Exhibit 4.2
EXECUTION COPY
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K & F INDUSTRIES, INC.
9 5/8% SENIOR SUBORDINATED NOTES DUE 2010
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INDENTURE
Dated as of December 20, 2002
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STATE STREET BANK AND TRUST COMPANY
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Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
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Act Section Indenture Section
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310(a)(1)...................................................................................... 7.10
(a)(2)......................................................................................... 7.10
(a)(3)......................................................................................... N.A.
(a)(4)......................................................................................... N.A.
(a)(5)......................................................................................... 7.10
(b)............................................................................................ 7.10
(c)............................................................................................ N.A.
311 (a)........................................................................................ 7.11
(b)............................................................................................ 7.11
(c)............................................................................................ N.A.
312 (a)........................................................................................ 2.05
(b)............................................................................................ 11.03
(c)............................................................................................ 11.03
313 (a)........................................................................................ 7.06
(b)(1)......................................................................................... N.A.
(b)(2)......................................................................................... 7.06
(c)............................................................................................ 7.06; 11.02
(d)............................................................................................ 7.06
314 (a)........................................................................................ 4.03; 4.04
(b)............................................................................................ N.A
(c)(1)......................................................................................... 11.04
(c)(2)......................................................................................... 11.04
(c)(3)......................................................................................... N.A.
(d)............................................................................................ N.A.
(e)............................................................................................ 11.05
(f)............................................................................................ N.A.
315 (a)........................................................................................ 7.02, 11.02
(b)............................................................................................ 7.05, 11.02
(c)............................................................................................ 7.01
(d)............................................................................................ 7.01
(e)............................................................................................ 6.11
316 (a)(last sentence)......................................................................... 2.09
(a)(1)(A)...................................................................................... 6.05
(a)(1)(B)...................................................................................... 6.04
(a)(2)......................................................................................... N.A.
(b)............................................................................................ 6.07
(c)............................................................................................ N.A.
317 (a)(1)..................................................................................... 6.08
(a)(2)......................................................................................... 6.09
(b)............................................................................................ 2.04
318(a)......................................................................................... 11.01
(b)............................................................................................ N.A.
(c)............................................................................................ 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
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ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions........................................................................ 1
Section 1.02. Other Definitions.................................................................. 14
Section 1.03. Incorporation by Reference of Trust Indenture Act.................................. 15
Section 1.04. Rules of Construction.............................................................. 15
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.................................................................... 16
Section 2.02. Execution and Authentication....................................................... 17
Section 2.03. Registrar and Paying Agent......................................................... 17
Section 2.04. Paying Agent to Hold Money in Trust................................................ 18
Section 2.05. Holder Lists....................................................................... 18
Section 2.06. Transfer and Exchange.............................................................. 18
Section 2.07. Replacement Notes.................................................................. 30
Section 2.08. Outstanding Notes.................................................................. 30
Section 2.09. Treasury Notes..................................................................... 30
Section 2.10. Temporary Notes.................................................................... 31
Section 2.11. Cancellation....................................................................... 31
Section 2.12. Defaulted Interest................................................................. 31
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................................................. 31
Section 3.02. Selection of Notes to Be Redeemed.................................................. 32
Section 3.03. Notice of Redemption............................................................... 32
Section 3.04. Effect of Notice of Redemption..................................................... 33
Section 3.05. Deposit of Redemption Price........................................................ 33
Section 3.06. Notes Redeemed in Part............................................................. 33
Section 3.07. Optional Redemption................................................................ 33
Section 3.08. Mandatory Redemption............................................................... 34
Section 3.09. Offer to Purchase by Application of Excess Proceeds................................ 34
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes................................................................... 36
Section 4.02. Maintenance of Office or Agency.................................................... 36
Section 4.03. Reports............................................................................ 36
Section 4.04. Compliance Certificate............................................................. 37
Section 4.05. Taxes.............................................................................. 38
Section 4.06. Stay, Extension and Usury Laws..................................................... 38
Section 4.07. Restricted Payments................................................................ 38
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Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries..................... 40
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock......................... 41
Section 4.10. Asset Sales........................................................................ 44
Section 4.11. Transactions with Affiliates....................................................... 45
Section 4.12. Liens.............................................................................. 46
Section 4.13. Offer to Repurchase Upon Change of Control......................................... 46
Section 4.14. Payments for Consent............................................................... 47
Section 4.15. No Senior Subordinated Debt........................................................ 48
Section 4.16. Designation of Restricted and Unrestricted Subsidiaries............................ 48
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets........................................... 48
Section 5.02. Successor Corporation Substituted.................................................. 49
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.................................................................. 49
Section 6.02. Acceleration....................................................................... 50
Section 6.03. Other Remedies..................................................................... 51
Section 6.04. Waiver of Past Defaults............................................................ 51
Section 6.05. Control by Majority................................................................ 52
Section 6.06. Limitation on Suits................................................................ 52
Section 6.07. Rights of Holders of Notes to Receive Payment...................................... 52
Section 6.08. Collection Suit by Trustee......................................................... 52
Section 6.09. Trustee May File Proofs of Claim................................................... 53
Section 6.10. Priorities......................................................................... 53
Section 6.11. Undertaking for Costs.............................................................. 53
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.................................................................. 54
Section 7.02. Rights of Trustee.................................................................. 55
Section 7.03. Individual Rights of Trustee....................................................... 55
Section 7.04. Trustee's Disclaimer............................................................... 55
Section 7.05. Notice of Defaults................................................................. 55
Section 7.06. Reports by Trustee to Holders of the Notes......................................... 56
Section 7.07. Compensation and Indemnity......................................................... 56
Section 7.08. Replacement of Trustee............................................................. 57
Section 7.09. Successor Trustee by Merger, Etc................................................... 58
Section 7.10. Eligibility; Disqualification...................................................... 58
Section 7.11. Preferential Collection of Claims Against Company.................................. 58
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE.
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance........................... 58
Section 8.02. Legal Defeasance and Discharge..................................................... 58
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Section 8.03. Covenant Defeasance................................................................ 59
Section 8.04. Conditions to Legal or Covenant Defeasance......................................... 59
Section 8.05. Deposited Money and Government Securities to Be Hew in Trust; Other
Miscellaneous Provisions........................................................... 60
Section 8.06. Repayment to the Company........................................................... 61
Section 8.07. Reinstatement...................................................................... 61
Section 8.08. Satisfaction and Discharge......................................................... 61
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes................................................ 62
Section 9.02. With Consent of Holders of Notes................................................... 62
Section 9.03. Compliance with Trust Indenture Act................................................ 63
Section 9.04. Revocation and Effect of Consents.................................................. 64
Section 9.05. Notation on or Exchange of Notes................................................... 64
Section 9.06. Trustee to Sign Amendments, Etc.................................................... 64
ARTICLE 10.
SUBORDINATION
Section 10.01. Notes Subordinated to Senior Indebtedness.......................................... 64
Section 10.02. Certain Definitions................................................................ 64
Section 10.03. No Payment on Notes in Certain Circumstances....................................... 65
Section 10.04. Payment Over of Proceeds Upon Dissolution, Etc..................................... 66
Section 10.05. Subrogation........................................................................ 67
Section 10.06. Obligations of the Company Unconditional........................................... 67
Section 10.07. Notice to Trustee.................................................................. 68
Section 10.08. Reliance on Judicial Order or Certificate of Liquidating Agent..................... 68
Section 10.09. Trustee's Relation to Senior Indebtedness.......................................... 68
Section 10.10. Subordination Rights Not Impaired by Acts of Omissions of the
Company or Holders of Senior Indebtedness.......................................... 69
Section 10.11. Holders of Notes Authorize Trustee to Effectuate Subordination of the
Notes 69
Section 10.12. Article 10 Not to Prevent Events of Default........................................ 70
Section 10.13. Trustee's Compensation Not Prejudiced.............................................. 70
Section 10.14. Reliance by Holders of Senior Indebtedness on Subordination Provisions............. 70
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls....................................................... 70
Section 11.02. Notices 70
Section 11.03. Communication by Holders of Notes with Other Holders of Notes...................... 71
Section 11.04. Certificate and Opinion as to Conditions Precedent................................. 71
Section 11.05. Statements Required in Certificate or Opinion...................................... 72
Section 11.06. Rules by Trustee and Agents........................................................ 72
Section 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders....................................................................... 72
Section 11.08. Governing Law...................................................................... 72
Section 11.09. No Adverse Interpretation of Other Agreements...................................... 72
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Section 11.10. Successors......................................................................... 72
Section 11.11. Severability....................................................................... 73
Section 11.12. Counterpart Originals.............................................................. 73
Section 11.13. Table of Contents, Headings, Etc................................................... 73
EXHIBITS
Exhibit A-1 FORM OF NOTE
Exhibit A-2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE FROM ACQUIRING ACCREDITED INVESTOR
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INDENTURE dated as of December 20, 2002 among K & F
Industries, Inc., a Delaware corporation (the "Company") and State Street Bank
and Trust Company, a Massachusetts trust company, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the 9 5/8%
Series A Senior Subordinated Notes due 2010 (the "Series A Notes") of the
Company and the 9 5/8% Series B Senior Subordinated Notes due 2010 of the
Company (the "Series B Notes" and, together with the Series A Notes, the
"Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"1997 PBGC Agreement" means that certain settlement agreement
between the United States Pension Benefit Guarantee Corporation and the Company
dated as of October 15, 1997.
"Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who is not also a QIB.
"AI Global Note" means the global Note in the form of Exhibit
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Accredited Investors.
"144A Global Note" means a global note in the form of Exhibit
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person,
(i) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person; and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise,
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Aircraft Braking Systems" means Aircraft Braking Systems
Corporation, a Delaware corporation and a Wholly Owned Subsidiary of the
Company.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"Asset Sale" means:
(i) the sale, lease, conveyance or other disposition of any
assets (including, without limitation, by way of a sale and leaseback, other
than sale and leaseback transactions so long as the present value of the rental
obligations of the Company and its Restricted Subsidiaries thereunder do not
exceed $30.0 million in the aggregate since the Issue Date) other than sales of
inventory in the ordinary course of business consistent with past practices
(provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole will be governed by Section 4.13 hereof and/or Section 5.01
hereof and not by Section 4.10 hereof); and (ii) the issuance of Equity
Interests in any of the Company's Restricted Subsidiaries or the sale of Equity
Interests in any of its Restricted Subsidiaries, in the case of either clause
(i) or (ii), whether in a single transaction or a series of related transactions
(a) that have a fair market value in excess of $5.0 million; or (b) for net
proceeds in excess of $5.0 million. Notwithstanding the foregoing, none of the
following items will be deemed to be an Asset Sale: (i) a transfer of assets by
the Company to a Restricted Subsidiary or by a Subsidiary to the Company or to
another Restricted Subsidiary, (ii) an issuance of Equity Interests by a
Restricted Subsidiary to the Company or to another Restricted Subsidiary, and
(iii) a Restricted Payment that is permitted by Section 4.07 hereof.
"Bank" means any financial institution, fund or other entity
extending credit under the New Credit Facility.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BLS" means Xxxxxxx X. Xxxxxxxx.
"BLS Group" means (i) BLS, (ii) BLS's spouse and descendants
(collectively, "relatives"); (iii) a trust of which there are no beneficiaries
other than BLS and the relatives of BLS; (iii) a partnership, corporation or
limited liability company of which there are no other partners stockholders or
members, as applicable, other than BLS or the relatives of BLS; (v) a legal
representative or guardian of BLS or a relative of BLS if BLS or such relative
becomes mentally incompetent, (vi) any person succeeding BLS or a relative of
BLS by will or by the laws of descent, (vii) any individual who is employed by,
a consultant to or a director of the Company or any of its subsidiaries, and
(viii) any individual who is a consultant or advisor to BLS with respect to the
investment by BLS in the Company.
"Board" means the Board of Directors, any managers or other
similar governing entity of the Company, the members of which are, in each case,
elected by the equity holders of the Company, including any duly authorized
committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
2
(however designated) of corporate stock, (iii) in the case of a partnership,
partnership interests (whether general or limited), and (iv) any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than twelve months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any domestic commercial
bank having capital and surplus in excess of $500.0 million, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above; and (v) commercial paper having a rating of at least A-3 from Xxxxx'x
Investors Service, Inc. or P-3 from Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole to any "person" (as such term is used
in Section 13 (d) (3) of the Exchange Act) other than the Permitted Investors,
(ii) the adoption of a plan relating to the liquidation or dissolution of the
Company, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Permitted Investors, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act), directly or indirectly, of more than 50% of the voting stock
of the Company or (iv) the first day on which a majority of the members of the
Board of the Company are not Continuing Directors. For purposes of this
definition, any transfer of an Equity Interest of an entity that was formed for
the purpose of acquiring voting stock of the Company will be deemed to be a
transfer of such portion of such voting stock as corresponds to the portion of
the equity of such entity that has been so transferred.
