the Company and its
Restricted Subsidiaries made in compliance with clause (G) of the
second paragraph of Section 4.10;
(9) Investments by the Company or a Restricted Subsidiary in a
Restricted Subsidiary;
(10) money market funds organized under the laws of the United
States of America or any state thereof that invest substantially all of
their assets in any of the types of investments described in clause
(2), (3), (4) or (6) above;
(11) Investments in any of the Notes;
(12) receivables owing to the Company or any Restricted
Subsidiary created in the ordinary course of business;
(13) Investments consisting of Indebtedness permitted under
clause (5) of the definition of Permitted Indebtedness; and
(14) Hedging obligations entered into in the ordinary course
of the Company's or its Restricted Subsidiaries business and not for
speculative purposes;
(15) Guarantees of Indebtedness and other obligations
otherwise permitted under the Indenture;
(16) Investments made by the Company or its Restricted
Subsidiaries as a result of consideration received in connection with
an Asset Sale made in compliance with Section 4.09;
-28-
(17) Investments in connection with a Permitted Receivables
Financing by or to any Receivables Subsidiary, including Investments of
funds held in accounts permitted or required by the arrangements
governing such Permitted Receivables Financing or any related
Indebtedness; and
(18) Investments in the aggregate amount of $20 million at any
time outstanding.
"Permitted Liens" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or
claims either (a) not delinquent, (b) that would not have a material
adverse effect on the business, condition (financial or otherwise),
results of operations or prospects of the Company and its Subsidiaries,
taken as a whole, or (c) contested in good faith by appropriate
proceedings and as to which the Company or any of its Restricted
Subsidiaries shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(2) security for the payment of workers' compensation,
unemployment insurance, other social security benefits or other
insurance-related obligations (including, but not limited to, in
respect of deductibles, self-insured retention amounts and premiums and
adjustments thereto);
(3) deposits or pledges in connection with bids, tenders,
leases and contracts (other than contracts for the payment of money);
(4) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property or minor irregularities of title (and with respect to
leasehold interests, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased
property, with or without consent of the lessee), none of which
interferes in any material respect with the ordinary conduct of the
business of the Company or any of its Subsidiaries or materially
impairs the use of any parcel of property;
(5) deposits or pledges to secure public or statutory
obligations, progress payments, surety and appeal bonds or other
obligations of like nature incurred in the ordinary course of business;
(6) certain surveys, exceptions, title defects, encumbrances,
easements, reservations of, or rights of others for, rights of way,
sewers, electric lines, telegraph or telephone lines and other similar
purposes or zoning or other restrictions as
-29-
to the use of real property not materially interfering with the
ordinary conduct of the business of the Company and its Subsidiaries
taken as a whole;
(7) Liens arising by operation of law in favor of landlords,
mechanics, carriers, warehousemen, materialmen, laborers, employees,
suppliers or the like, incurred in the ordinary course of business for
sums which are not yet delinquent or are being contested in good faith
by negotiations or by appropriate proceedings which suspend the
collection thereof; or that would not have a material adverse effect on
the business, condition (financial or otherwise), results of operations
or prospects of the Company and its Subsidiaries, taken as a whole;
(8) leases, subleases, licenses or sublicenses to third
parties;
(9) Liens securing Indebtedness incurred in compliance with
Section 4.06;
(10) Liens existing on, or provided for under written
arrangements existing on, the Issue Date, or (in the case of any such
Liens securing Indebtedness of the Company or any of its Subsidiaries
existing or arising under written arrangements existing on the Issue
Date) securing any Refinancing Indebtedness in respect of such
Indebtedness so long as the Lien securing such Refinancing Indebtedness
is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or under such written arrangements could
secure) the original Indebtedness;
(11) Liens securing Hedging Obligations;
(12) Liens arising out of judgments, decrees, orders or awards
in respect of which the Company shall in good faith be prosecuting an
appeal or proceedings for review, which appeal or proceedings shall not
have been finally terminated, or if the period within which such appeal
or proceedings may be initiated shall not have expired;
(13) Liens on properties or assets of the Company or any
Restricted Subsidiary securing Senior Indebtedness;
(14) Liens existing on property or assets of a Person at the
time such Person becomes a Subsidiary of the Company (or at the time
the Company or a Restricted Subsidiary acquires such property or
assets); provided, however, that such Liens are not created in
connection with, or in contemplation of, such other Person becoming
such a Subsidiary (or such acquisition of such property or assets), and
that such Liens are limited to all or part of the same property or
assets (plus improvements,
-30-
accessions, proceeds or dividends or distributions in respect thereof)
that secured (or, under the written arrangements under which such Liens
arose, could secure) the obligations to which such Liens relate;
(15) Liens on Capital Stock of an Unrestricted Subsidiary that
secure Indebtedness or other obligation of such Unrestricted
Subsidiary;
(16) Liens securing the Existing Notes, the Notes, the
Exchange Notes or the Exchange Debentures;
(17) Liens securing Refinancing Indebtedness incurred in
respect of any Indebtedness secured by, or securing any refinancing,
refunding, extension, renewal or replacement (in whole or in part) of
any other obligation secured by, any other Permitted Liens, provided
that any such new Lien is limited to all or part of the same property
or assets (plus improvements, accessions, proceeds or dividends or
distributions in respect thereof) that secured (or, under the written
arrangements under which the original Lien arose could secure) the
obligations to which such Liens relate; and
(18) Liens securing letters of credit entered into the
ordinary course of business and consistent with past business practice;
(19) Liens in favor of the Company or any Restricted
Subsidiary;
(20) Liens securing Purchase Money Indebtedness;
(21) Liens on and pledges of the stock of any Unrestricted
Subsidiary securing any Indebtedness of such Unrestricted Subsidiary;
(22) Liens on Receivables and Related Assets securing
Indebtedness or otherwise permitted to be incurred, in each case, with
a Permitted Receivables Financing.
"Permitted Receivables Financing" means a transaction or
series of transactions (including amendments, supplements, extensions, renewals,
replacements, refinancings or modifications thereof) pursuant to which a
Receivables Subsidiary purchases Receivables and Related Assets from the Company
or any Subsidiary and finances such Receivables and Related Assets through the
issuance of indebtedness or equity interests or through the sale of the
Receivables and Related Assets or a fractional undivided interest in the
Receivables and Related Assets; provided that:
-31-
(1) the Board of Directors shall have determined in good faith
that such Permitted Receivables Financing is economically fair and
reasonable to the Company and the Receivables Subsidiary;
(2) all sales of Receivables and Related Assets to or by the
Receivables Subsidiary are made at fair market value (as determined in
good faith by the Board of Directors of the Company);
(3) the financing terms, covenants, termination events and
other provisions thereof shall be market terms (as determined in good
faith by the Board of Directors of the Company);
(4) no portion of the Indebtedness of a Receivables Subsidiary
is Guaranteed by or is recourse to the Company or any Restricted
Subsidiary (other than recourse for customary representations,
warranties, covenants and indemnities, none of which shall relate to
the collectibility of the Receivables and Related Assets); and
(5) neither the Company nor any Subsidiary has any obligation
to maintain or preserve the Receivable Subsidiary's financial
condition.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Physical Notes" means certificated Notes in registered form
in substantially the form set forth in Exhibit A.
"Private Exchange" has the meaning set forth in the
Registration Rights Agreement.
"Private Exchange Notes" has the meaning set forth in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set
forth on the Rule 144A Notes and Other Notes that are Restricted Notes in the
form set forth in Exhibit B.
-32-
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Purchase Money Indebtedness" means any Indebtedness incurred
in the ordinary course of business by a Person to finance the cost (including
the cost of construction) of an item of property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Equity Offering" means a sale by the Company of
shares of its Qualified Capital Stock (however designated and whether voting or
non-voting) and any and all rights, warrants or options to acquire such
Qualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" shall have the
meaning specified in Rule 144A promulgated under the Securities Act.
"Receivables and Related Assets" means accounts receivable and
instruments, chattel paper, obligations, general intangibles and other similar
assets, in each case relating to such receivables, including interests in
merchandise or goods, the sale or lease of which gave rise to such receivable,
related contractual rights, guarantees, insurance proceeds, collections, other
related assets and proceeds of all of the foregoing.
"Receivables Subsidiary" means a wholly owned Subsidiary which
is established for the limited purpose of acquiring and financing Receivables
and Related Assets and engaging in activities ancillary thereto.
"redeem" means redeem, repurchase, defease or otherwise
acquire or retire for value; and "redemption" and "redeemed" have correlative
meanings.
"Redemption Date" when used with respect to any Note to be
redeemed means the date fixed for such redemption pursuant to the terms of the
Notes.
"refinance" means refinance, renew, extend, replace, defease
or refund, in whole or in part, including successively; and "refinancing" and
"refinanced" have correlative meanings.
"Registration Rights Agreement" means the Registration Rights
Agreement dated May 19, 1999 between the Company, and the initial purchasers
named therein.
-33-
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Responsible Officer" when used with respect to the Trustee,
means an officer or assistant officer assigned to the corporate trust department
of the Trustee (or any successor group of the Trustee) with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Note" has the same meaning as "Restricted
Security" set forth in Rule 144(a)(3) promulgated under the Securities Act;
provided, that the Trustee shall be entitled to request and conclusively rely
upon an Opinion of Counsel with respect to whether any Note is a Restricted
Note.
"Restricted Payment" means any of the following:
(1) the declaration or payment of any dividend or any other
distribution or payment on Capital Stock of the Company or any
Restricted Subsidiary of the Company or any payment made to the direct
or indirect holders (in their capacities as such) of Capital Stock of
the Company or any Restricted Subsidiary of the Company (other than (a)
dividends or distributions payable solely in Capital Stock (other than
Disqualified Capital Stock) or in options, warrants or other rights to
purchase such Capital Stock (other than Disqualified Capital Stock),
(b) in the case of Restricted Subsidiaries of the Company, dividends or
distributions payable to the Company or to a Wholly Owned Restricted
Subsidiary of the Company and (c) other pro rata dividends or other
distributions made by a Restricted Subsidiary of the Company that is
not a Wholly Owned Restricted Subsidiary to minority stockholders);
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any of its
Restricted Subsidiaries (other than Capital Stock owned by the Company
or a Wholly Owned Restricted Subsidiary of the Company, excluding
Disqualified Capital Stock) or any option, warrants or other rights to
purchase such Capital Stock;
(3) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement
for value, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, of any Indebtedness which is
subordinated in right of payment to the Notes (other than subordinated
Indebtedness acquired in anticipation of satisfying a scheduled sinking
fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition);
-34-
(4) the making of any Investment in any Person other than a
Permitted Investment; and
(5) forgiveness of any Indebtedness of an Affiliate of the
Company to the Company or a Restricted Subsidiary of the Company.
For purposes of determining the amount expended for Restricted
Payments, cash distributed or invested shall be valued at the face amount
thereof and property other than cash shall be valued at its fair market value
(as such fair market value is determined in good faith by the Board of Directors
of the Company).
"Restricted Subsidiary" means (i) T-H Licensing, Inc. and (ii)
any other Subsidiary of the Company other than an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"S&P" means Standard & Poor's Ratings Group and its
successors.
"Sale and Leaseback Transaction" means any arrangement with
any Person providing for the leasing by the Company or any Restricted Subsidiary
of the Company of any real or tangible personal property, which property has
been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person in contemplation of such leasing.
"Securities Act" means the Securities Act of 1933 and the
rules and regulations promulgated thereunder.
"S&P" means Standard & Poor's Corporation and its successors.
"Senior Credit Facility" means the Loan Agreement, dated as of
July 7, 1993, among the Company, the lenders named therein and General Electric
Capital Corporation, as agent for such lenders and other financial institutions
party thereto from time to time as such agreement may be assumed by any
successor in interest, and as such agreement may be amended, supplemented,
waived or otherwise modified from time to time, or refunded, refinanced,
restructured, replaced, renewed, repaid, increased or extended from time to time
(whether in whole or in part, whether with the original agent and lenders or
other agents and lenders or otherwise).
"Senior Indebtedness" means the principal of and premium, if
any, and interest on, and any and all other fees, expense reimbursement
obligations and other amounts
-35-
due pursuant to the terms of all agreements, documents and instruments providing
for, creating, securing or evidencing or otherwise entered into in connection
with:
(1) all Indebtedness of the Company owed to lenders under the
Credit Agreement or Designated Senior Indebtedness;
(2) all obligations of the Company with respect to any Hedging
Obligations;
(3) all obligations of the Company to reimburse any bank or
other person in respect of amounts paid under letters of credit,
acceptances or other similar instruments;
(4) all other Indebtedness of the Company which does not
provide that it is to rank pari passu with or subordinate to the Notes;
and
(5) all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any of the Senior
Indebtedness described above.
Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness will not include:
(A) Indebtedness of the Company to any of its Subsidiaries, or
to any Affiliate of the Company (other than in connection with
customary commercial banking services);
(B) Indebtedness represented by the Notes;
(C) Indebtedness represented by the Exchange Debentures, if
issued in accordance with the Exchange Indenture;
(D) any Indebtedness which by the express terms of the
agreement or instrument creating, evidencing or governing the same is
junior or subordinate in right of payment to any item of Senior
Indebtedness;
(E) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business;
(F) that portion of any Indebtedness of the Company that at
the time of incurrence is incurred in violation of the Indenture,
unless such Indebtedness consists of Designated Senior Indebtedness,
and the holder(s) of such Indebtedness and their agents and
representatives (i) had no actual knowledge at the time of incurrence
that
-36-
the incurrence of such Indebtedness violated the Indenture and (ii)
shall have received a certificate from an officer of the Company to the
effect that the incurrence of such Indebtedness does not violate the
provisions of the Indenture;
(G) Indebtedness represented by Disqualified Capital Stock;
and
(H) any Indebtedness to or guaranteed on behalf of any
shareholders of the Company or any Subsidiary of the Company.
"Senior Subordinated Indebtedness" means the Notes and any
other Indebtedness of the Company that specifically provides that such
indebtedness is to rank pari passu in right of payment with the Notes.
"Significant Subsidiary" shall have the same meaning as in
Rule 1.02(v) of Regulation S-X under the Securities Act, provided that each
Guarantor shall in all events be deemed a Significant Subsidiary.
"Stated Maturity" means, when used with respect to any Note or
any installment of interest thereon, the date specified in such Note as the
fixed date on which any principal of such Note or such installment of interest
is due and payable, and when used with respect to any other Indebtedness or any
installments of interest thereon, means any date specified in the instrument
governing such Indebtedness as the fixed date on which the principal of such
Indebtedness, or such installment of interest thereon, is due and payable.
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the date of this Indenture or thereafter
incurred) that is expressly subordinate in right of payment to the Notes
pursuant to a written agreement.
"Subsidiary", with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock
having at least a majority of the votes entitled to be cast in the
election of directors under ordinary circumstances shall at the time be
owned, directly or indirectly, by such Person; or
(2) any other Person of which at least a majority of the
voting interest under ordinary circumstances is at the time, directly
or indirectly, owned by such Person.
"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
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"Tax Sharing Agreement" means the Tax Sharing Agreement, dated
as of July 18, 1990, between the Company and Lancer, as amended from time to
time.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture (except as
provided in Section 8.03 hereof).
"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Unrestricted Subsidiary" means a Subsidiary of the Company
designated as such by the Company:
(1) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of which
(a) is guaranteed by the Company or any Restricted
Subsidiary of the Company,
(b) is recourse to or obligates the Company or any
Restricted Subsidiary of the Company in any way (other than
solely with respect to the stock of such Unrestricted
Subsidiary) or
(c) subjects any property or asset of the Company or
any Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the satisfaction
thereof (other than solely with respect to the stock of such
Unrestricted Subsidiary); and
(2) with which neither the Company nor any Restricted
Subsidiary of the Company has any obligation (other than by the terms
of the Indenture) (a) to subscribe for additional shares of Capital
Stock or other equity interest therein or (b) to maintain or preserve
such Subsidiary's financial condition or to cause such Subsidiary to
achieve certain levels of operating results; provided, however, that in
no event shall any Guarantor be an Unrestricted Subsidiary. The Company
may designate an Unrestricted Subsidiary as a Restricted Subsidiary by
written notice to the Trustee under the Indenture; provided, however,
that the Company shall not be permitted to designate any Unrestricted
Subsidiary as a Restricted Subsidiary unless (A) after giving pro forma
effect to such designation, the Company would be permitted to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness)
under the Indenture and (B) any Indebtedness or Liens of such
Unrestricted Subsidiary would
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be permitted to be incurred by a Restricted Subsidiary of the Company
under the Indenture.
"U.S. Government Obligations" means (a) securities that are
direct obligations of the United States of America for the payment of which its
full faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or a specific payment of principal or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of any person (irrespective of whether or not, at the time,
stock of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing
(1) the then outstanding aggregate principal amount of such
Indebtedness into
(2) the total of the product obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payment of principal, including payment at
final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) which will elapse between such
date and the making of such payment.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary of the Company of which 100% of the outstanding Capital Stock is
owned by the Company or another Wholly Owned Restricted Subsidiary of the
Company. For purposes of this definition,
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any directors' qualifying shares or investments by foreign nationals mandated by
applicable law shall be disregarded in determining the ownership of a Restricted
Subsidiary.
SECTION 1.02. Other Definitions.
The definitions of the following terms may be found in the
sections indicated as follows:
Term Defined in Section
---- ------------------
"Affiliate Transaction".......................................... 4.10
"Agent Members".................................................. 2.16(a)
"Basket"......................................................... 4.08(c)
"Business Day"................................................... 12.07
"CEDEL".......................................................... 2.16(a)
"Change of Control Date"......................................... 4.20
"Company Bankruptcy Proceeding".................................. 11.02
"Covenant Defeasance"............................................ 9.03
"Custodian"...................................................... 6.01
"Designation".................................................... 4.15(a)
"Euroclear"...................................................... 2.16(a)
"Events of Default".............................................. 6.01
"Excess Proceeds"................................................ 4.09
"Global Notes"................................................... 2.16(a)
"Initial Lien"................................................... 4.11
"Legal Defeasance"............................................... 9.02
"Legal Holiday".................................................. 12.07
"Note Portion of Excess Proceeds"................................ 4.09
"Other Debt"..................................................... 4.09
"Other Notes".................................................... 2.02
"Paying Agent"................................................... 2.04
"Preliminary Agreement".......................................... 4.14
"Refinancing Agreement".......................................... 4.14
"Registrar"...................................................... 2.04
"Regulation S Global Notes"...................................... 2.16(a)
"Regulation S Notes"............................................. 2.02
"Replacement Assets.............................................. 4.09
"Restricted Global Note"......................................... 2.16(a)
"Restricted Payment"............................................. 4.08
"Revocation"..................................................... 4.15(c)
"Rule 144A Notes"................................................ 2.02
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SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
portion of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"indenture securities" means the Notes.
"indenture securityholder" means a Holder or Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company or any other
obligor on the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by Commission
rule have the meanings therein assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether
defined expressly or by reference;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and in the
plural include the singular;
(4) words used herein implying any gender shall apply to both
genders;
(5) "herein" "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other Subsection;
(6) unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be
delivered hereunder shall be prepared in accordance
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with GAAP as in effect from time to time, applied on a basis consistent
with the most recent audited consolidated financial statements of the
Company;
(7) "$," "U.S. Dollars" and "United States Dollars" each refer
to United States dollars, or such other money of the United States that
at the time of payment is legal tender for payment of public and
private debts; and
(8) whenever in this Indenture there is mentioned, in any
context, principal, interest or any other amount payable under or with
respect to any Note, such mention shall be deemed to include mention of
the payment of Additional Interest to the extent that, in such context,
Additional Interest is, was or would be payable in respect thereof.
ARTICLE TWO
THE NOTES
SECTION 2.01. Amount of Notes.
The Trustee shall authenticate (i) Notes for original issue on
the Issue Date in the aggregate principal amount of $100,000,000 and (ii)
Additional Notes for original issue from time to time, in each case upon a
written order of the Company in the form of an Officers' Certificate of the
Company. Such written order shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated. All
Initial Notes and Additional Notes shall be identical in all respects other than
the issue dates and the date from which interest accrues except as provided in
this Section 2.01 and except that any Additional Note may contain any notations,
legends or endorsements permitted under Section 2.02.
