Exhibit 1.2
EXECUTION COPY
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BIOVAIL CORPORATION,
as Issuer,
COMPUTERSHARE TRUST COMPANY, INC,
as U.S. Trustee,
and
COMPUTERSHARE TRUST COMPANY OF CANADA,
as Canadian Trustee
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First Supplemental Indenture
Dated as of
March 28, 2002
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TABLE OF CONTENTS
Page
PARTIES..........................................................................................................1
RECITALS OF THE COMPANY..........................................................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions...................................................................................2
"Acquired Indebtedness"................................................................2
"Additional Notes".....................................................................3
"Asset Sale"...........................................................................3
"Asset Sale Offer".....................................................................3
"Asset Sale Offer Purchase Price"......................................................3
"Asset Sale Payment Date"..............................................................4
"Attributable Indebtedness"............................................................4
"Average Life".........................................................................4
"Bank Credit Agreement"................................................................4
"Board of Directors"...................................................................4
"Board Resolution".....................................................................4
"Capital Lease Obligation".............................................................4
"Capital Stock"........................................................................5
"Cash Equivalents".....................................................................5
"Change of Control"....................................................................5
"Change of Control Offer"..............................................................6
"Change of Control Payment Date".......................................................6
"Change of Control Purchase Price".....................................................6
"Consolidated EBITDA"..................................................................6
"Consolidated Fixed Charge Coverage Ratio".............................................7
"Consolidated Interest Expense"........................................................8
"Consolidated Net Income"..............................................................8
"Continuing Director"..................................................................9
"Currency Hedge Obligations"..........................................................10
"Default".............................................................................10
"Defeasance Trust Payment"............................................................10
"Designated Senior Debt"..............................................................10
"Determination Period"................................................................10
"DTC".................................................................................10
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Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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"Equity Offering".....................................................................10
"Excess Proceeds".....................................................................10
"Fair Market Value"...................................................................10
"Fall-Away Period"....................................................................10
"GAAP"................................................................................10
"Global Security".....................................................................10
"Government Obligations"..............................................................10
"Guaranteed Indebtedness".............................................................11
"Guarantor"...........................................................................11
"incur"...............................................................................11
"Indebtedness"........................................................................11
"Interest Payment Date"...............................................................13
"Interest Swap Obligation"............................................................13
"Investment"..........................................................................13
"Investment Grade"....................................................................13
"Issue Date"..........................................................................13
"Lien"................................................................................13
"Maturity"............................................................................14
"Xxxxx'x".............................................................................14
"Net Available Proceeds"..............................................................14
"Notes"...............................................................................14
"Obligation"..........................................................................14
"Officer's Certificate"...............................................................14
"Payment Blockage Notice".............................................................15
"Payment Default".....................................................................15
"Permitted Holders"...................................................................15
"Permitted Indebtedness"..............................................................15
"Permitted Investments"...............................................................16
"Permitted Junior Securities".........................................................18
"Permitted Liens".....................................................................18
"Permitted Refinancing Indebtedness"..................................................20
"Person"..............................................................................20
"Preferred Stock".....................................................................20
"Purchase Money Obligations"..........................................................21
"Rating Agencies".....................................................................21
"Rating Category".....................................................................21
"Redeemable Stock"....................................................................21
"Regular Record Date".................................................................21
"Replacement Asset"...................................................................21
"Representative"......................................................................21
"Restricted Investment"...............................................................22
"Restricted Subsidiary"...............................................................22
"S&P".................................................................................22
"Sale and Lease-Back Transaction".....................................................22
"Senior Debt".........................................................................22
"Stated Maturity".....................................................................23
"Subordinated Indebtedness"...........................................................23
"Subsidiary"..........................................................................23
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"Subsidiary Guarantee"................................................................23
"Surviving Entity"....................................................................24
"Total Assets"........................................................................24
"Transaction Date"....................................................................24
"Unrestricted Subsidiary".............................................................24
"U.S. Dollar", "U.S.$" or "$".........................................................25
"Voting Stock"........................................................................25
"Wholly Owned"........................................................................25
SECTION 102. Governing Law................................................................................25
ARTICLE TWO SECURITIES FORMS
SECTION 201. Creation of the Notes; Designation...........................................................25
SECTION 202. Forms Generally..............................................................................25
ARTICLE THREE GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 301. Title and Terms of Notes.....................................................................26
SECTION 302. Denominations................................................................................26
SECTION 303. Original Issue of Notes......................................................................26
SECTION 304. Interest.....................................................................................27
ARTICLE FOUR EVENTS OF DEFAULT
SECTION 401. Events of Default............................................................................27
ARTICLE Five Redemption of the notes
SECTION 501. Right of Redemption..........................................................................29
ARTICLE SIX CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 601. Amalgamation, Consolidation, Merger, Conveyances, Transfer or Lease..........................30
ARTICLE SEVEN SUBORDINATION OF NOTES
SECTION 701. Notes Subordinated to Senior Debt............................................................31
SECTION 702. Payment Over of Proceeds upon Dissolution, etc...............................................31
SECTION 703. No Payment on Notes in Certain Circumstances.................................................33
SECTION 704. Subrogation..................................................................................34
SECTION 705. Obligations of Company Unconditional.........................................................34
SECTION 706. Notice to Trustee............................................................................34
SECTION 707. Reliance on Judicial Order or Certificate of Liquidating Agent...............................35
SECTION 708. Trustee's Relation to Senior Debt............................................................35
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SECTION 709. Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior
Debt ........................................................................................36
SECTION 710. Holders Authorize Trustee To Effectuate Subordination of Notes...............................36
SECTION 711. This Article Not To Prevent Events of Default................................................36
SECTION 712. Trustee's Compensation Not Prejudiced........................................................36
SECTION 713. No Waiver of Subordination Provisions........................................................37
SECTION 714. Subordination Provisions Not Applicable to Money Held in Trust for Holders; Payments May Be
Paid Prior to Dissolution....................................................................37
SECTION 715. Acceleration of Notes........................................................................37
ARTICLE EIGHT COVENANTS
SECTION 801. Covenants....................................................................................37
ARTICLE Nine Supplemental indentures
SECTION 901. Supplemental Indentures......................................................................48
ARTICLE Ten DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1001. Defeasance and Covenant Defeasance...........................................................50
ARTICLE Eleven SATISFACTION AND DISCHARGE
SECTION 1101. Satisfaction and Discharge...................................................................54
ARTICLE Twelve MISCELLANEOUS PROVISIONS
SECTION 1201. Effect of First Supplemental Indenture.......................................................55
SECTION 1202. Effect of Headings and Table of Contents.....................................................56
SECTION 1203. Successors and Assigns.......................................................................56
SECTION 1204. Severability Clause..........................................................................56
SECTION 1205. Benefits of First Supplemental Indenture.....................................................56
SECTION 1206. Counterparts.................................................................................56
SECTION 1207. Acceptance of Trusts.........................................................................56
SECTION 1208. Effective Time...............................................................................56
TESTIMONIUM.....................................................................................................58
SIGNATURES AND SEALS............................................................................................58
FORM OF NOTE.............................................................................................EXHIBIT I
FIRST SUPPLEMENTAL INDENTURE, dated as of March 28, 2002 between BIOVAIL
CORPORATION, a corporation duly amalgamated and existing under the laws of the
Province of Ontario, Canada (herein called the "Company"), having its principal
office at 0000 Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0, Computershare
Trust Company of Canada, a trust company duly organized and existing under the
laws of Canada, as Canadian trustee (the "Canadian Trustee") and Computershare
Trust Company, Inc., a trust company duly organized and existing under the laws
of the State of Colorado (the "U.S. Trustee" and, together with the Canadian
Trustee, the "Trustee").
RECITALS OF THE COMPANY
The Company and the Trustee entered into an Indenture dated as of March 28,
2002 (the "Original Indenture"), pursuant to which unsecured debentures, notes
or other evidences of indebtedness of the Company (the "Securities"), which may
be convertible into or exchangeable for any securities of any person (including
the Company), may be issued in one or more series from time to time.
Section 301 of the Original Indenture permits the terms of any series of
Securities to be established in an indenture supplemental to the Original
Indenture.
Section 901 of the Original Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee without the consent
of any Holders of the Securities for certain purposes stated therein.
The Company has requested the Trustee to join with it in the execution and
delivery of this First Supplemental Indenture in order to supplement the
Original Indenture by, among other things, establishing certain terms of a
series of Securities to be known as the Company's "7?% Senior Subordinated Notes
due 2010" (the "Notes"), and adding certain provisions thereof for the benefit
of the Holders of the Notes.
The Company has furnished the Trustee with a duly authorized and executed
Company Order dated March 28, 2002 authorizing the execution of this First
Supplemental Indenture and the issuance of the Notes.
All things necessary to make this First Supplemental Indenture a valid
agreement of the Company and the Trustee and a valid supplement to the Original
Indenture have been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes to
be issued hereunder by Holders thereof, the Company and the Trustee mutually
covenant and agree, for the equal and proportionate benefit of the respective
Holders from time to time of the Notes, as follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
The Original Indenture together with this First Supplemental Indenture are
hereinafter sometimes collectively referred to as the "Indenture." For the
avoidance of doubt, references to any "Section" of the "Indenture" refer to such
Section of the Original Indenture as supplemented and amended by this First
Supplemental Indenture. All capitalized terms which are used herein and not
otherwise defined herein are defined in the Original Indenture and are used
herein with the same meanings as in the Original Indenture. If a capitalized
term is defined in the Original Indenture and this First Supplemental Indenture,
the definition in this First Supplemental Indenture shall apply to the Notes.
For all purposes of this First Supplemental Indenture and the Notes, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in Trust Indenture Act Section 311, shall
have the meanings assigned to them in the rules of the Commission adopted
under the Trust Indenture Act;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with United States generally
accepted accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at the
date of such computation;
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to the Indenture as a whole and not to any particular
Article, Section or other subdivision;
(5) "or" is not exclusive;
(6) words implying any gender shall apply to all genders; and
(7) the words Subsection, Section and Article refer to the
Subsections, Sections and Articles, respectively, of the Indenture unless
otherwise noted.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection
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with, or in contemplation of, such other Person merging with or into or becoming
a Subsidiary of such specified Person, but excluding Indebtedness which is
extinguished, retired or repaid in connection with such other Person merging
with or into or becoming a Subsidiary of such specified Person.
"Additional Notes" means additional Notes that may be issued under this
First Supplemental Indenture after the date that the Notes are first issued by
the Company and authenticated by the Trustee under the Indenture, which shall
rank pari passu with the Notes issued hereunder in all respects and shall be
considered a single class with the Notes for all purposes under the Indenture,
including, without limitation, waivers, amendments, redemptions and Offers to
Purchase.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease
or other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction) by the Company
or any Restricted Subsidiary to any Person other than the Company or a
Restricted Subsidiary, in one transaction, or a series of related transactions,
of (i) any Capital Stock of any Restricted Subsidiary or (ii) any other property
or assets of the Company or any Restricted Subsidiary outside the ordinary
course of business (excluding the sale, conveyance, transfer, lease or other
disposition of redundant and obsolete property or assets), other than:
(a) a Permitted Investment or a permitted Restricted Payment under
Section 1010 of the Indenture, or
(b) a consolidation, merger, continuance or the disposition of all or
substantially all of the assets of the Company and the Restricted
Subsidiaries, taken as a whole, in compliance with Section 801 of the
Indenture or any disposition that constituted a Change of Control, or
(c) a simultaneous exchange by the Company or any Restricted
Subsidiary of property or assets for Replacement Assets, provided that such
transaction is approved by the Board of Directors, or
(d) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration of
less than $10 million (provided that the Company or such Restricted
Subsidiary received consideration equal to the Fair Market Value of any
such property or assets so sold, conveyed, assigned, transferred, leased or
otherwise disposed of).
For the avoidance of doubt, the licensing of a product, product right and/or
technology of the Company or a Restricted Subsidiary to a Person shall not be
deemed an Asset Sale.
"Asset Sale Offer" has the meaning specified in Section 1014 of the
Indenture.
"Asset Sale Offer Purchase Price" has the meaning specified in Section 1014
of the Indenture.
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"Asset Sale Payment Date" has the meaning specified in Section 1014 of the
Indenture.
"Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction
means, at any date of determination, the present value (discounted at the
interest rate implicit in the lease determined in accordance with GAAP) of the
total obligations of the lessee for rental payments during the remaining term of
the lease (or to the first date on which the lessee is permitted to terminate
such lease without the payment of a penalty of not more than $1 million)
included in such Sale and Lease-Back Transaction (including any period for which
such lease has been extended or may, at the option of the lessor, be extended).
"Average Life" means, as of any date, with respect to any debt security,
the quotient obtained by dividing:
(i) the sum of the products of:
(x) the number of years from such date to the date of each
successive scheduled principal payment (including any sinking
fund or mandatory redemption payment requirements) of such debt
security multiplied in each case by
(y) the amount of such principal payment; by
(ii) the sum of all such principal payments.
"Bank Credit Agreement" means, the Credit Agreement, dated as of December
27, 2000, among the Company, the Guarantors named therein, Biovail SA, the
Lenders named therein, The Bank of Nova Scotia, as Lead Arranger, Bookmanager
and Administrative Agent, as amended by the First Amending Agreement, dated as
of June 22, 2001, among the Company, the Guarantors named therein, Biovail SA,
the Lenders named therein and The Bank of Nova Scotia as Agent, as further
amended by the Second Amending Agreement, dated as of November 30, 2001, among
the Company, the Guarantors named therein, Biovail SA, the Lenders named therein
and The Bank of Nova Scotia, as Agent and as further amended by the Third
Amending Agreement, dated as of March 27, 2002, among the Company, the
Guarantors named therein, Biovail SA, the Lenders named therein and The Bank of
Nova Scotia, as Agent, and as such agreement is further amended, modified,
supplemented or restated from time to time.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Capital Lease Obligation" means, at any time as to any Person with respect
to any property leased by such Person as lessee, the amount of the liability
with respect to
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such lease that would be required at such time to be capitalized and accounted
for as a capital lease on the balance sheet of such Person prepared in
accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
partnership interests, participations or other equivalents however designated in
the equity interest in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to acquire any equity
interest in such Person.