"Clearstream" means Clearstream Banking, S.A.
"Company" means K & F Industries, Inc., a Delaware
corporation.
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures incurred (whether paid in cash or accrued as
liabilities) by the Company and its Consolidated Restricted Subsidiaries during
such period that, in conformity with GAAP are included in the property, plant or
equipment or similar fixed asset account reflected in the consolidated balance
sheet of the Company and its Consolidated Restricted Subsidiaries.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period plus: (i)
an amount equal to any net loss realized in connection with an Asset Sale (to
the extent such losses were deducted in computing such Consolidated Net Income)
plus (ii) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was included in computing such Consolidated Net Income plus (iii)
Consolidated Interest Expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations but excluding
3
amortization of deferred financing fees incurred in connection with the
Recapitalization), to the extent that any such expense was deducted in computing
such Consolidated Net Income plus (iv) depreciation, amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) and 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 expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing such
Consolidated Net Income, in each case, on a consolidated basis and determined in
accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the
income or profits of, and the depreciation and amortization and other non-cash
charges of, a Restricted Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in the same proportion) that the Net Income of such Restricted Subsidiary
was included in calculating the Consolidated Net Income of such Person and only
if a corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.
"Consolidated Interest Expense" of any Person for any period
means interest expense (including amortization of original issue discount and
non-cash interest payments or accruals and the interest portion of Capital Lease
Obligations but excluding amortization of deferred financing fees incurred in
connection with the Recapitalization) of such Person and its Consolidated
Restricted Subsidiaries, all as determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary thereof (ii) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders; (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded; and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as
of any date, the sum of (i) the consolidated equity of the common stockholders
of such Person and its Consolidated Restricted Subsidiaries as of such date,
plus (ii) the respective amounts reported on such Person's balance sheet as of
such date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date hereof in the
book value of any asset owned by such Person or a Consolidated Restricted
Subsidiary of such Person (y) all investments as of such date in unconsolidated
Restricted Subsidiaries and in Persons that are not
4
Restricted Subsidiaries (except, in each case, Permitted Investments); and (z)
all unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Consolidated Restricted Subsidiary" of any Person means a
Restricted Subsidiary which for financial reporting purposes is or, in
accordance with GAAP, should be, accounted for by such Person as a consolidated
subsidiary.
"Continuing Directors" means, as of any date of determination,
any member of the Board of the Company who (i) was a member of such Board on the
date hereof or (ii) was nominated for election or elected to such Board with the
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Cumulative Operating Cash Flow" means, for the period
beginning October 1, 2002 through and including the end of the last fiscal
quarter (taken as one accounting period) preceding the date of any proposed
Restricted Payment, Operating Cash Flow for the Company and its Consolidated
Restricted Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Cumulative Total interest Expense" means, for the period
beginning October 1, 2002 through and including the end of the last fiscal
quarter (taken as one accounting period) preceding the date of any proposed
Restricted Payment, Consolidated Interest Expense for the Company and its
Consolidated Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP.
"Default means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of Exhibit A-1 hereto, except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Stock" means 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 upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is 91 days after the date on which the Notes mature.
"Engineered Fabrics" means Engineered Fabrics Corporation, a
Delaware corporation and a Wholly Owned Subsidiary of the Company.
5
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock so long as
it is a debt security).
"Euroclear" means Xxxxxx Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that shall be made by the
Company pursuant to the Registration Rights Agreement to exchange Series A Notes
for Series B Notes.
"Exchange Offer Registration Statement" means the registration
statement relating to the Exchange Offer to be filed by the Company pursuant to
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the New Credit Facility) in
existence on the date hereof, including the Notes, until such amounts are
repaid.
"Existing Senior Subordinated Indenture" means the indenture
dated October 15, 1997 governing the Existing Senior Subordinated Notes.
"Existing Senior Subordinated Notes" means the $185.0 million
of 9 1/4% Senior Subordinated Notes due 2007 pursuant to the Existing Senior
Subordinated Indenture.
"Fixed Charges" means, with respect to any Person for any
period, the sum of (i) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations but excluding amortization of deferred financing fees
incurred in connection with the Recapitalization), plus (ii) the consolidated
interest of such Person and its Restricted Subsidiaries that was capitalized
during such period plus (iii)any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries (whether or not such Guarantee or Lien is called upon); plus (iv)
the product of (a) all cash dividend payments (and non-cash dividend payments in
the case of a Person that is a Restricted Subsidiary) on any series of preferred
stock of such Person, times (b) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the Company or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems any
Indebtedness (other than revolving credit borrowings) or issues preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such incurrence,
6
assumption, Guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio: (i) acquisitions that have been made by the Company or any of
its Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the Calculation
Date shall be deemed to have occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period shall be
calculated without giving effect to clause (iii) of the proviso set forth in the
definition of Consolidated Net Income, (ii) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, and (iii) the Fixed Charges attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the forms of
Exhibit A-1 and Exhibit A-2 hereto issued in accordance with Section 2.01,
2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, without duplication, with respect to any
Person, any indebtedness of such Person, whether or not contingent (i) in
respect of borrowed money, (ii) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof), (iii) banker's acceptances, (iv) representing Capital Lease
Obligations, or (v) the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligations,
7
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all Indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
Indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any Indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Independent Financial Advisor" means a nationally recognized
investment banking firm (i) which does not (and whose directors, officers,
employees and Affiliates do not) have a direct or indirect material financial
interest in the Company and (ii) which, in the sole judgment of the Board, is
otherwise independent and qualified to perform the task for which such firm is
being engaged.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP; provided that an acquisition of assets, Equity Interests or other
securities by the Company for consideration consisting of common equity
securities of the Company shall not be deemed to be an Investment. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of.
"Issue Date" means the date of this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which
the Trustee or banking institutions in the City of New York or at a place of
payment are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
"Xxxxxx Investors" means those certain merchant banking
partnerships affiliated with Xxxxxx Brothers Holdings Inc.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer,
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
8
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries, and (ii) any extraordinary or nonrecurring gain or
loss, together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets that were
the subject of such Asset Sale, and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP.
"New Credit Facility" means that certain Amended and Restated
Credit Facility, dated as of December 20, 2002, by and among K&F Industries
Inc., Aircraft Braking Systems Corporation, Engineered Fabrics Corporation,
Xxxxxx Brothers Inc. and Xxxxxx Brothers Commercial Paper Inc., as
administrative agent, and the lenders named therein, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time with the same or different lenders.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or
otherwise, or (c) constitutes the lender, (ii) no default with respect to which
(including any rights that the holders of the Indebtedness may have to take
enforcement action against an Unrestricted Subsidiary) would permit upon notice,
lapse of time or both any holder of any other Indebtedness (other than the
Notes) of the Company or any of its Restricted Subsidiaries to declare a default
on such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity and (iii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" means the Series A Notes and the Series B Notes.
"Note Custodian" means the Trustee, as custodian with respect
to the Notes in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
expenses, indemnifications, reimbursements, obligations, damages and other
liabilities or other amounts payable under the documentation governing any
Indebtedness.
"Offering" means the Offering of the Notes by the Company.
9
"Officer" means, (a) with respect to any Person that is a
corporation, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person and (b) with respect to any other Person, the
individuals selected by the Board of such Person to perform functions similar to
those of the officers listed in clause (a).
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the Chief
Executive Officer, the Chief Financial Officer, the Treasurer or the principal
accounting officer of the Company that meets the requirements of Section 11.05
hereof.
"Operating Cash Flow" of any Person means, for any period, the
sum of (i) Net Income of such Person and its Consolidated Restricted
Subsidiaries for such period plus (ii) provision for taxes based on income or
profits included in computing Net Income of such Person for such period plus
(iii) Consolidated Interest Expense of such Person for such period plus (iv)
other non-cash charges deducted from consolidated revenues in determining Net
Income of such Person for such period, in each case, determined on a
consolidated basis in accordance with GAAP.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Investments" means (i) any Investment in the
Company or in a Wholly Owned Restricted Subsidiary of the Company, (ii) any
Investment in Cash Equivalents, (iii) any Investment by the Company or any
Restricted Subsidiary of the Company in a Person, if as a result of such
Investment, (a) such Person becomes a Restricted Subsidiary of the Company, or
(b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company, and (iv) any Restricted
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof.
"Permitted Investor" means (i) any Person that is a member of
the BLS Group or (ii) any Xxxxxx Investor.
"Permitted Liens" means (i) Liens on assets of the Company or
its Restricted Subsidiaries that secure Senior Indebtedness permitted by the
terms hereof to be incurred, (ii) Liens in favor of the Company, (iii) Liens on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Restricted Subsidiary of the Company or
becomes a Restricted Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such transaction and do not extend to
any other assets of the Company or its Restricted Subsidiaries, (iv) Liens on
property existing at the time of acquisition thereof by the Company or any
Restricted Subsidiary of the Company, provided that such Liens were in existence
prior to the contemplation of such acquisition, (v) Liens existing on the date
hereof and any extensions or renewals thereof, provided that such Liens do not
extend to or cover any other property or assets of the Company or any Restricted
Subsidiary, (vi) statutory Liens or landlords and carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business, (vii) Liens for taxes, assessments,
government charges or claims which are being contested in good faith by
appropriate proceedings promptly instituted
10
and diligently conducted and if a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made therefor,
(viii) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, (ix) Liens created or deposits made to secure the performance
of tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money), (x) easements,
rights-of-way, restrictions and other similar charges or encumbrances not
interfering in any material respect with the business of the Company or any
Significant Subsidiary incurred in the ordinary course of business, (xi) any
attachment or judgment Lien, unless the judgment it secures shall not, within 60
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within 60 days after the
expiration of any such stay, (xii) any other Liens imposed by operation of law
which do not materially affect the Company's ability to perform its obligations
under the Notes and this Indenture, (xiii) rights of banks to set off deposits
against debts owed to said bank, (xiv) Liens upon specific items of inventory or
other goods and proceeds of the Company or its Subsidiaries securing the
Company's or any Restricted Subsidiary's obligations in respect of bankers'
acceptances issued or created for the account of any such Person to facilitate
the purchase, shipment or storage of such inventory or other goods, (xv) Liens
securing reimbursement obligations with respect to letters of credit which
encumber documents and other property relating to such letters of credit and the
products and proceeds thereof, (xvi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods, (xvii) Liens encumbering property or
assets under construction arising from progress or partial payments by a
customer of the Company or one of its Restricted Subsidiaries relating to such
property or assets, (xviii) Liens on the property or assets of the Company or
its Restricted Subsidiaries in favor of the Pension Benefit Guaranty Corporation
in respect of unfunded pension obligations, which liens are junior to the liens
permitted under the New Credit Facility, (xix)Liens incurred in the ordinary
course of business of the Company or any Restricted Subsidiary of the Company
with respect to obligations that do not exceed $5.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary, and (xx)
Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of
Unrestricted Subsidiaries.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries,
provided that (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of accrued and unpaid
interest thereon, reasonable expenses incurred in connection therewith and any
associated redemption premium), (ii) such Permitted Refinancing Indebtedness has
a final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded, (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded, and (iv) such Indebtedness
is incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
11
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or agency or political
subdivision thereof (including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision or
business).
"Private Placement Legend" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Recapitalization" means the Recapitalization as defined in
the Offering Memorandum.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 20, 2002, by and among the Company, and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global
Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global
Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Notes initially sold in reliance on Rule 903 of Regulation S.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration department of the
Trustee (or any successor group of the Trustee) or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the
Private Placement Legend.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"Restricted Period" means the 40-day restricted period as
defined in Regulation S.
12
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
"Rule 904" means Rule 904 promulgated under the Securities
Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Notes" means the 9 5/8% Senior Subordinated Notes
due 2010 of the Company issued under this Indenture.
"Series B Notes" means the 9 5/8% Senior Subordinated Notes
due 2010 of the Company issued under this Indenture pursuant to the Exchange
Offer.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date hereof.