Upon receipt of a Company Request and an Officers' Certificate
certifying that a registration statement relating to an exchange offer specified
in the Registration Rights Agreement or, with respect to the Additional Notes, a
registration rights agreement substantially identical to the Registration Rights
Agreement, is effective or that the conditions precedent to a private exchange
thereunder have been met, the Trustee shall authenticate an additional series of
Notes in an aggregate principal amount not to exceed the outstanding aggregate
principal amount of the Initial Notes or Additional Notes, as the case may be,
for issuance in exchange for the Notes tendered for exchange pursuant to such
exchange offer registered under the Securities Act or pursuant to a Private
Exchange. Exchange Notes or Private Exchange Notes may have such distinctive
series designations and
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such changes in the form thereof as are specified in the Company Request
referred to in the preceding sentence.
In the event that the Company shall issue and the Trustee
shall authenticate any Additional Notes, the Company shall use its reasonable
best efforts to obtain the "CUSIP" number for such Notes as is printed on the
Notes outstanding at such time. Notwithstanding the foregoing, all Notes issued
under this Indenture shall vote and consent together on all matters as one class
and no series of Notes will have the right to vote or consent as a separate
class on any matter.
SECTION 2.02. Form and Dating.
The Notes and the Trustee's certificate of authentication with
respect thereto shall be substantially in the form set forth in Exhibit A, which
is incorporated in and forms a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, rule or usage to which the
Company is subject; in each case, the Company shall instruct the Trustee as to
the notation, legend or endorsement to be used. Without limiting the generality
of the foregoing, Notes offered and sold to Qualified Institutional Buyers in
reliance on Rule 144A ("Rule 144A Notes") shall bear the legend and include the
form of assignment set forth in Exhibit B, Notes offered and sold in offshore
transactions in reliance on Regulation S ("Regulation S Notes") shall bear the
legend and include the form of assignment set forth in Exhibit C, and Notes
offered and sold to Institutional Accredited Investors in transactions exempt
from registration under the Securities Act not made in reliance on Rule 144A or
Regulation S ("Other Notes") may be represented by a Restricted Global Note or,
if such an investor may not hold an interest in the Restricted Global Note, a
Physical Note, in each case, bearing the Private Placement Legend. Each Note
shall be dated the date of its authentication.
The terms and provisions contained in the Notes shall
constitute, and are expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and agree to be bound
thereby.
The Notes may be presented for registration of transfer and
exchange at the offices of the Registrar.
SECTION 2.03. Execution and Authentication.
Two Officers shall sign, or one Officer shall sign and one
Officer (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Notes for the Company by
manual or facsimile signature.
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If an Officer whose signature is on a Note was an Officer at
the time of such execution but no longer holds that office at the time the
Trustee authenticates the Note, the Note shall be valid nevertheless.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder. Notwithstanding the foregoing, if
any Note shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Note to the Trustee
for cancellation as provided in Section 2.12, for all purposes of this Indenture
such Note shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
The Trustee shall authenticate Initial Notes for original
issue in the aggregate principal amount of $100,000,000 (other than as provided
in Section 2.08 hereof) in one or more series, and from time to time, Additional
Notes in the aggregate principal amount of not less than $25.0 million per
series, upon a written order of the Company in the form of an Officers'
Certificate. Each such written order shall specify the amount of Notes to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes or
Exchange Notes and whether the Notes are to be issued as Definitive Notes or
Global Notes or such other information as the Trustee shall reasonably request.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Notes. Unless otherwise provided
in the appointment, an authenticating agent may authenticate the Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
Each Paying Agent is designated as an authenticating agent for purposes of this
Indenture.
The Notes shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.04. Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in The City of New York, State of New York)
where Notes may be presented for registration of transfer or for exchange (the
"Registrar"), and an office or agency where Notes may be presented for payment
(the "Paying Agent") and an office or
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agency where notices and demands to or upon the Company, if any, in respect of
the Notes and this Indenture may be served. The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may have one or
more additional Paying Agents. The term "Paying Agent" includes any additional
Paying Agent. Neither the Company nor any Affiliate thereof may act as Paying
Agent.
The Company shall enter into an appropriate agency agreement,
which shall incorporate the provisions of the TIA, with any Agent that is not a
party to this Indenture. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 7.07.
The Company initially appoints the Trustee as Registrar,
Paying Agent and Agent for service of notices and demands in connection with the
Notes and this Indenture.
SECTION 2.05. Paying Agent To Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of the
Noteholders or the Trustee all money held by the Paying Agent for the payment of
principal of or premium or interest on the Notes (whether such money has been
paid to it by the Company or any other obligor on the Notes), and the Company
and the Paying Agent shall notify the Trustee of any default by the Company (or
any other obligor on the Notes) in making any such payment. Money held in trust
by the Paying Agent need not be segregated except as required by law and in no
event shall the Paying Agent be liable for any interest on any money received by
it hereunder. The Company at any time may require the Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed and the
Trustee may at any time during the continuance of any Event of Default specified
in Section 6.01 (1) or (2), upon written request to the Paying Agent, require
such Paying Agent to pay forthwith all money so held by it to the Trustee and to
account for any funds disbursed. Upon making such payment, the Paying Agent
shall have no further liability for the money delivered to the Trustee.
Any moneys deposited with the Trustee or any Paying Agent or
then held by the Company in trust for the payment of the principal of, or
premium, if any, or interest on any Note that are not applied but remain
unclaimed by the Holder of such Note for two years after the date upon which the
principal of, or premium, if any, or interest on such Note shall have
respectively become due and payable shall be repaid to the Company upon a
Company Request, or if such moneys are then held by the Company in trust, such
moneys shall be released from such trust; and the Holder of such Note entitled
to receive such payment
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shall thereafter, as an unsecured general creditor, look only to the Company and
the Guarantors for the payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money shall thereupon cease.
SECTION 2.06. Noteholder 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 the Noteholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee 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 the Noteholders.
SECTION 2.07. Transfer and Exchange.
Subject to Sections 2.16 and 2.17, when Notes are presented to
the Registrar with a request from the Holder of such Notes to register a
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations, the Registrar shall register the transfer as
requested. Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorneys duly authorized in writing. To permit
registrations of transfers and exchanges, the Company shall issue and execute
and the Trustee shall authenticate new Notes evidencing such transfer or
exchange at the Registrar's request. No service charge shall be made to the
Noteholder for any registration of transfer or exchange. The Company may require
from the Noteholder payment of a sum sufficient to cover any transfer taxes or
other governmental charge that may be imposed in relation to a transfer or
exchange, but this provision shall not apply to any exchange pursuant to Section
2.11, 3.06, 4.09, 4.20 or 8.05 (in which events the Company shall be responsible
for the payment of such taxes). The Registrar shall not be required to exchange
or register a transfer of any Note for a period of 15 days immediately preceding
the mailing of notice of redemption of Notes to be redeemed or of any Note
selected, called or being called for redemption except the unredeemed portion of
any Note being redeemed in part.
Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee and any Agent shall treat the person
in whose name the Note is registered as the owner thereof for all purposes
whatsoever whether or not the Note shall be overdue, and neither the Company,
the Trustee nor any such Agent shall be affected by notice to the contrary. Any
Holder of the Global Note shall, by acceptance of such Global Note, agree that
transfers of the beneficial interests in such Global Note may be effected only
through a book entry system maintained by the Holder of such Global Note (or its
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agent), and that ownership of a beneficial interest in the Global Note shall be
required to be reflected in a book entry.
Each Holder of a Note agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Note in violation of any provision of this Indenture
and/or applicable U.S. Federal or state securities law.
Except as expressly provided herein, neither the Trustee nor
the Registrar shall have any duty to monitor the Company's compliance with or
have any responsibility with respect to the Company's compliance with any
Federal or state securities laws.
SECTION 2.08. Replacement Notes.
If a mutilated Note is surrendered to the Registrar or the
Trustee, or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note if the Holder of such Note furnishes to the
Company and the Trustee evidence reasonably acceptable to them of the ownership
and the destruction, loss or theft of such Note and if the requirements of
Section 8-405 of the New York Uniform Commercial Code as in effect on the date
of this Indenture are met. If required by the Trustee or the Company, an
indemnity bond shall be posted, sufficient in the judgment of both to protect
the Company, the Trustee or any Paying Agent from any loss that any of them may
suffer if such Note is replaced. The Company may charge such Holder for the
Company's reasonable out-of-pocket expenses in replacing such Note (including
any tax or governmental charge that may be imposed in relation thereto and its
reasonable fees and expenses of counsel) and the Trustee may charge the Company
for the Trustee's expenses (including, without limitation, attorneys' fees and
disbursements) in replacing such Note (which shall be included in such
reasonable out-of-pocket expenses chargeable to such Holder). Every replacement
Note shall constitute a contractual obligation of the Company.
SECTION 2.09. Outstanding Notes.
The Notes outstanding at any time are all Notes that have been
authenticated by the Trustee except for (a) those cancelled by it, (b) those
delivered to it for cancellation, (c) to the extent set forth in Sections 9.01
and 9.02, on or after the date on which the conditions set forth in Section 9.01
or 9.02 have been satisfied, those Notes theretofore authenticated and delivered
by the Trustee hereunder and (d) those described in this Section 2.09 as not
outstanding. Subject to Section 2.10, a Note does not cease to be outstanding
because the Company or one of its Affiliates holds the Note.
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If a Note is replaced pursuant to Section 2.08, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser in whose hands such Note is a
legal, valid and binding obligation of the Company.
If the Paying Agent holds, in its capacity as such, on any
Maturity Date, money sufficient to pay all accrued interest and principal with
respect to the Notes payable on that date and is not prohibited from paying such
money to the Holders thereof pursuant to the terms of this Indenture, then on
and after that date such Notes cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.10. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any declaration of acceleration or notice of
default or direction, waiver or consent or any amendment, modification or other
change to this Indenture, Notes owned by the Company or any other Affiliate of
the Company shall be disregarded as though they were not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent or any amendment, modification
or other change to this Indenture, only Notes as to which a Responsible Officer
of the Trustee has received an Officers' Certificate stating that such Notes are
so owned shall be so disregarded. Notes so owned which have been pledged in good
faith shall not be disregarded if the pledgee establishes to the reasonable
satisfaction of the Trustee the pledgee's right so to act with respect to the
Notes and that the pledgee is not the Company, any other obligor on the Notes or
any of their respective Affiliates.
SECTION 2.11. Temporary Notes.
Until definitive Notes are prepared and ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes.
SECTION 2.12. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee shall cancel all Notes
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surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall (subject to the record-retention requirements of the
Exchange Act) destroy cancelled Notes and deliver a certificate of destruction
thereof to the Company. Subject to Section 2.08, the Company may not reissue or
resell, or issue new Notes to replace, Notes that the Company has redeemed or
paid, or that have been delivered to the Trustee for cancellation.
SECTION 2.13. Defaulted Interest.
If the Company defaults on a payment of interest on the Notes,
it shall pay the defaulted interest, plus (to the extent permitted by law) any
interest payable on the defaulted interest, in accordance with the terms hereof,
to the Persons who are Noteholders on a subsequent special record date, which
date shall be at least five Business Days prior to the payment date. The Company
shall fix such special record date and payment date in a manner not
unsatisfactory to the Trustee. At least 10 days before such special record date,
the Company shall mail to each Noteholder a notice that states the special
record date, the payment date and the amount of defaulted interest, and interest
payable on defaulted interest, if any, 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 Notes may
be listed and, upon such notice as may be required by such exchange, if, after
written notice given by the Company to the Trustee of the proposed payment
pursuant to this sentence, such manner of payment shall be deemed practicable by
the Trustee.
SECTION 2.14. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and
if so, such CUSIP number shall be included in notices of redemption or exchange
as a convenience to Holders; provided, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any such CUSIP number used by the Company in
connection with the issuance of the Notes and of any change in the CUSIP number.
SECTION 2.15. Deposit of Moneys.
Prior to 10:00 a.m., New York City time, on each Interest
Payment Date and Maturity Date, the Company shall have deposited with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such Interest Payment Date or Maturity Date, as
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the case may be, in a timely manner which permits the Trustee to remit payment
to the Holders on such Interest Payment Date or Maturity Date, as the case may
be. The principal and interest on Global Notes shall be payable to the
Depository or its nominee, as the case may be, as the sole registered owner and
the sole holder of the Global Notes represented thereby. The principal and
interest on Physical Notes shall be payable, either in person or by mail, at the
office of the Paying Agent.
SECTION 2.16. Book-Entry Provisions for Global Notes.
(a) Rule 144A Notes initially shall be represented by one or
more notes in registered, global form without interest coupons (collectively,
the "Restricted Global Note"). Regulation S Notes initially shall be represented
by one or more notes in registered, global form without interest coupons
(collectively, the "Regulation S Global Note," and, together with the Restricted
Global Note and any other global notes representing Notes, the "Global Notes").
The Global Notes shall bear legends as set forth in Exhibit D. The Global Notes
initially shall (i) be registered in the name of the Depository or the nominee
of such Depository, in each case for credit to an account of an Agent Member
(or, in the case of the Regulation S Global Notes, of Euroclear System
("Euroclear") and Cedel Bank, S.A. ("CEDEL")), (ii) be delivered to the Trustee
as custodian for such Depository and (iii) bear legends as set forth in Exhibit
B with respect to Restricted Global Notes and Exhibit C with respect to
Regulation S Global Notes.
Members of, or direct or indirect participants in, the
Depository ("Agent Members") shall have no rights under this Indenture with
respect to any Global Note held on their behalf by the Depository, or the
Trustee as its custodian, or under the Global Notes, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.
(b) Transfers of Global Notes shall be limited to transfer in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Notes may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository and the provisions of Section 2.17. In addition, a Global Note
shall be exchangeable for Physical Notes if (i) the Depository notifies the
Company that it is unwilling or unable to continue as depository for such Global
Note or has ceased to be a clearing agency registered under the Exchange Act and
upon such notice or cessation the Company fails to appoint a successor
depository, (ii) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of such Physical Notes or (iii) there shall
have occurred and be continuing a Default or
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an Event of Default with respect to the Notes. In all cases, Physical Notes
delivered in exchange for any Global Note or beneficial interests therein shall
be registered in the names, and issued in any approved denominations, requested
by or on behalf of the Depository (in accordance with its customary procedures).
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall upon receipt of a written order from the
Company authenticate and make available for delivery, one or more Physical Notes
of like tenor and amount.
(d) In connection with the transfer of Global Notes as an
entirety to beneficial owners pursuant to paragraph (b), the Global Notes shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in writing in exchange for its
beneficial interest in the Global Notes, an equal aggregate principal amount of
Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Note delivered
in exchange for an interest in a Global Note pursuant to paragraph (b), (c) or
(d) shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of
Section 2.17, bear the Private Placement Legend or, in the case of the
Regulation S Global Note, the legend set forth in Exhibit C, in each case,
unless the Company determines otherwise in compliance with applicable law.
(f) On or prior to the 40th day after the later of the
commencement of the offering of the Notes represented by the Regulation S Global
Note and the issue date of such Notes (such period through and including such
40th day, the "Restricted Period"), a beneficial interest in a Regulation S
Global Note may be transferred to a Person who takes delivery in the form of an
interest in the corresponding Restricted Global Note only upon receipt by the
Trustee of a written certification from the transferor to the effect that such
transfer is being made (i)(a) to a Person whom the transferor reasonably
believes is a Qualified Institutional Buyer in a transaction meeting the
requirements of Rule 144A, (b) to an Institutional Accredited Investor for its
own account or for the account of another Institutional Accredited Investor in a
minimum principal amount of the Notes of $250,000, which is accompanied by an
opinion of counsel regarding the availability of such exemption from the
registration requirements under the Securities Act, or (c) pursuant to another
exemption from the registration requirements under the Securities Act which is
accompanied by an
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opinion of counsel regarding the availability of such exemption and (ii) in
accordance with all applicable securities laws of any state of the United States
or any other jurisdiction.
(g) Beneficial interests in the Restricted Global Note may be
transferred to a Person who takes delivery in the form of an interest in the
Regulation S Global Note or a Note held by an Institutional Accredited Investor
represented by a certificated Note bearing a restrictive legend, whether before
or after the expiration of the Restricted Period, only if the transferor first
delivers to the Trustee a written certificate to the effect that such transfer
is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if
available) and that, if such transfer occurs prior to the expiration of the
Restricted Period, the interest transferred will be held immediately thereafter
through Euroclear or CEDEL.
(h) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in another
Global Note shall, upon transfer, cease to be an interest in such Global Note
and become an interest in such other Global Note and, accordingly, shall
thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(i) The Holder of any Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.17. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors
and Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted Note
to any Institutional Accredited Investor which is not a QIB or to a Non-U.S.
Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Note, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after May
19, 2001 or such other date as such Note shall be freely transferable
under Rule 144 as certified in an Officers' Certificate or (y) (1) in
the case of a transfer to an Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons), the proposed transferee has
delivered to the Registrar a certificate substantially in the form of
Exhibit E hereto or (2) in the case of a transfer to a Non-U.S. Person
(including a QIB), the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit F hereto;
provided that in the case of any transfer of a Note bearing the Private
Placement Legend
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for a Note not bearing the Private Placement Legend, the Registrar has
received an Officers' Certificate authorizing such transfer; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the
Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of a Global Note in an amount equal to the
principal amount of the beneficial interest in a Global Note to be transferred,
and (b) the Registrar shall reflect on its books and records the date and an
increase in the principal amount of a Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note transferred or
the Company shall execute and the Trustee shall authenticate and make available
for delivery one or more Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration or any proposed registration of transfer of a
Note constituting a Restricted Note to a QIB (excluding transfers to Non-U.S.
Persons):
(i) the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on such Holder's Note stating, or has otherwise advised the Company
and the Registrar in writing, that the sale has been made in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on such Holder's Note stating, or has
otherwise advised the Company and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the
Notes to be transferred consist of Physical Notes which after transfer
are to be evidenced by an interest in the Global Note, upon receipt by
the Registrar of instructions given in accordance with the Depository's
and the Registrar's procedures, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of
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the Global Note in an amount equal to the principal amount of the
Physical Notes to be transferred, and the Trustee shall cancel the
Physical Notes so transferred.
(c) Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Notes not bearing the Private Placement
Legend, the Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Notes
bearing the Private Placement Legend, the Registrar shall deliver only Notes
that bear the Private Placement Legend unless (i) it has received the Officers'
Certificate required by paragraph (a)(i)(y) of this Section 2.17, (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 or (iii) such Note has been sold pursuant to an
effective registration statement under the Securities Act and the Registrar has
received an Officers' Certificate from the Company to such effect.
(d) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain for a period of two years copies of
all letters, notices and other written communications received pursuant to
Section 2.16 or this Section 2.17. The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable notice to the Registrar.
SECTION 2.18. Computation of Interest.
Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Election To Redeem; Notices to Trustee.
If the Company elects to redeem Notes pursuant to paragraph 6
of the Notes, at least 10 Business Days prior to giving notice of such
redemption pursuant to Section 3.03 hereof (unless a shorter notice shall be
agreed to in writing by the Trustee), the Company
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shall notify the Trustee in writing of the Redemption Date, the principal amount
of Notes to be redeemed and the redemption price, and deliver to the Trustee an
Officers' Certificate stating that such redemption will comply with the
conditions contained in paragraph 6 of the Notes. Notice given to the Trustee
pursuant to this Section 3.01 may not be revoked after the time that notice is
given to Noteholders pursuant to Section 3.03.
SECTION 3.02. Selection by Trustee of Notes To Be Redeemed.
In the event that fewer than all of the Notes are to be
redeemed, the Trustee shall select the Notes to be redeemed, if the Notes are
listed on a national securities exchange, in accordance with the rules of such
exchange or, if the Notes are not so listed, either by lot, or such other method
as it shall deem fair and equitable. The Trustee shall promptly notify the
Company of the Notes selected for redemption and, in the case of any Notes
selected for partial redemption, the principal amount thereof to be redeemed.
The Trustee may select for redemption portions of the principal of the Notes
that have denominations larger than $1,000. Notes and portions thereof the
Trustee selects shall be redeemed in amounts of $1,000 or whole multiples of
$1,000. For all purposes of this Indenture unless the context otherwise
requires, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days, and no more than 60 days, before a
Redemption Date, the Company shall mail, or cause to be mailed, a notice of
redemption by first-class mail to each Holder of Notes to be redeemed at his or
her last address as the same appears on the registry books maintained by the
Registrar pursuant to Section 2.04 hereof.