"Cash Equivalents" means:
(i) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or public
instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Xxxxx'x;
(iii) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Xxxxx'x;
(iv) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any commercial bank
organized under the laws of the United States of America or any state
thereof or the District of Columbia or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of
not less than $500 million;
(v) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (iv)
above; and
(vi) investments in money market funds which invest exclusively in
securities of the types described in clauses (i) through (v) above.
"Change of Control" means:
(i) a determination by the Company that any Person or group (as
defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) has become the
direct or beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of more than 50% of the Voting Stock of the Company other than
Permitted Holders;
(ii) the Company is merged with or into or amalgamated or consolidated
with another corporation and, immediately after giving effect to the
merger, amalgamation or consolidation, less than 50% of the outstanding
Voting
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Stock of the surviving or resulting entity is then beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) in the aggregate by:
(x) the stockholders of the Company immediately prior to such merger,
amalgamation or consolidation, or
(y) if the record date has been set to determine the stockholders of
the Company entitled to vote on such merger, amalgamation or
consolidation, the stockholders of the Company as of such a
record date;
(iii) the sale, lease, transfer, conveyance or other distribution
(other than by way of merger, amalgamation or consolidation), in one or a
series of related transactions, of all or substantially all of the assets
of the Company and its Subsidiaries, taken as a whole, including Capital
Stock of the Subsidiaries, to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act;
(iv) the adoption of a plan relating to the liquidation or dissolution
of the Company (which, for the avoidance of doubt, shall not include, the
adoption of any plan relating to an internal restructuring of the Company
or a change in the jurisdiction of organization of the Company); or
(v) the first day on which a majority of the individuals who
constitute the Board of Directors of the Company are not Continuing
Directors.
"Change of Control Offer" has the meaning specified in Section 1009 of the
Indenture.
"Change of Control Payment Date" has the meaning specified in Section 1009
of the Indenture.
"Change of Control Purchase Price" has the meaning specified in Section
1009 of the Indenture.
"Consolidated EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period, plus to the extent
reflected in the income statement of such Person for such period from which
Consolidated Net Income is determined, without duplication:
(i) Consolidated Interest Expense,
(ii) income tax expense,
(iii) depreciation expense,
(iv) amortization expense,
(v) any premium paid with respect to the early repayment of
Indebtedness, and
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(vi) any other non-cash charges (excluding any such non-cash charge to
the extent that it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash charge that was paid in
a prior period); and
minus, to the extent reflected in such income statement, any non-cash credits
that had the effect of increasing Consolidated Net Income of such Person for
such period, in each case on a consolidated basis and determined in accordance
with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means with respect to any
Person, the ratio of the aggregate Consolidated EBITDA of such Person during the
four full fiscal quarters (the "Determination Period") for which financial
information is available 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 Consolidated Interest Expense of such Person for the
Determination Period. In the event that the referent Person or any of its
Restricted Subsidiaries incurs, assumes or redeems any Indebtedness (other than
revolving credit borrowings) or issues or redeems Preferred Stock subsequent to
the commencement of the Determination Period but prior to the Transaction Date,
then the Consolidated Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption or redemption of Indebtedness, or
such issuance or redemption of Preferred Stock, and the application of the
proceeds thereof, as if the same had occurred at the beginning of the
Determination Period. In addition, for purposes of making the computation
referred to above:
(i) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through mergers, amalgamations or
consolidations and including any related financing transactions, during the
Determination Period or subsequent to such reference period and on or prior
to the Transaction Date shall be deemed to have occurred on the first day
of the Determination Period, and Consolidated EBITDA for such reference
period shall be calculated without giving effect to clause (v) of the
proviso set forth in the definition of Consolidated Net Income,
(ii) the Consolidated EBITDA attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Transaction Date, shall be excluded, and
(iii) the Consolidated Interest Expense attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Transaction Date, shall be excluded but
only to the extent that the obligations giving rise to such Consolidated
Interest Expense will not be the obligations of the referent Person or any
of its Restricted Subsidiaries after the Transaction Date.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated as if the
rate in effect on the Transaction Date had been the applicable rate for the
entire period (taking into account any Interest Swap Obligations applicable to
such Indebtedness). For purposes of making the computation referred to above,
interest on any Indebtedness under a revolving credit facility computed on a pro
forma basis shall be computed based upon the average daily balance of such
Indebtedness during the
8
applicable period. For purposes of this definition, whenever pro forma effect is
to be given to an acquisition of assets, the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness incurred in connection therewith, such pro forma calculations
shall be determined in accordance with Regulation S-X under the U.S. Securities
Act of 1933, as amended.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication the sum of:
(i) the aggregate amount of cash and non-cash interest expense
(including capitalized interest) of such Person and its Restricted
Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP in respect of Indebtedness paid or accrued, or
scheduled to be paid or accrued, during such period (including, without
limitation, (a) any amortization of debt discount, (b) net costs associated
with Interest Swap Obligations (including any amortization of discounts),
(c) the interest portion of any deferred payment obligation calculated in
accordance with the effective interest method, (d) all accrued interest,
(e) amortization of debt issuance costs and (f) all interest incurred or
paid under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person);
(ii) cash and non-cash dividends (other than dividends payable in
Capital Stock of the Company that is not Redeemable Stock) paid or accrued
on Preferred Stock or Redeemable Stock of such Person (and Preferred Stock
or Redeemable Stock of its Restricted Subsidiaries if paid to a Person
other than such Person or any Wholly Owned Restricted Subsidiaries);
(iii) the portion of any rental obligation of such Person or its
Restricted Subsidiaries in respect of any Capital Lease Obligation
allocable to interest expense in accordance with GAAP; and
(iv) the portion of any rental obligation of such Person or its
Restricted Subsidiaries in respect of any Sale and Lease-Back Transaction
allocable to interest expense (determined as if such were treated as a
Capital Lease Obligation).
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP, provided that there shall be excluded therefrom, without
duplication:
(i) any net income of any Unrestricted Subsidiary, except that the
Company's or any Restricted Subsidiary's interest in the net income of such
Unrestricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash or Cash
Equivalents actually distributed by such Unrestricted Subsidiary during
such period to the Company or any of its Restricted Subsidiaries as a
dividend or other distribution,
9
(ii) gains and losses, net of taxes, from Asset Sales or reserves
relating thereto,
(iii) the net income of any Person that is not a Subsidiary or that is
accounted for by the equity method of accounting which shall be included
only to the extent of the amount of dividends or distributions paid in cash
to such Person or its Restricted Subsidiaries,
(iv) any extraordinary or nonrecurring gain or loss and any expense or
charge in connection with acquired in-process research and development, and
(v) the net income (but not net loss) of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that net income is not at
the time permitted, directly or indirectly, by any means or by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, law, rule or governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
Notwithstanding the foregoing, for the purpose of Section 1010 of the Indenture
there shall be added back to Consolidated Net Income the Consolidated Net Income
excluded pursuant to clause (iv) above and attributable to payments received by
the Company or any Restricted Subsidiary in respect of any judgment on, or
settlement of, lawsuits pending on the Issue Date, provided that any such
settlement agreement or any other agreements entered into in connection
therewith (collectively, the "Settlement Agreement") does not restrict the
Company's or any Restricted Subsidiary's ability to market or license its
products or receive royalty payments in respect thereof. In determining the
amount to be added back pursuant to the preceding sentence, such Consolidated
Net Income shall be reduced by (1) the aggregate amount of any payments made by
the Company or any Restricted Subsidiary directly or indirectly in connection
with such Settlement Agreement, and (2) the net present value (discounted at the
rate of interest paid on 10 year U.S. Government Obligations) as determined by
the Board of Directors in good faith and evidenced by a Board Resolution of any
future payments to be made by the Company or any Restricted Subsidiary directly
or indirectly in connection with such Settlement Agreement by way of royalty
payments or otherwise and (3) the net present value (discounted at the rate of
interest paid on 10 year U.S. Government Obligations) as determined by the Board
of Directors in good faith and evidenced by a Board Resolution of any reduction
as a result of such Settlement Agreement in the amount of future payments which
would otherwise be received by way of royalty payments or otherwise by the
Company or any Restricted Subsidiary in the absence of such Settlement
Agreement.
"Continuing Director" means an individual who: (i) is a member of the Board
of Directors of the Company and (ii) either: (A) was a member of the Board of
Directors of the Company on the date hereof, or (B) whose nomination for
election or election to the Board of Directors of the Company was approved by
vote of a majority of the Continuing Directors who were members of such board at
the time of such election or nomination.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar
10
agreement or arrangement designed to protect against or manage such Person's or
any of its Restricted Subsidiaries' exposure to fluctuations in foreign currency
exchange rates.
"Default" means any event, act or condition the occurrence of which is, or
after notice or the passage of time or both would be, an Event of Default.
"Defeasance Trust Payment" has the meaning set forth in Section 703 of this
First Supplemental Indenture.
"Designated Senior Debt" means (1) Senior Debt Indebtedness under or in
respect of the Bank Credit Agreement and (2) any other Indebtedness constituting
Senior Debt which, at the time of determination, has an aggregate principal
amount of at least $25 million and is specifically designated in the instrument
evidencing such Senior Debt as "Designated Senior Debt."
"Determination Period" has the meaning specified within the definition of
"Consolidated Fixed Charge Coverage Ratio."
"DTC" means The Depository Trust Company, New York, New York, its
successors or any other depository appointed in its stead.
"Equity Offering" means any public offering or private placement of Capital
Stock (other than Redeemable Stock) of the Company after the Issue Date.
"Excess Proceeds" has the meaning set forth in Section 1014 of the
Indenture.
"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length 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 acting reasonably and in good faith and
shall be evidenced by a Board Resolution.
"Fall-Away Period" has the meaning set forth in Section 1020 of the
Indenture.
"GAAP" means generally accepted accounting principles in effect in the
United States which are in effect on the date of the Indenture.
"Global Security" has the meaning specified in Section 303 of this First
Supplemental Indenture.
"Government Obligations" means securities that are:
(i) direct obligations of the United States of America or Canada for
the payment of which its full faith and credit is pledged;
(ii) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America or Canada the
payment of which is unconditionally guaranteed as a full faith and credit
11
obligation by the United States of America or Canada, which, in either case
under clauses (i) or (ii) above, are not callable or redeemable at the
option of the issuers thereof; or
(iii) depository receipts issued by a bank or trust company as
custodian with respect to any such Government or a specific payment of
interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a 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
Government Obligation evidenced by such depository receipt.
"Guaranteed Indebtedness" has the meaning set forth in Section 1016 of the
Indenture.
"Guarantor" means each Restricted Subsidiary of the Company that hereafter
enters into a Subsidiary Guarantee in accordance with Section 1016 of the
Indenture; provided that such Subsidiary Guarantee shall be in effect.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or obligation on the balance sheet of such Person, including
an incurrence of Acquired Indebtedness (and "incurrence," "incurred,"
"incurrable" and "incurring" shall have meanings correlative to the foregoing).
"Indebtedness" as applied to any Person means, at any time, without
duplication, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent:
(i) any obligation of such Person for borrowed money;
(ii) any obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including, without limitation, any such
obligations incurred in connection with acquisition of property, assets or
businesses, excluding accounts payable made in the ordinary course of
business which are not more than 90 days overdue or which are being
contested in good faith and by appropriate proceedings;
(iii) any obligation of such Person for all or any part of the
purchase price of property or for the cost of property constructed or of
improvements thereto (including any obligation under or in connection with
any letter of credit related thereto), other than accounts payable incurred
in respect of property and services purchased in the ordinary course of
business which are no more than 90 days overdue or which are being
contested in good faith and by appropriate proceedings;
12
(iv) any obligation of such Person upon which interest charges are
customarily paid, other than accounts payable incurred in the ordinary
course of business which are not more than 90 days overdue or which are
being contested in good faith and by appropriate proceedings;
(v) any obligation of such Person under conditional sale or other
title retention agreements relating to purchased property;
(vi) any obligation of such Person issued or assumed as the deferred
purchase price of property, other than accounts payable incurred in the
ordinary course of business which are no more than 90 days overdue or which
are being contested in good faith and by appropriate proceedings;
(vii) any Capital Lease Obligation or Attributable Indebtedness
pursuant to any Sale and Lease-Back Transaction of such Person;
(viii) any obligation of any other Person of the type referred to in
clauses (i) through (vii) which are secured by any Lien on any property or
asset of such first Person, the amount of such obligations being deemed to
be the lesser of (1) the full amount of such obligations so secured and (2)
the fair market value of such property or asset;
(ix) any obligation of such Person in respect of any letter of credit
supporting any obligation of any other Person;
(x) the maximum fixed repurchase price plus accrued and unpaid
dividends of any Redeemable Stock of such Person or any Preferred Stock of
a Subsidiary;
(xi) the net obligation on any Interest Swap Obligation or Currency
Hedge Obligation of such Person at the time of determination; and
(xii) any obligation which is in economic effect a guarantee,
regardless of its characterization, other than an endorsement in the
ordinary course of business, with respect to any Indebtedness of another
Person, to the extent guaranteed.
For purposes of clause (x), the maximum fixed repurchase price of any Redeemable
Stock or Preferred Stock of a Subsidiary that does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Redeemable Stock
or Preferred Stock as if such Redeemable Stock or Preferred Stock were
repurchased on any date on which Indebtedness shall be required to be determined
pursuant to the Indenture, and if such price is based on, or measured by Fair
Market Value of such Redeemable Stock or Preferred Stock, such Fair Market Value
shall be determined in good faith by the Board of Directors of the issuer of
such Redeemable Stock or Preferred Stock, as the case may be. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and, with respect to
contingent obligations, the maximum liability upon the occurrence of the
contingency giving rise to the obligation; provided that for purposes of
calculating the amount of any non-interest bearing or other discount security,
such Indebtedness shall be deemed to be the
13
principal amount thereof that would be shown on the balance sheet of the issuer
dated such date prepared in accordance with GAAP but that such security shall be
deemed to have been incurred only on the date of the original issuance thereof.
"Interest Payment Date" means each of April 1 and October 1 of each year.