"Subsidiary" means, with respect to any Person (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Restricted Subsidiaries of that Person
(or a combination thereof), and (ii) any partnership (a) the sole general
partner or the managing general partner of which is such Person or a Restricted
Subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more Restricted Subsidiaries of such Person (or any
combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or
are required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note in
the form of Exhibit A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
13
"Unrestricted Subsidiary" means any Subsidiary of the Company
that is designated by the Board as an Unrestricted Subsidiary pursuant to a
resolution of the Board, but only to the extent that such Subsidiary (i) has no
Indebtedness other than Non-Recourse Debt, (ii) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company, (iii) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any direct or
indirect obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results, and (iv) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary
will be evidenced to the Trustee by filing with the Trustee a certified copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the preceding
conditions and was permitted by Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date pursuant to Section 4.09 hereof, the Company will be in
default of such covenant. The Board of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (i) such Indebtedness
is permitted pursuant to Section 4.09 hereof, calculated on a pro forma basis as
if such designation had occurred at the beginning of the four-quarter reference
period; and (ii) no Default or Event of Default would be in existence following
such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
"Asset Sale Offer"................................................... 3.09
"Blockage Period".................................................... 10.03
14
"Change of Control Offer"............................................ 4.13
"Change of Control Payment".......................................... 4.13
"Change of Control Payment Date"..................................... 4.13
"Covenant Defeasance"................................................ 8.03
"Default Notice"..................................................... 10.03
"Designated Senior Indebtedness"..................................... 10.02
"DTC"................................................................ 2.03
"Event of Default"................................................... 6.01
"Excess Proceeds".................................................... 4.10
"incur".............................................................. 4.09
"Legal Defeasance"................................................... 8.02
"Maximum Amount"..................................................... 4.09
"Offer Amount"....................................................... 3.09
"Offer Period"....................................................... 3.09
"Paying Agent"....................................................... 2.03
"Permitted Junior Securities"........................................ 10.02
"Purchase Date"...................................................... 3.09
"Registrar".......................................................... 2.03
"Restricted Payments"................................................ 4.07
"Senior Indebtedness"................................................ 10.02
"Specified Senior Indebtedness....................................... 10.02
Section 1.03. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
15
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(1) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 or Exhibit A-2
hereto. The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(2) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A-1 or A-2 attached hereto (including the
Global Note Legend and the "Schedule of Exchanges in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A-1 attached hereto (but without the Global Note Legend and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(3) Temporary Global Notes. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee, as custodian for the Depositary,
and registered in the name of the Depositary or the nominee of the Depositary
for the accounts of designated agents holding on behalf of Euroclear or
Clearstream, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Restricted Period shall be terminated upon the receipt
by the Trustee of (i) a written certificate from the Depositary, together with
copies of certificates from Euroclear and Clearstream certifying that they have
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Note (except to
the extent of any beneficial owners thereof who acquired an interest therein
during the Restricted Period pursuant to another exemption from registration
under the Securities Act and who will take delivery of a beneficial ownership
interest in a 144A Global Note or an Al Global Note, all as contemplated by
Section 2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the
16
Company. Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note shall be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary Global
Note and the Regulation S Permanent Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee, as the case may be, in connection with transfers of
interest as hereinafter provided.
(4) Euroclear and Clearstream Procedures Applicable. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream Banking" and "Customer Handbook" of Clearstream shall be applicable
to interests in the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes that are held by the agent members through Euroclear or
Clearstream.
Section 2.02. Execution and Authentication.
One Officer of the Company shall sign the Notes for the
Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by one Officer of the Company, authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Paying Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company may act as
Paying Agent or Registrar.
17
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of and premium, if any, interest and Liquidated Damages, if
any, on the Notes, and will notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company) shall have no further liability for the money. If the Company acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders of Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06. Transfer and Exchange.
(1) Transfer and Exchange of Global Notes. A Global Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary. All Global Notes will be
exchanged by the Company for Definitive Notes if (i) the Company delivers to the
Trustee notice from the Depositary that it is unwilling or unable to continue to
act as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act together with an Officer's Certificate
and Opinion of Counsel with respect thereto. Upon the occurrence of either of
the preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
18
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(2) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same
Global Note. Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted
Global Note in accordance with the transfer restrictions set
forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Temporary Global Note
may not be made to a U.S. Person or for the account or benefit
of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to
the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of
Beneficial Interests in Global Notes. In connection with all
transfers and exchanges of beneficial interests that are not
subject to Section 2.06(b)(i) above, the transferor of such
beneficial interest must deliver to the Registrar either (A)
(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing
information regarding the Participant account to be credited
with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary
in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be transferred or
exchanged and (2) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the
transfer or exchange referred to in (1) above; provided that
in no event shall Definitive Notes be issued upon the transfer
or exchange of beneficial interests in the Regulation S
Temporary Global Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the
Securities Act together with an Officer's Certificate and an
Opinion of Counsel with respect thereto. Upon consummation of
an Exchange Offer by the Company in accordance with Section
2.06(f) hereof, the requirements of this Section 2.06(b)(ii)
shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial
interests in the Restricted Global Notes. Upon satisfaction of
all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant
Global Note(s) pursuant to Section 2.06(h) hereof.
19
(iii) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any
Restricted Global Note may be transferred to a Person who
takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with
the requirements of Section 2.06(b)(ii) and the Registrar
receives the following:
(A) if the transferee will take
delivery in the form of a beneficial interest in the
144A Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transferee will take
delivery in the form of a beneficial interest in the
Regulation S Temporary Global Note or the Regulation
S Permanent Global Note, then the transferor must
deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2)
thereof; and
(C) if the transferee will take
delivery in the form of a beneficial interest in the
Al Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto,
including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if
applicable.
(iv) Transfer and Exchange of Beneficial
Interests in a Restricted Global Note for Beneficial Interests
in the Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of Section
2.06(b)(ii) above and:
(A) such exchange or transfer is
effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the holder
of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of
Transmittal that it, is not (1) a broker-dealer, (2)
a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant
to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(C) such transfer is effected by a
Participating Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the
following:
(1) if the holder of such
beneficial interest in a Restricted Global
Note proposes to exchange such beneficial
interest for a beneficial interest in an
Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto,
including the certifications in item (i)(a)
thereof; or
20
(2) if the holder of such
beneficial interest in a Restricted Global
Note proposes to transfer such beneficial
interest to a Person who shall take delivery
thereof in the form of a beneficial interest
in an Unrestricted Global Note, a
certificate from such holder in the form of
Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this
subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so
require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to
the effect that such exchange or transfer is
in compliance with the Securities Act and
that the restrictions on transfer contained
herein and in the Private Placement Legend
are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(3) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(i) Beneficial Interests in Restricted Global
Notes to Restricted Definitive Notes. If any holder of a
beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive
Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive
Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in
the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is
being transferred to a QIB in accordance with Rule
144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is
being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is
being transferred pursuant to an exemption from the
registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
21
(E) if such beneficial interest is
being transferred to an Accredited Investor in
reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof,
if applicable;
(F) if such beneficial interest is
being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(G) if such beneficial interest is
being transferred pursuant to an effective
registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Notwithstanding Sections 2.06(c)(i)(A) and
(C) hereof, a beneficial interest in the Regulation S
Temporary Global Note may not be exchanged for a Definitive
Note or transferred to a Person who takes delivery thereof in
the form of a Definitive Note prior to (x) the expiration of
the Restricted Period and (y) the receipt by the Registrar of
any certificates required pursuant to Rule 903(c)(3)(ii)(B)
under the Securities Act together with an Officer's
Certificate and an Opinion of Counsel with respect thereto,
except in the case of a transfer pursuant to an exemption from
the registration requirements of the Securities Act other than
Rule 903 or Rule 904.
(iii) Beneficial Interests in Restricted Global
Notes to Unrestricted Definitive Notes. A holder of a
beneficial interest in a Restricted Global Note may exchange
such beneficial interest for an Unrestricted Definitive Note
or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive
Note only if:
(A) such exchange or transfer is
effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the holder
of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a
Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant
to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;
22
(C) such transfer is effected by a
Participating Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the
following:
(1) if the holder of such
beneficial interest in a Restricted Global
Note proposes to exchange such beneficial
interest for a Definitive Note that does not
bear the Private Placement Legend, a
certificate from such holder in the form of
Exhibit C hereto, including the
certifications in item (1)(b) thereof; or
(2) if the holder of such
beneficial interest in a Restricted Global
Note proposes to transfer such beneficial
interest to a Person who shall take delivery
thereof in the form of a Definitive Note
that does not bear the Private Placement
Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
and, in each such case set forth in this
subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so
require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to
the effect that such exchange or transfer is
in compliance with the Securities Act and
that the restrictions on transfer contained
herein and in the Private Placement Legend
are no longer required in order to maintain
compliance with the Securities Act.
(iv) Beneficial Interests in Unrestricted Global
Notes to Unrestricted Definitive Notes. If any holder of a
beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes
delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section
2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iii) shall be registered in
such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall
instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement
Legend.
(4) Transfer and Exchange of Definitive Notes for
Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial
Interests in Restricted Global Notes. If any Holder of a
Restricted Definitive Note proposes to exchange such Note for
a beneficial interest in a Restricted Global Note or to
transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in
a
23
Restricted Global Note, then, upon receipt by the Registrar of
the following documentation:
(A) if the Holder of such Restricted
Definitive Note proposes to exchange such Note for a
beneficial interest in a Restricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Note
is being transferred to a QIB in accordance with Rule
144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note
is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or
904 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note
is being transferred pursuant to an exemption from
the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act,
a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Note
is being transferred to an Accredited Investor in
reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates
and Opinion of Counsel required in item (3) thereof,
if applicable;
(F) if such Restricted Definitive Note
is being transferred to the Company or any of its
Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(G) if such Restricted Definitive Note
is being transferred pursuant to an effective
registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the Al
Global Note.
(ii) Restricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of a
Restricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
24
(A) such exchange or transfer is
effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not
(1) a broker-dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant
to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(C) such transfer is effected by a
Participating Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the
following:
(1) if the Holder of such
Definitive Notes proposes to exchange such
Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (i)(c)
thereof; or
(2) if the Holder of such
Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery
thereof in the form of a beneficial interest
in the Unrestricted Global Note, a
certificate from such Holder in the form of
Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph
(D), if the Registrar so requests or if the
Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer
required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall
cancel the Definitive Note and increase or cause to be
increased the aggregate principal amount of the Unrestricted
Global Note.
(iii) Unrestricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of an
Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer
such Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the
Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
25
(5) Transfer and Exchange of Definitive Notes for
Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted
Definitive Notes. Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note
if the Registrar receives the following:
(A) if the transfer will be made
pursuant to Rule 144A under the Securities Act, then
the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in
item (1) thereof;
(B) if the transfer will be made
pursuant to Rule 903 or 904, then the transferor must
deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made
pursuant to any other exemption from the registration
requirements of the Securities Act, then the
transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be
exchanged by the Holder thereof for an Unrestricted Definitive
Note or transferred to a Person or Persons who take delivery
thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is
effected pursuant to the Exchange Offer in accordance
with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not
(1) a broker-dealer, (2) a Person participating in
the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144)
of the Company;
(B) such transfer is effected pursuant
to the Shelf Registration Statement in accordance
with the Registration Rights Agreement;
(C) such transfer is effected by a
Participating Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the
following:
(1) if the Holder of such
Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted
Definitive Note, a
26
certificate from such Holder in the form of
Exhibit C hereto, including the
certifications in item (l)(d) thereof; or
(2) if the Holder of such
Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall
take delivery thereof in the form of an
Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit B
hereto, including the certifications in item
(4) thereof; and
and, in each such case set forth in this
subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the
effect that such exchange or transfer is in
compliance with the Securities Act and that
the restrictions on transfer contained
herein and in the Private Placement Legend
are no longer required in order to maintain
compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to
Unrestricted Definitive Notes. A Holder of Unrestricted
Definitive Notes may transfer such Notes to a Person who takes
delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register for such a
transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder
thereof.
(6) Exchange Offer. Upon the occurrence of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company shall
issue and, upon receipt of an Authentication Order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes
in an aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) that are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer. Concurrently with the issuance of such Notes,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly, and the Company shall execute
and the Trustee shall authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(7) Legends. The following legends shall appear on the
face of all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph
(B) below, each Global Note and each Definitive Note
(and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in
substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
27
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES."
(B) Notwithstanding the foregoing, any
Global Note or Definitive Note issued pursuant to
subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(c)(iv), (d)(iii), (e)(ii), (e)(iii) or (f) to this
Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the
Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall
bear a legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(iii) Regulation S Temporary Global Note Legend.
The Regulation S Temporary Global Note shall bear a legend in
substantially the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES,
28
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR
THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON."
(8) Cancellation and/or Adjustment of Global Notes. At
such time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Note shall
be returned to or retained and cancelled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note by the Trustee or by the Depositary at the direction of the
Trustee to reflect such reduction; and if the beneficial interest is being
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note, such other Global Note
shall be increased accordingly and an endorsement shall be made on such Global
Note by the Trustee or by the Depositary at the direction of the Trustee to
reflect such increase.
