EXECUTION COPY
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ENTEX INFORMATION SERVICES, INC., as Issuer,
the GUARANTORS named herein
and
MARINE MIDLAND BANK, as Trustee
INDENTURE
Dated as of July 29, 1998
$100,000,000
12 1/2% Senior Subordinated Notes due 2006
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310 (a)(1) ............................................... 7.10
(a)(2) ............................................... 7.10
(a)(3) ............................................... N.A.
(a)(4) ............................................... N.A.
(b) .................................................. 7.08; 7.10
12.02
(b)(1) ............................................... 7.10
(b)(9) ............................................... 7.10
(c) .................................................. N.A.
311 (a) .................................................. 7.11
(b) .................................................. 7.11
(c) .................................................. N.A.
312 (a) .................................................. 2.05
(b) .................................................. 12.03
(c) .................................................. 12.03
313 (a) .................................................. 7.06
(b)(1) ............................................... N.A.
(b)(2) ............................................... 7.06
(c) .................................................. 12.02; 7.06
(d) .................................................. 7.06
314 (a) .................................................. 4.02; 4.04
12.02
(b) .................................................. N.A.
(c)(1) ............................................... 12.04; 12.05
(c)(2) ............................................... 12.04; 12.05
(c)(3) ............................................... N.A.
(d) .................................................. N.A.
(e) .................................................. 12.05
(f) .................................................. N.A.
315 (a) .................................................. 7.01; 7.02
(b) .................................................. 7.05; 12.02
(c) .................................................. 7.01
(d) .................................................. 6.05; 7.01
7.02
(e) .................................................. 6.11
316 (a)(last sentence) ................................... 12.06
(a)(1)(A) ............................................ 6.05
(a)(1)(B) ............................................ 6.04
(a)(2) ............................................... 8.02
(b) .................................................. 6.07
(c) .................................................. 8.04
317 (a)(1) ............................................... 6.08
(a)(2) ............................................... 6.09
(b) .................................................. 7.12
318 (a) .................................................. 12.01
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Other Definitions...........................................22
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...........22
SECTION 1.04. Rules of Construction.......................................23
ARTICLE 2
THE NOTES
SECTION 2.01. Dating; Incorporation of Form in Indenture..................24
SECTION 2.02. Execution and Authentication................................24
SECTION 2.03. Registrar and Paying Agent..................................25
SECTION 2.04. Paying Agent to Hold Money in Trust.........................26
SECTION 2.05. Noteholder Lists............................................26
SECTION 2.06. Transfer and Exchange.......................................26
SECTION 2.07. Replacement Notes...........................................27
SECTION 2.08. Outstanding Notes...........................................27
SECTION 2.09. Temporary Notes.............................................28
SECTION 2.10. Cancellation................................................28
SECTION 2.11. Defaulted Interest..........................................28
SECTION 2.12. Deposit of Moneys...........................................29
SECTION 2.13. CUSIP Number................................................29
SECTION 2.14. Book-Entry Provisions for Global Notes......................29
SECTION 2.15. Special Transfer Provisions.................................32
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee..........................................34
SECTION 3.02. Selection by Trustee of Notes to Be Redeemed................34
SECTION 3.03. Notice of Redemption........................................35
SECTION 3.04. Effect of Notice of Redemption..............................36
SECTION 3.05. Deposit of Redemption Price.................................36
SECTION 3.06. Notes Redeemed in Part......................................36
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes............................................37
SECTION 4.02. SEC Reports.................................................37
PAGE
SECTION 4.03. Waiver of Stay, Extension or Usury Laws.....................38
SECTION 4.04. Compliance Certificate......................................38