"Interest Swap Obligation" means the obligation pursuant to any interest
rate swap agreement, interest rate cap, collar or floor agreement or other
similar agreement or arrangement designed to protect against or manage exposure
to fluctuations in interest rates.
"Investment" means, with respect to any Person, all direct or indirect
investments in other Persons in the form of loans or other extensions of credit
(including a guarantee), capital contributions (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 purchases of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by
any other Person and any other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP. In determining the amount of
any Investment involving a transfer of any property or assets other than cash,
such property or assets shall be valued at its Fair Market Value at the time of
such transfer as determined in good faith by the Board of Directors (or
comparable body) of the Person making such transfer. The Company shall be deemed
to make an "Investment" in the amount of the Fair Market Value of the net assets
of a Restricted Subsidiary at the time such Restricted Subsidiary is designated
an Unrestricted Subsidiary (proportionate to the Company's equity interest in
such Restricted Subsidiary). The Company shall be deemed to make an "Investment"
in the amount of any Indebtedness of a Restricted Subsidiary owing to the
Company or any other Restricted Subsidiary at the time such Restricted
Subsidiary ceases to be a Restricted Subsidiary or such Restricted Subsidiary
transfers such Indebtedness to a Person other than the Company or another
Restricted Subsidiary. "Investments" shall exclude extensions of trade credit
incurred on commercially reasonable terms and in the ordinary course of
business. For the avoidance of doubt, the acquisition of rights in products,
product rights or technology directly through a license or technology sharing or
access agreement shall not constitute an Investment.
"Investment Grade" means (i) BBB- or above, in the case of S&P (or its
equivalent under any successor Rating Categories of S&P), and Baa3 or above, in
the case of Xxxxx'x (or its equivalent under any successor Rating Categories of
Xxxxx'x), or (ii) the equivalent in respect of the Rating Categories of any
Rating Agencies substituted for S&P or Xxxxx'x.
"Issue Date" means March 28, 2002.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or xxxxx x Xxxx or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
14
"Maturity" means the date on which the principal of a Note becomes due and
payable as provided therein or in the Indenture, whether at the Stated Maturity
or the Change of Control Payment Date or purchase date established pursuant to
the terms of the Indenture for an Asset Sale Offer or by declaration of
acceleration, call for redemption or otherwise.
"Xxxxx'x" means Xxxxx'x Investors Services, Inc.
"Net Available Proceeds" means, as to any Asset Sale, the proceeds thereof
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or Cash Equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary), net of:
(i) all legal and title expenses, commissions and other fees and
expenses incurred, and all federal, state, foreign, recording and local
taxes payable as a consequence of such Asset Sale,
(ii) all payments made on any Indebtedness which is secured by such
assets, in accordance with the terms of any Lien upon or with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale, and
(iii) appropriate amounts to be provided by the Company or any
Restricted Subsidiary as a reserve against any liabilities associated with
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sale, all as determined in conformity with GAAP and, as for
any Asset Sale by a Subsidiary, net of the equity interest in such proceeds
of any holder of Capital Stock of such Subsidiary (other than the Company,
any other Subsidiary or any Affiliate of the Company or any such other
Subsidiary).
"Notes" has the meaning specified in the fourth recital of this First
Supplemental Indenture and more particularly means any Notes authenticated and
delivered under this First Supplemental Indenture and any Additional Notes
authenticated and delivered pursuant to the Indenture treated as a single class.
"Obligation" means any principal, interest, penalties, fees,
indemnification, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Officer's Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President, the Chief Executive Officer,
the Chief Operating Officer or a Vice President, and by the Chief Financial
Officer, the Chief Accounting Officer, the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee, which shall comply with the Indenture.
15
"Payment Blockage Notice" has the meaning set forth in Section 703 of this
First Supplemental Indenture.
"Payment Default" has the meaning set forth in Section 501 of the
Indenture.
"Permitted Holders" means Xxxxxx Xxxxxx and any of his Affiliates.
"Permitted Indebtedness" means:
(i) Indebtedness of the Company under the Notes issued on the Issue
Date;
(ii) Indebtedness and reimbursement obligations of the Company and the
Restricted Subsidiaries under one or more credit or revolving credit
facilities with a bank or syndicate of banks or financial institutions or
other lenders including, without limitation, the Bank Credit Agreement, as
such may be amended, modified, revised, extended, replaced, or refunded
from time to time in an aggregate principal amount at any one time
outstanding not to exceed $400 million;
(iii) Indebtedness of the Company under Interest Swap Obligations or
Currency Hedge Obligations, provided that such agreements are designed to
protect the Company against, or manage exposure to, fluctuations in
interest rates and currency exchange rates, respectively, and that such
agreements do not increase the Indebtedness of the Company outstanding at
any time other than as a result of fluctuations in interest rates or
foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(iv) Indebtedness of the Company and the Restricted Subsidiaries
(other than under any bank credit facility outstanding on the Issue Date)
outstanding on the Issue Date;
(v) Indebtedness of the Company and the Restricted Subsidiaries in
respect of performance bonds, surety bonds, appeal bonds and letters of
credit or similar arrangements issued for the account of the Company or any
Restricted Subsidiary, in each case, in the ordinary course of business and
other than for an obligation for money borrowed;
(vi) Indebtedness of the Company owing to any Restricted Subsidiary
(but only so long as such Indebtedness is held by such Restricted
Subsidiary), provided that any Indebtedness of the Company owing to any
such Restricted Subsidiary is subordinated in right of payment from and
after such time as the Notes shall become due and payable (whether at
Stated Maturity, by acceleration or otherwise) to the payment and
performance of the Company's obligations under the Notes, unless the
subordination of such Indebtedness shall have material adverse tax
consequences to the Company or such Restricted Subsidiary, and provided,
further, that any transaction pursuant to which any Restricted Subsidiary
to which such Indebtedness is owed ceases to be a Restricted
16
Subsidiary will be deemed to be an incurrence of Indebtedness that is not
permitted by this clause (vi);
(vii) Indebtedness of any Restricted Subsidiary to the Company or to
any other Restricted Subsidiary, provided that any event which results in
any transfer of such Indebtedness (other than to the Company or another
Restricted Subsidiary) shall be deemed to constitute an incurrence of such
Indebtedness not permitted by this clause (vii);
(viii) Permitted Refinancing Indebtedness;
(ix) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or a Restricted Subsidiary of the Company or any of its
Restricted Subsidiaries, other than guarantees of indebtedness incurred by
any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition;
provided that the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received
by the Company and its Restricted Subsidiaries in connection with such
disposition;
(x) Guarantees of any Restricted Subsidiary of Indebtedness of the
Company entered into in accordance with Section 1016 of the Indenture; and
(xi) Purchase Money Obligations and Capital Lease Obligations incurred
in the ordinary course of business by the Company or any Restricted
Subsidiary in an aggregate principal amount at any one time outstanding not
to exceed $200 million; and
(xii) other Indebtedness of the Company in an aggregate principal
amount not to exceed $50 million at any one time outstanding.
So as to avoid duplication in determining the amount of Permitted Indebtedness
under any clause of this definition, guarantees permitted to be incurred
pursuant to the Indenture of, or obligations permitted to be incurred pursuant
to the Indenture in respect of letters of credit supporting, Indebtedness
otherwise included in the determination of such amount shall not also be
included.
"Permitted Investments" means:
(i) Investments in Cash Equivalents;
(ii) advances and loans to officers and employees of the Company or
any Restricted Subsidiary in the ordinary course of business and for bona
fide business purposes in an amount not exceeding $20 million any one time
outstanding;
17
(iii) Investments represented by that portion of the proceeds from
Asset Sales that is not required to be cash or Cash Equivalents by the
covenant described in Section 1014 of the Indenture;
(iv) Investments in the Company or in any Restricted Subsidiary;
(v) Investments by the Company or any Restricted Subsidiary in another
Person if, as a result of such Investment,
(a) such other Person becomes a Restricted Subsidiary or
(b) 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 a
Restricted Subsidiary;
(vi) Investments in the form of intercompany Indebtedness to the
extent permitted under clauses (vi) and (vii) of the definition of
"Permitted Indebtedness";
(vii) Interest Swap Obligations and Currency Hedge Obligations,
provided that such Interest Swap Obligations and Currency Hedge Obligations
constitute Permitted Indebtedness permitted by clause (iii) of the
definition thereof;
(viii) Investments of the Company or any Restricted Subsidiary in
effect on the Issue Date;
(ix) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon
the bankruptcy or insolvency of such trade creditors or customers;
(x) Investments by the Company or any Restricted Subsidiary in
companies, products or technologies which would not be prohibited under
Section 1019 of the Indenture having an aggregate fair market value, taken
together with all other Investments made pursuant to this clause (x) that
are at that time outstanding, not to exceed 10% of Total Assets at the time
of such Investment (with the fair market value of each such Investment
being measured at the time made and without giving effect to subsequent
change in value);
(xi) Investments in the Capital Stock of a Person in exchange for
assets of the Company or any Restricted Subsidiary sold to such Person
having an aggregate fair market value at the time of such transaction,
taken together with all other Investments made pursuant to this clause (xi)
that are at that time outstanding, not to exceed $50 million;
(xii) Investments the payment for which consists exclusively of
Capital Stock (other than Redeemable Stock) of the Company; and
18
(xiii) additional Investments not to exceed $50 million at any time
outstanding.
"Permitted Junior Securities" means:
(i) Capital Stock of the Company; or
(ii) debt securities that are subordinated to (a) all Senior Debt and
(b) any debt securities issued in exchange for Senior Debt provided such
subordination is to substantially the same extent as, or to a greater
extent than, the Notes are subordinated to Senior Debt and under the
Indenture.
"Permitted Liens" means:
(i) Liens in existence on the Issue Date;
(ii) Liens created for the benefit of the Notes and/or any guarantees
thereof;
(iii) Liens on property of a Person existing at the time such Person
is merged or consolidated with or into the Company or a Restricted
Subsidiary, or at the time such Person became a Restricted Subsidiary (and
not incurred as a result of, or in anticipation of, such transaction),
provided that any such Lien relates solely to such property;
(iv) Liens on property existing at the time of the acquisition thereof
(and not incurred as a result of, or in anticipation of such transaction),
provided that any such Lien relates solely to such property;
(v) Liens incurred or pledges and deposits made in connection with
worker's compensation, unemployment insurance and other social security
benefits, statutory obligations, bid, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course
of business (other than contracts in respect of borrowed money and other
Indebtedness);
(vi) Liens imposed by law or arising by operation of law, including,
without limitation, landlords', mechanics', carriers', warehousemen's,
materialmen's, suppliers' and vendors' Liens and Liens for master's and
crew's wages and other similar maritime Liens, and incurred in the ordinary
course of business for sums not delinquent or being contested in good
faith, if such reserves or other appropriate provisions, if any, as shall
be required by GAAP shall have been made with respect thereof;
(vii) zoning restrictions, easements, licenses, covenants,
reservations, restrictions on the use of real property and defects,
irregularities and deficiencies in title to real property that do not,
individually or in the aggregate, materially affect the ability of the
Company or any Restricted Subsidiary to conduct its business presently
conducted and are incurred in the ordinary course of business;
19
(viii) Liens for taxes or assessments or other governmental charges or
levies not yet due and payable, or the validity of which is being contested
by the Company or a Restricted Subsidiary in good faith and by appropriate
proceedings upon stay of execution or the enforcement thereof and for which
adequate reserves in accordance with GAAP or other appropriate provision
has been made;
(ix) Liens to secure any extension, renewal, refinancing or refunding
(or successive extensions, renewals, refinancings or refundings), in whole
or in part, of any Indebtedness secured by Liens referred to in the
foregoing clauses (i), (iii) and (iv) of this definition, provided that
such Lien does not extend to any other property of the Company or any
Restricted Subsidiary and the principal amount of the Indebtedness secured
by such Lien is not increased;
(x) judgment liens not giving rise to an Event of Default so long as
such Lien is adequately bonded and any appropriate legal proceedings that
may have been duly initiated for the review of such judgment, decree or
order shall not have been finally terminated or the period within which
such proceedings may be initiated shall not have expired;
(xi) Liens securing obligations of the Company under Interest Swap
Obligations or Currency Hedge Obligations permitted to be incurred under
clause (iii) of the definition of "Permitted Indebtedness" or any
collateral for the Indebtedness to which such Interest Swap Obligations or
Currency Hedge Obligations relate;
(xii) Liens in favor of the Company or any Restricted Subsidiary;
(xiii) Liens securing Purchase Money Obligations and Capital Lease
Obligations permitted by clause (xi) of the definition of Permitted
Indebtedness;
(xiv) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(xv) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(xvi) Liens arising out of consignment or similar arrangements for the
sale of goods in the ordinary course of business;
(xvii) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries provided that such Liens do not extend to any
property or assets which are not leased property subject to such leases or
subleases; and
20
(xviii) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection with the
importation of goods.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company or
any Restricted Subsidiary, incurred in exchange for, or the net proceeds of
which are used to renew, extend, refinance, refund or repurchase, outstanding
Indebtedness of the Company or any Restricted Subsidiary which outstanding
Indebtedness was incurred in accordance with, or is otherwise permitted by the
test under Section 1011 of the Indenture and the terms of clauses (i), (iv) and
(viii) of the definition of "Permitted Indebtedness," provided that:
(i) if the Indebtedness being renewed, extended, refinanced, refunded
or repurchased is pari passu with or subordinated in right of payment
(without regard to its being secured) to the Notes, then such new
Indebtedness shall be pari passu with or subordinated in right of payment
(without regard to its being secured) to, as the case may be, the Notes at
least to the same extent as the Indebtedness being renewed, extended,
refinanced, refunded or repurchased,
(ii) such new Indebtedness is scheduled to mature at the same time or
later than the Indebtedness being renewed, extended, refinanced, refunded
or repurchased,
(iii) such new Indebtedness has an Average Life at the time such
Indebtedness is incurred that is equal to or greater than the Average Life
of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, and
(iv) such new Indebtedness is in aggregate principal amount (or, if
such Indebtedness is issued at a price less than the principal amount
thereof, the aggregate amount of gross proceeds therefrom is) not in excess
of the aggregate principal amount then outstanding of the Indebtedness
being renewed, extended, refinanced, refunded or repurchased (or if the
Indebtedness being renewed, extended, refinanced, refunded or repurchased
was issued at a price less than the principal amount thereof, then not in
excess of the amount of liability in respect thereof determined in
accordance with GAAP) plus the amount of reasonable fees, expenses, and
premium, if any, incurred by the Company or such Restricted Subsidiary in
connection therewith, and provided further that in no event may
Indebtedness of the Company be refinanced by means of any Indebtedness of
any Restricted Subsidiary.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, incorporated or unincorporated association, joint
stock company, trust, unincorporated organization or government or other agency
or political subdivision thereof or other entity of any kind.