(9) General Provisions Relating to Transfers and
Exchanges.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate Global Notes and Definitive Notes upon the
Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder
of a beneficial interest in a Global Note or to a Holder of a
Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.13 and 9.05
hereof).
(iii) The Registrar shall not be required to
register the transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange any of Global
Notes or Definitive Notes shall be the valid obligations of
the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required (A) to
issue, to register the transfer of or to exchange any Notes
during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed
in part or (C) to register the transfer of or to exchange a
Note between a record date and the next succeeding Interest
Payment Date.
(vi) Prior to due presentment for the
registration of a transfer of any Note, the Trustee, any Agent
and the Company may deem and treat the Person in whose name
any
29
Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice
to the contrary.
(vii) The Trustee shall authenticate Global Notes
and Definitive Notes in accordance with the provisions of
Section 2.02 hereof.
(viii) All certifications, certificates and
Opinions of Counsel required to be submitted to the Registrar
pursuant to this Section 2.06 to effect a registration of
transfer or exchange may be submitted by facsimile.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or either
the Company or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the written order of the Company signed by two Officers of each of the
Company, shall authenticate a replacement Note if the Trustee's requirements are
met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent and any authenticating
agent from any loss that any of them may suffer if a Note is replaced. The
Company may charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of either of the Company holds the Note.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company, shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee knows are so owned shall be so disregarded. The Company agrees to notify
the Trustee of the existence of any Treasury Notes.
30
Section 2.10. Temporary Notes.
Until Definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company consider appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company upon request. The Company may not issue new Notes to replace
Notes that have been paid or that have been delivered to the Trustee for
cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company is required to make an offer to redeem Notes
pursuant to the provisions of Section 3.09 or 4.13 hereof, it shall furnish to
the Trustee at least 30 days but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the Section of this Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii)
the principal amount of Notes to be redeemed and (iv) the redemption price,
including, accrued interest and Liquidated Damages.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, at least 45 days but not more than
60 days before a redemption date, it shall notify the Trustee in writing of such
election, the redemption date, the principal amount of Notes to be redeemed and
the redemption price.
31
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time,
the Trustee shall select the Notes to be redeemed among the Holders of the Notes
in compliance with the requirements of the principal national securities
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 in accordance with any other method the
Trustee considers fair and appropriate. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein (including pursuant to Sections 3.09 and 4.13), not less than 30
nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion shall be issued upon cancellation of the original
Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(8) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
32
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
The Notes shall not be redeemable at the Company's option
prior to December 15, 2006. Thereafter, the Notes shall be subject to redemption
at the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on December 15, of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2006...................................................... 104.813%
2007...................................................... 103.208%
2008...................................................... 101.604%
2009 and thereafter....................................... 100.000%
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Notwithstanding the foregoing, prior to December 15, 2005, the
Company may redeem up to 35% of the original aggregate principal amount of Notes
at a redemption price of 109.625% of the principal amount thereof, in each case
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, with the net proceeds of one or more underwritten public
offerings of common stock of the Company; provided that (i) at least 65% of the
original aggregate principal amount of Notes remain outstanding immediately
after the occurrence of such redemption and (ii) the redemption shall occur
within 45 days of the date of the closing of such underwritten public offering
of common stock of the Company.
Section 3.08. Mandatory Redemption.
Except as set forth under Sections 3.09, 4.10 and 4.13 hereof,
the Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess
Proceeds.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to purchase Notes
(an "Asset Sale Offer"), they shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company will apply all Excess Proceeds (the "Offer
Amount") to purchase the principal amount of Notes and all Indebtedness ranking
pari passu with the Notes (the "Pari Passu Notes," which definition shall not
include the Existing Senior Subordinated Notes, which are entitled to receive a
prior offer to repurchase out of Net Proceeds) required to be purchased pursuant
to Section 4.10 hereof (on a pro rata basis, if applicable) or, if less than the
Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name a Note is registered at the
close of business on such record date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset
Sale Offer shall be made to all Holders. The notice, which shall govern the
terms of the Asset Sale Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
34
(3) that any Note not tendered or accepted for payment
shall continue to accrue interest;
(4) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Purchase Date;
(5) that Holders (other than those Holders whose Notes
bear a legend containing the text set forth in Footnote 1 to Exhibit A-1 or
Exhibit A-2) electing to have a Note purchased pursuant to an Asset Sale Offer
may only elect to have all of such Note purchased and may not elect to have only
a portion of such Note purchased;
(6) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice, no later than the termination of the Offer Period;
(7) that Holders shall be entitled to withdraw their
election if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and
Pari Passu Notes surrendered by Holders exceeds the Offer Amount, the Company
shall select the Notes and Pari Passu Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(9) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company or the Paying Agent,
as the case may be, shall promptly (but in any case not later than five days
after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Asset Sale Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.02 through 3.06 hereof.
35
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of,
premium, if any, interest and Liquidated Damages, if any, on the Notes on the
dates and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company, holds as of 12:00 noon New York Time on the due date money
deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served.
The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
office of the Trustee in Boston, Massachusetts.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the office of State Street Bank
and Trust Company, N.A., at 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000
as one such office or agency of the Company in accordance with Section 2.03. The
Trustee may resign such agency at any time by giving written notice to the
Company no later than 30 days prior to the effective date of such resignation.
Section 4.03. Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Holders of the Notes, within 15 days after they are or would have been
required to be contained in a filing with the SEC:
36
(1) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants; and
(2) all current reports that would be required to be
filed with the Commission on Form 8-K if the Company were required to file such
reports.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph will include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.
In addition, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all such
information and reports with the Commission for public availability (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company has agreed that, for so long as any Notes remain outstanding, they will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d) (4) under the Securities Act.
Section 4.04. Compliance Certificate.
(1) The Company shall deliver to the Trustee, within 105
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, in all material
respects, and further stating, as to each such Officer signing such certificate,
that to the best of his or her knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in the Indenture in
all material respects and is not in Default in the performance or observance of
any of the terms, provisions and conditions of this Indenture (and, if a Default
or Event of Default shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event.
(2) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of the Company's certified independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article Four or Article Five hereof or,
if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
37
The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith (and in any event within five
calendar days) upon any Officer of the Company becoming aware of any Default or
Event of Default an Officers' Certificate specifying such Default or Event of
Default.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Restricted
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment
or distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company) or to the
direct or indirect holders of the Company's Equity Interests in their capacity
as such (other than dividends or distributions payable in Equity Interests
(other than Disqualified Stock), dividends or distributions payable to the
Company or any Restricted Subsidiary of the Company or dividends or
distributions payable by a Restricted Subsidiary of the Company to its
shareholders on a pro rata basis);
(2) purchase, redeem or otherwise acquire or retire for
value any Equity Interests of the Company or any direct or indirect parent of
the Company (other than any such Equity Interests owned by the Company);
(3) make any principal payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes (other than intercompany Indebtedness between or among
the Company and any of its Wholly-Owned Restricted Subsidiaries), except at
stated maturity; or
(4) make any Restricted Investment (all such payments and
other actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; and
38
(2) with respect to Restricted Payments described in
clauses (1) and (2) of the immediately preceding paragraph, the Company would,
at the time of such Restricted Payment and after giving pro forma effect thereto
as if such Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof, and
(3) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date hereof (including the Restricted Payments permitted
by the next paragraph, but excluding Restricted Payments permitted by clauses
(2), (3), (4), (5) and (6) of the next paragraph), is less than the sum of:
(a) an amount equal to the difference (but not less than
zero) between (A) Cumulative Operating Cash Flow and (B) the product of
1.3 times Cumulative Total Interest Expense, plus
(b) 100% of the aggregate net proceeds, including the
fair market value of property other than cash as determined in good
faith by the Board whose determination shall be conclusive and
evidenced by a resolution of the Board set forth in an Officers'
Certificate delivered to the Trustee, received by the Company from the
issue or sale after the date hereof of Equity Interests of the Company
or of debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or debt securities issued subsequent to the date
hereof that have been converted into Disqualified Stock, plus
(c) to the extent that any Restricted Investment that was
made after the date hereof is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (A) the cash return of capital with
respect to such Restricted Investment (less the cost of disposition, if
any) and (B) the initial amount of such Restricted Investment, plus
(d) to the extent that any Unrestricted Subsidiary of the
Company is redesignated as a Restricted Subsidiary after the date
hereof, the lesser of (i) the fair market value of the Company's
Investment in such Subsidiary as of the date of such redesignation or
(ii) such fair market value as of the date on which such Subsidiary was
originally designated as an Unrestricted Subsidiary, plus
(e) $15 million.
The foregoing provisions will not prohibit:
(1) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company in exchange for, or out of
the proceeds of, the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of other Equity Interests of the Company (other than
any Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (3) (b) of the preceding paragraph;
39
(3) the defeasance, redemption or repurchase of
subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness or the substantially concurrent issuance
(other than to a Restricted Subsidiary of the Company) of Equity Interests of
the Company (other than Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (3) (b) of the
preceding paragraph;
(4) investments, loans or advances to joint ventures of
the Company or any of its Restricted Subsidiaries in an aggregate amount at any
time not to exceed $20.0 million;
(5) the repurchase of shares of, or options to purchase
shares of, the Company's common stock held by employees of the Company (other
than any member of the BLS Group) or any of its Restricted Subsidiaries pursuant
to the forms of agreements under which such employees purchase, or are granted
the option to purchase, shares of such common stock in an aggregate amount not
to exceed $3.0 million in any fiscal year, provided that the amount available in
any given fiscal year shall be increased by the excess, if any, of (A) $3.0
million over (B) the amount used pursuant to this clause (5) in the immediately
preceding fiscal year; and
(6) distributions of cash made by the Company in
connection with the Recapitalization within thirty days of the date hereof to
the holders of the Company's common stock and common stock options in an
aggregate amount not exceeding $209.4 million.
The amount of all Restricted Payments (other than cash) shall
be the fair market value (as determined in good faith by the Board, which
determination shall be conclusive and evidenced by a resolution of the Board set
forth in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the assets proposed to be transferred by the Company or
such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the this Section 4.07 were computed, which calculations
may be based upon the Company's latest available financial statements.
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary to:
(1) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
40
(1) the New Credit Facility as in effect as of the date
hereof, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more
restrictive, when taken as a whole, with respect to such
dividend and other payment restrictions than those contained
in the New Credit Facility as in effect on the date hereof;
(2) this Indenture and the Notes;
(3) applicable law;
(4) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of
the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(5) by reason of customary non-assignment provisions in
leases entered into in the ordinary course of business and
consistent with past practices;
(6) purchase money obligations for property, acquired in
the ordinary course of business that impose restrictions of
the nature described in clause (3) in the previous paragraph
on the property so acquired;
(7) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive,
when taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced; or
(8) the Existing Senior Subordinated Notes and the
Existing Senior Subordinated Indenture.
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) or Disqualified Stock and will not permit any of its Subsidiaries to issue
any shares of preferred stock; provided, however, that the Company or any of its
Subsidiaries may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock and the Subsidiaries may issue shares of preferred stock if
the Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock or preferred stock is issued would have been at least
2.0 to 1.0, determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been issued, as the
case may be, at the beginning of such four-quarter period.
The foregoing provisions will not apply to any of the
following items, collectively, "Permitted Debt":
41
(1) the incurrence by the Company or its Restricted
Subsidiaries of Indebtedness and letters of credit pursuant to the New Credit
Facility (with letters of credit being deemed to have a principal amount equal
to the maximum potential liability of the Company or its Restricted Subsidiaries
thereunder) in an aggregate principal amount not to exceed:
(a) $30.0 million plus
(b) the aggregate principal amount of such Indebtedness
used to, redeem, defease, discharge or otherwise acquire or retire for
value the Existing Senior Subordinated Notes and pay any redemption
premium and expenses related thereto;
provided that the aggregate principal amount of Indebtedness incurred
under this clause (1) shall not exceed $215.0 million; provided further
that the aggregate principal amount of Indebtedness permitted to be
incurred under this clause (1) shall be reduced by the aggregate amount
of all proceeds of Assets Sales that have been applied since the date
hereof to permanently reduce the outstanding amount of such
Indebtedness pursuant to Section 4.10 hereof.