The notice shall identify the Notes to be redeemed (including
the CUSIP numbers thereof) and shall state:
(1) the Redemption Date;
(2) the redemption price and, if any, the amount of premium
and accrued interest to be paid;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date and upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
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(5) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(6) that unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender to
the Paying Agent;
(7) the provision of paragraph 6 of the Notes, as the case may
be, pursuant to which the Notes called for redemption are being
redeemed; and
(8) the aggregate principal amount of Notes that are being
redeemed.
At the Company's written request made at least five Business
Days prior to the date on which notice is to be given, the Trustee shall give
the notice of redemption in the Company's name and at the Company's sole
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once the notice of redemption described in Section 3.03 is
mailed, Notes called for redemption become due and payable on the Redemption
Date and at the redemption price, including any premium, plus interest accrued
to the Redemption Date. Upon surrender to the Paying Agent, such Notes shall be
paid at the redemption price, including any premium, plus interest accrued 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 Holder of the redeemed Notes registered on the relevant
record date, and provided, further, that if a Redemption Date is a Legal
Holiday, payment shall be made on the next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
SECTION 3.05. Deposit of Redemption Price.
On or prior to 10:00 A.M., New York City time, on each
Redemption Date, the Company shall deposit with the Paying Agent in immediately
available funds money sufficient to pay the redemption price of, including
premium, if any, and accrued interest on all Notes to be redeemed on that date
other than Notes or portions thereof called for redemption on that date which
have been delivered by the Company to the Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay
the redemption price of, including premium, if any, and accrued interest on
Notes called for redemption shall have been made available in accordance with
the preceding paragraph, the Notes
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called for redemption will cease to accrue interest and the only right of the
Holders of such Notes will be to receive payment of the redemption price of and,
subject to the first proviso in Section 3.04, accrued and unpaid interest on
such Notes to the Redemption Date. If any Note surrendered for redemption shall
not be so paid, interest will be paid, from the Redemption Date until such
redemption payment is made, on the unpaid principal of the Note and any interest
not paid on such unpaid principal, in each case, at the rate and in the manner
provided in the Notes.
SECTION 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Trustee
shall authenticate for the Holder thereof a new Note equal in principal amount
to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
The Company shall pay the principal of and interest (including
all Additional Interest, if any, as provided in the Registration Rights
Agreement) on the Notes on the dates and in the manner provided in the Notes and
this Indenture. An installment of principal or interest shall be considered paid
on the date it is due if the Trustee or Paying Agent holds on that date money
designated for and sufficient to pay such installment.
The Company shall pay interest on overdue principal (including
post-petition interest in a proceeding under any Bankruptcy Law), and overdue
interest, to the extent lawful, at the rate specified in the Notes.
SECTION 4.02. Reports to Holders.
The Company shall deliver to the Trustee and the Holders,
within 15 days of the filing of same with the Commission, copies of the
quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be subject to the reporting requirements of Section 13(a) or
15(d) of the Exchange Act, the Company shall file with the Commission within the
time periods specified therein, to the extent permitted to so file, and provide
the Trustee and the Holders with such quarterly and annual reports and such
information, documents
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and other reports specified in Sections 13(a) and 15(d) of the Exchange Act
within 15 days of the time periods specified therein. In addition, for so long
as any Notes remain outstanding, the Company shall furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, and, to any beneficial holder of Notes, if not obtainable from
the Commission, information of the type that would be filed with the Commission
pursuant to the foregoing provisions, upon the request of any such holder. The
Company will also comply with the other provisions of TIA Section 314(a).
SECTION 4.03. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, or plead (as a defense or
otherwise) or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of,
premium, if any, and/or interest on the Notes as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year and on or before 60 days after the end of the
first, second and third quarters of each fiscal year, an Officers' Certificate
stating that a review of the activities of the Company and its Subsidiaries
during such fiscal year or fiscal quarter, as the case may be, has been made
under the supervision of the signing Officers with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge, the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions hereof (or, if a Default shall have occurred,
describing all such Defaults of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred and
is in existence, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
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(b) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, within 5 Business Days upon any Officer
becoming aware of the occurrence and continuance of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
(c) The Company's fiscal year currently ends on December 31.
The Company will provide written notice to the Trustee of any change in its
fiscal year.
SECTION 4.05. Taxes.
The Company shall, and shall cause each of its Restricted
Subsidiaries to, pay prior to delinquency all material taxes, assessments, and
governmental levies except as contested in good faith and by appropriate
proceedings.
SECTION 4.06. Limitation on Additional Indebtedness.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, incur (as defined) any
Indebtedness (including Acquired Indebtedness), other than Permitted
Indebtedness. Notwithstanding the foregoing limitations, the Company and its
Restricted Subsidiaries may incur Indebtedness if, after giving effect to the
incurrence of such Indebtedness, the Consolidated Fixed Charge Coverage Ratio of
the Company and its Restricted Subsidiaries is at least equal to 2.25 to 1.00.
SECTION 4.07. Limitation on Other Subordinated Indebtedness.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, incur, contingently or
otherwise, any Indebtedness (other than the Notes or Guarantees, as the case may
be) that is both (i) expressly subordinated in right of payment to any Senior
Indebtedness of the Company or any of its Restricted Subsidiaries, as the case
may be, and (ii) senior in right of payment to the Notes or Guarantees, as the
case may be. Unsecured Indebtedness is not deemed to be subordinate or junior to
secured Indebtedness merely because it is unsecured and Indebtedness that is not
guaranteed by a particular Person is not deemed to be subordinate or junior to
Indebtedness that is so guaranteed merely because it is not so guaranteed. For
purposes of this Section 4.07, Indebtedness is deemed to be senior in right of
payment to the Notes if it is not explicitly subordinated in right of payment to
Senior Indebtedness at least to the same extent as the Notes are subordinated to
such Senior Indebtedness.
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SECTION 4.08. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment
if at the time of such Restricted Payment and immediately after giving effect
thereto:
(1) any Default or Event of Default shall have occurred and be
continuing; or
(2) the Company is not able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.06 hereof; or
(3) the aggregate amount of Restricted Payments made
subsequent to the Issue Date (the amount expended for such purposes, if
other than in cash, being the fair market value of such property as
determined by the Board of Directors of the Company, whose
determination shall be conclusive) exceeds the sum of:
(a) 50% of the aggregate Consolidated Net Income of
the Company accrued on a cumulative basis during the period
(treated as one accounting period) beginning on the last day
of the fiscal quarter immediately preceding the Issue Date and
ending on the last day of the fiscal quarter of the Company
immediately preceding the date of such proposed Restricted
Payment (or, if such aggregate cumulative Consolidated Net
Income of the Company for such period shall be a deficit,
minus 100% of such deficit); plus
(b) the aggregate Net Proceeds received by the
Company, without duplication,
(x) as capital contributions to the Company
after the Issue Date; and
(y) from the issuance or sale of Qualified
Capital Stock (including Qualified Capital Stock
issued upon the conversion of convertible
Indebtedness, in exchange for outstanding
Indebtedness or from the exercise of options,
warrants or rights to purchase Qualified Capital
Stock) of the Company to any person (other than to a
Restricted Subsidiary of the Company) after the Issue
Date; plus
(c) in the case of the disposition or repayment of
any Investment constituting a Restricted Payment made after
the Issue Date (excluding any Investment made pursuant to
clause (D) below of this Section 4.08), an
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amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment, in
either case, less the cost of the disposition of such
Investment.
For purposes of the preceding clause (3)(b)(y), the value of
the aggregate Net Proceeds received by the Company upon the issuance of
Qualified Capital Stock either upon the conversion of convertible Indebtedness
or in exchange for outstanding Indebtedness or upon the exercise of options,
warrants or rights will be the net cash proceeds received upon the issuance of
such Indebtedness, options, warrants or rights plus the incremental amount
received by the Company upon the conversion, exchange or exercise thereof.
Notwithstanding the foregoing, these provisions will not
prohibit:
(A) the payment of any dividend or the making of any
distribution within 60 days after the date of its declaration if such
dividend or distribution would have been permitted on the date of
declaration;
(B) the redemption of the Existing Notes; provided, the notice
of redemption for the Existing Notes shall be given in accordance with
Article Eleven of the Existing Indenture on or prior to June 30, 1999;
(C) the purchase, redemption or other acquisition or
retirement of any Capital Stock of the Company or any warrants, options
or other rights to acquire shares of any class of such Capital Stock
either:
(x) solely in exchange for shares of Qualified
Capital Stock (including any such exchange pursuant to a
conversion right or privilege in connection with which cash is
paid in lieu of fractional shares or scrip); or
(y) `through the application of the net cash proceeds
of a substantially concurrent sale (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock or
warrants, options or other rights to acquire Qualified Capital
Stock;
(D) the purchase, redemption, retirement, defeasance or other
acquisition of Indebtedness of the Company that is subordinate or
junior in right of payment to the Notes either:
(x) solely in exchange for shares of Qualified
Capital Stock (or warrants, options or other rights to acquire
Qualified Capital Stock) or for Indebtedness of the Company
that is subordinate or junior in right of payment to the
Notes, at least to the extent that the Indebtedness being
acquired
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is subordinated to the Notes and has a Weighted Average Life
to Maturity no less than that of the Notes; or
(y) through the application of the net cash proceeds
of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital
Stock (or warrants, options or other rights to acquire
Qualified Capital Stock) or Indebtedness of the Company which
is subordinate or junior in right of payment to the Notes, at
least to the extent that the Indebtedness being acquired is
subordinated to the Notes and has a Weighted Average Life to
Maturity no less than that of the Notes;
(E) payments by the Company to Lancer pursuant to the Tax
Sharing Agreement;
(F) guarantees in respect of Indebtedness incurred by officers
or employees of the Company or any Restricted Subsidiary in the
ordinary course of business and payments in discharge thereof in an
amount not to exceed $500,000 in any fiscal year;
(G) the declaration and payment of regularly accruing
dividends to holders of the Existing Preferred Stock; provided that at
the time of the applicable dividend payment date, and after giving pro
forma effect to such dividend, the Company would have been able to
incur at least $1.00 of additional Indebtedness pursuant to Section
4.06 hereof;
(H) the declaration and payment of regularly accruing
dividends to holders of any class or series of Disqualified Capital
Stock of the Company or its Restricted Subsidiaries issued after the
Issue Date in accordance with Section 4.06 hereof;
(I) the declaration and payment of regularly accruing
dividends to holders of any class or series of Designated Preferred
Stock of the Company issued after the Issue Date; provided that at the
time of such issuance, and after giving effect to such issuance on a
pro forma basis (for purposes of making determinations on a pro forma
basis pursuant to this clause (I), treating all dividends which will
accrue on such Designated Preferred Stock during the four full fiscal
quarters immediately following such issuance, as well as all other
Designated Preferred Stock then outstanding, as if same will in fact
be, or have in fact been, paid in cash), the Company would have been
able to incur at least $1.00 of additional Indebtedness pursuant to
Section 4.06 hereof;
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(J) Investments constituting Restricted Payments made as a
result of the receipt of non-cash consideration from any Asset Sale;
(K) Restricted Payments in aggregate amount not to exceed $10
million; and
(L) the declaration and payment of regularly accruing
dividends to holders of Preferred Stock of Restricted Subsidiaries
issued after the Issue Date in accordance with Section 4.06 hereof;
provided that in calculating the aggregate amount of Restricted Payments made
subsequent to the Issue Date for purposes of clause (3) above, amounts expended
pursuant to clauses (A) and (L) of this paragraph shall be included in such
calculation and amounts expended pursuant to clauses (B) through (K) shall be
excluded from such calculation.
SECTION 4.09. Limitation on Asset Sales.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or such Restricted Subsidiary, as the case may
be, receives consideration at the time of such sale or other
disposition at least equal to the fair market value of the assets sold
or otherwise disposed of (as determined in good faith by the Board of
Directors of the Company, and evidenced by a board resolution, which
determination shall be conclusive);
(2) not less than 75% of the consideration (excluding, in the
case of an Asset Sale (or series of related Asset Sales) of assets, by
way of relief from, or by another Person assuming responsibilities for,
any liabilities, contingent or otherwise, that are not Indebtedness)
received by the Company or such applicable Restricted Subsidiary, as
the case may be, is in the form of cash or Cash Equivalents; provided
that this clause (2) shall not apply to any Asset Sale (or series of
related Asset Sales), involving assets that accounted for less than one
percent of Consolidated EBITDA during the period of the most recent
four consecutive fiscal quarters ending prior to the date of such Asset
Sale for which consolidated financial statements of the Company are
available; provided, further, that only for purposes of this clause (2)
the following shall be deemed to constitute cash:
(a) the outstanding principal amount of Indebtedness
of the Company or any Restricted Subsidiary (other than (x)
Capital Stock which constitutes Indebtedness and (y)
Indebtedness to the Company or any Restricted
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Subsidiary) assumed by the transferee (which shall not
constitute the Company or a Restricted Subsidiary) pursuant to
the respective Asset Sale, so long as the Company or such
Restricted Subsidiary is irrevocably and unconditionally
released from all liability under such Indebtedness; and
(b) any notes or other obligations received by the
Company or any Restricted Subsidiary from such transferee that
are, within 180 days after the date of the respective Asset
Sale, converted by the Company into cash (to the extent of the
cash received in that conversion); and
(3) the Asset Sale Proceeds received by the Company or such
Restricted Subsidiary are applied:
(a) to the extent the Company or any such Restricted
Subsidiary, as the case may be, elects, or is required, to
prepay, repay or purchase indebtedness under any then existing
Senior Indebtedness of the Company or any such Restricted
Subsidiary within 365 days following the receipt of the Asset
Sale Proceeds from any Asset Sale;
(b) to the extent the Company elects, to an
investment in assets (including Capital Stock or other
securities purchased in connection with the acquisition of
Capital Stock or property of another Person) used or useful in
businesses similar, reasonably related, ancillary or
complementary to the business of the Company (including
extensions or developments thereof) or any such Restricted
Subsidiary as conducted on the Issue Date; provided that such
investment occurs (or a definitive agreement committing so to
invest is entered) within 365 days following receipt of such
Asset Sale Proceeds;
(c) to the extent of the balance of Available Asset
Sale Proceeds after the application in accordance with clause
(a) or (b), if on such 365th day in the case of clauses (3)(a)
and (3)(b), the Available Asset Sale Proceeds exceed $10.0
million, the Company shall apply an amount equal to the
Available Asset Sale Proceeds to an offer to repurchase the
Notes, at a purchase price in cash equal to 100% of the
principal amount thereof plus accrued and unpaid interest, if
any, to the purchase date (an "Excess Proceeds Offer").
Notwithstanding the foregoing, in the event that a Restricted
Subsidiary that is not a Wholly Owned Restricted Subsidiary dividends or
distributes to all of its stockholders on a pro rata basis any proceeds of an
Asset Sale to the Company or another Restricted
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Subsidiary, the Company or such Restricted Subsidiary need only apply its share
of such proceeds in accordance with the preceding clauses (a), (b) and (c).
If an Excess Proceeds Offer is not fully subscribed, the
Company may retain the portion of the Available Asset Sale Proceeds not required
to repurchase Notes.
If the Company is required to make an Excess Proceeds Offer,
the Company shall mail, within 30 days following the date specified in clause
(3)(c) above, a notice to the Holders stating, among other things:
(1) that such Holders have the right to require the Company to
apply the Available Asset Sale Proceeds to repurchase such Notes at a
purchase price in cash equal to 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the purchase date;
(2) the purchase date, which shall be no earlier than 30 days
and not later than 45 days from the date such notice is mailed;
(3) the instructions that each Holder must follow in order to
have such Notes purchased; and
(4) the calculations used in determining the amount of
Available Asset Sale Proceeds to be applied to the purchase of such
Notes.
In the event of the transfer of substantially all of the
property and assets of the Company and its Restricted Subsidiaries, taken as a
whole, to a Person in a transaction permitted under Section 5.01 below, the
successor Person shall be deemed to have sold the properties and assets of the
Company and its Restricted Subsidiaries not so transferred for purposes of this
Section 4.09, and shall comply with the provisions of this Section 4.09 with
respect to such deemed sale as if it were an Asset Sale.
The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an Excess Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with the "Asset Sale"
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.09 by virtue thereof.
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SECTION 4.10. Limitation on Transactions with Affiliates.
The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any holder
(or any Affiliate of such holder) of 10% or more of any class of Capital Stock
of the Company or with any Affiliate of the Company or any Restricted
Subsidiary, except upon fair and reasonable terms no less favorable to the
Company or such Restricted Subsidiary than could be obtained, at the time of
such transaction or, if such transaction is pursuant to a written agreement, at
the time of the execution of the agreement providing therefore, in a comparable
arm's length transaction with a Person that is not such a holder or an
Affiliate.
The foregoing limitation does not limit, and shall not apply
to:
(A) transactions (1) approved by a majority of the
disinterested members of the Board of Directors or (2) for which the
Company or a Restricted Subsidiary delivers to the Trustee a written
opinion of a nationally recognized accounting, valuation or investment
banking firm stating that the transaction is fair to the Company or
such Restricted Subsidiary from a financial point of view;
(B) any transaction solely between the Company and any of its
Restricted Subsidiaries or solely between Restricted Subsidiaries;
(C) any Permitted Investment or any Restricted Payment that is
not prohibited by the provisions described under Section 4.08 above;
(D) payments to Lancer under the Tax Sharing Agreement;
(E) payments to participants in the Equity Participation Plan
in an amount not exceeding $1.32 million in any fiscal year and $5.28
million in the aggregate;
(F) reasonable and customary regular fees to directors of the
Company;
(G) loans or advances to officers of the Company and its
Restricted Subsidiaries for bona fide business purposes of the Company
in the ordinary course of business;
(H) in the event T-H Licensing is not a Guarantor at the time
of such payment, royalty payments by the Company to T-H Licensing
pursuant to that certain letter agreement dated as of December 29, 1989
between the Company and T-H Licensing (as such agreement may be amended
from time to time pursuant to its
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terms), provided that any such payment (less any amounts permitted to
be retained by T-H Licensing pursuant to the Credit Agreement) is
returned to the Company as a loan within sixty days after receipt of
such payment by T-H Licensing;
(I) payments or distributions to participants in the Equity
Incentive Plan pursuant to the terms thereof;
(J) transactions in connection with Permitted Receivables
Financing;
(K) payments of the Company's allocated portion of the Lancer
consolidated group's corporate expenses and fees to Lancer or any
Affiliate of Lancer incurred in connection with Lancer's or any
Affiliate of Lancer's performance of management consulting and
monitoring services with respect to the Company and any Restricted
Subsidiary in an amount not to exceed $2.0 million in any fiscal year
(excluding amounts paid prior to the Issue Date); and
(L) any transaction between the Company and any of its
Affiliates involving ordinary course of business investment banking,
commercial banking, financial advisory services and related activities.
Notwithstanding the foregoing, any transaction or series of
related transactions covered by the first paragraph of this Section 4.10 and not
covered by clauses (B) through (L) above of this Section 4.10, (a) the aggregate
amount of which exceeds $5 million in value, must be approved to be fair in the
manner provided for in clause (A) (1) or (2) above and (b) the aggregate amount
of which exceeds $10 million in value, must be determined to be fair in the
manner provided for in clause (A) (2) above.
SECTION 4.11. Limitations on Liens.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, incur or otherwise cause or suffer to exist
or become effective any Liens of any kind (other than Permitted Liens) upon any
property or asset of the Company or any of its Restricted Subsidiaries or any
shares of Capital Stock or Indebtedness of any Restricted Subsidiary of the
Company which owns property or assets (an "Initial Lien"), now owned or
hereafter acquired, unless:
(1) if such Initial Lien secures Indebtedness which is pari
passu with the Notes, then the Notes are secured on an equal and
ratable basis with the obligations so secured until such time as such
obligation is no longer secured by a Lien; or
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(2) if such Initial Lien secures Indebtedness which is
subordinated to the Notes, any such Lien shall be subordinated to the
Lien granted to the holders of the Notes to the same extent as such
Indebtedness is subordinated to the Notes.
Any Lien created in favor of the Notes pursuant hereto will be
automatically and unconditionally released and discharged upon (i) the
unconditional release and discharge of the Initial Lien to which it relates or
(ii) the sale, exchange or transfer to any Person that is not an Affiliate of
the Company or any Restricted Subsidiary of the property or assets secured by
such Initial Lien, or of all of the equity interests held by the Company and the
Restricted Subsidiaries in, or all or substantially all of the assets of, the
Restricted Subsidiary whose property or assets were the subject of such Lien,
provided that, in the case of clause (ii), Section 4.09 is complied with in
connection with such sale, exchange or transfer.