"Preferred Stock" of any Person means Capital Stock of such Person of any
class or classes (however designated) that ranks prior, as to the payment of
dividends and/or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of at least one other class of such Person.
21
"Purchase Money Obligations" of any Person means any obligations of such
Person or any of its Subsidiaries to any seller or any other person incurred or
assumed in connection with the purchase of real or personal property to be used
in the business of such person or any of its subsidiaries within 180 days of
such purchase.
"Rating Agencies" means (i) S&P and Xxxxx'x or (ii) if S&P or Xxxxx'x or
both of them are not making ratings of the Notes publicly available, a
nationally recognized U.S. rating agency or agencies, as the case may be,
selected by the Company, which will be substituted for S&P or Xxxxx'x or both,
as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories (any of which may include a "+" or "-"): AAA, AA, A, BBB, BB, B, CCC,
CC, C and D (or equivalent successor categories); (ii) with respect to Xxxxx'x,
any of the following categories (any of which may include a 1, 2 or 3): Aaa, Aa,
A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and (iii)
the equivalent of any such categories of S&P or Xxxxx'x used by another Rating
Agency, if applicable.
"Redeemable Stock" means, with respect to any Person, any Capital Stock
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (including the occurrence of an
event) matures or is required to be redeemed (pursuant to any sinking fund
obligation or otherwise), or is redeemable at the option of the holder thereof,
in whole or in part or is convertible into or exchangeable for Indebtedness of
such Person or any of its Subsidiaries at any time prior to the Stated Maturity
of the Notes; provided that any Capital Stock that would not constitute
Redeemable Stock but for provisions thereof giving holders thereof the right to
require such Person to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
Stated Maturity of the Notes shall not constitute Redeemable Stock if the "asset
sale" or "change of control" provisions applicable to such Capital Stock are no
more favorable to the holders of such Capital Stock than the provisions
contained in Section 1014 and Section 1009 of the Indenture and such Capital
Stock specifically provides that such Person will not repurchase or redeem any
such stock pursuant to such provision prior to the Company's repurchase of such
Notes as are required to be repurchased pursuant to Section 1014 and Section
1009 of the Indenture.
"Regular Record Date" means the March 15 and September 15 of each year
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Replacement Asset" means a property or asset that, as determined by the
Board of Directors of the Company as evidenced by a Board Resolution, is related
or complimentary to the business of the Company as it is conducted on the Issue
Date or any business which is the same, similar or related to such business.
"Representative" means any agent or representative in respect of any
Designated Senior Debt; provided that if, and for so long as, any Designated
Senior Debt lacks such representative, then the Representative for such
Designated Senior Debt shall at all times constitute the holders of a majority
in outstanding principal amount of such Designated Senior Debt.
22
"Restricted Investment" means any Investment in any Person, including an
Unrestricted Subsidiary, or the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, other than a Permitted Investment.
"Restricted Subsidiary" means a Subsidiary of the Company other than an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Sale and Lease-Back Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which property is sold or transferred
by such Person or a Restricted Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Restricted Subsidiaries.
"Senior Debt" means the principal of, premium, if any, and interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on any
Indebtedness of the Company, whether outstanding on the Issue Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes.
Without limiting the generality of the foregoing, "Senior Debt" shall also
include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of:
(1) all monetary obligations of every nature under, or with respect
to, the Bank Credit Agreement, including, without limitation, obligations
to pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities (and guarantees thereof); and
(2) all Interest Swap Obligations and Currency Hedge Obligations in
respect of the Bank Credit Agreement;
in each case whether outstanding on the Issue Date or thereafter incurred.
Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of the Company to any of its Subsidiaries;
(2) Indebtedness to, or guaranteed on behalf of, any director, officer
or employee of the Company or any of its Subsidiaries (including, without
limitation, amounts owed for compensation);
23
(3) obligations to trade creditors and other amounts incurred (but not
under the Bank Credit Agreement) in connection with obtaining goods,
materials or services;
(4) Indebtedness constituting the obligation to redeem or repay
Redeemable Stock;
(5) any liability for taxes owed or owing by the Company;
(6) that portion of any Indebtedness incurred in violation of Section
1011 of the Indenture (but, as to any such obligation, no such violation
shall be deemed to exist for purposes of this clause (6) if the holder(s)
of such obligation or their representative shall have received an Officers'
Certificate of the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit indebtedness,
that the incurrence of the entire committed amount thereof at the date on
which the initial borrowing thereunder is made would not) violate such
provisions of the Indenture);
(7) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to the Company; and
(8) any Indebtedness which is, by its express terms, subordinated in
right of payment to any other Indebtedness of the Company.
"Stated Maturity" means (i) with respect to any Indebtedness, the date
specified in the instrument governing such Indebtedness as the fixed date on
which the final installment of principal is due and payable and (ii) with
respect to any scheduled installment of principal or interest on any
Indebtedness, the date specified in the instrument governing such Indebtedness
as the fixed date on which such installment is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the Company that is
subordinated in right of payment to the Notes.
"Subsidiary" means, with respect to any Person:
(i) any corporation more than 50% of the outstanding Voting Stock of
which is owned, directly or indirectly, by such Person, or by one or more
other Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person,
(ii) any general partnership, joint venture or similar entity, more
than 50% of the outstanding partnership or similar interest of which is
owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries of such Person and
(iii) any limited partnership of which such Person or any Subsidiary
of such Person is a general partner.
"Subsidiary Guarantee" has the meaning set forth in Section 1016 of the
Indenture.
24
"Surviving Entity" has the meaning set forth in Section 801 of the
Indenture.
"Total Assets" means total consolidated assets of the Company and its
Restricted Subsidiaries, as set forth on the Company's most recent consolidated
balance sheet.
"Transaction Date" has the meaning specified within the definition of
Consolidated Fixed Charge Coverage Ratio.
"Unrestricted Subsidiary" means (i) any Subsidiary that at the time of
determination shall be an Unrestricted Subsidiary (as designated by the Board of
Directors of the Company, as provided below) and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of the Company may designate any
Subsidiary (including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary so long as:
(i) neither the Company nor any Restricted Subsidiary is directly or
indirectly liable for any Indebtedness of such Subsidiary,
(ii) no default with respect to any Indebtedness of such Subsidiary
would permit (upon notice, lapse of time or otherwise) any holder
of any other Indebtedness of the Company or any Restricted
Subsidiary to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to
its Stated Maturity,
(iii) any Investment in such Subsidiary made as a result of
designating such Subsidiary an Unrestricted Subsidiary will not
violate the provisions of Section 1010,
(iv) neither the Company nor any Restricted Subsidiary has a
contract, agreement, arrangement, understanding or obligation of any
kind, whether written or oral, with such Subsidiary other than those
that might be obtained at the time from persons who are not Affiliates
of the Company, and
(v) neither the Company nor any other Restricted Subsidiary has
any obligation
(a) to subscribe for additional shares of Capital Stock or
other equity interest in such Subsidiary, or
(b) to maintain or preserve such Subsidiary's financial
condition or to cause such Subsidiary to achieve certain levels
of operating results.
Any such designation by the Board of Directors of the Company shall be evidenced
to the Trustee by filing a Board Resolution with the Trustee giving effect to
such designation. The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary if, immediately after giving
effect to such designation, there would be no Default or Event of Default under
the Indenture and the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 1011 of the Indenture.
25
"U.S. Dollar", "U.S.$" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States of America as at the time shall be
legal tender for the payment of public and private debts.
"Voting Stock" means with respect to any Person, securities of any class or
classes of Capital Stock in such Person entitling the holder thereof (whether at
all times or at the times that such class of Capital Stock has voting power by
reason of the happening of any contingency) to vote in the election of members
of the Board of Directors or comparable body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares of Investments by foreign nationals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
SECTION 102. Governing Law.
This First Supplemental Indenture and the Notes shall be governed by and
construed in accordance with the laws of the State of New York.
ARTICLE TWO
Securities Forms
SECTION 201. Creation of the Notes; Designation.
In accordance with Section 301 of the Original Indenture, the Company
hereby creates the Notes as a series of its Securities issued pursuant to the
Indenture. The Notes shall be known and designated as the "7?% Senior
Subordinated Notes due 2010" of the Company.
SECTION 202. Forms Generally.
The Notes and the Trustee's certificate of authentication shall be in the
forms set forth in Exhibit I attached hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
the Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The Notes shall be printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner, all as
determined by the officers of the Company executing such Notes, as evidenced by
their execution of such Notes.
26
ARTICLE THREE
General terms and conditions of the notes
SECTION 301. Title and Terms of Notes.
(a) The aggregate principal amount of the Notes which may be authenticated
and delivered is unlimited.
(b) The maturity date of the Notes is April 1, 2010.
(c) The Notes shall be known and designated as the "7?% Senior Subordinated
Notes due 2010".
(d) The Notes shall be issued in fully registered certificated form without
interest coupons. Principal and interest on Notes issued in certificated form
will be payable, the transfer of such Notes will be registrable and such Notes
will be exchangeable for Notes bearing identical terms and provisions, at the
office or agency of the Trustee; provided, however, that payment of principal
and interest may be made at the option of the Company by mailing a check payable
to the Holder at such address as it appears on the Security Register or wire
transfer to an account maintained by the payee located in the United States if
appropriate wire transfer instructions have been received in writing by the
Trustee not less than 15 days prior to the date of payment of such principal or
interest, provided, further, that in the case of payments of principal, the
related Note is first surrendered to the Paying Agent.
(e) The Notes shall not be redeemable, other than as provided in Article
Five of this First Supplemental Indenture.
(f) Section 1108 of the Indenture shall apply to the Notes with respect to
a change or amendment which is announced or becomes effective on or after March
25, 2002.
(g) Section 1005 of the Indenture shall apply to the Notes.
(h) Additional Notes may be created and issued from time to time by the
Company without notice to or consent of the Holders provided, however, that the
Company's ability to issue Additional Notes shall be subject to the Company's
compliance with Section 1011 of the Indenture, which Additional Notes shall be
authenticated by the Trustee upon receipt of a Company Order.
SECTION 302. Denominations.
The Notes shall be issuable only in fully registered form without coupons
and only in denominations of U.S.$1,000 and any integral multiple thereof.
SECTION 303. Original Issue of Notes.
Notes in the aggregate principal amount of U.S.$400,000,000 may, upon
execution of this First Supplemental Indenture, be executed by the Company and
delivered to the
27
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes, upon receipt of a Company Order, without any further action
by the Company. The Notes will be issued on original issue in the form of one or
more global Notes in registered form representing the aggregate principal amount
of Notes issued on the date hereof (each such global Notes, a "Global
Security").
SECTION 304. Interest.
(a) The Notes will bear interest, payable in U.S. Dollars, at the rate of
7?% of the principal amount thereof per annum, accruing from March 28, 2002 (or
from such other date that may be specified in the terms of any Additional Notes
that are issued pursuant to Subsection 301(h) of this First Supplemental
Indenture) until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
interest rate stated above, compounded annually, payable semi-annually in
arrears on April 1 and October 1 of each year commencing on October 1, 2002, to
the Person in whose name such Note or any Predecessor Security of such Note is
registered, at the close of business on the Regular Record Date for such
interest installment.
(b) In the event that any date on which interest is payable on the Notes is
not a Business Day, then payment of the interest otherwise due on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, then such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date. Interest payments will be made in an amount
equal to the interest accrued from and including the immediately preceding
Interest Payment Date in respect of which interest has been paid or duly made
available for payment (or from and including the date of issue, if no interest
has been paid or duly made available for payment) to but excluding the
applicable Interest Payment Date or Maturity Date, as the case may be.
ARTICLE FOUR
Events of default
SECTION 401. Events of Default.
(a) For the benefit of Holders of the Notes, clauses (1), (2), (3), (4),
(5) and (6) of Section 501 of the Original Indenture shall not apply to the
Notes and instead the following Events of Default shall replace them and shall
be considered clauses (1), (2), (3), (4), (5) and (6), of Section 501 of the
Indenture respectively, for all purposes of the Indenture:
"(1) default in the payment of interest (including any Additional
Amounts) on, any Note when the same becomes due and payable, and the
continuance of such default for a period of 30 days (whether or not such
payment is prohibited by the subordination provisions of Article Seven of
this First Supplemental Indenture);
(2) default in the payment of the principal of, or premium, if any,
on, any Note at its Maturity, whether upon optional redemption, required
repurchase (including
28
pursuant to a Change of Control Offer or an Asset Sale Offer) or otherwise
or the failure to make an offer to purchase any such Note as required
(whether or not such payment is prohibited by the subordination provisions
of Article Seven of this First Supplemental Indenture);
(3) the Company fails to comply with any of its covenants or
agreements contained in Sections 801 and 1009 of this Indenture (whether or
not such payment is prohibited by the subordination provisions of Article
Seven of this First Supplemental Indenture);
(4) default in the performance, or breach, of any covenant of the
Company in this Indenture (other than a covenant addressed in clause (1),
(2), (3) or (7) of this Section 501) and continuance of such Default or
breach for a period of 30 days after written notice thereof has been given
to the Company by the Trustee or to the Company and the Trustee by holders
of at least 25% of the aggregate principal amount of the outstanding Notes;
(5) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Restricted Subsidiary, a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under or subject to the Bankruptcy and Insolvency Act (Canada),
the Companies' Creditors Arrangement Act (Canada), the U.S. Federal
Bankruptcy Code or any other federal, provincial, state or foreign
bankruptcy, insolvency or analogous laws, or the issuance of a
sequestration order or the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or in
receipt of any substantial part of the property of the Company, and any
such decree, order or appointment continues unstayed and in effect for a
period of 90 consecutive days; or
(6) the institution by the Company or any Restricted Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking reorganization
or relief under or subject to the Bankruptcy and Insolvency Act (Canada),
the Companies' Creditors Arrangement Act (Canada), the U.S. Federal
Bankruptcy Code or any other federal, provincial, state or foreign
bankruptcy, insolvency or analogous laws or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or of any substantial part of its property, or the making by it of a
general assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due or
the taking by it of a corporate action in furtherance of any of the
aforesaid purposes."