SECTION 4.05. Taxes.......................................................39
SECTION 4.06. Limitation on Additional Indebtedness.......................39
SECTION 4.07. Limitation on Capital Stock of Restricted Subsidiaries......40
SECTION 4.08. Limitation on Restricted Payments...........................41
SECTION 4.09. Limitation on Certain Asset Sales...........................43
SECTION 4.10. Limitation on Transactions with Affiliates..................45
SECTION 4.11. Limitations on Liens........................................46
SECTION 4.12. Limitation on Other Senior Subordinated Debt................47
SECTION 4.13. Additional Guarantees.......................................47
SECTION 4.14. Payments for Consent........................................47
SECTION 4.15. Corporate Existence.........................................48
SECTION 4.16. Change of Control...........................................48
SECTION 4.17. Maintenance of Office or Agency.............................51
SECTION 4.18. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries............51
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. Limitation on Consolidation, Merger and Sale of Assets......52
SECTION 5.02. Successor Person Substituted................................53
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default...........................................54
SECTION 6.02. Acceleration................................................56
SECTION 6.03. Other Remedies..............................................56
SECTION 6.04. Waiver of Past Defaults and Events of Default...............57
SECTION 6.05. Control by Majority.........................................57
SECTION 6.06. Limitation on Suits.........................................57
SECTION 6.07. Rights of Holders to Receive Payment........................58
SECTION 6.08. Collection Suit by Trustee..................................58
SECTION 6.09. Trustee May File Proofs of Claim............................58
SECTION 6.10. Priorities..................................................59
SECTION 6.11. Undertaking for Costs.......................................59
ii
PAGE
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee...........................................60
SECTION 7.02. Rights of Trustee...........................................61
SECTION 7.03. Individual Rights of Trustee................................62
SECTION 7.04. Trustee's Disclaimer........................................62
SECTION 7.05. Notice of Defaults..........................................62
SECTION 7.06. Reports by Trustee to Holders...............................62
SECTION 7.07. Compensation and Indemnity..................................63
SECTION 7.08. Replacement of Trustee......................................64
SECTION 7.09. Successor Trustee by Consolidation, Merger or Conversion....65
SECTION 7.10. Eligibility; Disqualification...............................65
SECTION 7.11. Preferential Collection of Claims Against Company...........65
SECTION 7.12. Paying Agents...............................................65
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01. Without Consent of Holders..................................66
SECTION 8.02. With Consent of Holders.....................................67
SECTION 8.03. Compliance with Trust Indenture Act.........................68
SECTION 8.04. Revocation and Effect of Consents...........................68
SECTION 8.05. Notation on or Exchange of Notes............................69
SECTION 8.06. Trustee to Sign Amendments, etc.............................69
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Discharge of Indenture......................................69
SECTION 9.02. Legal Defeasance............................................70
SECTION 9.03. Covenant Defeasance.........................................70
SECTION 9.04. Conditions to Legal Defeasance or Covenant Defeasance.......71
SECTION 9.05. Deposited Money and U.S. Government
Obligations to Be Held in Trust;
Other Miscellaneous Provisions............................73
SECTION 9.06. Reinstatement...............................................73
SECTION 9.07. Moneys Held by Paying Agent.................................74
SECTION 9.08. Moneys Held by Trustee......................................74
ARTICLE 10
GUARANTEE OF NOTES
SECTION 10.01. Guarantee..................................................75
SECTION 10.02. Execution and Delivery of Guarantees.......................76
iii
PAGE
SECTION 10.03. Limitation of Guarantee.....................................76
SECTION 10.04. Release of Guarantor........................................76
SECTION 10.05. Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness..........................77
SECTION 10.06. Payment Over of Proceeds Upon
Dissolution, etc., of a Guarantor.........................78
SECTION 10.07. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness in Default.............79
SECTION 10.08. Subrogation to Rights of Holders
of Guarantor Senior Indebtedness..........................82
SECTION 10.09. Guarantee Subordination Provisions