SECTION 4.12. [Intentionally Omitted]
SECTION 4.13. Limitation on Creation of Subsidiaries.
The Company will not create or acquire, and it will not permit
any of its Restricted Subsidiaries to create or acquire, any Subsidiary other
than:
(1) a Restricted Subsidiary existing as of the Issue Date;
(2) a Restricted Subsidiary conducting a business similar or
reasonably related, ancillary or complementary thereto or extensions or
developments thereof to the business of the Company and its
Subsidiaries on the Issue Date; or
(3) an Unrestricted Subsidiary;
provided, however, that each Restricted Subsidiary organized under the laws of
the United States or any State thereof or the District of Columbia acquired or
created pursuant to clause (2) shall, at the time it has either assets or
shareholder's equity in excess of $10,000, have executed a guarantee, in the
form attached to the Indenture and reasonably satisfactory in form and substance
to the Trustee (and with such documentation relating thereto as the Trustee
shall require, including, without limitation a supplement or amendment to the
Indenture and opinions of counsel as to the enforceability of such guarantee in
accordance with Article Ten of this Indenture); provided, further, in the event
the Company and its Restricted Subsidiaries, on a consolidated basis, incurs
Acquired Indebtedness (assuming such incurrence is in accordance with Section
4.06 hereof) as a result of the acquisition of a Restricted Subsidiary and the
terms of such Acquired Indebtedness prohibits the guarantee of the Notes by such
newly-acquired Restricted
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Subsidiary or such newly-acquired Restricted Subsidiary would be in breach or
default of the terms of the Acquired Indebtedness as a result of such guarantee,
such Restricted Subsidiary will not be required to execute a guarantee; however,
until such Restricted Subsidiary executes and delivers a guarantee in accordance
with this covenant, none of the Company or any other Restricted Subsidiary will
transfer any assets (other than in the ordinary course of business) to such
newly-acquired Restricted Subsidiary and such newly acquired Restricted
Subsidiary will not transfer such Acquired Indebtedness to the Company or any
other Restricted Subsidiary.
SECTION 4.14. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary of the Company to:
(1) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock owned by the
Company or a Restricted Subsidiary;
(2) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary of the Company;
(3) make loans or advances to the Company or any other
Restricted Subsidiary of the Company;
(4) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary of the Company (other than any
customary restriction on transfers of property subject to a Permitted
Lien (other than a Lien on cash not constituting proceeds of non-cash
property subject to a Permitted Lien) which could not materially
adversely affect the Company's ability to satisfy its obligations
hereunder); or
(5) guarantee any Indebtedness of the Company or any other
Restricted Subsidiary of the Company;
except for such encumbrances or restrictions existing under or by reason of:
(A) applicable law;
(B) any agreement or other instrument of a person acquired by
the Company or any Restricted Subsidiary of the Company in existence at
the time of such acquisition (but not created in contemplation
thereof), which encumbrance or
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restriction is not applicable to any person, or the properties or
assets of any person, other than the person, or the property or assets
of the person, so acquired;
(C) any encumbrance or restriction in any agreement:
(1) 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, or
the subletting, assignment or transfer of any lease, license,
conveyance or contract or similar property or asset;
(2) contained in any mortgage, pledge or other
security agreement securing Indebtedness of a Restricted
Subsidiary to the extent restricting the transfer of the
property subject thereto; or
(3) pursuant to customary provisions restricting
dispositions of real property interests set forth in any
reciprocal easement agreements of the Company or any
Restricted Subsidiary;
(D) Purchase Money Indebtedness permitted under Section 4.06;
(E) with respect to a Restricted Subsidiary (or any of its
property or assets) imposed pursuant to an agreement entered into for
the direct or indirect sale or disposition of all or substantially all
of the Capital Stock or assets of such Restricted Subsidiary (or the
property or assets that are subject to such restriction) pending the
closing of such sale or disposition;
(F) on the transfer of property or assets required by any
regulatory authority having jurisdiction over the Company or any
Restricted Subsidiary or any of their businesses;
(G) with respect to a Receivables Subsidiary, an agreement
relating to Indebtedness of a Receivable Subsidiary which is permitted
under Section 4.06 above or pursuant to an agreement relating to a
Permitted Receivables Financing by a Receivables Subsidiary;
(H) any encumbrance or restriction in any agreement existing
on the Issue Date to the extent and in the manner such encumbrance or
restriction is in effect on the Issue Date 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;
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(I) existing under Senior Indebtedness otherwise permitted to
be incurred pursuant to Section 4.06 that limits the right of the
debtor to dispose of assets securing such Indebtedness;
(J) any encumbrance or restriction pursuant to any agreement
that extends, refinances, renews or replaces any agreement described in
clause (B) above, which is not materially more restrictive or less
favorable to the holders of Notes than those existing under the
agreement being extended, refinanced or renewed (as determined in good
faith by the Company); and
(K) pursuant to an agreement or instrument relating to
Indebtedness permitted by clause (18) of the definition of "Permitted
Indebtedness" (a "Refinancing Agreement"); provided, however, that the
encumbrances and restrictions contained in any such Refinancing
Agreement or amendment are no less favorable to the holders of the
Notes taken as a whole than encumbrances and restrictions contained in
the initial agreement or agreements to which such Refinancing Agreement
or amendment relates (as determined in good faith by the Board of
Directors, whose determination shall be conclusive).
SECTION 4.15. [Intentionally Omitted]
SECTION 4.16. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries
to issue any Preferred Stock (other than to the Company or to a Restricted
Subsidiary) unless the Company or such Restricted Subsidiary would be entitled
to incur or assume Indebtedness under Section 4.06 above in an aggregate
principal amount equal to the aggregate liquidation value of the Preferred Stock
to be issued.
SECTION 4.17. Limitation on Guarantees by Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary,
directly or indirectly, to assume, guarantee or in any other manner become
liable with respect to any Indebtedness of the Company or any Guarantor,
(excluding any Guarantee of a Restricted Subsidiary which constitutes Acquired
Indebtedness of such Subsidiary so long as such Guarantee does not apply to any
other Indebtedness of the Company and its Restricted Subsidiaries not acquired
pursuant to the respective acquisition or merger) unless such Restricted
Subsidiary is a Guarantor or simultaneously executes and delivers a supplemental
indenture providing for the guarantee of payment of the Notes by such Restricted
Subsidiary
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in accordance with Article Ten of this Indenture; provided, however, that a
Restricted Subsidiary may guarantee the Company's obligations under any Senior
Indebtedness without executing and delivering such supplemental indenture or
guaranteeing the Notes; provided, further, that in the case of any guarantee of
any Guarantor with respect to Senior Subordinated Indebtedness, the guarantee of
the payment of the Notes by such Guarantor to be provided in accordance herewith
shall be pari passu with the guarantee with respect to such Senior Subordinated
Indebtedness in the same manner and to the same extent as the Senior
Subordinated Indebtedness is guaranteed. Each guarantee created pursuant to the
provisions described above is referred to as a "Guarantee" and the issuer of
each such Guarantee, so long as the Guarantee remains outstanding, is referred
to as a "Guarantor."
Notwithstanding the foregoing, in the event that a Guarantor
is released from all obligations which pursuant to the first sentence of the
preceding paragraph obligate it to become a Guarantor, such Guarantor shall be
released from all obligations under its Guarantee (provided that the provisions
of the first sentence of the preceding paragraph shall apply anew in the event
that such Guarantor subsequent to being released incurs any obligations that
pursuant to such sentence obligate it to become a Guarantor). In addition, upon
any sale or disposition (by merger or otherwise) of any Guarantor by the Company
or a Restricted Subsidiary of the Company to any person that is not a Restricted
Subsidiary or a holder, directly or indirectly, of any Capital Stock of the
Company or any of its Restricted Subsidiaries which is otherwise in compliance
with the terms of the Indenture, such Guarantor will be deemed to be released
from all obligations under its Guarantee; provided, however, that each such
Guarantor is sold or disposed of in accordance with Section 4.09 above;
provided, further, that the foregoing proviso shall not apply to the sale or
disposition of a Guarantor in a foreclosure to the extent that such proviso
would be inconsistent with the requirements of the Uniform Commercial Code. In
addition, a Guarantor shall be deemed to be released from all obligations under
its Guarantee in the event such Guarantor is designated an Unrestricted
Subsidiary.
SECTION 4.18. Maintenance of Office or Agency.
The Company shall maintain an office or agency where Notes may
be surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
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SECTION 4.19. Legal Existence.
Subject to Article Five hereof, the Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect
(i) its legal existence, and the corporate, partnership or other existence of
each Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of each such Restricted
Subsidiary and the rights (charter and statutory), licenses and franchises of
the Company and its Restricted Subsidiaries; provided that the Company shall not
be required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Restricted Subsidiaries if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders; provided, further, however, that
a determination by the Board of Directors of the Company shall not be required
in the event of a merger of one or more Restricted Subsidiaries of the Company
with or into another Restricted Subsidiary of the Company.
SECTION 4.20. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company shall
be obligated to make an offer to purchase (the "Change of Control Offer") each
holder's outstanding Notes at a purchase price (the "Change of Control Purchase
Price") equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the Change of Control Payment Date (as defined) in
accordance with the procedures set forth below.
Within 30 days of the occurrence of a Change of Control, the
Company shall (i) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Xxxxx News Service or similar business news service in the
United States and (ii) send by first-class mail, postage prepaid, to the Trustee
and to each Holder of the Notes, at the address appearing in the register
maintained by the Registrar of the Notes, a notice stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 4.20 and that all Notes tendered will be accepted for
payment;
(2) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 30 days nor later than
60 days from the date such notice is mailed (the "Change of Control
Payment Date"));
(3) that any Note not tendered will continue to accrue
interest;
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(4) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Payment Date;
(5) that holders accepting the offer to have their Notes
purchased pursuant to a Change of Control Offer will be required to
surrender the Notes to the Paying Agent at the address specified in the
notice prior to the close of business on the business day preceding the
Change of Control Payment Date;
(6) that holders will be entitled to withdraw their acceptance
if the Paying Agent receives, not later than the close of business on
the third Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Notes delivered for
purchase, and a statement that such Holder is withdrawing his election
to have such Notes purchased;
(7) that holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered;
(8) any other procedures that a holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to
the extent lawful,
(1) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer,
(2) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof so tendered and
(3) deliver or cause to be delivered to the Trustee Notes so
accepted together with an Officer's Certificate stating the Notes or
portions thereof tendered to the Company.
The Paying Agent shall promptly mail to each holder of Notes
so accepted payment in an amount equal to the purchase price for such Notes, and
the Company shall execute and issue, and the Trustee shall promptly authenticate
and mail to such holder, a
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new Note equal in principal amount to any unpurchased portion of the Notes
surrendered; provided that each such new Note shall be issued in an original
principal amount in denominations of $1,000 and integral multiples thereof.
If the Credit Agreement is in effect, or any amounts are owing
thereunder or in respect thereof, at the time of the occurrence of a Change of
Control, prior to the mailing of the notice to holders described in the second
preceding paragraph, but in any event within 30 days following any Change of
Control, the Company covenants to:
(1) repay in full all obligations and terminate all
commitments under or in respect of the Credit Agreement and all other
Senior Indebtedness the terms of which require repayment upon a Change
of Control or offer to repay in full all obligations and terminate all
commitments under or in respect of the Credit Agreement and all such
Senior Indebtedness and repay the Indebtedness owed to each such lender
who has accepted such offer; or
(2) obtain the requisite consents under the Credit Agreement
and all such other Senior Indebtedness to permit the repurchase of the
Notes as described above.
The Company must first comply with the covenant described in
the preceding sentence before it shall be required to purchase Notes in the
event of a Change of Control; provided that the Company's failure to comply with
the covenant described in the preceding sentence constitutes an Event of Default
described in clause (3) under Section 6.01 below if not cured within 30 days
after the notice required by such clause. As a result of the foregoing, a holder
of the Notes may not be able to compel the Company to purchase the Notes unless
the Company is able at the time to refinance all of the obligations under or in
respect of the Credit Agreement and all such other Senior Indebtedness or obtain
requisite consents under the Credit Agreement and all such other Senior
Indebtedness.
In the event (1) if the Company or any Restricted Subsidiary
thereof has issued any outstanding (a) indebtedness that is subordinated in
right of payment to the Notes or (b) Preferred Stock, and the Company or such
Restricted Subsidiary is required to make a change of control offer or to make a
distribution with respect to such subordinated indebtedness or Preferred Stock
in the event of a change of control, the Company shall not consummate any such
offer or distribution with respect to such subordinated indebtedness or
Preferred Stock until such time as the Company shall have paid the Change of
Control Purchase Price in full to the holders of Notes that have accepted the
Company's change of control offer and shall otherwise have consummated the
change of control offer made to holders of the Notes and (2) the Company will
not issue Indebtedness that is subordinated in right of payment to the Notes or
Preferred Stock with change of control provisions
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requiring the payment of such Indebtedness or Preferred Stock prior to the
payment of the Notes in the event of a Change in Control under the Indenture.
The Company will comply with the requirements of Rule 14e-1 of
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.20 by virtue thereof.
SECTION 4.21. Maintenance of Properties; Insurance; Compliance with Law.
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, at all times cause all material properties used or useful in
the conduct of their business to be maintained and kept in good condition,
repair and working order (reasonable wear and tear excepted) and supplied with
all necessary equipment, and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereto; provided, however,
that nothing in this Section 4.21 shall prevent the Company or any Restricted
Subsidiary from discontinuing the use, operation or maintenance of any such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the reasonable judgment of the Company or such Restricted Subsidiary,
desirable for the Company or such Subsidiary and not adverse in any material
respect to the Holders.
(b) The Company shall maintain, and shall cause to be
maintained for each of its Restricted Subsidiaries, insurance covering such
risks as are usually and customarily insured against by corporations similarly
situated, in such amounts as shall be customary for corporations similarly
situated and with such deductibles and by such methods as shall be customary and
reasonable.
(c) The Company shall, and shall cause each of its
Subsidiaries to, comply with all statutes, laws, ordinances or government rules
and regulations to which they are subject, non-compliance with which would
materially adversely affect the business, earnings, properties, assets or
financial condition of the Company and their Subsidiaries taken as a whole.
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SECTION 4.22. Further Assurance to the Trustee.
The Company shall, upon the reasonable request of the Trustee,
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the provisions of
this Indenture.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Limitation on Consolidation, Merger and Sale of Assets.
The Company will not and will not permit any of its Restricted
Subsidiaries to consolidate with, merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets of
the Company (as an entirety or substantially as an entirety in one transaction
or a series of related transactions), to any Person unless:
(1) the Company or such Restricted Subsidiary, as the case may
be, shall be the continuing Person, or the Person (if other than the
Company or such Restricted Subsidiary) formed by such consolidation or
into which the Company or such Restricted Subsidiary, as the case may
be, is merged or to which the properties and assets of the Company or
such Restricted Subsidiary, as the case may be, are sold, assigned,
transferred, leased, conveyed or otherwise disposed of shall be a
corporation organized and existing under the laws of the United States
or any State thereof or the District of Columbia and shall expressly
assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the obligations of
the Company or such Restricted Subsidiary, as the case may be, under
the Indenture, the Notes and any Guarantees and the obligations
thereunder shall remain in full force and effect;
(2) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred
and be continuing; and
(3) immediately after giving effect to such transaction on a
pro forma basis the Company or such Person could incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) under
Section 4.06 above;
provided that (x) any Restricted Subsidiary may merge into the Company or
another Person that is a Restricted Subsidiary and (y) the Company may merge
with an Affiliate incorporated
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or organized for the purpose of reincorporating or reorganizing the Company in
another jurisdiction to realize tax benefits without complying with clause (3);
provided, in the case of a transaction pursuant to subclause (y), immediately
after giving effect to such transaction on a pro forma basis, either (A) the
surviving entity could incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 4.06 or (B) the Fixed Charge Coverage
Ratio of the surviving entity is not less than the Fixed Charge Coverage Ratio
of the Company immediately prior to such transaction and the surviving entity
conducts business in the same line or an extension of the same line of business
as that of the Company immediately prior to such transaction.
In connection with any consolidation, merger or transfer of
assets contemplated by this provision, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance not unsatisfactory to the
Trustee, an Officer's Certificate stating that such consolidation, merger or
transfer and the supplemental indenture in respect thereto comply with this
provision and that all conditions precedent herein provided for relating to such
transaction or transactions have been complied with.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
SECTION 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company or any Restricted Subsidiary in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into which the Company is merged or to which such transfer is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company or such Restricted Subsidiary under this Indenture with
the same effect as if such successor corporation had been named as the Company
or such Restricted Subsidiary herein, and thereafter the predecessor corporation
shall be relieved of all obligations and covenants under this Indenture and the
Notes.
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ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
The following events are "Events of Default":
(1) default in payment of any principal of, or premium, if
any, on the Notes whether at maturity, upon redemption or otherwise
(whether or not such payment shall be prohibited by Article Eleven);
(2) default for 30 days in payment of any interest on the
Notes;
(3) default by the Company or any Restricted Subsidiary in the
observance or performance of any other covenant in the Notes or this
Indenture for 60 consecutive days after written notice from the Trustee
or the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding (except in the case of a default with
respect to the covenants set forth in Section 4.20 or 5.01 which shall
constitute an Event of Default with such notice requirement but without
such passage of time requirement);
(4) failure to pay when due principal, interest or premium in
an aggregate amount of $7.5 million or more with respect to any
Indebtedness of the Company or any Restricted Subsidiary thereof, or
the acceleration of any such Indebtedness aggregating $7.5 million or
more which default, shall not be cured, waived or postponed pursuant to
an agreement with the holders of such Indebtedness within 60
consecutive days after written notice as provided in the Indenture, or
acceleration shall not be rescinded or annulled within 20 consecutive
days after written notice as provided in the Indenture;
(5) any final judgment or judgments which can no longer be
appealed for the payment of money in excess of $7.5 million (excluding
(i) amounts covered by insurance for which coverage is not being
challenged or denied, and (ii) amounts for which coverage has been
challenged or denied that the Company is contesting in good faith)
shall be rendered against the Company or any Restricted Subsidiary
thereof, and shall not be discharged for any period of 60 consecutive
days during which a stay of enforcement shall not be in effect;
(6) the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
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(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) admits in writing that it generally is not paying
its debts as they become due; or
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against either of the Company or
any Restricted Subsidiary in an involuntary case,
(B) appoints a Custodian of either of the Company or
any Restricted Subsidiary or for all or substantially all of
the property of either of the Company or any Restricted
Subsidiary, or
(C) orders the liquidation of either of the Company
or any Restricted Subsidiary,
and the order or decree remains unstayed and in effect for 60 days;
provided, however, that if the entry of such order or decree is
appealed and dismissed upon appeal, then the Event of Default hereunder
by reason of the entry of such order or decree shall be deemed to have
been cured.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
Subject to Sections 7.01 and 7.02, the Trustee shall not be
charged with knowledge of any Default, Event of Default, Change of Control or
Asset Sale or the requirement for payment of Additional Interest unless written
notice thereof shall have been given to a Responsible Officer at the Corporate
Trust Office of the Trustee by the Company or any other Person.
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SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default
described in Section 6.01(6) or (7)) shall have occurred and be continuing, then
the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Notes then outstanding may by written notice to the Company declare to be
immediately due and payable the entire principal amount of all the Notes then
outstanding plus accrued and unpaid to the date of acceleration (1) and such
amounts shall become immediately due and payable or (2) if there are any amounts
outstanding under or in respect of the Credit Agreement, shall become due and
payable upon the first to occur of an acceleration of amounts outstanding under
or in respect of the Credit Agreement or five Business Days after receipt by the
Company and the representative under or in respect of the Credit Agreement of
notice of the acceleration of the Notes; provided, however, that after such
acceleration but before a judgment or decree based on such acceleration is
obtained by the Trustee, the Majority Holders may rescind and annul such
acceleration and its consequences if:
(1) the recission would not conflict with judgment or decree,
(2) all Events of Default, other than nonpayment of principal,
premium, if any, or interest that has become due solely because of the
acceleration, have been cured or waived as provided in this Indenture,
(3) to the extent the payment of such interest is lawful,
interest on overdue installments of interest and overdue principal
which has become due otherwise than by such declaration of
acceleration, has been paid,
(4) the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements
and advances, and
(5) in the event of the cure or waiver of an Event of Default
of the type described in clause (5) of Section 6.01, the Trustee shall
have received an Officers' Certificate and an opinion of counsel that
such Event of Default has been cured or waived.