(b) For the benefit of the Holders of the Notes, Section 501(7) of the
Original Indenture, shall, for the purposes of this First Supplemental
Indenture, be hereby amended in its entirety and replaced with the following:
29
"(7) default in the performance, or breach, of the covenant contained
in Section 1014 of this Indenture and continuance of such Default or breach
for a period of 10 days after written notice thereof has been given to the
Company by the Trustee or to the Company and the Trustee by holders of at
least 25% of the aggregate principal amount of the outstanding Notes;
(8) default under any mortgage, indenture or instrument under which
there is issued or by which there is secured or evidenced any Indebtedness
for money borrowed by the Company or any of its Restricted Subsidiaries (or
the payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists, or is
created after the date of this Indenture), which default (a) is caused by a
failure to pay principal of or premium, if any, on such Indebtedness after
the expiration of the grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its Stated Maturity and, in each
case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated,
aggregates $50 million or more; and
(9) the entry by a court of competent jurisdiction of one or more
final judgments which are non-appealable against the Company or any
Restricted Subsidiary in an uninsured or unindemnified aggregate amount in
excess of $50 million which is not discharged, waived, stayed, bonded or
satisfied for a period of 60 consecutive days."
ARTICLE FIVE
Redemption of the notes
SECTION 501. Right of Redemption.
The Notes may be redeemed, at the election of the Company, in whole or in
part, on one or more occasions, subject to the conditions specified in the form
of Security and in accordance with Article Eleven of the Indenture, in amounts
of $1,000 or an integral multiple of $1,000, at the Redemption Prices specified
in the form of Security set forth in Exhibit I together with accrued interest to
the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on an Interest Payment Date that is
on or prior to the Redemption Date).
The Notes will also be subject to redemption pursuant to Section 1108 of
the Indenture as set forth in Section 301(f) of this First Supplemental
Indenture.
30
ARTICLE SIX
consolidation, merger, conveyance, transfer or lease
SECTION 601. Amalgamation, Consolidation, Merger, Conveyances, Transfer or
Lease.
Article Eight of the Original Indenture shall, for the purposes of this
First Supplemental Indenture, be hereby amended in its entirety and replaced
with the following:
"ARTICLE EIGHT
AMALGAMATION, CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 801. Company May Amalgamate, Etc., Only on Certain Terms.
The Company may not, in any transaction or series of transactions,
amalgamate or consolidate with or merge with or into any other Person, or permit
any other Person to amalgamate or consolidate with or merge with or into the
Company, or directly or indirectly sell, convey, assign, transfer, lease or
otherwise dispose of all or substantially all of the property and assets to any
Person, unless:
(i) either:
(a) the Company shall be the continuing corporation, or
(b) the corporation (if other than the Company) formed by such
amalgamation, consolidation or into which the Company is merged, or
the Person to which such sale, assignment, conveyance, transfer, lease
or disposition shall have been made (such corporation or Person, the
"Surviving Entity"), shall be a corporation organized and validly
existing under the federal laws of Canada or any province or territory
thereof or the laws of the United States of America, any political
subdivision thereof or any state thereof or the District of Columbia,
and shall expressly assume, by a supplemental indenture in a form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Notes and
the performance of the Company's covenants and obligations under this
Indenture;
(ii) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (including,
without limitation, any Indebtedness incurred or anticipated to be
incurred in connection with or in respect of such transaction or
series of transactions), no Event of Default or Default shall have
occurred and be continuing or would result therefrom:
(iii) except in the case of a merger or amalgamation of the
Company with or into a Wholly Owned Restricted Subsidiary, immediately
after giving effect to any such transaction or series of
31
transactions on a pro forma basis as if such transaction or series of
transactions had occurred on the first day of the Determination Period
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction or series of transactions), the Company (or the Surviving
Entity if the Company is not continuing) would be permitted to incur
$1.00 of additional Indebtedness pursuant to the test set forth in
Section 1011 of this Indenture; and
(iv) the Company shall have delivered, or caused to be delivered,
to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officer's Certificate and an Opinion of Counsel, each
stating that such amalgamation, consolidation, merger, continuance,
sale, assignment, conveyance or transfer and the supplemental
indenture (if applicable) in respect thereto comply with the
provisions of this Indenture and that all conditions precedent in this
Indenture relating to such transactions have been complied with.
SECTION 802. Successor Substituted.
Upon any amalgamation, consolidation or merger, or any conveyance,
transfer, lease or other disposition of the properties and assets of the Company
substantially as an entity in accordance with Section 801 above, the Surviving
Entity shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture and the Notes with the same
effect as if such Surviving Entity had been named as the Company herein; and
when a Surviving Entity duly assumes all of the obligations and covenants of the
Company pursuant to this Indenture and the Notes except in the case of a lease,
the Company shall be relieved of all such obligations."
ARTICLE SEVEN
SUBORDINATION OF NOTES
SECTION 701. Notes Subordinated to Senior Debt.
The Company covenants and agrees, and the Trustee and each Holder of the
Notes by his acceptance thereof likewise covenant and agree, that all Notes
shall be issued subject to the provisions of this Article Seven; and each person
holding any Note, whether upon original issue or upon transfer, assignment or
exchange thereof, accepts and agrees that all payments of the principal of and
interest on the Notes by the Company shall, to the extent and in the manner set
forth in this Article Seven, be subordinated and junior in right of payment to
the prior payment in full in cash or Cash Equivalents of all Obligations arising
under Senior Debt.
SECTION 702. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of the Company
of any kind or character, whether in cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment), upon any dissolution or winding-up or total or
partial liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other similar
proceedings relating to the Company or its assets or in an assignment for the
benefit of creditors or any marshalling of the Company's assets and liabilities
the holder of all Senior Debt of the
32
Company then outstanding will be entitled to payments in full in cash or Cash
Equivalents of all Obligations due in respect of Senior Debt before the Holders
are entitled to receive any payments (excluding any payment or distribution of
Permitted Junior Securities and excluding any Defeasance Trust Payment) on or
with respect to the Notes and, until all holders of Senior Debt receive payment
in full in cash or Cash Equivalents of all Obligations due in respect of Senior
Debt, any distribution to which the Holders would be entitled will be made to
holders of Senior Debt.
Before any payment may be made by, or on behalf of, the Company of the
principal of, premium, if any, or interest on the Notes upon any such
dissolution or winding-up or total or partial liquidation or reorganization, or
in an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities any payment or distribution of assets or
securities of the Company of any kind or character, whether in cash, property or
securities (excluding any payment or distribution of Permitted Junior Securities
and excluding any Defeasance Trust Payment), to which the Holders of the Notes
or the Trustee on their behalf would be entitled, but for the subordination
provisions of this First Supplemental Indenture, shall be made by the Company or
by any receiver, trustee in bankruptcy, liquidation trustee, agent or other
Person making such payment or distribution, directly to the holders of the
Senior Debt (pro rata to such holders on the basis of the respective amounts of
Senior Debt held by such holders) or their representatives or to the trustee or
trustees or agent or agents under any agreement or indenture pursuant to which
any of such Senior Debt may have been issued, as their respective interests may
appear, to the extent necessary to pay all such Senior Debt in full in cash or
Cash Equivalents after giving effect to any prior or concurrent payment,
distribution or provision therefor to or for the holders of such Senior Debt.
(b) In the event that, notwithstanding the foregoing provision prohibiting
such payment or distribution, any payment or distribution of assets or
securities of the Company of any kind or character, whether in cash, property or
securities (excluding any payment or distribution of Permitted Junior Securities
and excluding any Defeasance Trust Payment), shall be received by the Trustee or
any Holder of Notes at a time when such payment or distribution is prohibited by
Section 702(a) of this First Supplemental Indenture and before all Obligations
in respect of Senior Debt are paid in full in cash or Cash Equivalents, such
payment or distribution shall be received and held in trust for the benefit of,
and shall be paid over or delivered to, the holders of Senior Debt (pro rata to
such holders on the basis of the respective amounts of Senior Debt held by such
holders) or their respective representatives, or to the trustee or trustees or
agent or agents under any indenture pursuant to which any of such Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of Senior Debt remaining unpaid until all such Senior Debt has
been paid in full in cash or Cash Equivalents after giving effect to any prior
or concurrent payment, distribution or provision therefor to or for the holders
of such Senior Debt.
The consolidation of the Company with, or the merger of the Company with or
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Eight of the Indenture shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 702 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Eight of the Indenture.
33
SECTION 703. No Payment on Notes in Certain Circumstances.
(a) The Company may not make any payment or distribution of any kind or
character with respect to any Obligations on or relating to the Notes or acquire
any Notes for cash or assets or otherwise (excluding any payment or distribution
of, in either case, Permitted Junior Securities and excluding any payment from
funds held in trust for the benefit of the Holders pursuant to Article Fourteen
of the Indenture (such payment, a "Defeasance Trust Payment") if (i) a payment
default on any Senior Debt occurs and is continuing; or (ii) any other default
occurs and is continuing on Designated Senior Debt that permits holders of the
Designated Senior Debt to accelerate its maturity and each of the Company and
the Trustee receives a notice of such default (a "Payment Blockage Notice") from
the Representative of any Designated Senior Debt.
Payments on and distributions with respect to any Obligations on or with
respect to the Notes may and shall, be resumed (i) in the case of a payment
default on any Senior Debt, upon the date on which all payment defaults are
cured or waived; and (ii) in case of a nonpayment default, the earliest of (1)
the date on which all such nonpayment defaults are cured or waived, (2) 179 days
after the date on which the applicable Payment Blockage Notice is received (3)
the date on which the Trustee receives notice from the Representative for such
Designated Senior Debt rescinding the Payment Blockage Notice, unless, in each
case, the maturity of any Designated Senior Debt has been accelerated.
No new Payment Blockage Notice may be delivered unless and until 360 days
have elapsed since the effectiveness of the immediately prior Payment Blockage
Notice.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice (to the extent the holder of
Designated Senior Debt, trustee or agent, giving such Payment Blockage Notice
had knowledge of such existing or continuing default) unless such default shall
have been cured or waived for a period of not less than 90 days. Any subsequent
action or any breach of any financial covenants for a period ending after the
date of delivery of the initial Payment Blockage Notice that in either case
would give rise to a default pursuant to any provisions under which a default
previously existed or was continuing will constitute a new default for this
purpose.
Notwithstanding anything to the contrary, Defeasance Trust Payments will be
permitted and will not be subordinated so long as the payments into the trust
were made in accordance with the requirements of Article Fourteen of the
Indenture and did not violate such subordination provisions when they were made.
(b) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section
703(a) of this First Supplemental Indenture, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Designated Senior Debt or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Designated Senior
Debt may have been issued, as their respective interests may appear, but only to
the extent that, upon notice from the Trustee to the holders of Designated
Senior Debt that such prohibited payment has been made, the holders of the
Designated Senior Debt (or their Representative or Representatives or a trustee
or trustees) notify the Trustee in writing of the
34
amounts then due and owing on the Designated Senior Debt, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Designated Senior Debt.
SECTION 704. Subrogation.
Upon the payment in full in cash of all Senior Debt, or provision for
payment, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of cash, property or
securities of the Company made on such Senior Debt until the principal of and
interest on the Notes shall be paid in full in cash; and, for the purposes of
such subrogation, no payments or distributions to the holders of the Senior Debt
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 Seven, and no payment over pursuant to the provisions of this Article
Seven to the holders of Senior Debt by Holders of the Notes or the Trustee on
their behalf shall, as between the Company, its creditors other than holders of
Senior Debt, and the Holders of the Notes, be deemed to be a payment by the
Company to or on account of the Senior Debt. It is understood that the
provisions of this Article Seven 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 the Senior Debt, 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 Seven shall
have been applied, pursuant to the provisions of this Article Seven, to the
payment of all amounts payable under Senior Debt, then and in such case, the
Holders of the Notes shall be entitled to receive from the holders of such
Senior Debt any payments or distributions received by such holders of Senior
Debt in excess of the amount required to make payment in full in cash of such
Senior Debt.
SECTION 705. Obligations of Company Unconditional.
Nothing contained in this Article Seven or elsewhere in the Indenture or in
the Notes is intended to or shall impair, as among the Company 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 and interest
on the Notes as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders of the Notes and creditors of the Company other than the holders of the
Senior Debt, nor shall anything herein or therein prevent the Holder of any Note
or the Trustee on their behalf from exercising all remedies otherwise permitted
by applicable law upon default under the Indenture, subject to the rights, if
any, under this Article Seven of the holders of the Senior Debt in respect of
cash, property or securities of the Company received upon the exercise of any
such remedy.
Without limiting the generality of the foregoing, nothing contained in this
Article Seven shall restrict the right of the Trustee or the Holders of Notes to
take any action to declare the Notes to be due and payable prior to their stated
maturity pursuant to Section 401 of this First Supplemental Indenture or Section
501 of the Indenture or to pursue any rights or remedies hereunder; provided,
however, that all Senior Debt then due and payable shall first be paid in full
in cash before the Holders of the Notes or the Trustee are entitled to receive
any direct or indirect payment from the Company of principal of or interest on
the Notes.
SECTION 706. Notice to Trustee.
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The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article
Seven. The Trustee shall not be charged with knowledge of the existence of any
event of default with respect to any Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing at its Corporate Trust Office
to that effect signed by an Officer of the Company, or by a holder of Senior
Debt or trustee or agent therefor; and prior to the receipt of any such written
notice, the Trustee shall, subject to Article Six of the Indenture, be entitled
to assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 706 at least two
Business Days prior to the date upon which by the terms of the Indenture any
moneys shall become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Note), then, regardless of
anything herein to the contrary, the Trustee shall have full power and authority
to receive any moneys from the Company and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date. Nothing
contained in this Section 706 shall limit the right of the holders of Senior
Debt to recover payments as contemplated by Section 703 of this First
Supplemental Indenture. The Trustee shall be entitled to rely on the delivery to
it of a written notice by a Person representing himself or itself to be a holder
of any Senior Debt (or a trustee on behalf of, or other Representative) to
establish that such notice has been given by a holder of such Senior Debt or a
trustee or Representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article Seven, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article Seven, and if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment.