Solely To Define Relative Rights..........................82
SECTION 10.10. Application of Certain Article 11 Provisions................83
ARTICLE 11
SUBORDINATION OF NOTES
SECTION 11.01. Notes Subordinate to Senior Indebtedness....................83
SECTION 11.02. Payment Over of Proceeds upon Dissolution, etc..............84
SECTION 11.03. Suspension of Payment When Senior Indebtedness
in Default................................................85
SECTION 11.04. Trustee's Relation to Senior Indebtedness...................87
SECTION 11.05. Subrogation to Rights of Holders of Senior Indebtedness.....87
SECTION 11.06. Provisions Solely to Define Relative Rights.................88
SECTION 11.07. Trustee to Effectuate Subordination.........................89
SECTION 11.08. No Waiver of Subordination Provisions.......................89
SECTION 11.09. Notice to Trustee...........................................90
SECTION 11.10. Reliance on Judicial Order or Certificate of
Liquidating Agent.........................................90
SECTION 11.11. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights............91
SECTION 11.12. Article Applicable to Paying Agents.........................91
SECTION 11.13. No Suspension of Remedies...................................91
iv
PAGE
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls...............................92
SECTION 12.02. Notices....................................................92
SECTION 12.03. Communications by Holders with Other Holders...............93
SECTION 12.04. Certificate and Opinion as to Conditions Precedent.........93
SECTION 12.05. Statements Required in Certificate and Opinion.............93
SECTION 12.06. When Treasury Notes Disregarded............................94
SECTION 12.07. Rules by Trustee and Agents................................94
SECTION 12.08. Business Days; Legal Holidays..............................94
SECTION 12.09. Governing Law..............................................95
SECTION 12.10. No Adverse Interpretation of Other Agreements..............95
SECTION 12.11. No Recourse Against Others.................................95
SECTION 12.12. Successors.................................................95
SECTION 12.13. Multiple Counterparts......................................95
SECTION 12.14. Table of Contents, Headings, etc...........................95
SECTION 12.15. Separability...............................................96
EXHIBITS
Exhibit A. Form of Note........................................... A-1
Exhibit B. Form of Legend and Assignment for
144A Notes............................................. B-1
Exhibit C. Form of Legend and Assignment for
Regulation S Notes..................................... C-1
Exhibit D. Form of Legend and Assignment for
Global Notes........................................... D-1
Exhibit E. Form of Certificate to Be Delivered in
Connection with Transfers to Non-QIB
Accredited Investors................................... E-1
Exhibit F. Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to
Regulations S..................................... F-1
Exhibit G. Form of Guarantee...................................... G-1
v
INDENTURE, dated as of July 29, 1998, among ENTEX INFORMATION SERVICES, INC., a
Delaware corporation, as Issuer (the "Company"), the GUARANTORS (as hereinafter
defined) and Marine Midland Bank, a banking corporation and trust company,
organized under the laws of the state of New York, not in its individual
capacity but solely as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 12 1/2% Senior
Subordinated Notes due 2006 (the "Notes").
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or is merged or consolidated with or into the Company or a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person.
"Additional Interest" means additional interest on the Notes which the
Company agrees to pay to the Holders pursuant to Section 4 of the Registration
Rights Agreement.
"Adjusted Net Assets" of any Person at any date shall mean the lesser of
the amount by which (x) the fair value of the property of such Person exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities),
but excluding liabilities under the Guarantee of such Person at such date and
(y) the present fair saleable value of the assets of such Person at such date
exceeds the amount that will be required to pay the probable liability of such
Person on its debts (after giving effect to any collection from any Subsidiary
of such Person in respect of the obligations of such Person under the Guarantee
of such Person), excluding Indebtedness in respect of the Guarantee of such
Person, as they become absolute and matured.
"Affiliate" of any specified Person means any other Person which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, such specified Person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by," and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direc-
tion of the management or policies of such Person, whether through the ownership
of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent, co-registrar or agent for
service of notices and demands.