No such recission shall affect any subsequent Default or impair any right
consequent thereto.
In case an Event of Default described in Section 6.01(6) or
(7) shall occur, the principal, premium and interest amount with respect to all
of the Notes shall be due and payable immediately without any declaration or
other act on the part of the Trustee or the Holders. In addition, if within 60
days after such Event of Default described in
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Section 6.01(6) or (7) arose (x) the Indebtedness that is the basis for such
Event of Default has been discharged, or (y) the holders thereof have rescinded
or waived the acceleration, notice or action (as the case may be) giving rise to
such Event of Default, or (z) the default in respect of such Indebtedness that
is the basis for such Event of Default has been cured, the declaration of
acceleration of the Notes referred to in the preceding clause and such Event of
Default and the consequences thereof (including without limitation any
acceleration or resulting payment default) shall be annulled, waived and
rescinded, automatically and without any action by the Trustee or the Holders,
and be of no further effect.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or premium, if any, and interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture and may
take any necessary action requested of it as Trustee to settle, compromise,
adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Noteholder 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. Any costs
associated with actions taken by the Trustee under this Section 6.03 shall be
reimbursed to the Trustee by the Company.
SECTION 6.04. Waiver of Past Defaults and Events of Default.
Subject to Sections 6.02, 6.08 and 8.02 hereof, the Majority
Holders have the right to waive any existing Default or Event of Default or
compliance with any provision of this Indenture or the Notes. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto. In
case of any such waiver, the Company, the Trustee and the Holders shall be
restored to their former positions hereunder and under the Notes, respectively.
SECTION 6.05. Control by Majority.
The Majority Holders may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee by this Indenture. The Trustee,
however, shall have the right to
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refuse to follow any direction that conflicts with law (including the TIA) or
this Indenture or that the Trustee determines may be unduly prejudicial to the
rights of another Noteholder not taking part in such direction, and the Trustee
shall also have the right to decline to follow any such direction if the
Trustee, being advised by counsel, determines that the action so directed may
not lawfully be taken or if the Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed may involve it in personal
liability; provided that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 6.06. Limitation on Suits.
Subject to Section 6.08 below, a Noteholder may not institute
any proceeding or pursue any remedy with respect to this Indenture or the Notes
unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount
of the Notes then outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer and if requested provide to
the Trustee indemnity reasonably satisfactory to the Trustee 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, and, if requested,
provision of, indemnity; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60 day period by the Majority
Holders.
A Noteholder may not use this Indenture to prejudice the
rights of another Noteholder or to obtain a preference or priority over another
Noteholder.
SECTION 6.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.
No director, officer, employee or stockholder of the Company,
any Guarantor or any Subsidiary of any thereof shall have any liability for any
obligation of the Company or any Guarantor under this Indenture, the Notes or
any Guarantor or for any claim based on, in respect of, or by reason of, any
such obligation or its creation. Each Holder of the Notes, by accepting the
Notes, waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes.
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SECTION 6.08. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal of, or premium, if
any, and interest of the Note (including Additional Interest) on or after the
respective due dates expressed in the Note, or to bring suit for the enforcement
of any such payment on or after such respective dates, is absolute and
unconditional and shall not be impaired or affected without the consent of the
Holder.
SECTION 6.09. Collection Suit by Trustee.
If an Event of Default in payment of principal, premium or
interest specified in Section 6.01(1) or (2) hereof occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or any Guarantor (or any other obligor on the Notes)
for the whole amount of unpaid principal and accrued interest remaining unpaid,
together with interest on overdue principal and, to the extent that payment of
such interest is lawful, interest on overdue installments of interest, in each
case at the rate set forth in the Notes, and such further amounts as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
SECTION 6.10. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof) and the Noteholders allowed
in any judicial proceedings relative to the Company or any Guarantor (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same after
deduction of its charges and expenses to the extent that any such charges and
expenses are not paid out of the estate in any such proceedings and any
custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan or reorganization,
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arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Noteholder in any such proceedings.
SECTION 6.11. Priorities.
If the Trustee collects any money pursuant to this Article
Six, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07
hereof;
SECOND: to holders of Senior Indebtedness to the extent
required by Article Eleven hereof;
THIRD: to Noteholders for amounts due and unpaid on the Notes
for principal, premium, if any, and interest (including Additional
Interest, if any) as to each, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Notes; and
FOURTH: to the Company or, to the extent the Trustee collects
any amount from any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 6.11.
SECTION 6.12. 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 6.12 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.08 hereof or a suit by Holders of more than 10% in
principal amount of the Notes then outstanding.
SECTION 6.13. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason (including by reason of the waiver of
the applicable Event or Events
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of Default as permitted herein), or has been determined adversely to the Trustee
or to such Holder, then and in every case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default actually known to a Responsible
Officer of the Trustee has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent person would
exercise or use under the same circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture but, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform on their face to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01.
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(2) The Trustee shall not be liable for any error of judgment
made in good faith, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to the terms hereof.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its rights, powers or duties if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
(e) Whether or not therein expressly so provided, paragraphs
(a), (b), (c) and (e) of this Section 7.01 shall govern every provision of this
Indenture that in any way relates to the Trustee.
(f) The Trustee may refuse to perform any duty or exercise any
right or power which may cause it to incur liability or expense unless it
receives indemnity satisfactory to it in its sole discretion against any loss,
liability, expense or fee.
(g) 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 or
any Guarantor. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by the law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(1) The Trustee may rely on any document reasonably 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.
(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both,
which shall conform to the provisions of Section 12.05 hereof. The
Trustee shall be protected and shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or
opinion.
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(3) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
(other than an agent who is an employee of the Trustee) appointed by it
with due care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers; provided that the Trustee's
conduct does not constitute gross negligence or bad faith.
(5) The Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel as to matters of law shall be
full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such
counsel.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may make loans to, accept deposits from,
perform services for or otherwise deal with the either of the Company or any
Guarantor, or any Affiliates thereof, with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. The Trustee,
however, shall be subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes or
any Guarantee, it shall not be accountable for the Company's or any Guarantor's
use of the proceeds from the sale of Notes or any money paid to the Company or
any Guarantor pursuant to the terms of this Indenture and it shall not be
responsible for any statement in the Notes, Guarantee or this Indenture other
than its certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each Noteholder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of the principal of, or premium, if any, or interest on any
Note or a default in the observance or performance of any of the obligations of
the Company under Article Five, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the best interest of the Noteholders.
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SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after
January 1 of any year, commencing January 1, 2000 the Trustee shall mail to each
Noteholder a brief report dated as of such January 1 that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c) and TIA Section 313(d).
A copy of each report at the time of its mailing to
Noteholders shall be filed with the Commission and each stock exchange, if any,
on which the Notes are listed. The Company shall promptly notify the Trustee
when the Notes are listed on any stock exchange.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee and Agents from time to
time reasonable compensation for its services hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust). The Company shall reimburse the Trustee and Agents
upon request for all reasonable disbursements, expenses and advances incurred or
made by it in connection with its duties under this Indenture, including the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify each of the Trustee and any
predecessor Trustee for, and hold each of them harmless against, any and all
loss, damage, claim, liability or expense, including without limitation taxes
(other than taxes based on the income of the Trustee or such Agent) and
reasonable attorneys' fees and expenses incurred by each of them in connection
with the acceptance or performance of its duties under this Indenture including
the reasonable costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder (including, without limitation, settlement costs). The Trustee
or Agent shall notify the Company in writing promptly of any claim asserted
against the Trustee or Agent for which it may seek indemnity. However, the
failure by the Trustee or Agent to so notify the Company shall not relieve the
Company of its obligations hereunder except to the extent the Company is
prejudiced thereby.
Notwithstanding the foregoing, the Company need not reimburse
the Trustee for any expense or indemnify it against any loss or liability
incurred by the Trustee through its gross negligence or bad faith. To secure the
payment obligations of the Company in this Section 7.07, the Trustee shall have
a lien prior to the Notes on all money or property held or collected by the
Trustee except such money or property held in trust to pay principal of
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and interest on particular Notes. The obligations of the Company under this
Section 7.07 to compensate and indemnify the Trustee, Agents and each
predecessor Trustee and to pay or reimburse the Trustee, Agents and each
predecessor Trustee for expenses, disbursements and advances shall be
liabilities of the Company and shall survive the resignation or removal of the
Trustee and the satisfaction, discharge or other termination of this Indenture,
including any termination or rejection hereof under any Bankruptcy Law.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
For purposes of this Section 7.07, the term "Trustee" shall
include any trustee appointed pursuant to this Article Seven.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing.
The Holders of a majority in principal amount of the outstanding Notes may
remove the Trustee by notifying the Company and the removed Trustee in writing
and may appoint a successor Trustee with the Company's written consent, which
consent shall not be unreasonably withheld. The Company may remove the Trustee
at its election if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee (and the Company shall pay the expenses related to such
petition, including reasonable compensation, disbursements and expenses of
counsel).
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If the Trustee fails to comply with Section 7.10 hereof, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately following
such delivery, the retiring Trustee shall, subject to its rights under Section
7.07 hereof, transfer all property held by it as Trustee to the successor
Trustee, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Noteholder. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Consolidation, Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, subject to Section 7.10 hereof, the successor corporation without
any further act shall be the successor Trustee; provided such entity shall be
otherwise qualified and eligible under this Article Seven.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1) and (2) in every respect. The Trustee
(together with its corporate parent) shall have a combined capital and surplus
of at least $100,000,000 as set forth in the most recent applicable published
annual report of condition. The Trustee shall comply with TIA Section 310(b),
including the provision in Section 310(b)(1) (including the proviso thereof).
If at any time the Trustee shall cease to be eligible pursuant to this Section
7.10, the Trustee shall resign immediately in the manner and with the effect
specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311 (b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
SECTION 7.12. Paying Agents.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to it and the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
7.12:
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(A) that it will hold all sums held by it as agent for the
payment of principal of, or premium, if any, or interest on, the Notes
(whether such sums have been paid to it by the Company or by any
obligor on the Notes) in trust for the benefit of Holders of the Notes
or the Trustee;
(B) that it will at any time during the continuance of any
Event of Default, upon written request from the Trustee, deliver to the
Trustee all sums so held in trust by it together with a full accounting
thereof; and
(C) that it will give the Trustee written notice within three
(3) Business Days of any failure of the Company (or by any obligor on
the Notes) in the payment of any installment of the principal of,
premium, if any, or interest on, the Notes when the same shall be due
and payable.
ARTICLE EIGHT
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01. Without Consent of Holders.
The Company and any Guarantors, when authorized by a Board
Resolution of each of them, and the Trustee may amend, waive or supplement this
Indenture or the Notes without notice to or consent of any Noteholder:
(1) to comply with Section 5.01 hereof;
(2) to provide for uncertificated Notes in addition to or in
place of certificated Notes (provided, however, that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code), to add Guarantees with
respect to the Notes, to secure the Notes;
(3) to comply with any requirements of the Commission under
the TIA;
(4) to cure any ambiguity, omission, defect or inconsistency;
(5) to make any other change that does not materially and
adversely affect the rights of any Noteholders hereunder;
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(6) to add to the covenants of the Company for the benefit of
the holders of the Notes or to surrender any right or power conferred
upon the Company;
(7) to add Guarantees with respect to the Notes; or
(8) to provide for the issuance of the Exchange Notes or the
Private Exchange Notes in accordance with Section 2.01 and pursuant to
the Registration Rights Agreement.
However, no amendment may be made to the subordination
provisions of the Indenture that adversely affects the rights 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.
The Trustee is hereby authorized to join with the Company in
the execution of any supplemental indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture which adversely affects
its own rights, duties or immunities under this Indenture.
SECTION 8.02. With Consent of Holders.
The Company and any Guarantors, when authorized by a Board
Resolution of each of them, and the Trustee may modify or supplement this
Indenture or the Notes with the written consent of the Majority Holders. The
Majority Holders may waive compliance in a particular instance by the Company or
any Guarantors with any provision of this Indenture or the Notes. Subject to
Section 8.04, without the consent of each Noteholder affected, however, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(1) reduce the amount of Notes whose holders must consent to
an amendment, supplement, or waiver to the Indenture;
(2) reduce the rate of or change the time for payment of
interest, including defaulted interest, on any Note;
(3) reduce the principal of or premium on or change the stated
maturity of any Note or change the date on which any Notes may be
subject to redemption or repurchase or reduce the redemption or
repurchase price therefor;
(4) make any Note payable in money other than that stated in
the Note or change the place of payment from New York, New York;
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(5) waive a default on the payment of the principal of,
interest on or redemption payment with respect to any Note;
(6) make any change in provisions of this Indenture protecting
the right of each holder of Notes to receive payment of principal of
and interest on such Notes on or after the due date thereof or to bring
suit to enforce such payment, or permitting holders of a majority in
principal amount of Notes to waive Defaults or Events of Default;
(7) amend, change or modify in any material respect the
obligation of the Company to make and consummate a Change of Control
Offer in the event of a Change of Control or make and consummate an
Excess Proceeds Offer with respect to any Asset Sale that has been
consummated or modify any of the provisions or definitions with respect
thereto; or
(8) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the Notes
or any Guarantee in a manner which adversely affects the holders of
Notes.
In addition, without the consent of the holders of 90% in
principal amount of the Notes then outstanding, no amendment may release any
Guarantor from any of its obligations under its Guarantee or this Indenture
otherwise than in accordance with the terms of this Indenture.
After an amendment, supplement or waiver under this Section
8.02 becomes effective, the Company shall mail to the Holders a notice briefly
describing the amendment, supplement or waiver. However, the failure to give
such notice to all Holders, or any defect thereby will not impair or affect the
validity of the amendment.
Upon the written request of the Company, accompanied by a
Board Resolution authorizing the execution of any such supplemental indenture,
and upon the receipt by the Trustee of evidence not unsatisfactory to the
Trustee of the consent of the Noteholders as aforesaid and upon receipt by the
Trustee of the documents described in Section 8.06 hereof, the Trustee shall
join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture, in which case the Trustee may, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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SECTION 8.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 8.04. Revocation and Effect of Consents.
Until an amendment, supplement, waiver or other action becomes
effective, a consent to it by a Holder of a Note is a continuing consent
conclusive and binding upon such Holder and every subsequent Holder of the same
Note or portion thereof, and of any Note issued upon the transfer thereof or in
exchange therefor or in place thereof, even if notation of the consent is not
made on any such Note. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Note or portion of
such Note by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Notes have consented (and not theretofore
revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement, or waiver. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such amendment, supplement, or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date (except as to any supplemental indenture
agreement or instrument or waiver entered into or any other action taken in
respect of such consent, prior to the expiration of such 90 day period).
After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Noteholder, unless it makes a change described in
any of clauses (1) through (8) of Section 8.02 hereof. In that case the
amendment, supplement, waiver or other action shall bind each Holder of a Note
who has consented to it and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's Note.
SECTION 8.05. Notation on or Exchange of Notes.
If an amendment, supplement, or waiver changes the terms of a
Note, the Trustee (in accordance with the specific written direction of the
Company) shall request the Holder of the Note (in accordance with the specific
written direction of the Company) to
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deliver it to the Trustee. In such case, the Trustee shall place an appropriate
notation on the Note about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or
issue a new Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 8.06. Trustee To Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Eight if the amendment, supplement or waiver
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign such amendment,
supplement or waiver. In signing or refusing to sign such amendment, supplement
or waiver the Trustee shall be entitled to receive and, subject to Section 7.01
hereof, shall be fully protected in relying upon an Officers' Certificate and an
Opinion of Counsel stating, in addition to the matters required by Section
12.04, that such amendment, supplement or waiver is authorized or permitted by
this Indenture and is a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms (subject to
customary exceptions).
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Discharge of Indenture.
The Company may terminate its obligations under the Notes, and
this Indenture, except the obligations referred to in the last paragraph of this
Section 9.01, if there shall have been cancelled by the Trustee or delivered to
the Trustee for cancellation all Notes theretofore authenticated and delivered
(other than any Notes that are asserted to have been destroyed, lost or stolen
and that shall have been replaced as provided in Section 2.08 hereof) and the
Company has paid all sums payable by them hereunder or deposited all required
sums with the Trustee.
After such delivery, the Trustee upon Company Request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations specified below.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company in Sections 7.07, 9.05 and 9.06 hereof
shall survive.
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SECTION 9.02. Legal Defeasance.
The Company and the Guarantors may at the option of the
Company, by Board Resolution of the Board of Directors of the Company, be
discharged from their obligations with respect to the Notes and the Guarantees
on the date the conditions set forth in Section 9.04 below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Notes and to have satisfied all its other
obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall, subject to
Section 9.06 hereof, execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of outstanding Notes to receive solely from
the trust funds described in Section 9.04 hereof and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Notes when such payments are due, (B) the Company's obligations
with respect to such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.11 and 4.18 hereof, (C) the rights, powers, trusts, duties, and immunities of
the Trustee hereunder (including claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof) and (D) this Article Nine. Subject to
compliance with this Article Nine, the Company may exercise its option under
this Section 9.02 with respect to the Notes notwithstanding the prior exercise
of its option under Section 9.03 below with respect to the Notes.
SECTION 9.03. Covenant Defeasance.
At the option of the Company, pursuant to a Board Resolution
of the Board of Directors of the Company, (x) the Company shall be released from
its obligations under Sections 4.02 (except for obligations mandated by the TIA)
through 4.17, inclusive, 4.19 through 4.21, inclusive, and (y) clauses (1), (2)
and (3) of Section 5.01 hereof and clause (3) of Section 6.01 hereof shall no
longer apply with respect to the outstanding Notes on and after the date the
conditions set forth in Section 9.04 hereof are satisfied (hereinafter,
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means that
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section or
portion thereof, whether directly or indirectly by reason of any reference
elsewhere herein to any such specified Section or portion thereof or by reason
of any reference in any such specified Section or portion thereof to any other
provision herein or in any other document, but the remainder of this Indenture
and the Notes shall be unaffected thereby.
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SECTION 9.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of
Section 9.02 or Section 9.03 hereof to the outstanding Notes:
(1) the Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 hereof who shall agree to comply with the
provisions of this Article Nine applicable to it) as funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
the Notes, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later
than the due date of any payment, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of, premium, if
any, and accrued interest on the outstanding Notes at the maturity date
of such principal, premium, if any, or interest, or on dates for
payment and redemption of such principal, premium, if any, and interest
selected in accordance with the terms of this Indenture and of the
Notes;
(2) no Event of Default or Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit or,
insofar as Events of Default under Section 6.01(6) or (7) are
concerned, at any time during the period ending on the 91st day after
the date of such deposit or, if longer, ending on the day following the
expiration of the longest preference period under any Bankruptcy Law
applicable to the Company in respect of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period);
(3) such Legal Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest for purposes of the
TIA with respect to any securities of the Company;
(4) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute default under this
Indenture, the Senior Credit Facility or any other material agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
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(5) the Company shall have delivered to the Trustee an Opinion
of Counsel stating that, as a result of such Legal Defeasance or
Covenant Defeasance, neither the trust nor the Trustee will be required
to register as an investment company under the Investment Company Act
of 1940, as amended;
(6) in the case of an election under Section 9.02 above, 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 to the effect that
or (ii) there has been a change in any applicable Federal income tax
law with the effect that, and such opinion shall confirm that, the
Holders of the outstanding Notes or Persons in their positions will not
recognize income, gain or loss for United States Federal income tax
purposes solely as a result of such Legal Defeasance and will be
subject to United States Federal income tax on the same amounts, in the
same manner, including as a result of prepayment, and at the same times
as would have been the case if such Legal Defeasance had not occurred;
(7) in the case of an election under Section 9.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of the outstanding Notes will not recognize
income, gain or loss for United States Federal income tax purposes as a
result of such Covenant Defeasance and will be subject to United States
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;
(8) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the Legal
Defeasance under Section 9.02 above or the Covenant Defeasance under
Section 9.03 hereof (as the case may be) have been complied with;
(9) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit under clause (1) was not
made by the Company with the intent of preferring the Holders of the
Notes over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any creditors of the
Company or others;
(10) the Company shall have delivered to the Trustee on
Opinion of Counsel to the effect that (i) the trust funds will not be
subject to the rights of the holders of Senior Indebtedness, including,
without limitation, those arising under this Indenture and (ii) after
the 91st day following the deposit, the trust funds will not be subject
to the effect of any applicable Bankruptcy Law; and
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(11) the Company shall have paid or duly provided for payment
under terms mutually satisfactory to the Company and the Trustee all
amounts then due to the Trustee pursuant to Section 7.07 hereof.