SECTION 707. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets or securities referred to in
this Article Seven, the Trustee and the Holders of the Notes shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which bankruptcy, dissolution, winding-up, liquidation or reorganization
proceedings are pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, delivered to the Trustee or to the Holders of the Notes for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Seven.
SECTION 708. Trustee's Relation to Senior Debt.
The Trustee and any Paying Agent shall be entitled to all the rights set
forth in this Article Seven with respect to any Senior Debt which may at any
time be held by it in its
36
individual or any other capacity to the same extent as any other holder of
Senior Debt, and nothing in the Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Seven, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into the
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt (except as provided in Section
703(b) of this First Supplemental Indenture). The Trustee shall not be liable to
any such holders if the Trustee shall in good faith mistakenly pay over or
distribute to Holders of Notes or to the Company or to any other person cash,
property or securities to which any holders of Senior Debt shall be entitled by
virtue of this Article Seven or otherwise.
SECTION 709. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of the Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with. The provisions of
this Article Seven are intended to be for the benefit of, and shall be
enforceable directly by, the holders of Senior Debt notwithstanding that such
holders are not parties to the Indenture.
SECTION 710. Holders Authorize Trustee To Effectuate Subordination of
Notes.
Each Holder of Notes by his acceptance of such Notes authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Seven, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its or his Notes
in the form required in those proceedings.
SECTION 711. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest on the
Notes by reason of any provision of this Article Seven shall not be construed as
preventing the occurrence of an Event of Default specified in clauses (1), (2)
or (3) of Section 501 of the Indenture.
SECTION 712. Trustee's Compensation Not Prejudiced.
Nothing in this Article Seven shall apply to amounts due to the Trustee
pursuant to other sections in the Indenture.
37
SECTION 713. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 709 of this First
Supplemental Indenture, the holders of Senior Debt may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders of
the Notes, without incurring responsibility to the Holders of the Notes and
without impairing or releasing the subordination provided in this Article Seven
or the obligations hereunder of the Holders of the Notes to the holders of
Senior Debt, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt or any instrument evidencing the same or any agreement under which Senior
Debt is outstanding or secured; (b) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing Senior Debt; (c)
release any Person liable in any manner for the collection of Senior Debt; and
(d) exercise or refrain from exercising any rights against the Company and any
other Person.
SECTION 714. Subordination Provisions Not Applicable to Money Held in Trust
for Holders; Payments May Be Paid Prior to Dissolution.
All money and Government Obligations deposited in trust with the Trustee
pursuant to and in accordance with Article Four of the Original Indenture shall
be for the sole benefit of the Holders and shall not be subject to this Article
Seven.
Nothing contained in this Article Seven or elsewhere in the Indenture shall
prevent (i) the Company, except under the conditions described in Section 702 of
this First Supplemental Indenture, from making payments of principal of and
interest on the Notes or from depositing with the Trustee any moneys for such
payments or from effecting a termination of the Company's obligations under the
Notes and the Indenture as provided in Article Four of the Indenture, or (ii)
the application by the Trustee of any moneys deposited with it for the purpose
of making such payments of principal of and interest on the Notes, to the
holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 703(b) of this First Supplemental
Indenture or in Section 706 of this First Supplemental Indenture. The Company
shall give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Company.
SECTION 715. Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of Default, the
Company shall promptly notify holders of the Senior Debt of the acceleration.
ARTICLE EIGHT
COVENANTS
SECTION 801. Covenants. For the benefit of Holders of the Notes, the
following covenants are added to Article Ten of the Original Indenture and shall
be considered as Sections 1009 through 1020 of Article Ten for all purposes of
the Indenture:
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"SECTION 1009. Change of Control.
Upon the occurrence of a Change of Control, each Holder will have the right
to require the Company to repurchase all of such Holder's Notes in whole or in
part (equal to $1,000 or an integral multiple thereof) (the "Change of Control
Offer") at a purchase price (the "Change of Control Purchase Price") in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest to the Change of Control Payment Date (as defined below) on the terms
described below.
Within 30 days following any Change of Control, the Company or the Trustee
(at the expense of the Company) will mail a notice to each Holder and to the
Trustee stating, among other things:
(i) that a Change of Control has occurred and a Change of Control
Offer is being made as provided for in this Indenture, and that,
although Holders are not required to tender their Notes, all Notes
that are timely tendered will be accepted for payment;
(ii) the Change of Control Purchase Price and the repurchase
date, which will be no earlier than 30 days and no later than 60 days
after the date such notice is mailed (the "Change of Control Payment
Date");
(iii) that any Note accepted for payment pursuant to the Change
of Control Offer (and duly paid for on the Change of Control Payment
Date) will cease to accrue interest after the Change of Control
Payment Date; and
(iv) the instructions and any other information necessary to
enable Holders to tender their Notes and have such Notes purchased
pursuant to the Change of Control Offer.
The Company will comply with any applicable tender offer rules (including,
without limitation, any applicable requirements of Rule 14e-1 under the Exchange
Act) in the event that the Change of Control Offer is triggered under the
circumstances described herein.
The Company will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
above and repurchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
SECTION 1010. Limitation on Restricted Payments.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of its Capital Stock (other than (x) dividends
or distributions payable solely in shares of Capital Stock (other than
Redeemable
39
Stock) of the Company or in options, warrants or other rights to
acquire such shares of Capital Stock (other than Redeemable Stock),
(y) dividends or distributions payable to other holders of Capital
Stock of a Restricted Subsidiary, provided that at least a pro rata
amount is paid to the Company and/or a Restricted Subsidiary or (z)
dividends and distributions payable to the Company or any Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock of the Company;
(iii) make any principal payment on, or repurchase, redeem,
defease or otherwise acquire or retire for value, prior to the Stated
Maturity of any principal payment or any sinking fund payment, any
Subordinated Indebtedness of the Company; or
(iv) make any Restricted Investment in any Person;
(such payments or other actions described in (but not excluded from)
clauses (i) through (iv) are collectively referred to as "Restricted
Payments"), unless at the time of and after giving effect to the
proposed Restricted Payment,
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) the Company could incur at least $1.00 of additional
Indebtedness under the test set forth in Section 1011 of this
Indenture; and
(c) the aggregate amount of all Restricted Payments declared or
made on or after October 1, 2001 by the Company or any Restricted
Subsidiary shall not exceed the sum of:
(i) 50% (or if such Consolidated Net Income shall be a
deficit, minus 100% of such deficit) of the aggregate
Consolidated Net Income accrued during the period beginning on
October 1, 2001 and ending on the last day of the fiscal quarter
ending immediately prior to the date of such proposed Restricted
Payment; plus
(ii) an amount equal to the aggregate net cash proceeds
received by the Company, subsequent to October 1, 2001, from the
issuance or sale (other than to a Subsidiary) of shares of its
Capital Stock (excluding Redeemable Stock, but including Capital
Stock issued upon the exercise of options, warrants or rights to
purchase Capital Stock (other than Redeemable Stock) of the
Company) or warrants, options or rights to purchase shares of
Capital Stock (other than Redeemable Stock) and Indebtedness of
the Company which has been converted into, exchanged for or
satisfied by the issuance of shares of
40
Capital Stock (other than Redeemable Stock and other than by or
from a Subsidiary) of the Company and the aggregate net cash
proceeds received by the Company at the time of any such
conversion or exchange, subsequent to the Issue Date; plus
(iii) 100% of the net reduction in Restricted Investments,
subsequent to October 1, 2001, in any Person, resulting from
payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of property (but only to
the extent such interest, dividends, repayments or other
transfers of property are not included in the calculation of
Consolidated Net Income), in each case to the Company or any
Restricted Subsidiary from any Person (including, without
limitation, from Unrestricted Subsidiaries) or from
redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition
of "Investments"), not to exceed in the case of any Person the
amount of Restricted Investments previously made by the Company
or any Restricted Subsidiary in such Person and in each such case
which was treated as a Restricted Payment.
The foregoing provisions will not prevent:
(i) the payment of any dividend on Capital Stock of any
class within 60 days after the date of its declaration if at the
date of declaration such payment would be permitted by this
Indenture;
(ii) any repurchase or redemption of Capital Stock or
Subordinated Indebtedness of the Company or a Restricted
Subsidiary made by (x) exchange for Capital Stock (other than
Redeemable Stock) of the Company or (y) out of the net cash
proceeds from the substantially concurrent issuance or sale
(other than to a Subsidiary) of Capital Stock (other than
Redeemable Stock) of the Company;
(iii) so long as no Default or Event of Default shall have
occurred and be continuing or should occur as a consequence
thereof, any repurchase or redemption of Subordinated
Indebtedness solely in exchange for, or out of the net cash
proceeds from the substantially concurrent sale (other than to a
Subsidiary) of, new Subordinated Indebtedness of the Company so
long as such Subordinated Indebtedness:
(a) is subordinated to the Notes at least to the same
extent as the Subordinated Indebtedness so exchanged,
purchased or redeemed, and
(b) has an Average Life at the time incurred that is
equal to or greater than the remaining Average Life of
41
the Subordinated Indebtedness so exchanged, purchased or
redeemed;
(iv) so long as no Default or Event of Default shall have
occurred and be continuing, the repurchase of common shares of
the Company (other than, with respect to repurchases not made
over a stock exchange, common shares held by any Affiliate,
officers or directors of the Company or any Restricted
Subsidiary); provided that such repurchases do not exceed $100
million and are completed within 12 months of the Issue Date;
(v) the repurchase of Capital Stock of the Company deemed to
occur upon the exercise of stock options if such Capital Stock
represents a portion of the exercise price thereof;
(vi) so long as no Default or Event of Default shall have
occurred and be continuing, Restricted Payments not otherwise
permitted hereby in an aggregate amount not to exceed $50 million
subsequent to the Issue Date.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (c) of the
immediately preceding paragraph, amounts expended pursuant to
clauses (i), (ii)(y) and (vi) of this paragraph shall be included
in such calculation.
For purposes of this Section 1010, if a particular Restricted Payment
involves a non-cash payment, including a distribution of assets, then such
Restricted Payment shall be deemed to be an amount equal to the cash portion of
such Restricted Payment, if any, plus an amount equal to the Fair Market Value
of the non-cash portion of such Restricted Payment.
SECTION 1011. Limitation on Indebtedness.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness), except that the Company or a Guarantor may incur Indebtedness
(including Acquired Indebtedness), and any Restricted Subsidiary that is not a
Guarantor may incur Acquired Indebtedness, if, after giving pro forma effect to
the incurrence of such Indebtedness, the Consolidated Fixed Charge Coverage
Ratio for the Determination Period preceding the Transaction Date is at least
2.0 to 1.0. Notwithstanding the foregoing, the Company or any Restricted
Subsidiary may incur Permitted Indebtedness. Any Indebtedness of a Person
existing at the time at which such Person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be incurred by such Restricted Subsidiary at the time at which it becomes a
Restricted Subsidiary.
SECTION 1012. Limitation on Layering Indebtedness.
The Company shall not directly or indirectly, incur or suffer to exist any
Indebtedness that is or purports to be by its terms (or by the terms of any
42
agreement governing such Indebtedness) senior to the Notes and subordinated to
any other Indebtedness of the Company.
SECTION 1013. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary,
directly or indirectly, to create, enter into any agreement with any Person or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind which by its terms restricts the ability
of any Restricted Subsidiary to:
(i) pay dividends, in cash or otherwise, or make any other
distributions on its Capital Stock to the Company or any other Restricted
Subsidiary;
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary;
(iii) make loans or advances to the Company or any other Restricted
Subsidiary;
(iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary; or
(v) guarantee any Indebtedness of the Company or any other Restricted
Subsidiary,
except any encumbrance or restriction existing under or by reason of:
(a) any agreement in effect on the date of this Indenture,
(b) applicable law,
(c) customary non-assignment provisions in leases and other
agreements entered into in the ordinary course of business of the
Company or any Restricted Subsidiary,
(d) any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired,
(e) customary restrictions on transfers of property contained in
any security agreement (including a Capital Lease Obligation) securing
Indebtedness of the Company or a Restricted Subsidiary otherwise
permitted under this Indenture,
43
(f) any encumbrance or restriction with respect to a Restricted
Subsidiary of the Company entered into for the sale or disposition of
all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary permitted under Section 1014 of this Indenture,
(g) any restriction or encumbrance contained in contracts for
sale of assets permitted by this Indenture in respect of the assets
being sold pursuant to such contracts pending the close of such sale,
(h) any agreement for Indebtedness permitted to be incurred by
this Indenture subsequent to the Issue Date provided that any such
encumbrance or restriction contained in such agreement is no less
favorable to the Company or any Restricted Subsidiary as determined by
the Board of Directors of the Company in their reasonable and good
faith judgment than those encumbrances and restrictions permitted by
the foregoing clause (a) and
(i) any encumbrance or restriction under any agreement that
extends, renews, refinances or replaces agreements existing on the
date of this Indenture containing the encumbrances or restrictions in
the foregoing clauses (a) through (h), so long as the terms and
conditions of any such encumbrances or restrictions are no less
favorable to the Company, any Restricted Subsidiary and the holders of
the Notes as determined by the Board of Directors of the Company in
their reasonable and good faith judgment than those so extended,
renewed, refinanced or replaced.
SECTION 1014. Limitation on Asset Sales.
The Company shall not engage in, and shall not permit any Restricted
Subsidiary to engage in, any Asset Sale unless:
(i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration for such Asset Sale at least equal to the Fair
Market Value as evidenced by a Board Resolution set forth in an Officers'
Certificate delivered to the Trustee of assets or Capital Stock sold or
issued or otherwise disposed of and
(ii) at least 75% of such consideration consists of cash or Cash
Equivalents (or the assumption of Indebtedness of the Company or such
Restricted Subsidiary relating to the Capital Stock or property or asset
that was the subject of such Asset Sale and the unconditional release of
the Company or such Restricted Subsidiary from such Indebtedness).