(2) Existing Indebtedness;
(3) the incurrence by the Company, or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund, Indebtedness that was permitted by this Indenture to be
incurred;
(4) the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany Indebtedness between or among the
Company and any of its Restricted Subsidiaries; provided, however, that (i) if
the Company is the obligor on such Indebtedness, such Indebtedness is expressly
subordinate in right of payment to the payment in full of all Obligations with
respect to the Notes and (ii) (A) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a Person other
than the Company or a Restricted Subsidiary and (B) any sale or other transfer
of any such Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be;
(5) Indebtedness under Guarantees in respect of
obligations of joint ventures of the Company or any of its Restricted
Subsidiaries in aggregate principal amount not to exceed $20.0 million at any
one time;
(6) (A) Indebtedness incurred to finance the purchase or
construction of property, plant or equipment (including through the purchase of
all of the Capital Stock of a Person) which will be treated as Consolidated
Capital Expenditures of the Company so long as such Indebtedness is secured by a
Lien on the property, plant or equipment so purchased or constructed and such
Indebtedness does not exceed the value of such property, plant or equipment so
purchased or constructed and such Lien shall not extend to or cover other assets
of the Company or any of its Restricted Subsidiaries other than the property,
plant or equipment so purchased or constructed and the real property, if any, on
which the property so constructed or so purchased, is situated and the
accessions, attachments, replacements and improvements thereto or (B)
Indebtedness incurred in connection with any lease financing transaction in
conjunction with the acquisition of new property; provided that such lease
financing transaction is consummated within 60 days of such acquisition (whether
such lease will be treated as an operating or capital lease in accordance with
GAAP) and the aggregate of the Indebtedness incurred pursuant to clauses (A) and
(B) does not exceed $15.0 million during any fiscal year (such amount is
referred to as the "Maximum Amount"); provided that the Maximum Amount for each
year shall be increased by the
42
excess, if any, of (a) $30.0 million over (b) Consolidated Capital Expenditures
for the immediately preceding two years;
(7) Indebtedness incurred in connection with any sale and
leaseback transaction, provided that the aggregate of the Indebtedness incurred
pursuant to this clause (7) shall not exceed $30.0 million;
(8) obligations incurred in the ordinary course of
business under (A) trade letters of credit which are to be repaid in full not
more than one year after the date on which such Indebtedness is originally
incurred to finance the purchase of goods by the Company or a Restricted
Subsidiary of the Company; (B) standby letters of credit issued for the purpose
of supporting (1) workers' compensation liabilities of the Company or any of its
Restricted Subsidiaries as required by law, (2) obligations with respect to
leases of the Company or any of its Restricted Subsidiaries, (3) performance,
payment, deposit or surety obligations of the Company or any of its Restricted
Subsidiaries or (4) environmental liabilities of the Company or any of its
Restricted Subsidiaries as required by law, not exceeding an aggregate amount of
$15.0 million at any one time outstanding in addition to any amounts required by
law; (C) performance bonds and surety bonds, and refinancings thereof, and (D)
Guarantees of Indebtedness incurred in the ordinary course of business of
suppliers, licensees, franchisees, or customers in an aggregate amount not to
exceed $5.0 million;
(9) Indebtedness to repurchase shares, or cancel options
to purchase shares, of the Company's common stock held by employees of the
Company (other than any member of the BLS Group) or any of its Restricted
Subsidiaries pursuant to the forms of agreements under which such employees
purchase shares of the Company's common stock;
(10) the incurrence by the Company or any of its
Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose
of fixing or hedging interest rate risk with respect to any Indebtedness that is
permitted by the terms of this Indenture to be outstanding;
(11) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business, provided that
such Indebtedness is extinguished within five Business Days of its Incurrence;
(12) the incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt; provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event will be deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company that was not permitted by this clause (12); and
(13) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness (in addition to Indebtedness permitted
by any other clause of this paragraph), Disqualified Stock or preferred stock of
Restricted Subsidiaries in an aggregate principal amount (or accreted value or
liquidation preference, as applicable) at any time outstanding not to exceed
$25.0 million.
Notwithstanding the foregoing, the accretion or amortization
of original issue discount under any Indebtedness, the payment of interest in
additional Indebtedness or the accretion of the liquidation preference of
Disqualified Stock or preferred stock, shall not be deemed an incurrence of
Indebtedness, Disqualified Stock or preferred stock; provided, however, that
such accretion or amortization or payment of interest is included in Fixed
Charges. For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (13) above,
or is entitled to be incurred pursuant to the first paragraph of this covenant,
the Company will be permitted to classify such
43
item of Indebtedness on the date of its incurrence, or later reclassify all or a
portion of such item of Indebtedness, in any manner that complies with this
covenant. Indebtedness under the New Credit Facility outstanding on the date on
which Notes are first issued and authenticated under this Indenture will be
deemed to have been incurred on such date in reliance on the exception provided
by clause (1) of the definition of Permitted Debt.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the
case may be) receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced by a resolution of the Board set forth
in an Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests issued or sold or otherwise disposed of; and
(2) at least 70% of the consideration therefor received
by the Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents. For purposes of this provision, the following shall be deemed to be
cash:
(a) any liabilities (as shown on the Company's
or such Restricted Subsidiary's most recent balance sheet) of
the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms
subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets; and
(b) any notes, securities or other obligations
received by the Company or any such Restricted Subsidiary from
such transferee that are immediately (subject to normal
settlement periods) converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash
received).
The Company may apply such Net Proceeds, at its option, within
360 days after the receipt of any Net Proceeds from an Asset Sale:
(1) to permanently reduce;
(a) Senior Indebtedness; or
(b) Indebtedness of the Company's Restricted
Subsidiaries;
(2) to make an offer to repurchase the Existing Senior
Subordinated Notes to the extent required by and in accordance with the terms of
the Existing Senior Subordinated Indenture; or
(3) to invest in the business or businesses of the
Company or any of its Restricted Subsidiaries or any business directly related
to any business then conducted by the Company or any of its Restricted
Subsidiaries or any business related to the aircraft industry or used for
working capital purposes.
Pending the final application of any such Net Proceeds, the
Company may temporarily reduce the revolving portion of Senior Indebtedness or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture.
44
Any Net Proceeds from Asset Sales that are not applied or
invested as provided in clauses (1), (2) or (3) above will be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company will be required to make an offer to all
Holders of Notes and the holders of Pari Passu Notes requiring the making of
such an offer (an "Asset Sale Offer") to purchase the maximum principal amount
of Notes and Pari Passu Notes that may be purchased out of the Excess Proceeds,
at an offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages thereon to the
date of purchase, in accordance with the procedures set forth in this Indenture.
To the extent that the aggregate amount of Notes and Pari Passu Notes tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
may use any remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes and Pari Passu Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes and Pari Passu Notes to be purchased on a pro rata basis. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
Section 4.11. Transactions with Affiliates.
The Company will not, and will not permit any of its
Restricted Subsidiaries to directly or indirectly enter into any transaction
involving aggregate consideration in excess of $1.0 million with any Affiliate
or holder of 5% or more of any class of Capital Stock of the Company (including
any Affiliates of such holders) except for:
(1) transactions (including any loans or advances by or
to any Affiliate) in good faith the terms of which are fair and reasonable to
the Company or such Restricted Subsidiary, as the case may be,
(2) are at least as favorable as the terms which could be
obtained by the Company or such Restricted Subsidiary, as the case may be, in a
comparable transaction made on an arm's length basis with Persons who are not
such a holder, an Affiliate of such holder or Affiliate of the Company; provided
that:
(a) any such transaction shall be conclusively deemed to
be on terms which are fair and reasonable to the Company or any of its
Restricted Subsidiaries and on terms which are at least as favorable as
the terms which could be obtained on an arm's length basis with Persons
who are not such a holder, an Affiliate of such holder or Affiliate of
the Company if such transaction is approved by a majority of the
Company's directors (including a majority of the Company's
disinterested and independent directors, if any); and
(b) with respect to the purchase or disposition of assets
of the Company or any of its Restricted Subsidiaries having a net book
value in excess of $5 million, if the Company does not have any
disinterested and independent directors, in addition to approval of its
Board, the Company shall obtain a written opinion of an Independent
Financial Advisor stating that the terms of such transaction are fair
and reasonable to the Company or its Restricted Subsidiary, as the case
may be, and are at least as favorable to the Company or such Restricted
Subsidiary, as the case may be, as could have been obtained on an arm's
length basis with Persons who are not such a holder, an Affiliate of
such holder or Affiliate of the Company.
This covenant shall not apply to:
(1) any transaction between the Company or any Affiliate
thereof and any Xxxxxx Investors, including, without limitation, the payment of
fees to any Xxxxxx Investor for financial and consulting services;
45
(2) transactions between the Company or any of its
Restricted Subsidiaries and any employee or director of, or consultant to, the
Company or any of its Restricted Subsidiaries that are approved by the Board;
(3) the payment of reasonable and customary regular fees
to directors of the Company;
(4) any transaction between the Company and any of its
Restricted Subsidiaries or between any of its Restricted Subsidiaries; and
(5) any Restricted Payment not otherwise prohibited by
Section 4.07 hereof;
(6) transactions with Loral Space pursuant to agreements
in effect on the date hereof (as such agreements are in effect on such date).
Section 4.12. Liens.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
Section 4.13. Offer to Repurchase Upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes (the
"Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment Date"). The Change of Control Offer shall be made in compliance
with all applicable laws, including, without limitation, Rule 14e-1 under the
Exchange Act and all applicable federal and state securities laws, and shall
include all instructions and materials necessary to enable Holders to tender
their Notes. Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder stating:
(1) the transaction or
transactions that constitute the Change of
Control, providing information regarding the
Person or Persons acquiring control, and
stating that the Change of Control Offer is
being made pursuant to this Section 4.13 and
that, to the extent lawful, all Notes
tendered will be accepted for payment;
(2) the purchase price and the
purchase date, which shall be no earlier
than 30 days nor later than 60 days from the
date such notice is mailed;
(3) that any Note not tendered
will continue to accrue interest;
(4) that, unless the Company
defaults in the payment of the Change of
Control Payment, all Notes accepted for
payment pursuant to the Change of Control
Offer shall cease to accrue interest after
the Change of Control Payment Date;
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(5) that Holders electing to
have any Notes purchased pursuant to a
Change of Control Offer will be required to
surrender the Notes, with the form entitled
"Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the
Paying Agent at the address specified in the
notice prior to the close of business on the
third Business Day preceding the Change of
Control Payment Date;
(6) that Holders will be
entitled to withdraw their election if the
Paying Agent receives, not later than the
close of business on the second Business Day
preceding the Change of Control Payment
Date, a telegram, telex, facsimile
transmission or letter setting forth the
name of the Holder, the principal amount of
Notes delivered for purchase, and a
statement that such Holder is withdrawing
his election to have the Notes purchased;
and
(7) that Holders whose Notes
are being purchased only in part will be
issued new Notes equal in principal amount
to the unpurchased portion of the Notes
surrendered, which unpurchased portion must
be equal to $1,000 in principal amount or an
integral multiple thereof;
On the Change of Control Payment Date, the Company will, to
the extent lawful (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the paying
agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company.
The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this covenant, but in any event within 90 days following
a Change of Control, the Company will either repay all outstanding Senior
Indebtedness or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Indebtedness to permit the repurchase of the Notes
required by this Section 4.13. The Company will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
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 in this Section 4.13 applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
This Section 4.13 shall be applicable whether or not any other
provisions of this Indenture are applicable.
47
Section 4.14. Payments for Consent.
Neither the Company nor any of its Subsidiaries will, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.15. No Senior Subordinated Debt.
The Company will not incur, create, issue, assume, guarantee
or otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Indebtedness and senior in any respect in right of
payment to the Notes.
Section 4.16. Designation of Restricted and Unrestricted
Subsidiaries
The Board may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly designated will be deemed to
be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments pursuant to Section 4.07 or Permitted
Investments, as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if the redesignation would not cause a Default.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company may not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of the properties
or assets of the Company and its Restricted Subsidiaries taken as a whole, in
one or more related transactions, to another corporation, Person or entity,
unless:
(1) the Company is the surviving corporation or the
entity or the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation organized
or existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes,
this Indenture and the Registration Rights Agreement pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or
Event of Default exists; and
(4) except in the case of a merger of the Company with or
into a Wholly Owned Restricted Subsidiary of the Company, the Company or the
entity or Person formed by or surviving any
48
such consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made:
(a) will have Consolidated Net Worth immediately after
the transaction equal to or greater than the Consolidated Net Worth of
the Company immediately preceding the transaction; and
(b) will, at the time of such transaction and after
giving pro forma effect thereto as if such transaction had occurred at
the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of Section
4.09 hereof.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all or substantially all of the Company's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An Event of Default occurs if:
(1) the Company defaults in the payment when due of
interest, or Liquidated Damages, on the Notes (whether or not prohibited by
Article 10) and such default continues for a period of 30 days;
(2) the Company defaults in the payment when due of
principal of or premium, if any, on the Notes (whether or not prohibited by
Article 10) when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise;
(3) the Company fails to observe or perform any other
covenant or agreement in this Indenture or the Notes and such failure to observe
or perform continues for a period of 45 days after notice thereof;
(4) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be 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 hereof which default (a) is caused by a
failure to pay principal or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such Indebtedness on
49
the date of such default (a "Payment Default"), or (b) results in the
acceleration of such Indebtedness prior to its express maturity and, in each
case under clauses (a) and (b), 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 $10 million or more;
(5) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction against the
Company or any of its Restricted Subsidiaries and such judgment or judgments
remain unpaid or undischarged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such unpaid,
undischarged or unstayed judgments exceeds $10 million;
(6) the Company or any Restricted Subsidiary of the
Company:
(a) commences a voluntary case under any
Bankruptcy Law,
(b) consents to the entry of an order for
relief against it in an involuntary case,
(c) consents to the appointment of a custodian
or receiver of it or for all or substantially all of its
property,
(d) makes a general assignment for the benefit
of its creditors, or
(e) generally is not paying its debts as they
become due; or
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company or any of
the Company's Restricted Subsidiaries;
(b) appoints a Custodian of the Company or any
of its Restricted Subsidiaries or for all or substantially all
of the property of the Company or any of its Restricted
Subsidiaries; or
(c) orders the liquidation of the Company or any
of its Restricted Subsidiaries; and the order or decree
remains unstayed and in effect for 60 consecutive days.