SECTION 9.05. Deposited Money and U.S. Government Obligations
To Be Held in Trust; Other Miscellaneous Provisions.
All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 9.04 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent, to the Holders of such
Notes, of all sums due and to become due thereon in respect of principal,
premium, if any, and accrued interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 9.04 hereof or the principal, premium,
if any, and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of the outstanding
Notes.
Anything in this Article Nine to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon a Company
Request any money or U.S. Government Obligations held by it as provided in
Section 9.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof
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 Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Nine until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with Section
9.01 hereof; provided that if the Company has made any payment of principal of,
premium, if any, or accrued interest on any Notes because of the reinstatement
of their
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obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or U.S. Government Obligations
held by the Trustee or Paying Agent.
SECTION 9.07. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any Paying Agent under the provisions of this
Indenture shall, upon written demand of the Company, be paid to the Trustee, or
if sufficient moneys have been deposited pursuant to Section 9.04 hereof, to the
Company upon a Company Request, and thereupon such Paying Agent shall be
released from all further liability with respect to such moneys.
SECTION 9.08. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or
then held by the Company in trust for the payment of the principal of, or
premium, if any, or interest on any Note that are not applied but remain
unclaimed by the Holder of such Note for two years after the date upon which the
principal of, or premium, if any, or interest on such Note shall have
respectively become due and payable shall be repaid to the Company upon a
Company Request, or if such moneys are then held by the Company in trust, such
moneys shall be released from such trust; and the Holder of such Note entitled
to receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company and the Guarantors for the payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, that the Trustee or any such Paying Agent,
before being required to make any such repayment, may, at the expense of the
Company, either mail to each Noteholder affected, at the address shown in the
register of the Notes maintained by the Registrar pursuant to Section 2.03
hereof, or cause to be published once a week for two successive weeks, in a
newspaper published in the English language, customarily published each Business
Day and of general circulation in The City of New York, New York, a notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such mailing or publication, any
unclaimed balance of such moneys then remaining will be repaid to the Company.
After payment to the Company or the release of any money held in trust by the
Company, Noteholders entitled to the money must look only to the Company for
payment as general creditors unless applicable abandoned property law designates
another Person.
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ARTICLE TEN
GUARANTEE OF NOTES
SECTION 10.01. Guarantee.
Subject to the provisions of this Article Ten, each Guarantor,
by execution of a Guarantee will, jointly and severally unconditionally
guarantee to each Holder and to the Trustee, on behalf of the Holders, (i) the
due and punctual payment of the principal of, and premium, if any, and interest
on each Note, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
(including Additional Interest) on the overdue principal of, and premium, if
any, and interest on the Notes, to the extent lawful, and the due and punctual
payment of all other Obligations of the Company to the Holders or the Trustee
(including without limitation amounts due the Trustee under Section 7.07) all in
accordance with the terms of such Note and this Indenture, and (ii) in the case
of any extension of time of payment or renewal of any Notes or any of such other
Obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, at stated maturity, by
acceleration or otherwise. Each Guarantor, by execution of a Guarantee, will,
agree that its obligations hereunder shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
unenforceability of any such Note or this Indenture, any failure to enforce the
provisions of any such Note or this Indenture, any waiver, modification or
indulgence granted to the Company with respect thereto by the Holder of such
Note or the Trustee, or any other circumstances which may otherwise constitute a
legal or equitable discharge of a surety or such Guarantor.
Each Guarantor, by execution of a Guarantee, will waive
diligence, presentment, demand for payment, filing of claims with a court in the
event of merger or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest or notice with respect to any such Note or
the Indebtedness evidenced thereby and all demands whatsoever, and will covenant
that the Guarantee will not be discharged as to any such Note except by payment
in full of the principal thereof, premium if any and interest thereon as
provided in Section 9.01 hereof. Each Guarantor, by execution of a Guarantee,
will further agree that, as between such Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the Obligations
guaranteed hereby may be accelerated as provided in Article Six hereof for the
purposes of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
such Obligations as provided in Article Six hereof, such Obligations (whether or
not due and payable) shall forthwith become due and payable by each Guarantor
for the purpose of this Guarantee. In addition, without limiting the foregoing
provisions, upon the effectiveness
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of an acceleration under Article 6 hereof, the Trustee shall promptly make a
demand for payment on the Notes under the Guarantee provided for in this Article
10 and not discharged. Failure to make such a demand shall not affect the
validity or enforceability of the Guarantee upon any Guarantor.
A Guarantee shall not be valid or become obligatory for any
purpose with respect to a Note until the certificate of authentication on such
Note shall have been signed by or on behalf of the Trustee.
A Guarantee shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities
are, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Securities, whether as a
"voidable preference," "fraudulent transfer" or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Securities shall,
to the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorporator,
past, present or future, of any Guarantor, as such, shall have any personal
liability under this Guarantee by reason of his, her or its status as such
stockholder, officer, director, employer or incorporator.
A Guarantor, by execution of a Guarantee, will have the right
to seek contribution from any non-paying Guarantor so long as the exercise of
such right does not impair the rights of the Holders under such Guarantee.
SECTION 10.02. Execution and Delivery of Guarantee.
A Guarantee shall be executed by either manual or facsimile
signature of an Officer or an Officer of a general partner, as the case may be,
of such Guarantor.
If an officer of a Guarantor whose signature is on the
Guarantee no longer holds that office, such Guarantor's Guarantee shall be valid
nevertheless.
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SECTION 10.03. Limitation of Guarantee.
Each Guarantor, and by its acceptance hereof each Holder and
the Trustee, hereby confirms that it is the intention of all such parties that
the Guarantee does not constitute a fraudulent transfer or conveyance for
purposes of Title 11 of the United States Code, as amended, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
U.S. Federal or state law. To effectuate the foregoing intention, each Holder
and each Guarantor hereby irrevocably agree that the obligations of a Guarantor
under its Guarantee shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Guarantor, and
after giving effect to any collections from or payments made by or on behalf of
such Guarantor in respect of the obligations of such Guarantor pursuant to this
Article Ten, result in the obligations of such Guarantor not constituting such a
fraudulent transfer or conveyance.
SECTION 10.04. Additional Guarantors.
Any person may become a Guarantor by executing and delivering
to the Trustee (a) a supplemental indenture in form and substance satisfactory
to the Trustee, which subjects such person to the provisions of this Indenture
as a Guarantor, and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such person and
constitutes the legal, valid, binding and enforceable obligation of such person
(subject to such customary exceptions concerning fraudulent conveyance laws,
creditors' rights and equitable principles as may be acceptable to the Trustee
in its discretion).
SECTION 10.05. Release of Guarantor.
A Guarantor shall be released from all of its obligations
under its Guarantee if:
(i) the Guarantor has sold all or substantially all of its
assets or the Company and its Restricted Subsidiaries have sold all of
the Capital Stock of the Guarantor owned by them, in each case in a
transaction in compliance with the terms of this Indenture (including
Sections 4.09, 4.20 and 5.01);
(ii) the Guarantor merges with or into or consolidates with,
or transfers all or substantially all of its assets to, the Company or
another Guarantor in a transaction in compliance with the terms of this
Indenture (including Section 5.01); or
(iii) the Guarantor is designated an Unrestricted Subsidiary
in compliance with the terms of this Indenture (including Section
4.08);
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and in each such case, such Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with and that such release is authorized and permitted hereunder.
The Trustee shall execute any documents reasonably requested
by the Company or a Guarantor in order to evidence the release of such Guarantor
from its obligations under its Guarantee endorsed on the Notes and under this
Article Ten.
SECTION 10.06. Subordination of Subrogation and Other Rights; Subrogation.
Each Guarantor hereby agrees that any claim against the
Company that arises from the payment, performance or enforcement of such
Guarantor's obligations under the Guarantee or this Indenture, including,
without limitation, any right of subrogation, shall be subject and subordinate
to, and no payment with respect to any such claim of such Guarantor shall be
made before, the payment in full in cash of all outstanding Senior Indebtedness
and Guarantor Senior Indebtedness in accordance with the provisions provided
therefor in this Indenture.
Upon the payment in full in cash or Cash Equivalents of all
Guarantor Senior Indebtedness of a Guarantor, the Holders of the Notes shall be
subrogated to the rights of the holders of such Guarantor Senior Indebtedness to
receive payments or distributions of cash, property or securities of such
Guarantor made on such Guarantor Senior Indebtedness until the principal of and
interest on the Notes shall be paid in full in cash or Cash Equivalents; and,
for the purposes of such subrogation, no payments or distributions to the
holders of such Guarantor Senior Indebtedness of any cash, property or
securities to which the Holders of the Notes or the Trustee on their behalf
would be entitled except for the provisions of this Article Ten, and no payment
over pursuant to the provisions of this Article Ten to the holders of such
Guarantor Senior Indebtedness by Holders of the Notes or the Trustee on their
behalf shall, as between such Guarantor, its creditors other than holders of
such Guarantor Senior Indebtedness, and the Holders of the Notes, be deemed to
be a payment by such Guarantor to or on account of such Guarantor Senior
Indebtedness. It is understood that the provisions of this Article Ten are and
are intended solely for the purpose of defining the relative rights of the
Holders of the Notes, on the one hand, and the holders of Guarantor Senior
Indebtedness of any such Guarantor on the other hand.
If any payment or distribution to which the Holders of the
Notes would otherwise have been entitled but for the provisions of this Article
Ten shall have been applied, pursuant to the provisions of this Article Ten, to
the payment of all amounts payable under Guarantor Senior Indebtedness of the
Guarantors, then and in such case, the Holders of the
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Notes shall be entitled to receive from the holders of such Guarantor Senior
Indebtedness any payments or distributions received by such holders of Guarantor
Senior Indebtedness in excess of the amount required to make payment in full in
cash of such Guarantor Senior Indebtedness.
SECTION 10.07. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness.
Each Guarantor, by execution of a Guarantee, will covenant and
agree, and each Holder of Notes, by its acceptance thereof, will likewise
covenants and agrees, that to the extent and in the manner hereinafter set forth
in this Article Ten, the Indebtedness represented by the Guarantee and the
payment of the principal of, premium, if any, and interest on the Notes pursuant
to the Guarantee by such Guarantor are hereby expressly made subordinate and
subject in right of payment as provided in this Article Ten to the prior
indefeasible payment and satisfaction in full in cash of all existing and future
Guarantor Senior Indebtedness of such Guarantor.
This Section 10.07 and the following Sections 10.08 through
10.16 shall constitute a continuing offer to all Persons who, in reliance upon
such provisions, become holders of or continue to hold Guarantor Senior
Indebtedness of any Guarantor; and such provisions are made for the benefit of
the holders of Guarantor Senior Indebtedness of each Guarantor; and such holders
are made obligees hereunder and they or each of them may enforce such
provisions.
SECTION 10.08. Payment Over of Proceeds upon Dissolution, etc., of a
Guarantor.
In the event of any:
(1) insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar
case or proceeding in connection therewith, relative to a Guarantor or
to its creditors, as such, or to its assets, whether voluntary or
involuntary;
(2) liquidation, dissolution or other winding-up of a
Guarantor, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy;
(3) general assignment for the benefit of creditors of a
Guarantor; or
(4) marshaling of assets or liabilities of a Guarantor (except
in connection with the merger or consolidation of a Guarantor or its
liquidation or dissolution following
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the transfer of substantially all of its assets, upon the terms and
conditions permitted under the circumstances described under Section
5.01).
(all of the foregoing events described in clauses (1) through
(4) referred to herein individually as a "Guarantor Bankruptcy Proceeding" and
collectively as "Guarantor Bankruptcy Proceedings"), the holders of Guarantor
Senior Indebtedness of a Guarantor will be entitled to receive payment and
satisfaction in full in cash of all amounts due on or in respect of all
Guarantor Senior Indebtedness of a Guarantor before the holders of the Notes are
entitled to receive or retain any payment or distribution of any kind on account
of the Notes.
In the event that, notwithstanding the foregoing, the Trustee
or any Holder of Notes receives any payment or distribution of assets of a
Guarantor of any kind, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of the Notes
before all Guarantor Senior Indebtedness of a Guarantor is paid and satisfied in
full in cash, then such payment or distribution will be held by the recipient in
trust for the benefit of holders of Guarantor Senior Indebtedness and will be
immediately paid over or delivered to the holders of Guarantor Senior
Indebtedness or their representative or representatives to the extent necessary
to make payment in full of all Guarantor Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution, or provision
therefor, to or for the holders of Guarantor Senior Indebtedness. By reason of
such subordination, in the event of any such Guarantor Bankruptcy Proceeding,
creditors of a Guarantor who are holders of Guarantor Senior Indebtedness may
recover more, ratably, than other creditors of a Guarantor, including Holders of
the Notes, and creditors of a Guarantor who are not holders of Guarantor Senior
Indebtedness or of the Notes may recover more, ratably, than the Holders of the
Notes.
The consolidation of a Guarantor with, or the merger of a
Guarantor with or into, another Person or the liquidation or dissolution of a
Guarantor following the conveyance, transfer or lease of its properties and
assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article Five hereof shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the benefit of creditors
or marshaling of assets and liabilities of a Guarantor for the purposes of this
Article Eleven if the Person formed by such consolidation or the surviving
entity of such merger or the Person which acquires by conveyance, transfer or
lease such properties and assets substantially as an entirety, as the case may
be, shall, as a part of such consolidation, merger, conveyance, transfer or
lease, comply with the conditions set forth in Article Five hereof.
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SECTION 10.09. Suspension of Guarantee Obligations When Guarantor Senior
Indebtedness in Default.
(a) Unless Section 10.08 hereof shall be applicable, upon the
occurrence of a Payment Default on Designated Senior Indebtedness, no payment or
distribution of any assets or securities of any Guarantor or any Restricted
Subsidiary of such Guarantor of any kind or character (including, without
limitation, cash, property and any payment or distribution which may be payable
or deliverable by reason of the payment of any other Indebtedness of such
Guarantor being subordinated to the payment of its Obligations on its Guarantee)
may be made by or on behalf of such Guarantor or any Restricted Subsidiary of
such Guarantor, including, without limitation, by way of set-off or otherwise,
for or on account of its Obligations on its Guarantee, and neither the Trustee
nor any holder or owner of any Notes shall take or receive from any Guarantor or
any Restricted Subsidiary of such Guarantor, directly or indirectly in any
manner, payment in respect of all or any portion of its Obligations on its
Guarantee commencing on the date of receipt by the Trustee of written notice
from the representative of the holders of Designated Senior Indebtedness which
constitutes Guarantor Senior Indebtedness (the "Guarantor Representative") of
the occurrence of such Payment Default, and in any such event, such prohibition
shall continue until such Payment Default is cured, waived in writing or ceases
to exist. At such time as the prohibition set forth in the preceding sentence
shall no longer be in effect, subject to the provisions of the following clause
(b) of this Section 10.09, such Guarantor shall resume making any and all
required payments in respect of its Obligations under its Guarantee, including
any missed payments.
(b) Unless Section 10.08 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness
which constitutes Guarantor Senior Indebtedness, no payment or distribution of
any assets of such Guarantor of any kind may be made by such Guarantor or any
Restricted Subsidiary of such Guarantor, including, without limitation, by way
of set-off or otherwise, for or on account of its Obligations under its
Guarantee, or for or on account of the purchase or redemption or other
acquisition of its Obligations under its Guarantee, for a period (a "Guarantor
Payment Blockage Period") commencing on the date of receipt by the Trustee of
written notice from the Guarantor Representative of such Non-Payment Event of
Default unless and until (subject to any blockage of payments that may then be
in effect under the preceding paragraph) the earliest of (x) more than 179 days
shall have elapsed since receipt of such written notice by the Trustee, (y) such
Non-Payment Event of Default shall have been cured or waived in writing or shall
have ceased to exist or such Designated Senior Indebtedness which constitutes
Guarantor Senior Indebtedness shall have been paid in full or (z) such Guarantor
Payment Blockage Period shall have been terminated by written notice to such
Guarantor or the Trustee from such Guarantor Representative, after which, in the
case of
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clause (x), (y) or (z), such Guarantor shall resume making any and all required
payments in respect of its Obligations under its Guarantee, including any missed
payments, unless the holders of such Designated Senior Indebtedness which
constitutes Guarantor Senior Indebtedness or the Guarantor Representative of
such holders have or has accelerated the maturity of such Designated Senior
Indebtedness which constitutes Guarantor Senior Indebtedness, or any Payment
Default otherwise exists. Notwithstanding any other provision of the Indenture,
in no event shall a Guarantor Payment Blockage Period commenced in accordance
with the provisions of this Section 10.09(b) extend beyond 179 days from the
date of the receipt by the Trustee of the notice referred to above (the "Initial
Guarantor Blockage Period"). Any number of additional Guarantor Payment Blockage
Periods may be commenced during the Initial Guarantor Blockage Period; provided,
however, that no such additional Guarantor Payment Blockage Period shall extend
beyond the Initial Guarantor Blockage Period. After the expiration of the
Initial Guarantor Blockage Period, no Guarantor Payment Blockage Period may be
commenced until at least 180 consecutive days have elapsed from the last day of
the Initial Guarantor Blockage Period. Notwithstanding any other provision of
this Indenture, no Non-Payment Event of Default with respect to Designated
Senior Indebtedness which constitutes Guarantor Senior Indebtedness and which
existed or was continuing on the date of the commencement of any Guarantor
Payment Blockage Period initiated by the Guarantor Representative shall be, or
be made, the basis for the commencement of a second Guarantor Payment Blockage
Period initiated by the Guarantor Representative, whether or not within the
Initial Guarantor Blockage Period, unless such Non-Payment Event of Default
shall have been waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Note shall have received any payment from a
Guarantor prohibited by the foregoing provisions of this Section 10.09, then and
in such event such payment shall be paid over and delivered forthwith to the
Guarantor Representative initiating the Guarantor Payment Blockage Period, in
trust for distribution to the holders of Guarantor Senior Indebtedness or, if no
amounts are then due in respect of Guarantor Senior Indebtedness, promptly
returned to such Guarantor, or otherwise as a court of competent jurisdiction
shall direct.
(d) Nothing in this Section 10.09 or in Section 10.08 shall
prevent the Trustee from receiving any payment due to the Trustee in accordance
with Section 7.07 hereof.
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SECTION 10.10. Trustee's Relation to Guarantor Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article Ten with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness and the Trustee shall not be liable to any holder of Guarantor
Senior Indebtedness (other than for its willful misconduct or gross negligence)
if it shall in good faith mistakenly pay over or deliver to the Holders of
Notes, the Company or any other Person moneys or assets to which any holder of
Guarantor Senior Indebtedness shall be entitled by virtue of this Article Ten or
otherwise. Nothing in this Section 10.10 shall affect the obligation of any
other such Person, the Company, or the Holders to hold such money or assets for
the benefit of, and to pay such money or assets over to, the holders of the
Guarantor Senior Indebtedness or their applicable representative or
representatives.
SECTION 10.11. Subrogation to Rights of Holders of Guarantor Senior
Indebtedness.
Upon the payment in full of all amounts payable under or in
respect of all Guarantor Senior Indebtedness of a Guarantor, the Holders shall
be subrogated to the rights of the holders of such Guarantor Senior Indebtedness
to receive payments and distributions of cash, property and securities of such
Guarantor made on such Guarantor Senior Indebtedness until all amounts due to be
paid under the Guarantee shall be paid in full. For the purposes of such
subrogation, no payments or distributions to holders of Guarantor Senior
Indebtedness of any cash, property or securities to which Holders of the Notes
would be entitled except for the provisions of this Article Ten and no payments
over pursuant to the provisions of this Article Ten to holders of Guarantor
Senior Indebtedness by Holders of the Notes, shall, as among each Guarantor, its
creditors other than holders of Guarantor Senior Indebtedness and the Holders of
the Notes, be deemed to be a payment or distribution by such Guarantor to or on
account of such Guarantor Senior Indebtedness.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Ten shall
have been applied, pursuant to the provisions of this Article Ten, to the
payment of all amounts payable under Guarantor
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Senior Indebtedness, then and in such case, the Holders shall be entitled to
receive from the holders of such Guarantor Senior Indebtedness at the time
outstanding any payments or distributions received by such holders of Guarantor
Senior Indebtedness in excess of the amount sufficient to pay all amounts
payable under or in respect of such Guarantor Senior Indebtedness in full in
cash.