The Company or such Restricted Subsidiary, as the case may be, may apply
the Net Available Proceeds from each Asset Sale:
(x) to the acquisition of one or more Replacement Assets, or
44
(y) to repurchase or repay Senior Debt (with a permanent reduction of
availability in the case of revolving credit borrowings);
provided that a binding commitment to make such acquisition or such
repurchase or repayment shall be made within 365 days after the
consummation of the relevant Asset Sale.
Any Net Available Proceeds from any Asset Sale made after the Issue Date
that are not bindingly committed to so acquire Replacement Assets or to
repurchase or repay Senior Debt within 365 days after consummation of the
relevant Asset Sale constitute "Excess Proceeds." When the aggregate amount of
Excess Proceeds exceeds $25 million, the Company shall within 25 days thereafter
make a pro rata offer (an "Asset Sale Offer") to purchase from all holders of
Notes an aggregate principal amount of Notes equal to the Excess Proceeds, at a
price in cash (the "Asset Sale Offer Purchase Price") equal to 100% of the
outstanding principal thereof plus accrued and unpaid interest to the purchase
date on the terms described below; provided, however, to the extent the
aggregate principal amount of Notes tendered pursuant to such Asset Sale Offer
exceeds the Excess Proceeds to be applied to the repurchase thereof, such Notes
shall be purchased pro rata based on the aggregate principal amount of such
Notes tendered by each holder thereof.
Within 25 days following any Asset Sale Offer, the Company or the Trustee
(at the expense of the Company) will mail a notice to each Holder and to the
Trustee stating:
(i) that an Asset Sale has occurred and an Asset Sale Offer is being
made as provided for in this Indenture, and that, although Holders are not
required to tender their Notes, all Notes that are timely tendered will be
accepted for payment; provided, however, to the extent the aggregate
principal amount of Notes tendered pursuant to such Asset Sale Offer
exceeds the Excess Proceeds to be applied to the repurchase thereof, such
Notes shall be purchased pro rata based on the aggregate principal amount
of such Notes tendered by each holder thereof;
(ii) the Asset Sale Offer Purchase Price and the repurchase date,
which will be no earlier than 30 days and no later than 60 days after the
date such notice is mailed (the "Asset Sale Payment Date");
(iii) that any Note accepted for payment pursuant to the Asset Sale
Offer (and duly paid for on the Asset Sale Payment Date) will cease to
accrue interest after the Asset Sale Payment Date; and
(iv) the instructions and any other information necessary to enable
Holders to tender their Notes and have such Notes purchased pursuant to the
Asset Sale Offer.
To the extent that the aggregate purchase price of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company or any
45
Restricted Subsidiary may use such deficiency for general corporate purposes.
Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero.
The Company will comply with any applicable tender offer rules (including,
without limitation, any applicable requirements of Rule 14e-1 under the Exchange
Act) in the event that an Asset Sale Offer is required under the circumstances
described herein.
SECTION 1015. Limitation on Issuances of Capital Stock of Restricted
Subsidiaries.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to issue any Capital Stock of a Restricted Subsidiary except:
(A) to the Company or a Wholly Owned Restricted Subsidiary,
(B) the ownership by directors of director's qualifying shares or the
ownership by foreign nationals of Capital Stock of any Restricted
Subsidiary, to the extent mandated by applicable law, or
(C) if, immediately after giving effect to such issuance, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving effect to such
issuance would have been permitted to be made under Section 1010 of this
Indenture, if made on the date of such issuance.
SECTION 1016. Limitation on Issuances of Guarantees by Restricted
Subsidiaries.
The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to guarantee, assume or in any other manner become liable with
respect to any Indebtedness of the Company other than Indebtedness or
reimbursement obligations of the Company of the type permitted by clause (ii) of
the definition of "Permitted Indebtedness" ("Guaranteed Indebtedness"), unless
(i) such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a guarantee (a
"Subsidiary Guarantee") of payment of the Notes by such Restricted Subsidiary
and (ii) such Restricted Subsidiary waives and will not in any manner whatsoever
claim, or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Subsidiary Guarantee; provided that this paragraph shall not be
applicable to any guarantee of any Restricted Subsidiary that existed at the
time such Person became a Restricted Subsidiary and was not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary. If the Guaranteed Indebtedness is (A) Senior Debt, then the
Subsidiary Guarantee shall be subordinated to the guarantee of such Guaranteed
Indebtedness to the same extent as the Notes are subordinated to Senior Debt;
(B) pari passu with the Notes, then the guarantee of such Guaranteed
Indebtedness shall be pari passu with, or subordinated to, the
46
Subsidiary Guarantee or (C) Subordinated Indebtedness, then the guarantee of
such Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee
at least to the extent that the Guaranteed Indebtedness is subordinated to the
Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person that is not an Affiliate of the Company, of all of the Company's
and each Restricted Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Restricted Subsidiary (which sale, exchange or transfer is
not prohibited by this Indenture) or (ii) the release or discharge of the
guarantee which resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such guarantee, provided
that, with respect to clause (ii), such Restricted Subsidiary has no
Indebtedness other than Indebtedness permitted to be incurred by a Restricted
Subsidiary that is not a Guarantor.
SECTION 1017. Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, affirm, incur, assume or suffer to exist any
Liens of any kind other than Permitted Liens on or with respect to any property
or assets of the Company or such Restricted Subsidiary or any interest therein
or any income or profits therefrom, whether owned at the Issue Date or
thereafter acquired, in each case to secure Indebtedness that is not Senior Debt
without effectively providing that the Notes shall be secured equally and
ratably with (or prior to) the Indebtedness so secured for so long as such
obligations are so secured.
SECTION 1018. Limitations on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, but not limited to, the purchase, sale or
exchange of property, the making of any Investment, the giving of any guarantee
or the rendering of any service) with any Affiliate of the Company unless:
(i) such transaction or series of related transactions is on terms no
less favorable to the Company or such Restricted Subsidiary than those that
could be obtained in a comparable arm's length transaction with a Person
that is not such an Affiliate and
(ii) (a) with respect to a transaction or series of related
transactions that has a Fair Market Value in excess of $10 million, the
Company delivers an Officers' Certificate to the Trustee certifying that
such transaction or series of related transactions complies with clause (i)
above and that such transaction or series of related transactions have been
approved by the Board of Directors of the Company (including a majority of
disinterested directors); or
47
(b) with respect to a transaction or series of related
transactions that has a Fair Market Value equal to or in excess of $50
million, the Company will obtain a written opinion from a nationally
recognized investment banking or accounting firm or, if an investment
banking or public accounting firm is generally not qualified to give
such an opinion, by a nationally recognized appraisal firm certifying
that such transaction or series of related transactions is fair to the
Company or such Restricted Subsidiary, as the case may be, from a
financial point of view;
provided, that this Section 1018 shall not restrict:
(1) any transaction or series of related transactions among
the Company and Restricted Subsidiaries or among Restricted
Subsidiaries;
(2) reasonable and customary fees and compensation paid to,
and indemnity provided on behalf of, officers, directors,
employees, agents or consultants of the Company or any Restricted
Subsidiary of the Company as determined in good faith by the
Company's Board of Directors;
(3) any agreement as in effect as of the Issue Date or any
amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) or any replacement
agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Company or its
Restricted Subsidiaries, as the case may be, than the original
agreement as in effect on the Issue Date;
(4) any issuance of securities or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock
ownership plans of the Company approved by the Board of Directors
of the Company in good faith;
(5) loans advanced to employees and officers of the Company
and its Restricted Subsidiaries not in excess of $20 million at
any time outstanding; and/or
(6) the making of any Restricted Payment otherwise permitted
by this Indenture.
SECTION 1019. Limitations on Line of Business.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, engage to any material extent in any line or lines of
business activity that is not the same, similar, reasonably related or
complementary to any line of business that the Company or its Restricted
Subsidiaries is engaged on the Issue Date.
SECTION 1020. Certain Fall Away Covenants.
48
During any period of time that (a) the Notes have Investment Grade Ratings
from both Rating Agencies and (b) no Default or Event of Default has occurred
and is continuing hereunder, the Company and its Restricted Subsidiaries will
not be subject to the following provisions of this Indenture: Sections 1009,
1010 (except to the extent applicable under the definition of Unrestricted
Subsidiary), 1011, 1013, 1014, 1015, 1018, 1019 and clause (iii) of Section 801
of this Indenture.
If the Company and the Restricted Subsidiaries are not subject to these
covenants for any period of time as a result of the previous sentence (a
"Fall-Away Period") and, subsequently, one, or both, of the Rating Agencies
withdraws its ratings or downgrades the ratings assigned to the Notes below the
required Investment Grade Ratings or a Default or Event of Default occurs and is
continuing, then the Company and its Restricted Subsidiaries will thereafter
again be subject to these covenants. The ability of the Company and its
Restricted Subsidiaries to make Restricted Payments after the time of such
withdrawal, downgrade, Default or Event of Default will be calculated as if the
provisions of Section 1010 of this Indenture had been in effect during the
entire period of time from the date of this First Supplemental Indenture.
Notwithstanding the foregoing, the continued existence of facts and
circumstances or obligations arising from transactions which occurred during a
Fall-Away Period shall not constitute a breach of any covenant set forth in this
Indenture or cause a Default or Event of Default thereunder; provided, that (i)
the Company and its Restricted Subsidiaries did not incur or otherwise cause
such facts and circumstances or obligations to exist in anticipation of a
ratings withdrawal or downgrade below an Investment Grade Rating and (ii) the
Company and its Restricted Subsidiaries did not reasonably believe that such
transactions would result in such withdrawal or downgrade."
ARTICLE NINE
Supplemental indentures
SECTION 901. Supplemental Indentures.
Sections 901 and 902 of the Original Indenture, shall, for the purposes of
this First Supplemental Indenture, be hereby amended in their entirety and
replaced with the following:
"Section 901. Supplemental Indentures and Amendments Without Consent of
Holders
Without the consent of any Holders, the Company and any Restricted
Subsidiary, (each when authorized by a Board Resolution), and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto for any of the following purposes:
49
(i) to evidence the succession of another Person to the
Company and the assumption by such successor of the covenants and
obligations of the Company under this Indenture and contained in
the Notes;
(ii) to add to the covenants of the Company, for the benefit
of the Holders, or to surrender any right or power conferred upon
the Company by this Indenture;
(iii) to add any additional Events of Default;
(iv) to evidence and provide for the acceptance of
appointment under this Indenture by a successor Trustee;
(v) to secure the Notes; or
(vi) to cure any ambiguity, to correct or supplement any
provision in this Indenture which may be inconsistent with any
other provision herein or to add any other provisions with
respect to matters or questions arising under this Indenture;
provided that, in each case, such provisions shall not adversely affect
the interests of the Holders in any material respect.
Section 902. Supplemental Indentures and Certain Amendments with Consent of
Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes), the Company and
the Trustee may enter into one or more indentures supplemental to this Indenture
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders; provided that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby;
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal
amount thereof (or premium, if any), or the interest thereon that
would be due and payable upon Maturity thereof, or change the
place of payment where, or the coin or currency in which, any
Note or any premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof;
(ii) reduce the percentage in principal amount of the
Outstanding Notes, the consent of whose Holders is necessary for
any such supplemental indenture or required for any waiver of
compliance with certain provisions of this Indenture, or certain
Defaults hereunder;
50
(iii) modify the obligations of the Company under Section
1014 or 1009 of this Indenture;
(iv) modify or change any provisions of Article Seven of
this First Supplemental Indenture or any related definition in a
manner that adversely affects the Holders;
(v) make any change that would adversely affect the rights
of the Holders to receive Additional Amounts as described in
Section 1005 of the Original Indenture; or
(vi) modify any of the provisions of this Section (except to
increase any percentage set forth herein).
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Anything in this Section 902 to the contrary notwithstanding, no amendment
of, or supplement or waiver to, this Indenture shall adversely affect the rights
of any holder of Senior Debt under the subordination provisions of Article Seven
of the First Supplemental Indenture to this Indenture, dated March 28, 2002,
without the consent of such holder."
ARTICLE TEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1001. Defeasance and Covenant Defeasance.
Article Fourteen of the Original Indenture shall, for the purposes of this
First Supplemental Indenture, be hereby amended in its entirety and replaced
with the following:
"ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1401. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 1402 or Section 1403 be
applied to all Outstanding Notes upon compliance with the conditions set forth
below in this Article Fourteen.
Section 1402. Defeasance and Discharge.
Upon the Company's exercise under Section 1401 of the option applicable to
this Section 1402, the Company shall be deemed to have been
51
discharged from its obligations with respect to all Outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Notes, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 1405 and the other Sections of this Indenture referred to in
(A), (B), and (C) below, and to have satisfied all its other obligations under
such Notes and this Indenture insofar as such Notes are concerned (and the
Trustee, upon Company Request and at the expense of the Company, shall 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 payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due solely
from the trust referred to below, (B) the Company's obligations with respect to
the Notes under Sections 304, 305, 306, 1002 and 1005 of this Indenture (for
purposes of applying Section 1005, if the Trustee is required by law or by the
interpretation or administration thereof to withhold or deduct any amount for or
on the account of Taxes from any payment made from the trust fund described in
Section 1404 under or with respect to the Notes, such payment shall have been
deemed to have been made by the Company and the Company shall be deemed to have
been so required to withhold or deduct) for security payments held in trust, (C)
the rights, powers, trusts, duties and immunities of the Trustee hereunder, and
the Company's obligations in connection therewith and (D) this Article Fourteen.
Subject to compliance with this Article Fourteen, the Company may exercise its
option under this Section 1402 notwithstanding the prior exercise of its option
under Section 1403 with respect to the Notes.
Section 1403. Covenant Defeasance.