Section 6.02. Acceleration.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately; provided, that so
long as the New Credit Facility is in effect, such declaration shall not become
effective until the earlier of (i) five days after receipt of notice of such
acceleration by the Agent and the Company or (ii) an acceleration of obligations
under the New Credit Facility.
Notwithstanding the foregoing, if an Event of Default
specified in clause (6) or (7) of Section 6.01 hereof occurs with respect to the
Company, any Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary of the Company,
all outstanding Notes shall be due and payable immediately without further
action or notice. The Holders of
50
a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
In the case of any Event of Default occurring by reason any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable, to the extent permitted by law upon the acceleration of the
Notes. If an Event of Default occurs prior to December 15, 2006 by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding the prohibition on redemption of the Notes prior
to December 15, 2006, then the premium, as discussed below, will become
immediately due and payable to the extent permitted by law upon the acceleration
of the Notes. The premium payable for purposes of this paragraph for each of the
years beginning on December 15, of the years set forth below shall be as set
forth in the following table expressed as a percentage of the amount that would
otherwise be due but for the provisions of this sentence, plus accrued interest,
if any, to the date of payment:
Year Percentage
---- ----------
2002...................................... 109.625%
2003...................................... 108.663%
2004...................................... 107.700%
2005...................................... 106.738%
2006...................................... 105.775%
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, interest or Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
The Trustee shall not be deemed to have knowledge of the
Company's intent to avoid the payment of any such premium unless it shall have
received notice thereof from a Holder or the Company.
The Company shall promptly notify holders of Senior
Indebtedness if payment of the Notes is accelerated because of an Event of
Default.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal
amount of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of Default
and its consequences hereunder, except a continuing Default or Event of Default
in the payment of the principal of or interest on the Notes (including in
connection with an offer to purchase)
51
(provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability and shall be entitled to the benefit
of Section 7.01(c)(iii) and (e) hereof.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(e) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal of, or premium, if
any, interest or Liquidated Damages, if any, on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as Trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
52
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents (including
accountants, experts or such other professionals as the Trustee deems necessary,
advisable or appropriate) and counsel (including the allocated costs of inside
counsel)) and the Holders of the Notes allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Notes), its creditors or
its property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium and Liquidated Damages, if
any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a special record date and payment date for
any payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require
53
the filing by any party litigant in the suit of an undertaking to pay the costs
of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(1) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(2) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be
determined solely by the express provisions of this Indenture
and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the
requirements of this Indenture.
(3) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer,
unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant to
Section 6.05 hereof.
(4) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
(5) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee
shall be under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
54
(6) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
Section 7.02. Rights of Trustee.
(1) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(2) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(3) The Trustee may act through its attorneys and agents,
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or within
the rights or powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(6) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the TIA) it must eliminate such conflict within 90 days,
apply to the SEC for permission to continue as Trustee or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. Notice of Defaults.
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If a Default or Event of Default occurs and is continuing and
if it is known to a Responsible Officer of the Trustee, the Trustee shall mail
to Holders of Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of, premium, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15
following the date hereof, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim, and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
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When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
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Section 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against
Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE.
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance.
The Company may, at the option of its Board evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from their obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding Notes, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all their
other obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, or premium, if any, interest and Liquidated Damages, if any,
on such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article 2 and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article Eight. Subject to
compliance with
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this Article Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.07 - 4.16
hereof 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 not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason to any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
6.01(3) hereof, but, except as specified above, the remainder of this Indenture
and such Notes shall be unaffected thereby. In addition, upon the Company's
exercise under Section 8.01 hereof of the option applicable to this Section 8.03
hereof, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, Sections 6.01(3) through 6.01(5) hereof shall not constitute Events of
Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Notes, cash in
United States dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, and premium, if any, interest and
Liquidated Damages, if any, on the outstanding Notes on the stated date
for payment thereof or on the applicable redemption date, as the case
may be and the Company must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 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 of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the
59
Trustee confirming that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit) or insofar as Section 6.01(6) or (7) hereof is concerned,
at any time in the period ending on the 91st day after the date of
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under,
any material agreement or instrument (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;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that after the 91st day following the
deposit, the trust funds will not be preferential under any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and
(g) 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, or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company;
and
(h) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent and provided for relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to Be
Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the
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amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to the Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium
or Liquidated Damages, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium or Liquidated Damages, if any,
or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a secured creditor, look only
to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in the New York Times and
The Wall Street Journal (national editions), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Company under this
Indenture, and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the
Company makes any payment of principal of, 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.
Section 8.08. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of
further effect as to all Notes issued hereunder, when (a) either (i) all such
Notes theretofore authenticated and delivered (except lost, stolen or destroyed
Notes which have been replaced or paid and Notes for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company) have
been delivered to the Trustee for cancellation or (ii) all such Notes not
theretofore delivered to such Trustee for cancellation have become due and
payable by reason of the making of a notice of redemption or otherwise or will
become due and payable within one year and the Company has irrevocably deposited
or caused to be deposited with such Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation for principal, premium, if any, and accrued interest to the date of
maturity or redemption; (b) 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 or shall occur as a result of such deposit and such deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which the Company is bound; (c)
the Company has paid or caused to be paid all sums payable by it under this
Indenture; and (d) the Company has delivered irrevocable instructions to the
Trustee under this
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Indenture to apply the deposited money toward the payment of such Notes at
maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate
and an Opinion of Counsel to the Trustee stating that all conditions precedent
to satisfaction and discharge have been satisfied.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(c) to provide for the assumption of the Company's
obligations to the Holders of the Notes in the case of a merger or
consolidation pursuant to Article 5 hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Notes;
or
(e) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company, accompanied by a resolution
of the Board authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture (including Section 3.10,
4.10, 4.13 and Article 10 hereof, and including the defined terms used therein)
and the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding (including
consents obtained in connection with a tender offer or exchange offer for the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, interest or Liquidated Damages, if any, on the
Notes) or compliance with any provision of this Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for the Notes).
Without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Notes held by a non-consenting Holder):
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(1) reduce the principal amount of Notes whose Holders
must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity
of any Note or alter or waive any of the provisions with respect to the
redemption of the Notes (other than with respect to Section 4.10 and 4.13
hereof);
(3) reduce the rate of or change the time for payment of
interest on any Note;
(4) waive a Default or Event of Default in the payment of
principal of, or premium, if any, or interest on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(5) make any Note payable in money other than that stated
in the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, if any, interest on the Notes;
(7) waive a redemption payment with respect to any Note
(other than with respect to Section 4.10 and 4.13 hereof); or
(8) make any change in Section 6.04 or 6.07 hereof or in
the foregoing amendment and waiver provisions.
In addition, any amendment to the provisions of Article 10 of
this Indenture or any of the related definitions will require the consent of the
Holders of at least 75% in aggregate principal amount of the Notes then
outstanding if such amendment would adversely affect the rights of Holders of
Notes.
Upon the written request of the Company accompanied by a
resolution of the Board authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.
Section 9.03. Compliance with Trust Indenture Act.
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Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and rely upon an Officer's Certificate and an
Opinion of Counsel stating that (i) the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture, (ii) no
Event of Default shall occur as a result of the execution of such Officer's
Certificate or the delivery of such Opinion of Counsel and (iii) the amended or
supplemented indenture complies with the terms of this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01. Notes Subordinated to Senior Indebtedness.
The Company covenants and agrees and each Holder, by his
acceptance thereof likewise covenants and agrees, that all Notes shall be issued
subject to the provisions of this Article 10; and each Person holding any Note,
whether upon original issue or upon transfer, assignment or exchange thereof,
accepts and agrees that the payment of the principal of and interest on the
Notes, whether at maturity, by declaration or otherwise by the Company, shall,
to the extent and in the manner herein set forth, be subordinated and junior in
right of payment, to the prior payment in full in cash or Cash Equivalents of
Senior Indebtedness.
Section 10.02. Certain Definitions.
"Designated Senior Indebtedness" means (i) Indebtedness under
the New Credit Facility; and (ii) if there is no Indebtedness outstanding or
active commitments to issue Indebtedness under the
64
New Credit Facility, any other Indebtedness constituting Senior Indebtedness
which, at the time of determination has an aggregate principal amount
outstanding of at least $25.0 million and is specifically designated in the
instrument evidencing such Senior Indebtedness as "Designated Senior
Indebtedness."
"Permitted Junior Securities" means Equity Interests in the
Company or debt securities that are subordinated to all Senior Indebtedness (and
any debt securities issued in exchange for Senior Indebtedness) to substantially
the same extent as, or to a greater extent than, the Notes are subordinated to
Senior Indebtedness pursuant to this Indenture.
"Senior Indebtedness" means (i) all Indebtedness and other
monetary obligations (whether now existing or hereafter incurred) of the Company
and its Restricted Subsidiaries on, under or in respect of, the New Credit
Facility and including all fees, expenses (including reasonable fees and
expenses of counsel), claims, charges, indemnity obligations and interest
accruing on or subsequent to the filing of a petition initiating any proceeding
in bankruptcy, insolvency or like proceeding whether or not such interest is an
allowed claim in such proceeding (ii) all other Indebtedness of the Company
(other than the Notes and the Existing Senior Subordinated Notes), whether
presently outstanding or hereafter created, incurred or assumed, unless such
Indebtedness, by its terms or the terms of the instrument creating or evidencing
it is subordinate in right of payment to or pari passu with the Notes; and (iii)
any Hedging Obligations provided the term "Senior Indebtedness" shall not
include (i) any Indebtedness of the Company which when incurred and without
respect to any election under Section 1111(b) of the Bankruptcy Code, was
without recourse to the Company (ii) any Indebtedness of the Company to any of
its Subsidiaries or Affiliates (iii) any Indebtedness of the Company not
otherwise permitted by Section 4.09 and Section 4.15 hereof (iv) Indebtedness to
any employee of the Company (v) any liability for taxes; and (vi) trade
payables.
"Specified Senior Indebtedness" means any Indebtedness
constituting Senior Indebtedness which, at the time of determination has an
aggregate principal amount outstanding of at least $25.0 million and is
specifically designated in the instrument evidencing such Senior Indebtedness as
"Specified Senior Indebtedness."
Section 10.03. No Payment on Notes in Certain Circumstances.
(1) If any default in the payment of any principal of or
interest on any Specified Senior Indebtedness or any Designated Senior
Indebtedness when due and payable, whether at maturity, upon any redemption, by
declaration or otherwise, occurs and is continuing, no payment shall be made by
the Company with respect to the principal of, premium, if any, or interest or
Liquidated Damages, if any, on, or other amount owing with respect to, the
Notes, or to redeem or acquire any of the Notes for cash or property or
otherwise.