SECTION 10.12. Guarantee Subordination Provisions Solely To Define
Relative Rights.
The subordination provisions of this Article Ten are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Notes on the one hand and the holders of Guarantor Senior Indebtedness on
the other hand. Nothing contained in this Article Ten or elsewhere in this
Indenture or in the Notes is intended to or shall (a) impair, as among each
Guarantor, its creditors other than holders of its Guarantor Senior Indebtedness
and the Holders of the Notes, the obligation of such Guarantor, which is
absolute and unconditional, to make payments to the Holders in respect of its
Obligations on its Guarantee in accordance with its terms; or (b) affect the
relative rights against such Guarantor of the Holders of the Notes and creditors
of such Guarantor other than the holders of the Guarantor Senior Indebtedness;
or (c) prevent the Holder of any Note from exercising all remedies otherwise
permitted by applicable law upon a Default or an Event of Default under this
Indenture, subject to the rights, if any, under this Article Ten of the holders
of Guarantor Senior Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of any Guarantor referred to in
Section 10.08 hereof, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or deliverable to such
Holder, or (2) under the conditions specified in Section 10.09 hereof, to
prevent any payment prohibited by such Section or enforce their rights pursuant
to Section 10.09(c) hereof.
The failure by any Guarantor to make a payment in respect of
its obligations on its Guarantee by reason of any provision of this Article Ten
shall not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
SECTION 10.13. Trustee To Effectuate Subordination.
Each Holder of a Note by his acceptance thereof agrees to be
bound by such provisions and authorizes and directs the Trustee, on his behalf,
to take such action as may be necessary or appropriate to effectuate the
subordination provisions in this Article Ten and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
Guarantor Bankruptcy Proceeding or other dissolution, winding-up, liquidation or
reorganization of a Guarantor whether in bankruptcy, insolvency, receivership
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proceedings, or otherwise, the prompt and timely filing of a claim for the
unpaid balance of the indebtedness of such Guarantor owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
If the Trustee does not file such a claim prior to 30 days before the expiration
of the time to file such a claim, the holders of Guarantor Senior Indebtedness,
or any Guarantor Representative, may, and hereby are authorized to, file such a
claim on behalf of Holders of the applicable Notes.
SECTION 10.14. Notice to Trustee.
(a) The Company or any Guarantor shall give prompt written
notice to the Trustee of any fact known to the Company or any such Guarantor
which would prohibit the making of any payment to or by the Trustee at its
Corporate Trust Office in respect of the Guarantees pursuant to the provisions
of this Article Ten. Notwithstanding the provisions of this Article Ten or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Guarantees, unless and until the
Trustee shall have received written notice thereof from the Company or a holder
of Guarantor Senior Indebtedness or from any trustee, fiduciary, representative,
or agent therefor no later than two Business Days prior to such payment; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of this Section 10.14, and subject to the provisions of Sections 7.01
and 7.02 hereof, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
referred to in this Section 10.14 at least one Business Day prior to the date
upon which by the terms hereof any such payment may become payable for any
purpose under this Indenture (including, without limitation, the payment of the
principal of, premium, if any, or interest on any Note), then, anything herein
contained to the contrary notwithstanding but without limiting the rights and
remedies of the holders of Guarantor Senior Indebtedness or any trustee,
fiduciary, representative, or agent therefor as against the Holders of the Notes
or any other Person, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it less than one Business Day prior to such date; nor shall the
Trustee be charged with knowledge of the curing of any such applicable default
in respect of Designated Senior Indebtedness or the elimination of the act or
condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect (subject to the rights of the
holders of the Designated Senior Indebtedness under Section 10.09 hereof).
Nothing contained in this Section 10.14 shall limit the right of holders of
Senior Indebtedness to recover payments as contemplated by Section 10.08. The
Trustee shall be entitled to rely upon 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 trustee on behalf of, or other representative of, such
holder) to establish
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that such notice has been given by a holder of such Senior Indebtedness or a
trustee or representative on behalf of any such holder.
(b) Subject to the provisions of Section 7.01 hereof, the
Trustee shall be entitled to rely (to the extent reasonable and in good faith)
on the delivery to it of a written notice to the Trustee and the Company or a
Guarantor by a Person representing itself to be a holder of Guarantor Senior
Indebtedness (or a trustee, fiduciary, representative, or agent therefor) for
purposes of establishing that such notice actually has been given by a holder of
Guarantor Senior Indebtedness (or a trustee, fiduciary, representative, or agent
therefor); provided, however, that failure to give such notice to the Company or
a Guarantor shall not affect in any way the ability of the Trustee to rely on
such notice. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Ten, the Trustee may request such Person to furnish
evidence not unsatisfactory to the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Ten, and if such evidence is not
furnished, the Trustee, acting in good faith, may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 10.15. Rights of Trustee as a Holder of Guarantor Senior
Indebtedness; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article Ten with respect to any Guarantor
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Guarantor Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article Ten shall apply to claims of, or payments to, the Trustee for its
compensation owing pursuant to and in accordance with, the first sentence of
Section 7.07 hereof.
SECTION 10.16. Application of Certain Article Eleven Provisions.
The provisions of Sections 11.08, 11.10, 11.12 and 11.13
hereof shall apply, mutatis mutandis, to each Guarantor and their respective
holders of Guarantor Senior Indebtedness and the rights, duties and obligations
set forth therein shall govern the rights, duties and obligations of each
Guarantor, the holders of Guarantor Senior Indebtedness and the Holders with
respect to the Guarantee and all references therein to Article Eleven hereof
shall mean this Article Ten.
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ARTICLE ELEVEN
SUBORDINATION OF NOTES
SECTION 11.01. Notes Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of Notes, by
its acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner hereinafter set forth in this Article Eleven, the Indebtedness
represented by the Notes and the payment of the principal of, premium, if any,
and interest on the Notes are hereby expressly made subordinate and subject in
right of payment as provided in this Article Eleven to the prior indefeasible
payment and satisfaction in full in cash of all existing and future Senior
Indebtedness.
This Article Eleven shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of or continue to
hold Senior Indebtedness; and such provisions are made for the benefit of the
holders of Senior Indebtedness; and such holders are made obligees hereunder and
they or each of them may enforce such provisions.
SECTION 11.02. Payment Over of Proceeds upon Dissolution, etc.
In the event of any:
(1) insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or
to its creditors, as such, or to its assets, whether voluntary or
involuntary;
(2) liquidation, dissolution or other winding-up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy;
(3) general assignment for the benefit of creditors of the
Company; or
(4) marshaling of assets or liabilities of the Company (except
in connection with the merger or consolidation of the Company or its
liquidation or dissolution following the transfer of substantially all
of its assets, upon the terms and conditions permitted under the
circumstances described under Section 5.01).
(all of the foregoing events described in clauses (1) through
(4) referred to herein individually as a "Bankruptcy Proceeding" and
collectively as "Bankruptcy Proceedings"),
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the holders of Senior Indebtedness of the Company will be entitled to receive
payment and satisfaction in full in cash of all amounts due on or in respect of
all Senior Indebtedness of the Company before the Holders of the Notes are
entitled to receive or retain any payment or distribution of any kind on account
of the Notes.
In the event that, notwithstanding the foregoing, the Trustee
or any Holder of Notes receives any payment or distribution of assets of the
Company of any kind, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before all
Senior Indebtedness of the Company is paid and satisfied in full in cash, then
such payment or distribution will be held by the recipient in trust for the
benefit of holders of Senior Indebtedness and will be immediately paid over or
delivered to the holders of Senior Indebtedness or their representative or
representatives to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of Senior
Indebtedness. By reason of such subordination, in the event of any such
Bankruptcy Proceeding, creditors of the Company who are holders of Senior
Indebtedness may recover more, ratably, than other creditors of the Company,
including holders of the Notes, and creditors of the Company who are not holders
of Senior Indebtedness or of the Notes may recover more, ratably, than the
Holders of the Notes.
The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another Person upon the terms and conditions set
forth in Article Five hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Article Eleven if the Person formed by such consolidation or the surviving
entity of such merger or the Person which acquires by conveyance, transfer or
lease such properties and assets substantially as an entirety, as the case may
be, shall, as a part of such consolidation, merger, conveyance, transfer or
lease, comply with the conditions set forth in Article Five hereof.
SECTION 11.03. Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 11.02 hereof shall be applicable, upon the
occurrence of a Payment Default on Designated Senior Indebtedness, no payment or
distribution of any assets or securities of the Company or any Restricted
Subsidiary of any kind or character (including, without limitation, cash,
property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of the Company being
subordinated to the payment of the Notes by the Company) may be made by or on
behalf of the Company or any Restricted Subsidiary of the Company, including,
without limitation, by way of set-off or otherwise, for or on account of the
Notes, or for or on
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account of the purchase, redemption or other acquisition of any Notes, and
neither the Trustee nor any holder or owner of any Notes shall take or receive
from the Company or any Restricted Subsidiary of the Company, directly or
indirectly in any manner, payment in respect of all or any portion of Notes
commencing on the date of receipt by the Trustee of written notice from the
representative of the holders of Designated Senior Indebtedness (the
"Representative") of the occurrence of such Payment Default, and in any such
event, such prohibition shall continue until such Payment Default is cured,
waived in writing or ceases to exist. At such time as the prohibition set forth
in the preceding sentence shall no longer be in effect, subject to the
provisions of the following clause (b) of this Section 11.03, the Company shall
resume making any and all required payments in respect of the Notes, including
any missed payments.
(b) Unless Section 11.02 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Indebtedness,
no payment or distribution of any assets of the Company of any kind may be made
by the Company or any Restricted Subsidiary of the Company, including, without
limitation, by way of set-off or otherwise, for or on account of the Notes, or
for or on account of the purchase or redemption or other acquisition of any
Notes, for a period (a "Payment Blockage Period") commencing on the date of
receipt by the Trustee of written notice from the Representative of such
Non-Payment Event of Default unless and until (subject to any blockage of
payments that may then be in effect under the preceding paragraph) the earliest
of (x) more than 179 days shall have elapsed since receipt of such written
notice by the Trustee, (y) such Non-Payment Event of Default shall have been
cured or waived in writing or shall have ceased to exist or such Designated
Senior Indebtedness shall have been paid in full or (z) such Payment Blockage
Period shall have been terminated by written notice to the Company or the
Trustee from such Representative, after which, in the case of clause (x), (y) or
(z), the Company shall resume making any and all required payments in respect of
the Notes, including any missed payments, unless the holders of such Designated
Senior Indebtedness or the Representative of such holders have or has
accelerated the maturity of such Designated Senior Indebtedness, or any Payment
Default otherwise exists. Notwithstanding any other provision of this Indenture,
in no event shall a Payment Blockage Period commenced in accordance with the
provisions of this Section 11.03(b) extend beyond 179 days from the date of the
receipt by the Trustee of the notice referred to above (the "Initial Blockage
Period"). Any number of additional Payment Blockage Periods may be commenced
during the Initial Blockage Period; provided, however, that no such additional
Payment Blockage Period shall extend beyond the Initial Blockage Period. After
the expiration of the Initial Blockage Period, no Payment Blockage Period may be
commenced until at least 180 consecutive days have elapsed from the last day of
the Initial Blockage Period. Notwithstanding any other provision of this
Indenture, no Non-Payment Event of Default with respect to Designated Senior
Indebtedness which existed or was continuing on the date of the commencement of
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any Payment Blockage Period initiated by the Representative shall be, or be
made, the basis for the commencement of a second Payment Blockage Period
initiated by the Representative, whether or not within the Initial Blockage
Period, unless such Non-Payment Event of Default shall have been waived for a
period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Note shall have received any payment prohibited by
the foregoing provisions of this Section 11.03, then and in such event such
payment shall be paid over and delivered forthwith to the Representative
initiating the Payment Blockage Period, in trust for distribution to the holders
of Senior Indebtedness or, if no amounts are then due in respect of Senior
Indebtedness, promptly returned to the Company, or otherwise as a court of
competent jurisdiction shall direct.
(d) Nothing in this Section 11.03 or in Section 11.02 shall
prevent the Trustee from receiving any payment due to the Trustee in accordance
with Section 7.07 hereof.
SECTION 11.04. Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article Eleven with respect to any Senior Indebtedness
which may at any time be held by it in its individual or any other capacity to
the same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Eleven, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and the
Trustee shall not be liable to any holder of Senior Indebtedness (other than for
its willful misconduct or gross negligence) if it shall in good faith mistakenly
pay over or deliver to the Holders of Notes, the Company or any other Person
moneys or assets to which any holder of Senior Indebtedness shall be entitled by
virtue of this Article or otherwise. Nothing in this Section 11.04 shall affect
the obligation of any other such Person, the Company, or the Holders to hold
such money or assets for the benefit of, and to pay such money or assets over
to, the holders of the Senior Indebtedness or their applicable representative or
representatives.
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SECTION 11.05. Subrogation to Rights of Holders of Senior Indebtedness.
Upon the payment in full of all Senior Indebtedness, the
Holders of the Notes shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any and interest on the Notes shall be paid in full. For purposes of
such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of the
Notes would be entitled except for the provisions of this Article Eleven, and no
payments over pursuant to the provisions of this Article Eleven to the holders
of Senior Indebtedness by Holders of the Notes shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Notes, be deemed to be a payment or distribution by the Company to or on account
of the Senior Indebtedness.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article Eleven shall
have been applied, pursuant to the provisions of this Article Eleven, to the
payment of all amounts payable under the Senior Indebtedness of the Company,
then and in such case the Holders shall be entitled to receive from the holders
of such Senior Indebtedness at the time outstanding any payments or
distributions received by such holders of such Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full in cash.
SECTION 11.06. Provisions Solely To Define Relative Rights.
The provisions of this Article Eleven are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Notes on the one hand and the holders of Senior Indebtedness on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the Notes
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Notes, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Notes the principal of, premium, if any, and interest on the Notes as and
when the same shall become due and payable in accordance with their terms; or
(b) affect the relative rights against the Company of the Holders of the Notes
and creditors of the Company other than the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Note from exercising all remedies
otherwise permitted by applicable law upon a Default or an Event of Default
under this Indenture, subject to the rights, if any, under this Article Eleven
of the holders of Senior Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding-up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of the Company referred to in Section
11.02 hereof, to
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receive, pursuant to and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder, or
(2) under the conditions specified in Section 11.03, to prevent any payment
prohibited by such Section or enforce their rights pursuant to Section 11.03(c)
hereof.
The failure to make a payment on account of principal of,
premium, if any, or interest on the Notes by reason of any provision of this
Article Eleven shall not be construed as preventing the occurrence of a Default
or an Event of Default hereunder.
SECTION 11.07. Trustee to Effectuate Subordination.
Each Holder of a Note by his acceptance thereof agrees to be
bound by such provisions and authorizes and directs the Trustee, on his behalf,
to take such action as may be necessary or appropriate to effectuate the
subordination provisions in this Article Eleven and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
Company Bankruptcy Proceeding or other dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the prompt and timely filing of a claim for the
unpaid balance of the indebtedness of the Company owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
If the Trustee does not file such a claim prior to 30 days before the expiration
of the time to file such a claim, the holders of Senior Indebtedness, or any
Representative, may, and hereby are authorized to, file such a claim on behalf
of Holders of the applicable Notes.
SECTION 11.08. No Waiver of Subordination Provisions
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with. The provisions of this Article Eleven are intended
to be for the benefit of, and shall be enforceable directly by, the holders of
Senior Indebtedness.
(b) Without limiting the generality of subsection (a) of this
Section 11.08, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provisions in this Article Eleven or
the obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner,
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place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (2) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
event shall any such actions limit the right of the Holders of the Notes to take
any action to accelerate the maturity of the Notes pursuant to Article Six
hereof or to pursue any rights or remedies hereunder or under applicable laws if
the taking of such action does not otherwise violate the terms of this
Indenture.
SECTION 11.09. Notice to Trustee.
(a) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee at its Corporate Trust Office in respect of the
Notes pursuant to the provisions of this Article Eleven. Notwithstanding the
provisions of this Article Eleven or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in respect of the
Notes, unless and until the Trustee shall have received written notice thereof
from the Company or a holder of Senior Indebtedness or from any trustee,
fiduciary, representative, or agent therefor no later than one Business Day
prior to such payment; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of this Section 11.09, and subject to the
provisions of Sections 7.01 and 7.02 hereof, shall be entitled in all respects
to assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice referred to in this Section 11.09 at least one
Business Day prior to the date upon which by the terms hereof any such payment
may become payable for any purpose under this Indenture (including, without
limitation, the payment of the principal of, premium, if any, or interest on any
Note), then, anything herein contained to the contrary notwithstanding but
without limiting the rights and remedies of the holders of Senior Indebtedness
or any trustee, fiduciary, representative, or agent therefor as against the
Holders of the Notes or any other Person, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it less than one Business Day prior to such date; nor
shall the Trustee be charged with knowledge of the curing of any such applicable
default in respect of Designated Senior Indebtedness or the elimination of the
act or condition preventing any such payment unless and until the Trustee shall
have received an Officers' Certificate to such effect (subject to the rights of
the holders of the Senior Indebtedness under Section 11.03 hereof). Nothing
contained in this Section 11.09 shall limit the right of holders of Senior
Indebtedness to recover payments as
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contemplated by Section 11.02 or 11.03. The Trustee shall be entitled to rely
upon 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 trustee on behalf of, or
other representative of, such holder) to establish that such notice has been
given by a holder of such Senior Indebtedness or a trustee or representative on
behalf of any such holder.
(b) Subject to the provisions of Section 7.01 hereof, the
Trustee shall be entitled to rely (to the extent reasonable and in good faith)
on the delivery to it of a written notice to the Trustee and the Company by a
Person representing itself to be a holder of Senior Indebtedness (or a trustee,
fiduciary, representative, or agent therefor) for purposes of establishing that
such notice actually has been given by a holder of Senior Indebtedness (or a
trustee, fiduciary, representative, or agent therefor); provided, however, that
failure to give such notice to the Company shall not affect in any way the
ability of the Trustee to rely on such notice. In the event that the Trustee
determines in good faith that further 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 Eleven, the Trustee may request
such Person to furnish evidence not unsatisfactory to 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 any other
facts pertinent to the rights of such Person under this Article Eleven, and if
such evidence is not furnished, the Trustee, acting in good faith, may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 11.10. Reliance on Judicial Order or Certificate of Liquidating Agent
Upon any payment or distribution of assets of the Company
referred to in the Article Eleven, the Trustee, subject to the provisions of
Section 7.01 hereof, and the Holders shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceedings is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
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 Eleven.
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SECTION 11.11. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article Eleven with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in this Indenture shall deprive
the Trustee of any of its rights as such holder. Nothing in this Article Eleven
shall apply to claims of, or payments to, the Trustee for its compensation owing
pursuant to and in accordance with, the first sentence of Section 7.07 hereof.
SECTION 11.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article Eleven shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article Eleven in addition to or in place of the Trustee.
SECTION 11.13. No Suspension of Remedies.
Nothing contained in this Article Eleven shall limit the right
of the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article Six hereof or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Eleven of the holders, from time to time, of Senior Indebtedness.
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control. If any provision of
this Indenture modifies any TIA provision that may be so modified, such TIA
provision shall be deemed to apply to this Indenture as so modified. If any
provision of this Indenture excludes any TIA provision that may be so excluded,
such TIA provision shall be excluded from this Indenture.
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The provisions of TIA Sections 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 12.02. Notices.
Except for notice or communications to Holders, any notice or
communication shall be given in writing and delivered in person, sent by
facsimile, delivered by commercial courier service or mailed by first-class
mail, postage prepaid, addressed as follows:
If to the Company or any Guarantor:
FAIRFIELD MANUFACTURING COMPANY, INC.