"Asset Sale" means the sale, transfer or other disposition (other than to
the Company or any Restricted Subsidiary) in any single transaction or series of
related transactions having a fair market value in excess of $1,000,000 of (a)
any Capital Stock of or other equity interest in any Restricted Subsidiary, (b)
all or substantially all of the assets of the Company or of any Restricted
Subsidiary, (c) real property or (d) all or substantially all of the assets of a
division, line of business or comparable business segment or part thereof of the
Company or any Restricted Subsidiary; provided that Asset Sales shall not
include (i) sales, transfers or other dispositions to the Company or to a
Restricted Subsidiary or to any other Person if after giving effect to such
sale, lease, conveyance, transfer or other disposition such other Person becomes
a Restricted Subsidiary, (ii) the sale, lease, conveyance, disposition or other
transfer of all or substantially all of the assets of the Company as permitted
under Section 5.01 (unless such transfer is of the Company's Product Business
and clause (i) of the first paragraph under Section 5.1 is not being complied
with) and (iii) any Restricted Payment permitted under Section 4.08.
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i) cash
received by the Company or any Restricted Subsidiary from such Asset Sale
(including cash received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such Asset
Sale, (b) payment of all brokerage commissions, underwriting and other fees and
expenses related to such Asset Sale, (c) provision for minority interest holders
in any Restricted Subsidiary as a result of such Asset Sale and (d) deduction of
appropriate amounts to be provided by the Company or a Restricted Subsidiary as
a reserve, in accordance with GAAP, against any liabilities associated with the
assets sold or disposed of in such Asset Sale and retained by the Company or a
Restricted Subsidiary after such Asset Sale, including, without limitation,
pension and other post employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated with
the assets sold or disposed of in such Asset Sale, and (ii) promissory notes and
other noncash consideration received by the Company or any Restricted Subsidiary
from such Asset Sale or other disposition upon the liquidation or conversion of
such notes or noncash consideration into cash.
2
"Available Asset Sale Proceeds" means, with respect to any Asset Sale, the
aggregate Asset Sale Proceeds from such Asset Sale that have not been applied in
accordance with clause (iii)(a) or (iii)(b), and which have not yet been the
basis for an Excess Proceeds Offer in accordance with clause (iii)(c), of
Section 4.09(a).
"Board of Directors" means the board of directors of the Company or a
Guarantor, as appropriate, or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified pursuant to an
Officers' Certificate to have been duly adopted by the Board of Directors of the
Company or a Guarantor, as appropriate, and to be in full force and effect and
delivered to the Trustee.
"Capital Stock" means, with respect to any Person, any and all shares or
other equivalents (however designated) of capital stock, partnership interests
or any other participation, right or other interest in the nature of an equity
interest in such Person or any option, warrant or other security convertible
into any of the foregoing.
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Change of Control" of the Company will be deemed to have occurred at such
time as (i) any Person (including a Person's Affiliates and associates), other
than a Permitted Holder, becomes the beneficial owner (as defined under Rule
13d-3 or any successor rule or regulation promulgated under the Exchange Act) of
50% or more of the total voting or economic power of the Common Stock of the
Company and/or warrants or options to acquire such Common Stock on a fully
diluted basis, (ii) any Person (including a Person's Affiliates and associates),
other than a Permitted Holder, becomes the beneficial owner of 35% or more of
the total voting power of the Common Stock of the Company and the Permitted
Holders beneficially own, in the aggregate, a lesser percentage of the total
voting power of the Common Stock of the Company than such other Person and do
not have the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of the Company,
(iii) the Company consolidates with, or merges with or into, another Person or
conveys, transfers, leases or otherwise disposes of all or substantially all of
its assets to any Person, or any Person consolidates with, or merges with or
into the Company, pursuant to a transaction in which the outstanding
3
Common Stock of the Company is converted into or exchanged for cash, securities
or other property, other than any such transaction where (a) (1) the outstanding
Common Stock of the Company is not converted or exchanged at all (except to the
extent necessary to reflect a change in the jurisdiction of incorporation) or is
converted into or exchanged for Common Stock (other than Disqualified Capital
Stock) of the surviving or transferee corporation (the "Surviving Entity") and
(2) immediately after such transaction, no "person" or "group" (as such terms
are used in Sections 13 (d) and 14 (d) of the Exchange Act), other than a
Permitted Holder, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than a majority of the total outstanding Common
Stock of the Surviving Entity, or (b) the holders of the Common Stock of the
Company outstanding immediately prior to the consolidation or merger hold,
directly or indirectly, at least a majority of the Common Stock of the surviving
corporation immediately after such consolidation or merger, or (iv) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company has been approved by 66b% of the
directors then still in office who either were directors at the beginning of
such period or whose election or recommendation for election was previously so
approved) cease to constitute a majority of the Board of Directors of the
Company.