(2) If any event of default (other than a default in
payment of the principal of or interest on any Designated Senior Indebtedness)
occurs and is continuing in respect of any Senior Indebtedness (or if such an
event of default would occur upon any payment of any kind or character with
respect to the Notes), as such event of default is defined in such Designated
Senior Indebtedness, permitting the holders thereof to accelerate the maturity
thereof and if the holder or holders or a representative of such holder or
holders gives written notice of the event of default to the Company and the
Trustee (a "Default Notice"), then, unless and until such event of default has
been cured or waived or has ceased to exist or the Trustee receives notice from
the holder or holders of the relevant Designated Senior Indebtedness (or a
representative of such holder or holders) terminating the Blockage Period (as
defined below), during the 179 period after the delivery of such Default Notice
(the "Blockage Period"), the Company, or any Person acting on its behalf, shall
not, (x) make any payment or distribution of or with respect to the principal
of, premium, if any or interest or Liquidated Damages, if any, on, or other
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amounts owing with respect to the Notes or (y) acquire any of the Notes for cash
or property or otherwise. At the expiration of such Blockage Period, the Company
shall, subject to Section 10.03(1), promptly pay to the Trustee all sums which
the Company would have been obligated to pay during such Blockage Period but for
this Section 10.03(2). Only one such Blockage Period may be commenced within any
360 consecutive days. For all purposes of this Section 10.03, no event of
default which existed or was continuing with respect to the Designated Senior
Indebtedness to which the Blockage Period relates on the date such Blockage
Period commenced shall be or be made the basis for the commencement of any
subsequent Blockage Period by the holder or holders of such Designated Senior
Indebtedness (or a representative of such holder or holders) unless such event
of default is cured or waived for a period of not less than 90 consecutive days.
(3) 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 10.03(1) or 10.03(2), such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
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 the Senior
Indebtedness that such prohibited payment has been made, the holders of the
Senior Indebtedness notify the Trustee of the amounts then due and owing on the
Senior Indebtedness, if any, and only the amounts specified in such notice to
the Trustee shall be paid to the holders of Senior Indebtedness.
Section 10.04. Payment Over of Proceeds Upon Dissolution,
Etc.
(1) Upon any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any 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 proceedings, all amounts due or to
become due upon all Senior Indebtedness (including any interest accruing under
the New Credit Facility subsequent to an event of bankruptcy whether or not such
interest is an allowed claim in such proceeding) shall first be paid in full in
cash or Cash Equivalents, or payment provided for in cash or Cash Equivalents
before any payment of any kind or character (excluding Permitted Junior
Securities) may be made on account of the principal of, premium, if any, or
interest or Liquidated Damages, if any, on the Notes, or to acquire or redeem
any of the Notes for cash or property (excluding Permitted Junior Securities).
Before any payment may be made by, or on behalf of, the Company of the principal
of, premium, if any, or interest or Liquidated Damages, if any, on the Notes
upon any such dissolution winding-up, liquidation or reorganization, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders or the Trustee on their
behalf would be entitled, except for the provisions of this Article 10, shall be
paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, or by the
Holders of the Notes or by the Trustee under this Indenture if received by them
or it, directly to the holders of Senior Indebtedness (pro rata to such holders
on the basis of the respective amounts of Senior Indebtedness held by such
holders) or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full in cash or Cash Equivalents after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of Senior Indebtedness.
(2) In the event that, notwithstanding the foregoing, any
payment or distribution or assets of the Company of any kind or character,
whether in cash, property or securities (excluding Permitted Junior Securities),
shall be received by the Trustee or any Holder when such payment or distribution
is prohibited by Section 10.04(1), such payment or distribution shall be held in
trust for the
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benefit or, and shall be paid over or delivered to, the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amount of
Senior Indebtedness held by such holders) or their respective representatives,
or to the trustee or trustees under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of Senior Indebtedness remaining unpaid
until all such Senior Indebtedness has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness.
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 5 hereof shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 10.04
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article 5.
Section 10.05. Subrogation.
Subject to the payment in full in cash or Cash Equivalents of
all Senior Indebtedness, the Holders of the Notes shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal of and interest on the Notes shall be
paid in full; and, for the purposes of the such subrogation, (a) no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the Holders of the Notes would be entitled except for the
provisions of Article 10 and no payment over pursuant to the provisions of
Article 10 to the holders of Senior Indebtedness by Holders of the Notes shall,
as between the Company, its creditors other than holders of Senior Indebtedness,
and Holders of the Notes, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness, and (b) no payment or distributions of cash,
property or securities to or for the benefit of the Holders of the Notes
pursuant to this Section 10.05, which would otherwise have been paid to the
holders of Senior Indebtedness shall be deemed to be a payment by the Company to
or for the account of the Notes. It is understood that the provisions of this
Article 10 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 Indebtedness, on the other hand.
If any payment or distribution to which the Holders of Notes
would otherwise have been entitled but for the provisions of this Article 10
shall have been applied, pursuant to the provisions of this Article 10, to the
payment of all amounts payable under the Senior Indebtedness, then and in such
case, the Holders of Notes shall be entitled to receive from the holders of such
Senior Indebtedness any payments or distributions received by such holders of
Senior Indebtedness in excess of the amount required to make payment in full in
cash or Cash Equivalents of such Senior Indebtedness.
Section 10.06. Obligations of the Company Unconditional.
Nothing contained in this Article 10 or elsewhere in this
Indenture is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the Holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Notes the principal of 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 Indebtedness, nor shall
anything herein or therein prevent the Holders of any Note or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject
67
to the rights, if any, under this Article 10 of the holders of the Senior
Indebtedness 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 Article 10 will 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 6.01 or to pursue any rights or
remedies hereunder.
Section 10.07. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Notes pursuant to the provisions of this
Article 10. Regardless of anything to the contrary contained in this Article 10
or elsewhere in this Indenture, the Trustee shall not be charged with knowledge
of the existence of any default or event of default with respect to any Senior
Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until a Responsible Officer of the
Trustee shall have received notice in writing at the Corporate Trust Office of
the Trustee to that effect signed by an officer of the Company, or by a holder
of Senior Indebtedness or trustee or agent therefor, who shall have been
certified by the Company or otherwise established to the reasonable satisfaction
of the Trustee to be such holder, trustee or agent, and, prior to the receipt of
any such written notice, the Trustee shall, subject to Sections 7.01 and 7.02,
be entitled to assume that no such facts exist; provided that if the Trustee
shall not have received the notice provided for in this Section 10.07 at least
three Business Days prior to the date upon which by the terms hereof any such
monies 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 such monies and 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.
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 Indebtedness to participate in any payment or distribution pursuant to
this Article 10, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 10, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee, subject to the provisions of
Section 7.01 and 7.02 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 a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10.
Section 10.09. Trustee's Relation to Senior Indebtedness.
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The Trustee and any agent of the Company or the Trustee shall
be entitled to all the rights set forth in this Article 10 with respect to any
Senior Indebtedness which may at any time be held by it in its individual or any
other capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent, of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness. The
Trustee shall not be liable to any holder of Senior Indebtedness if it shall pay
over or deliver to Holders of Notes, the Company or any other person monies or
assets to which any holder of Senior Indebtedness shall be entitled by virtue of
this Article 10 or otherwise, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
Section 10.10. Subordination Rights Not Impaired by Acts of
Omissions of the Company or Holders of Senior Indebtedness.
(1) No right of any present or future holders of any
Senior Indebtedness to enforce subordination as provided herein will at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with. The provision of this Article 10 are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness. No amendment, waiver or other modification of this Indenture shall
in any way adversely affect the rights of the holders of any Senior Indebtedness
under this Article 10 unless such holders of Senior Indebtedness consent in
writing to such amendment, waiver or modification.
(2) The holders of Senior Indebtedness may at any time
and from time to time without the consent of, or notice to, any Holder of Notes
and without incurring any responsibility to any Holder and without impairing or
releasing any rights of the holders of any Senior Indebtedness or any of the
obligations of any Holder hereunder; (i) change the manner, place or terms
(including amortization, interest rate, covenants and other terms) of, or renew,
extend, refinance, refund, restructure or otherwise alter any or all Senior
Indebtedness; (ii) perfect, or not perfect, sell, exchange, release or otherwise
deal with any property at any time pledged, assigned or mortgaged to secure
Senior Indebtedness; (iii) release any Person liable in any manner for the
payment or collection of Senior Indebtedness; (iv) exercise or refrain from
exercising any rights against the Company and any other Person; and (v) apply
any amounts paid, acquired or realized to Senior Indebtedness.
Section 10.11. Holders of Notes Authorize Trustee to
Effectuate Subordination of the Notes.
Each Holder of Notes by his acceptance of them 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 10, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon any 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. If the Trustee does not file a proper
claim or proof of debt in the form required in such proceeding at least 30 days
before the expiration of the time to file such claim or claims, the holders of
the Senior Indebtedness (or its representatives) are hereby authorized to file
an appropriate claim for and on behalf of the Holders of Notes.
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Section 10.12. Article 10 Not to Prevent Events of Default.
The failure to make a payment on account of principal of or
interest on, or any other amount owing on, the Notes by reason of any provision
of this Article 10 will not be construed as preventing the occurrence of an
Event of Default.
Section 10.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article will apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
Section 10.14. Reliance by Holders of Senior Indebtedness
on Subordination Provisions.
Each Holder by accepting a Note acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Note, to acquire and continue to hold such Senior Indebtedness
and such holder of Senior Indebtedness shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold such
Senior Indebtedness.
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision hereof limits, qualifies or conflicts with a
provision of the TIA or another provision that would be required or deemed under
such Act to be part of and govern this Indenture if this Indenture were subject
thereto, the latter provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
Section 11.02. Notices.
Any notice or communication by the Company or the Trustee to
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company:
K & F Industries, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Telecopier: (000) 000-0000
Attention: Xxxx Xxxxxxxx
If to the Trustee:
State Street Bank and Trust Company
Corporate Trust Administration
Xxxxxxx Square
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 11.03. Communication by Holders of Notes with Other
Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 11.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have
been satisfied; and
71
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.
No director, officer, employee, incorporator or stockholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Notes, this Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the Commission that such a waiver is against public policy.
Section 11.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES.
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 11.10. Successors.
All agreements of the Company in this Indenture and the Notes
shall bind their successors. All agreements of the Trustee in this Indenture
shall bind its successors.
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Section 11.11. Severability.
In case any provision in this 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 11.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 11.13. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture, which have been inserted for
convenience of reference only, are not to be considered a part of this Indenture
and shall in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
73
SIGNATURES
K & F INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Exhibit A-1
(Face of Note)
================================================================================
9 5/8% [Series A] [Series B] Senior Subordinated Notes due 2010
CUSIP: 482240 AH 1
No. $________
K & F INDUSTRIES, INC.
promise to pay to Cede & Co. or registered assigns, the
principal sum of $___________ on December 15, 2010.
Interest Payment Dates: June 15 and December 1
Record Dates: June 1 and December 1
Dated: December 20, 2002
K & F INDUSTRIES, INC.
By:________________________
Name:
Title:
This is one of the
Notes referred to in
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:___________________________
Name:
Title:
================================================================================
A1 - 1
(Back of Note)
9 5/8% [Series A] [Series B] Senior Subordinated
Notes due 2010
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
A1 - 2
ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED STATES.
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. Interest. K & F Industries, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 9 5/8% per annum from December 20, 2002, until maturity and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company will pay interest
and Liquidated Damages, if any, semi-annually on June 15 and December 15 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be June 15, 2003.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on
the Notes (except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Notes at the close of business on the June
1 or December 1 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium, interest and
Liquidated Damages, if any, at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium and
Liquidated Damages on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. Paying Agent and Registrar. Initially, State Street
Bank and Trust Company, the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company may act in any such capacity.
4. Indenture. The Company issued the Notes under an
Indenture dated as of December 20, 2002 (the "Indenture") between the Company
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general obligations of the Company
limited to $250 million in aggregate principal amount.
A1 - 3
5. Optional Redemption. (a) Except as set forth in
subparagraph (b) of this Paragraph 5, the Company shall not have the option to
redeem the Notes prior to December 15, 2006. Thereafter, the Company shall have
the option to redeem the Notes, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on December 15 of the years
set forth below:
YEAR PERCENTAGE
---- ----------
2006...................................................... 104.813%
2007...................................................... 103.208%
2008...................................................... 101.604%
2009 and thereafter....................................... 100.000%
Notwithstanding the foregoing, prior to December 15, 2005, the
Company may redeem up to 35% of the original aggregate principal amount of Notes
at a redemption price of 109.625% of the principal amount thereof, in each case
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, with the net proceeds of one or more underwritten public
offerings of common stock of the Company; provided that (i) at least 65% of the
original aggregate principal amount of Notes remain outstanding immediately
after the occurrence of such redemption and (ii) the redemption shall occur
within 45 days of the date of the closing of such underwritten public offering
of common stock of the Company.