X.X. 00 Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Vice President, Finance
Fax Number: (000) 000-0000
with a copy to:
DEBEVOISE & XXXXXXXX
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Fax Number: (000) 000-0000
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If to the Trustee:
First Union National Bank
Corporate Trust Administration, PA 1249
X.X. Xxx 0000
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Fax Number: (000) 000-0000
Such notices or communications shall be effective when
received and shall be sufficiently given if so given within the time prescribed
in this Indenture.
The Company or the Trustee by written notice to the others may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Noteholder shall be
mailed to him by first-class mail, postage prepaid, at his address shown on the
register kept by the Registrar.
Failure to mail a notice or communication to a Noteholder or
any defect in it shall not affect its sufficiency with respect to other
Noteholders. If a notice or communication to a Noteholder is mailed in the
manner provided above, it shall be deemed duly given, whether or not the
addressee receives it.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
SECTION 12.03. Communications by Holders with Other Holders.
Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or the
Notes. The Company the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
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(1) an Officers' Certificate (which shall include, to the
extent relevant, the statements set forth in Section 12.05 below)
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 (which shall include the statements
set forth in Section 12.05 below) stating that, in the opinion of such
counsel, all such conditions precedent have been complied with;
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provisions of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
SECTION 12.05. Statements Required in Certificate and Opinion.
Each certificate and opinion with respect to compliance by or
on behalf of the Company with a condition or covenant provided for in this
Indenture (other than Section 4.04) shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, it or he
has made such examination or investigation as is necessary to enable it
or him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with; provided,
however, that with respect to matters of fact, an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public
officials.
SECTION 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or
meetings of Noteholders. The Registrar and Paying Agent may make reasonable
rules for their functions.
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SECTION 12.07. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal Holiday. A
"Legal Holiday" is a Saturday, a Sunday or other day on which (i) commercial
banks in the City of New York are authorized or required by law to close or (ii)
the New York Stock Exchange is not open for trading. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
SECTION 12.08. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
SECTION 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan, security or debt agreement of the Company or any Subsidiary thereof. No
such indenture, loan, security or debt agreement may be used to interpret this
Indenture.
SECTION 12.10. No Recourse Against Others.
No recourse for the payment of the principal of or premium, if
any, or interest, including Additional Interest, on any of the Notes, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company in this Indenture or
in any supplemental indenture, or in any of the Notes, or because of the
creation of any Indebtedness represented thereby, shall be had against any
stockholder, officer, director or employee, as such, past, present or future, of
the Company or of any successor corporation or against the property or assets of
any such stockholder, officer, employee or director, either directly or through
the Company, or any successor corporation thereof, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
Notes are solely obligations of the Company, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, any stockholder,
officer, employee or director of the Company, or any successor corporation
thereof, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements contained in this
Indenture or the Notes or implied therefrom, and that any and all such personal
liability of, and any and all claims against
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every stockholder, officer, employee and director, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of the Notes. It is understood that this
limitation on recourse is made expressly for the benefit of any such
shareholder, employee, officer or director and may be enforced by any of them.
SECTION 12.11. Successors.
All agreements of the Company in this Indenture and the Notes
shall bind its respective successor. All agreements of the Trustee, any
additional trustee and any Paying Agents in this Indenture shall bind its
successor.
SECTION 12.12. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
SECTION 12.13. Table of Contents, Headings, etc.
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 to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 12.14. Separability.
Each provision of this Indenture shall be considered separable
and if for any reason any provision which is not essential to the effectuation
of the basic purpose of this Indenture or the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
S-1
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed all as of the date and year first written above.
FAIRFIELD MANUFACTURING COMPANY, INC.
By:
---------------------------------
Name:
Title:
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FIRST UNION NATIONAL BANK, as Trustee
By:
---------------------------------
Name:
Title:
EXHIBIT A
CUSIP
FAIRFIELD MANUFACTURING COMPANY, INC.
No. $
9-5/8% SENIOR SUBORDINATED NOTE DUE 2008
FAIRFIELD MANUFACTURING COMPANY, INC., a Delaware corporation
(the "Company"), for value received, promises to pay to CEDE & CO. or registered
assigns the principal sum of $ dollars on October 15, 2008.
Interest Payment Dates: April 15 and October 15.
Record Dates: April 1 and October 1.
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers.
FAIRFIELD MANUFACTURING COMPANY, INC.
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
Dated: May 19, 1999
Certificate of Authentication
This is one of the 9-5/8% Senior Subordinated Notes due 2008
referred to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK, as Trustee
By:
---------------------------------
Dated: May 19, 1999
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[FORM OF REVERSE OF NOTE]
FAIRFIELD MANUFACTURING COMPANY, INC.
9-5/8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. FAIRFIELD MANUFACTURING COMPANY, INC., a Delaware
corporation (the "Company"), promises to pay, until the principal hereof is paid
or made available for payment, interest on the principal amount set forth on the
face hereof at a rate of 9-5/8% per annum. Interest hereon will accrue from and
including the most recent date to which interest has been paid or, if no
interest has been paid, from and including May 19, 1999 to but excluding the
date on which interest is paid. Interest shall be payable in arrears on each
April 15 and October 15, commencing October 15, 1999. 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 and on overdue interest (to the full extent
permitted by law) at a rate of 9-5/8% per annum.
2. Method of Payment. The Company will pay interest hereon
(except defaulted interest) to the Persons who are registered Holders at the
close of business on April 1 or October 1 next preceding the interest payment
date (whether or not a Business Day). Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States of America that at the time of payment is legal
tender for payment of public and private debts. The Company may pay principal
and interest by wire transfer of Federal funds (provided that the Paying Agent
shall have received wire instructions on or prior to the relevant Interest
Record Date), or interest by check mailed to the Holder entitled thereto at the
address indicated on the register maintained by the Registrar for the Notes.
3. Paying Agent and Registrar. Initially, First Union National
Bank (the "Trustee") will act as a Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice. Neither the Company nor any
of its Affiliates may act as Paying Agent or Registrar.
4. Indenture. The Company issued the Notes under an Indenture
dated as of May 19, 1999 (the "Indenture") by and between the Company and the
Trustee. This is one of an issue of Notes of the Company issued, or to be
issued, under the Indenture. The terms of the Notes 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. Code Sections 77aaa-77bbbb), as amended from time
to time. The Notes are subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of them. Capitalized and certain
other terms used herein and not otherwise defined have the meanings set forth in
the Indenture. The aggregate principal amount of Notes which may be issued under
the Indenture is not limited (except as otherwise provided in the Indenture) and
one or more additional
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series of Notes may be issued from time to time in aggregate principal amounts
of not less than $25,000,000 per series; provided that the aggregate principal
amount of Initial Notes on the Issue Date shall not exceed $100,000,000.
5. Subordination. The Indebtedness evidenced by the Notes
referred to below is, to the extent and in the manner provided in the Indenture,
subordinated and subject in right of payment to the prior indefeasible payment
in full in cash of all Senior Indebtedness as defined in the Indenture, and this
Note is issued subject to such provisions. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose.
6. Optional Redemption. (a) The Company, at its option, may
redeem the Notes, in whole at any time or in part, from time to time on or after
April 15, 2004 upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed as percentages of principal amount), set forth
below, together, in each case, with accrued and unpaid interest to the
Redemption Date, if redeemed during the twelve month period beginning on April
15 of each year listed below:
Year Redemption Price
---- ----------------
2004.............................................. 104.813%
2005.............................................. 103.208%
2006.............................................. 101.604%
2007 and thereafter............................... 100.000%
(b) Notwithstanding the foregoing, the Company may redeem in
the aggregate up to 35% of the original principal amount of Notes (including the
original principal amount of any Additional Notes issued under the Indenture) at
any time and from time to time prior to April 15, 2002 at a redemption price
equal to 109.625% of the aggregate principal amount so redeemed, plus accrued
and unpaid interest, if any, to the redemption date out of the Net Proceeds of
one or more Qualified Equity Offerings; provided that at least 65% of the
aggregate principal amount of Notes (including the original principal amount of
any Additional Notes issued under the Indenture) originally issued remain
outstanding immediately after the occurrence of any such redemption and that any
such redemption occurs within 90 days following the closing of any such
Qualified Equity Offering.
(c) In the event of a redemption of fewer than all of the
Notes, the Trustee shall select the Notes to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, while such
Notes are listed, or if such Notes are not then listed on a national securities
exchange, by lot or in such other manner as the Trustee shall deem fair and
equitable. The Notes will be redeemable in whole or in part upon not
A-4
less than 30 nor more than 60 days' prior written notice, mailed by first class
mail to a Holder's last address as it shall appear on the register maintained by
the Registrar of the Notes. On and after any redemption date, interest will
cease to accrue on the Notes or portions thereof called for redemption unless
the Company shall fail to redeem any such Note.
7. Notice of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at his registered address. On and after the
Redemption Date, unless the Company defaults in making the redemption payment,
interest ceases to accrue on Notes or portions thereof called for redemption.
8. Offers To Purchase. The Indenture provides that upon the
occurrence of a Change of Control or an Asset Sale and subject to further
limitations contained therein, the Company shall make an offer to purchase
outstanding Notes in accordance with the procedures set forth in the Indenture.
9. Registration Rights. Pursuant to a Registration Rights
Agreement among the Company and the initial purchasers named therein, the
Company will be obligated to consummate an exchange offer pursuant to which the
Holder of this Note shall have the right to exchange this Note for notes of a
separate series issued under the Indenture (or a trust indenture substantially
identical to the Indenture in accordance with the terms of the Registration
Rights Agreement) which have been registered under the Securities Act, in like
principal amount and having substantially identical terms as the Notes. The
Holders shall be entitled to receive certain additional interest payments in the
event such exchange offer is not consummated and upon certain other conditions,
all pursuant to and in accordance with the terms of the Registration Rights
Agreement.
10. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. A Holder may transfer or exchange Notes in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay to it any
taxes and fees required by law or permitted by the Indenture. The Registrar need
not register the transfer of or exchange any Notes or portion of a Note selected
for redemption, or register the transfer of or exchange any Notes for a period
of 15 days before a mailing of notice of redemption.
11. Persons Deemed Owners. The registered Holder of this Note
may be treated as the owner of this Note for all purposes.
12. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee will pay the money back to
the Company at its written request. After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an "abandoned
property" law designates another Person.
A-5
13. Amendment, Supplement, Waiver, Etc. The Company and the
Trustee (if a party thereto) may, without notice to or consent of the Holders of
any outstanding Notes, amend, waive or supplement the Indenture or the Notes for
certain specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies, maintaining the qualification of the Indenture under
the Trust Indenture Act of 1939, as amended, and making any change that does not
materially and adversely affect the rights of any Holder. Other amendments and
modifications of the Indenture or the Notes may be made by the Company and the
Trustee with the consent of the Holders of not less than a majority of the
aggregate principal amount of the outstanding Notes, subject to certain
exceptions requiring the consent of the Holders of the particular Notes to be
affected.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
their Capital Stock or certain Indebtedness, make certain Investments, create or
incur liens, enter into transactions with Affiliates, enter into agreements
restricting the ability of Restricted Subsidiaries to pay dividends and make
distributions, issue Preferred Stock of any Restricted Subsidiaries of the
Company, and on the ability of the Company to merge or consolidate with any
other Person or transfer all or substantially all of the Company's or any
Guarantor's assets. Such limitations are subject to a number of important
qualifications and exceptions. Pursuant to Section 4.04 of the Indenture, the
Company must make quarterly reports to the Trustee on compliance with such
limitations.
15. Successor Corporation. When a successor corporation
assumes all the obligations of its predecessor under the Notes and the Indenture
and the transaction complies with the terms of Article Five of the Indenture,
the predecessor corporation will, except as provided in Article Five, be
released from those obligations.
16. Defaults and Remedies. Events of Default are set forth in
the Indenture. Subject to certain limitations in the Indenture, if an Event of
Default (other than an Event of Default specified in Section 6.01(6) or (7) of
the Indenture with respect to the Company) occurs and is continuing, the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
outstanding Notes may, by written notice to the Trustee and the Company, and the
Trustee upon the request of the Holders of not less than 25% in aggregate
principal amount of the outstanding Notes shall, declare all principal of and
accrued interest on all Notes to be immediately due and payable and (i) such
amounts shall become immediately due and payable or (ii) if there are any
amounts outstanding under or in respect of any Senior Indebtedness, such amounts
shall become due and payable upon the first to occur of an acceleration of
amounts outstanding under or in respect of such Senior Indebtedness or five
Business Days after receipt by the Company and the representative of the holders
of Senior Indebtedness, of notice of the acceleration of the Notes. If an Event
of Default specified in Section 6.01(6) or (7) of the Indenture occurs with
respect to the Company, the principal amount of and interest on, all Notes shall
ipso facto become and be
A-6
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. Holders may not enforce the Indenture or the Notes
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal, premium, if any, or interest on the Notes or a
default in the observance or performance of any of the obligations of the
Company under Article Five of the Indenture) if it determines that withholding
notice is in their best interests.
17. Trustee Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.
18. No Recourse Against Others. No director, officer, employee
incorporator or stockholder, of the Company or any Guarantor shall have any
liability for any obligations of the Company or any Guarantors under the Notes,
the Indenture or any Guarantees or for a claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes.
19. Discharge. The Company's obligations pursuant to the
Indenture will be discharged, except for obligations pursuant to certain
sections thereof, subject to the terms of the Indenture, upon the payment of all
the Notes or upon the irrevocable deposit with the Trustee of United States
dollars or U.S. Government Obligations sufficient to pay when due principal of
and interest on the Notes to maturity or redemption, as the case may be.
20. Guarantees. The Note will be entitled to the benefits of
certain senior subordinated Guarantees made for the benefit of the Holders.
Reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and obligations thereunder of the
Guarantors, the Trustee and the Holders.
21. Authentication. This Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Note.
22. Governing Law. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. The Trustee, the Company and the Holders agree
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to the Indenture or the Notes.
A-7
23. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TENANT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
FAIRFIELD MANUFACTURING COMPANY, INC.
X.X. 00 Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Vice President, Finance
A-8
ASSIGNMENT
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Date: Your Signature:
------------------ --------------------------
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:
------------------------
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note
purchased by the Company pursuant to Section 4.09 or Section 4.20 of the
Indenture, check the appropriate box:
|_| Section 4.09 |_| Section 4.20
If you want to have only part of the Note purchased by the
Company pursuant to Section 4.09 or Section 4.20 of the Indenture, state the
amount you elect to have purchased:
$
-------------------------
(multiple of $1,000)
Date:
---------------------
Your Signature:
----------------------------------------------
(Sign exactly as your name appears on the face
of this Note)
---------------------------
Signature Guaranteed
A-10
EXHIBIT B
[FORM OF LEGEND FOR 144A NOTES AND OTHER NOTES THAT ARE RESTRICTED NOTES]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS,
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT IT
(1) WILL NOT PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT
IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST
DATE ON WHICH THE COMPANY, OR ANY AFFILIATE OF THE COMPANY, WAS THE OWNER OF
THIS NOTE (OR ANY PREDECESSOR OF THIS NOTES), RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3), OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE), (E) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) AND (2) WILL
GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, IF THE PROPOSED TRANSFEREE IS
AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
B-1
[FORM OF ASSIGNMENT FOR 144A NOTES AND OTHER NOTES THAT ARE
RESTRICTED NOTES]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance
with the exemption from registration under the
Securities Act provided by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in
accordance with (a) above and documents are being
furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Sections 2.16 and 2.17 of the Indenture shall have been
satisfied.
Date: Your Signature:
--------------------- --------------------------------
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee:
-----------------------------------------------------------
B-2
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-3
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
-------------------- ------------------------------------
NOTICE: To be executed by
an executive officer
B-4
EXHIBIT C
[FORM OF LEGEND FOR REGULATION S NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
UNLESS REGISTERED UNDER THE ACT OR EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT.
C-1
[FORM OF ASSIGNMENT FOR REGULATION S NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance
with the exemption from registration under the
Securities Act provided by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in
accordance with (a) above and documents are being
furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Sections 2.16 and 2.17 of the Indenture shall have been
satisfied.
Date: Your Signature:
--------------------- -------------------------
(Sign exactly as your name
appears on the face of this Note)
Signature Guarantee:
-----------------------------------------------------------
C-2
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
C-3
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
-------------------- ------------------------------------
NOTICE: To be executed by
an executive officer
C-4
EXHIBIT D
[FORM OF LEGEND FOR GLOBAL NOTE]
Any Global Note authenticated and delivered hereunder shall
bear a legend (which would be in addition to any other legends required in the
case of a Restricted Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE
(OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) ("DTC")
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IT 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, AND TRANSFERS OF INTERESTS IN THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTION 2.16 OF THE INDENTURE.
D-1
EXHIBIT E
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[Trustee]
Fairfield Manufacturing Company, Inc.
[c/o Trustee]
Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of 9-5/8% Senior
Subordinated Notes due 2008 (the "Notes") of Fairfield Manufacturing Company,
Inc., a Delaware Corporation (the "Company"), we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the
Indenture dated as of May 19, 1999 relating to the Notes and we agree
to be bound by, and not to resell, pledge or otherwise transfer the
Notes except in compliance with, such restrictions and conditions and
the Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the Notes have not been registered under
the Securities Act or any other applicable securities laws, have not
been and will not be qualified for sale under the securities laws of
any non-U.S. jurisdiction and that the Notes may not be offered, sold,
pledged or otherwise transferred except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we should sell any
Notes, we will do so only (i) to the Company or any subsidiary thereof,
(ii) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined in Rule 144A), (iii) to an
institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you a signed letter containing certain
representations and agreements relating to the restrictions on transfer
of the Notes, (iv) outside the United States to persons other than U.S.
persons in offshore transactions meeting the requirements of Rule 904
of Regulation S under the Securities Act, (v) pursuant to the exemption
form registration provided by Rule 144 under the Securities Act (if
applicable) or (vi) pursuant to an effective registration statement,
and we further agree to provide to any person purchasing any of the
Notes from us a notice advising such purchaser that resales of the
Notes are restricted as stated herein.
E-1
3. We understand that, on any proposed resale of any Notes, we
will be required to furnish to you and the Company such certifications,
legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and have
such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting each are able to
bear the economic risk of our or their investment, as the case may be.
5. We are acquiring the Notes purchased by us for our account
or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
6. We are not acquiring the Notes with a view toward the
distribution thereof in a transaction that would violate the Securities
Act or the securities laws of any state of the United States or any
other applicable jurisdiction.
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 proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------------
Name:
Title:
Date:
---------------------
E-2
EXHIBIT F
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[Trustee]
Fairfield Manufacturing Company, Inc.
[c/o Trustee]
Attention: Corporate Trust Services
Re: Fairfield Manufacturing Company, Inc., a Delaware corporation (the
"Company") 9-5/8% Senior Subordinated Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed sale of $__________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a U.S. person or to
a person in the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 904(a) of
Regulation S;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Notes.
F-1
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 Transferee]
By:
--------------------------------
F-2
EXHIBIT G
[FORM OF GUARANTEE]
The undersigned (the "Guarantor") hereby unconditionally
guarantees, to the extent set forth in the Indenture dated as of May 19, 1999 by
and among Fairfield Manufacturing Company, Inc., as issuer, and First Union
National Bank, as trustee (the "Trustee") (as amended, restated or supplemented
from time to time, the "Indenture"), and subject to the provisions of the
Indenture, (a) the due and punctual payment of the principal of, and premium, if
any, and interest on the Notes, when and as the same shall become due and
payable, whether at maturity, by acceleration or otherwise, the due and punctual
payment of interest on overdue principal of, and premium and, to the extent
permitted by law, interest, and the due and punctual performance of all other
obligations of the Company to the Noteholders or the Trustee, all in accordance
with the terms set forth in Article Ten of the Indenture, and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.
The obligations of the Guarantor to the Noteholders and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth,
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Guarantor Senior Indebtedness, to the extent and in the
manner provided, in Article Ten of the Indenture, and reference is hereby made
to the Indenture for the precise terms and limitations of this Guarantee. Each
Holder of the Note to which this Guarantee is endorsed, by accepting such Note,
agrees to and shall be bound by such provisions.
[Signatures on Following Pages]
G-1
IN WITNESS WHEREOF, the Guarantor named below has caused this
Guarantee to be signed by a duly authorized officer.
[GUARANTOR]
By:
--------------------------------
Name:
Title:
G-2