Upon the Company's exercise under Section 1401 of the option applicable to
this Section 1403, the Company shall be released from its obligations under any
covenant contained in Article Eight of this Indenture and in Sections 1004 and
1006 through 1020 of this Indenture with respect to the Outstanding Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"), and the Notes shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed Outstanding
for financial accounting purposes). For this purpose, such covenant defeasance
means that, with respect to the Outstanding Notes, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under subsections 501(3), (4) or (7) of this Indenture, but, except
as specified above, the remainder of this Indenture (including Section 607
52
of this Indenture) and such Notes shall be unaffected thereby. In addition, upon
the Company's exercise under Section 1401 of the option applicable to Section
1403, subsections 501(3), (4) or (7) of this Indenture shall not constitute
Events of Default.
Section 1404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 1402
or Section 1403 to the Outstanding Notes:
(i) The Company shall irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of Notes, cash in U.S. Dollars, or
Government Obligations, or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest on the Outstanding Notes on the Stated Maturity or on the
applicable Redemption Date, as the case may be;
(ii) in the case of an election under Section 1402 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that:
(a) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or
(b) since the date hereof, there has been a change in the
applicable United States federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the Outstanding Notes will not recognize income,
gain or loss for United States federal income tax purposes as a result
of such 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 defeasance had not occurred;
(iii) in the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
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;
(iv) the Company shall have delivered to the Trustee an Opinion of
Counsel in Canada reasonably acceptable to the Trustee confirming that
under the federal laws of Canada the Company will not be required following
such defeasance or covenant defeasance, as the case may be, to withhold tax
from interest paid or credited by it on the principal
53
of a Note to any non-resident of Canada with whom it is dealing at arm's
length;
(v) no Default or an Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Events of Default
from bankruptcy or insolvency events are concerned, at any time in the
period ending on the 91st day after the date of deposit;
(vi) such defeasance or covenant defeasance will not result in a
breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in the case of Officer's
Certificate, stating that all conditions precedent provided for in clauses
(i) through (vii) have been complied with, and, in the case of the Opinion
of Counsel, that the conditions precedent provided for in clauses (ii),
(iii), (iv) and (vi) have been complied with.
Section 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003 of this
Indenture, all money and Government Obligations (including the proceeds thereof)
deposited with the Trustee pursuant to Section 1404 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and 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 on an after tax basis
against any tax, fee or other charge imposed on or assessed against the cash or
Government Obligations deposited pursuant to Section 1404 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the Outstanding Notes.
Anything in this Article Fourteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
54
Request any money or Government Obligations held by it as provided in Section
1404 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 1404(i)), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
Section 1406. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money in accordance
with Section 1405, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1402 or 1403, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1405; provided, however, that, if the Company makes any payment of principal of
(or premium, if any) or interest on any Note following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent."
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE
SECTION 1101. Satisfaction and Discharge.
Article Four of the Original Indenture shall, for the purposes of this
First Supplemental Indenture, be hereby amended in its entirety and replaced
with the following:
"ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture will be discharged and will cease to be of further effect
(except as to surviving rights of registration of transfer or exchange to the
Notes) when:
(1) either:
(a) all the Notes theretofore authenticated and delivered (other
than destroyed, lost or stolen Notes which have been replaced or paid
and Notes for whose payment money has been deposited with the Trustee,
in trust, or any Paying Agent or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such
trust as
55
provided for in this Indenture) have been delivered to the Trustee for
cancellation or
(b) all such Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, will become due and payable
within one year or are to be called for redemption within one year
under irrevocable arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company, and the Company has irrevocably deposited or
caused to be deposited with the Trustee, in trust, an amount
sufficient to pay and discharge the entire indebtedness on the Notes
not theretofore delivered to the Trustee for cancellation, for
principal of (premium, if any, on) and interest on the Notes to the
date of deposit or Maturity or Redemption Date;
(2) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
and such deposit will not result in a breach or violation of, or constitute
a default under any other instrument to which the Company is a party or by
which the Company is bound;
(3) the Company has paid or caused to be paid all sums then due and
payable by the Company under this Indenture; and
(4) the Company has delivered an Officers' Certificate and an Opinion
of Counsel relating to compliance with the conditions set forth in this
Indenture.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003 of this
Indenture, all money deposited with the Trustee pursuant to Section 401 of this
Indenture shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law."
ARTICLE TWELVE
MISCELLANEOUS PROVISIONS
SECTION 1201. Effect of First Supplemental Indenture.
(a) This First Supplemental Indenture is a supplemental indenture within
the meaning of Section 901 of the Original Indenture, and the Original Indenture
shall be read together with this First Supplemental Indenture and shall have the
same effect over the Notes, in
56
the same manner as if the provisions of the Original Indenture and this First
Supplemental Indenture were contained in the same instrument.
(b) In all other respects, the Original Indenture is confirmed by the
parties hereto as supplemented by the terms of this First Supplemental
Indenture.
SECTION 1202. Effect of Headings and Table of Contents.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
SECTION 1203. Successors and Assigns.
All covenants and agreements in this First Supplemental Indenture by the
Company, the Trustee and the Holders shall bind their successors and assigns,
whether so expressed or not.
SECTION 1204. Severability Clause.
In case any provision in this First Supplemental Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1205. Benefits of First Supplemental Indenture.
Nothing in this First Supplemental Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Note Registrar and their successors
hereunder and the Holders of Notes, any benefit or any legal or equitable right,
remedy or claim under this First Supplemental Indenture.
SECTION 1206. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument. Counterparts may be
executed either in original or faxed form and the parties hereto adopt any
signatures received by a receiving fax machine as the original signature of such
party.
SECTION 1207. Acceptance of Trusts.
The Trustee hereby accept the trusts in this First Supplemental Indenture
declared and provided for and agrees to perform the same upon the terms and
conditions set forth in the Indenture and in trust for the Holders from time to
time, subject to the terms and conditions of the Indenture.
SECTION 1208. Effective Time.
This First Supplemental Indenture shall become effective upon the execution
and delivery of this First Supplemental Indenture by the Company and the
Trustee.
* * * * *
57
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
BIOVAIL CORPORATION
By:/s/ Xxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President and Chief
Financial Officer
COMPUTERSHARE TRUST COMPANY
OF CANADA, as Canadian Trustee
By:/s/ Xxxxx Xxxxxxxxx
-----------------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Authorized Signatory
By:/s/ Xxxxxx Xxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxx
Title: Authorized Signatory
COMPUTERSHARE TRUST COMPANY, INC., as U.S. Trustee
By:/s/ Xxx Xxxxx
-----------------------------------------------
Name: Xxx Xxxxx
Title: President
By: /s/ Xxxxxx Xxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
EXHIBIT I
FORM OF NOTE
BIOVAIL CORPORATION
7?% Senior Subordinated Notes
due April 1, 2010
CUSIP ______
No. U.S.$ __________
----------
Biovail Corporation, a corporation amalgamated under the laws of Ontario
(herein called the "Company", which term includes any successor entity under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co. or registered assigns, the principal sum of _________ United
States Dollars (U.S.$____________) on April 1, 2010, at the office or agency of
the Company referred to below, and to pay interest thereon on October 1, 2002
and semiannually thereafter, on April 1 and October 1 in each year, from March
28, 2002, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, at the rate of 7.875% per annum until the
principal hereof is paid or duly provided for, and (to the extent lawful) to pay
on demand interest on any overdue interest at the rate borne by the Notes from
the date of the Interest Payment Date on which such overdue interest becomes
payable to the date payment of such interest has been made or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date shall, as provided in such Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the March 15 or September 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for, shall forthwith cease to
be payable to the Holder on such Regular Record Date, and may be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Notes not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this Note
shall be made at the office of the agent of the Trustee or agency of the Company
maintained for that purpose in the Borough of Manhattan, in the City of New York
(which shall be the Corporate Trust Office of the Trustee or Agency, unless the
Company shall designate and maintain some other office or agency for such
purpose), or at such other office or agency of the Company as may be maintained
for such purpose, in lawful money of the United States; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the address of the Person entitled thereto as such address shall appear on the
Security Register.
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Initially, Computershare Trust Company, Inc., the U.S. Trustee under the
Indenture, shall act as Paying Agent and Security Registrar. The Company may
change any Paying Agent or Security Registrar without the consent of, or notice
to, any Holder. The Company may act in any such capacity.
Interest on this Note shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: BIOVAIL CORPORATION
By
-------------------------------------------------
Name:
Title:
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FORM OF REVERSE OF SECURITY
This Note is one of a duly authorized issue of securities of the Company
designated as its 7?% Senior Subordinated Notes due April 1, 2010 (the "Notes"),
issued under an indenture (the "Original Indenture") dated as of March 28, 2002,
among the Company, as issuer, Computershare Trust Company Inc., as U.S. Trustee
and Computershare Trust Company of Canada, as Canadian Trustee (the U.S. Trustee
and the Canadian Trustee are collectively known as the "Trustee"), as
supplemented by a First Supplemental Indenture dated March 28, 2002 among the
Company, U.S. Trustee and Canadian Trustee (the Original Indenture as
supplemented by the First Supplemental Indenture (the "Indenture")) to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Trustee and the Holders of the
Notes, and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
As provided for in the Indenture, the Company may, subject to certain
limitations, from time to time, without notice or the consent of the Holders,
create and issue Additional Notes so that such Additional Notes shall be
consolidated and form a single series with the Notes initially issued by the
Company and shall have the same terms as to status, redemption or otherwise as
Notes originally issued. Any Additional Notes shall be issued with the benefit
of any indenture supplemental to the Indenture.
The Company shall pay to each Holder, other than an Excluded Holder, such
Additional Amounts as may become payable under Section 1005 of the Indenture.
Except as provided below, the Notes will not be redeemable at the option of
the Company prior to April 1, 2006. On or after such date, the Notes will be
redeemable at the option of the Company, in whole at any time or in part from
time to time at the following prices (expressed in percentages of the principal
amount), if redeemed during the 12 months beginning April 1 of the years
indicated below, in each case together with accrued and unpaid interest to the
Redemption Date (subject to the right of Holders of record on the relevant date
to receive interest due on the relevant interest payment date):
Year Redemption Price
---- ----------------
2006................................................... 103.938%
2007................................................... 101.969%
2008 and thereafter.................................... 100.000%
Notwithstanding the foregoing, at any time on or before April 1, 2005, the
Company may, at its option, redeem up to a maximum of 35% (calculated after
giving effect to the original issuance of Additional Notes, if any) of the
aggregate principal amount of the Notes with the net cash proceeds of one or
more Equity Offerings or the net cash proceeds received upon the exercise of
warrants to purchase Capital Stock (other than Redeemable Stock) of the Company
at a Redemption Price equal to 107.875% of the principal amount of the Notes,
plus
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accrued and unpaid Interest to the Redemption Date; provided that at least
65% of the aggregate amount of the original aggregate principal amount of Notes
(calculated after giving effect to the original issuance of Additional Notes, if
any) shall remain Outstanding immediately after the occurrence of any such
redemption; and provided, further, that each such redemption shall occur within
90 days of the closing of such Equity Offering.
The Notes shall be subject to redemption, at the option of the Company, as
a whole but not in part, at any time upon not fewer than 30 nor more than 60
days' notice mailed to each Holder of Notes at the addresses appearing in the
Security Register at a redemption price equal to 100% of the principal amount of
the Notes plus accrued interest to but excluding the Redemption Date if the
Company has become or would become obligated to pay on the next date on which
any amount would be payable under or with respect to the Notes, any Additional
Amounts as a result of any change or amendment to the laws (or regulations
promulgated thereunder) of Canada (or any political subdivision or taxing
authority thereof or therein), or any change in or amendment to any official
position or administration or assessing practices regarding the application or
interpretation of such laws or regulations, which change or amendment is
announced or becomes effective on or after March 25, 2002.
If fewer than all the Notes are redeemed, selection for redemption will be
made by the Trustee in accordance with the rules of the principal stock
exchange, if any, on which the Notes are listed, or, if the Notes are not so
listed, on a pro rata basis, by lot or by any other means which the Trustee
determines to be fair and appropriate.
In the case of any redemption of Notes, interest installments whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Notes, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Date referred to on the face hereof. Notes (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
The Notes do not have the benefit of any sinking fund obligations.
In the event of redemption or purchase pursuant to an Asset Sale Offer or a
Change of Control of this Note in part only, a replacement Note or Notes for the
unredeemed or unpurchased portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Note will, to the extent set forth in
the Indenture, be subordinate in right of payment to the prior indefeasible
payment in full in cash or Cash Equivalents of all Senior Debt (whether
outstanding on the date of the First Supplemental Indenture or thereafter
created, incurred, assumed or guaranteed), and this Note is issued subject to
the provisions of the Indenture with respect thereto. 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 his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
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If an Event of Default shall occur and be continuing, the principal amount
of all the Notes may be declared due and payable in the manner and with the
effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the
entire debt of the Company on this Note and (b) certain restrictive covenants
and the related Defaults and Events of Default, upon compliance by the Company
with certain conditions set forth therein, which provisions apply to this Note.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Notes at the time Outstanding. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Notes at the time Outstanding, on behalf of
the Holders of all the Notes, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable on the Security Register of the
Company, upon surrender of this Note for registration of transfer at the office
of the agent of the Trustee maintained for such purpose in the Borough of
Manhattan, in the City of New York, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more replacement Notes, of
authorized denominations and for the same aggregate principal amount, shall be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of U.S.$1,000 and any integral multiple thereof.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to pay all documentary, stamp or similar issue or transfer taxes or
other governmental charges payable in connection with any registration of
transfer or exchange.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note
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be overdue, and none of the Company, the Trustee or any agent shall be affected
by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year of
twelve 30-day months. For the purposes of disclosure under the Interest Act
(Canada), the yearly rate of interest which is equivalent to the rate payable
hereunder is the rate payable multiplied by the actual number of days in the
year and divided by 360.
No director, officer, employee, incorporator or shareholder of the Company
shall have any liability for any obligations of the Company under the Notes or
the Indenture, as applicable, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
The Indenture and this Note shall be governed by, and construed in
accordance with, the laws of the State of New York.
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Subject to Section 612 of the Indenture, the Trustee's certificate of
authentication for the Notes shall be in substantially the following form:
This is one of the Notes referred to in the within-mentioned Indenture.
COMPUTERSHARE TRUST COMPANY OF CANADA,
as Trustee
By:
----------------------------------------------------
Authorized Officer
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