6. Mandatory Redemption. Except as set forth in
Paragraph 7 below, the Company shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the principal amount thereof plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase (in either case, the "Change of Control Payment Date"). Within 30 days
following any Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset
Sale, within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $10 million, the Company shall commence an offer to all Holders
of Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes and all Indebtedness ranking pari passu with the Notes (the
"Pari Passu Notes," which definition shall not include the Existing Senior
Subordinated Notes, which are entitled to receive a prior offer to repurchase
out of Net Proceeds) tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for
general corporate purposes. If the aggregate principal amount of Notes and Pari
Passu Notes surrendered by Holders thereof exceeds
A1 - 4
the amount of Excess Proceeds, the Trustee shall select the Notes and the Pari
Passu Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. Notice of Redemption. Subject to the provisions of
Section 3.09 of the Indenture, a notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Subordination. The Notes are subordinated in right of
payment, to the extent and in the manner provided in the Indenture, to the prior
payments in full of all Senior Indebtedness (as defined in the Indenture).
10. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a
Note may be treated as its owner for all purposes.
12. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes (including consents obtained in connection with a purchase of,
the tender offer or exchange for, Notes), and any existing default or compliance
with any provision of the Indenture or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange for,
Notes). Without the consent of any Holder of a Note, the Indenture or the Notes
may be amended or supplemented to cure any ambiguity, defect or inconsistency,
to provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights under the Indenture of any such
Holder, or to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
13. Defaults and Remedies. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated Damages on
the Notes; (ii) default in payment when due of principal of or premium, if any,
on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company for 45 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with certain other agreements in the Indenture or the Notes; (iv) default
under certain other agreements relating to Indebtedness of the Company which
default (a) is
A1 - 5
caused by a failure to pay principal or premium, if any, or interest on such
Indebtedness prior to 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 express maturity and, in each
case, the principal amount of 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 $10
million; (v) certain final judgments for the payment of money that remain
undischarged for a period of 60 days, provided that the aggregate of all such
undischarged judgments exceeds $10 million; and (vi) certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
14. Trustee Dealings with the Company. The Trustee, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or their Affiliates, and may otherwise deal
with the Company or their Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. A director, officer,
employee, incorporator or stockholder, of the Company, as such, shall not have
any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18 Additional Rights of Holders of Transfer Restricted
Securities. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of December 20,
2002, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
19 CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on
A1 - 6
the Notes and the Trustee may use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
K & F Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
A1 - 7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature:____________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee:_______________
A1 - 8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.13 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.13
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.13 of the Indenture, state
the amount you elect to have purchased: $________
Date: ___________________ Your Signature:_______________________
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:_______________
Signature Guarantee:__________________
A1 - 9
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
Principal Amount of
this Global Note Signature of
Amount of decrease Amount of increase in following such authorized officer
in Principal Amount Principal Amount of decrease (or of Trustee or Note
Date of Exchange of this Global Note this Global Note increase) Custodian
---------------- ------------------- --------------------- ------------------- ------------------
A1 - 10
Exhibit A-2
(Face of Regulation S Temporary Global Note)
================================================================================
9 5/8% [Series A] [Series B] Senior Subordinated Notes due 2010
CUSIP: U4858K AB 3
No. $________
K & F INDUSTRIES, INC.
promise to pay to Cede & Co. or registered assigns, the
principal sum of $___________ on December 15, 2010.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: December 20, 2002
K & F INDUSTRIES, INC.
By:________________________
Name:
Title:
This is one of the
Notes referred to in
within-mentioned Indenture:
State Street Bank and Trust Company,
as Trustee
By:___________________________
Name:
Title:
================================================================================
A2 - 1
(Back of Regulation S Temporary Global Note)
9 5/8% [Series A] [Series B] Senior Subordinated
Notes due 2010
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE
FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS
DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS
OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN
CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY
A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS
A2 - 2
OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE),
(4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED STATES.
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. Interest. K & F Industries, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 9 5/8% per annum from December 20, 2002, until maturity and shall
pay the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company will pay interest
and Liquidated Damages, if any, semi-annually on June 15 and December 15 of each
year, or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be June 15, 2003.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
Until this Regulation S Temporary Global Note is exchanged for
one or more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Senior Subordinated Notes under the Indenture.
2. Method of Payment. The Company will pay interest on
the Notes (except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Notes at the close of business on the June
1 or December 1 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium, interest and
Liquidated Damages, if any, at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium and
Liquidated Damages on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
A2 - 3
3. Paying Agent and Registrar. Initially, State Street
Bank and Trust Company, the Trustee under the Indenture, will act as Paying
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company may act in any such capacity.
4. Indenture. The Company issued the Notes under an
Indenture dated as of December 15, 2002 (the "Indenture") between the Company
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject
to all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general obligations of the Company
limited to $250 million in aggregate principal amount.
5. Optional Redemption. (a) Except as set forth in
subparagraph (b) of this Paragraph 5, the Company shall not have the option to
redeem the Notes prior to December 15, 2006. Thereafter, the Company shall have
the option to redeem the Notes, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on December 15 of the years
set forth below:
YEAR PERCENTAGE
---- ----------
2006...................................................... 104.813%
2007...................................................... 103.208%
2008...................................................... 101.604%
2009 and thereafter....................................... 100.000%
Notwithstanding the foregoing, prior to December 15, 2005, the
Company may redeem up to 35% of the original aggregate principal amount of Notes
at a redemption price of 109.625% of the principal amount thereof, in each case
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, with the net proceeds of one or more underwritten public
offerings of common stock of the Company; provided that (i) at least 65% of the
original aggregate principal amount of Notes remain outstanding immediately
after the occurrence of such redemption and (ii) the redemption shall occur
within 45 days of the date of the closing of such underwritten public offering
of common stock of the Company.
6. Mandatory Redemption. Except as set forth in
Paragraph 7 below, the Company shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the principal amount thereof plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase (in either case, the "Change of Control Payment Date"). Within 30 days
following any Change of Control, the Company shall mail a notice to each Holder
setting forth the procedures governing the Change of Control Offer as required
by the Indenture.
A2 - 4
(b) If the Company or a Subsidiary consummates any Asset
Sale, within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $10 million, the Company shall commence an offer to all Holders
of Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, to the date fixed for the closing of such offer, in accordance
with the procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes and all Indebtedness ranking pari passu with the Notes (the
"Pari Passu Notes," which definition shall not include the Existing Senior
Subordinated Notes, which are entitled to receive a prior offer to repurchase
out of Net Proceeds) tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for
general corporate purposes. If the aggregate principal amount of Notes and Pari
Passu Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes and the Pari Passu Notes to be
purchased on a pro rata basis. Holders of Notes that are the subject of an offer
to purchase will receive an Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
8. Notice of Redemption. Subject to the provisions of
Section 3.09 of the Indenture, a notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. Subordination. The Notes are subordinated in right of
payment, to the extent and in the manner provided in the Indenture, to the prior
payments in full of all Senior Indebtedness (as defined in the Indenture).
10. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
This Regulation S Temporary Global Note is exchangeable in
whole or in part for one or more Global Notes only (i) on or after the
termination of the 40-day restricted period (as defined in Regulation 5) and
(ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.
11. Persons Deemed Owners. The registered Holder of a
Note may be treated as its owner for all purposes.
12. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a
A2 - 5
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a purchase of, the tender offer or exchange for,
Notes), and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange for, Notes). Without the
consent of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
13. Defaults and Remedies. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated Damages on
the Notes; (ii) default in payment when due of principal of or premium, if any,
on the Notes when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise, (iii) failure
by the Company for 45 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes then outstanding to
comply with certain other agreements in the Indenture or the Notes; (iv) default
under certain other agreements relating to Indebtedness of the Company which
default (a) is caused by a failure to pay principal or premium, if any, or
interest on such Indebtedness prior to 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 express
maturity and, in each case, the principal amount of 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 $10 million; (v) certain final judgments for the payment of money
that remain undischarged for a period of 60 days, provided that the aggregate of
all such undischarged judgments exceeds $10 million; and (vi) certain events of
bankruptcy or insolvency with respect to the Company or any of its Restricted
Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes will become due and payable without further
action or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
14. Trustee Dealings with the Company. The Trustee, in
its individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or their Affiliates, and may otherwise deal
with the Company or their Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. A director, officer,
employee, incorporator or stockholder, of the Company, as such, shall not have
any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations
A2 - 6
or their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. Additional Rights Of Holders Of Transfer Restricted
Securities. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of December 20,
2002, between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
19. CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
K & F Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
A2 - 7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we)
assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax ID. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: ___________________________
Your Signature:______________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee:_________________
A2 - 8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.13 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.13
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.13 of the Indenture, state
the amount you elect to have purchased: $________
Date:__________________ Your Signature:
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.: ______________
Signature Guarantee: _________________
A2 - 9
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES
The following exchanges of a part of this Regulation S
Temporary Global Note for an interest in another Global Note, or of other
Restricted Global Notes for an interest in this Regulation S Temporary Global
Note, have been made:
Principal Amount of
this Global Note Signature of
Amount of Decrease Amount of Increase in following such authorized officer
in Principal Amount Principal Amount of decrease (or of Trustee or Note
Date of Exchange of this Global Note this Global Note increase) Custodian
---------------- ------------------- --------------------- ------------------- ------------------
A2 - 10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
K & F Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
State Street Bank and Trust Company
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Re: 9 5/8% Senior Subordinated Notes due 2010
Reference is hereby made to the Indenture, dated as of
December 20, 2002 (the "Indenture"), between K & F Industries, Inc., as issuer
(the "Company"), and State Street Bank and Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
_______________ (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to ____________ (the "Transferee"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
RULE 144A. The Transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further certifies
that the beneficial interest or Definitive Note is being transferred to a Person
that the Transferor reasonably believed and believes is purchasing the
beneficial interest or Definitive Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the 144A Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE REGULATION S TEMPORARY GLOBAL NOTE, THE REGULATION S
PERMANENT GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act, (iii) the transaction
B - 1
is not part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Permanent Global Note, the
Regulation S Temporary Global Note, and/or the Definitive Note and in the
Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE
DELIVERY OF A BENEFICIAL INTEREST IN THE AL GLOBAL NOTE OR A DEFINITIVE NOTE
PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR
REGULATION S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act and any applicable blue sky securities laws of any state of the
United States, and accordingly the Transferor hereby further certifies that
(check one):
(a) [ ] such Transfer is being effected pursuant to and
in accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or
a subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interests or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Al Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED
DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i)
The Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of
B - 2
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interests or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S.
(i) The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities
laws of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interests or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
State of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interests or Definitive Note will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
_________________________
[Insert Name of Transferor]
By: ___________________
Name:
Title:
Dated: ___________, ____
B - 3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ______), or
(ii) [ ] Regulation S Global Note (CUSIP ______), or
(iii) [ ] All Global Note (CUSIP _______), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _____), or
(ii) [ ] Regulation S Global Note (CUSIP _____), or
(iii) [ ] AI Global Note (CUSIP ______); or
(iv) [ ] Unrestricted Global Note (CUSIP ______); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B - 4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
K & F Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
State Street Bank and Trust Company
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Re: 9 5/8% Senior Subordinated Notes due 2010
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of
December 20, 2002 (the "Indenture"), between K & F Industries, Inc., as issuer
(the "Company") and State Street Bank and Trust Company, as Trustee. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indenture.
__________,(the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$_____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE.
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global Note
in an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the United
States Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the
C - 1
Securities Act and (iv) the Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Owner's Exchange of a Restricted Definitive Note for a beneficial interest
in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of
a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.
2. [ ] EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES
OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] AI
Global Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
C - 2
This certificate and the statements contained herein are made
for your benefit a' benefit of the Company.
________________________________________
[Insert Name of Owner]
By:_____________________________________
Name:
Title:
Dated: _____________,_____
C - 3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING ACCREDITED INVESTOR
K & F Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
State Street Bank and Trust Company
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Re: 9 5/8% Senior Subordinated Notes due 2010
Reference is hereby made to the Indenture, dated as of
December 20, 2002 (the "Indenture"), between K & F Industries, Inc., as issuer
(the "Company"), and State Street Bank and Trust Company, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the
Notes or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes
have not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you and to the Company a
signed letter substantially in the form of this letter and, if such transfer is
in respect of a principal amount of Notes, at the time of transfer of less than
$250,000, an Opinion of Counsel in form reasonably acceptable to the Company to
the effect that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the provisions of Rule 144(k) under the
Securities
D - 1
Act or (F) pursuant to an effective registration statement under the Securities
Act, and we further agree to provide to any person purchasing the Definitive
Note or beneficial interest in a Global Note from us in a transaction meeting
the requirements of clauses (A) through (E) of this paragraph a notice advising
such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the
Notes or beneficial interest therein, we will be required to furnish to you and
the Company such certifications, legal opinions and other information as you and
the Company may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Notes purchased
by us will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the placement agents.
4. We are an "accredited investor" (as defined in Rule
501(a) of Regulation D under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any accounts for
which we are acting are each able to bear the economic risk of our or its
investment.
5. We are acquiring the Notes or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By: ____________________________
Name:
Title:
Dated: ___________,_______
D - 2