"Common Stock" of any Person means all Capital Stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person or
(ii) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management and policies of such Person.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces such party pursuant to Article 5 of this
Indenture and thereafter means the successor and any other obligor on the Notes.
"Company Request" means any written request signed in the name of the
Company by the Chairman of the Board, the Chief Executive Officer, the
President, any Executive Vice President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, Controller, Secretary or any Vice-President
and attested to by the Secretary or any Assistant Secretary of the Company.
"Consolidated Fixed Charges" means, with respect to any Person, for any
period the sum of a Person's (i) Consolidated
4
Interest Expense, plus (ii) the product of (x) the aggregate amount of all
dividends paid on Disqualified Capital Stock of such Person or, in the case of
the Company, on each series of Preferred Stock of each Restricted Subsidiary
(other than dividends paid or payable in additional shares of Preferred Stock or
to such Person or any of its Wholly Owned Subsidiaries) times (y) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current effective combined federal, state and local tax rate of such Person
(expressed as a decimal), in each case, for the last four fiscal quarters for
which financial statements are available.
"Consolidated Interest Expense" means, with respect to any Person, for any
period and without duplication, the aggregate amount of interest which, in
conformity with GAAP, would be set forth opposite the caption "interest expense"
or any like caption on an income statement for such Person and its Subsidiaries
on a consolidated basis (including, but not limited to, (i) imputed interest
included in Capitalized Lease Obligations, (ii) all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (iii) net payments made in connection with Interest Rate
Agreements, (iv) the interest portion of any deferred payment obligation, (v)
amortization of discount or premium, if any, and (vi) all other non-cash
interest expense (other than interest amortized to cost of sales)) plus all net
capitalized interest for such period and all interest paid under any guarantee
of Indebtedness (including a guarantee of principal, interest or any combination
thereof) of any Person, and minus (a) net payments received in connection with
Interest Rate Agreements and (b) amortization of deferred financing costs and
expenses.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that (a) the Net Income of any Person (the "other Person") in
which the Person in question or any of its Subsidiar-
5
ies has less than a 100% interest (which interest does not cause the net income
of such other Person to be consolidated into the net income of the Person in
question in accordance with GAAP) shall be included only to the extent of the
amount of dividends or distributions paid to the Person in question or the
Subsidiary, (b) the Net Income of any Subsidiary of the Person in question
(other than a Guarantor) that is subject to any restriction or limitation on the
payment of dividends or the making of other distributions (other than pursuant
to the Notes or the Indenture) shall be excluded to the extent of such
restriction or limitation, (c) (i) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition and (ii) any net gain (but not loss) resulting from an Asset Sale by
the Person in question or any of its Subsidiaries other than in the ordinary
course of business shall be excluded and (d) extraordinary, unusual and
non-recurring gains and losses shall be excluded.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at Corporate
Trust Services, Marine Midland Bank, 000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000.
"Credit Facility" means collectively the IBMCC Working Capital Line of
Credit, the FINOVA Inventory Line of Credit and any other agreement or
arrangement with a vendor pursuant to which the Company or its Subsidiaries
purchases inventory for resale as such agreements or arrangements may be
amended, modified or supplemented from time to time or deferred, renewed,
extended, refunded, refinanced, restructured or replaced from time to time in
whole or in part, whether with the original parties or other lenders and whether
provided under similar agreements or otherwise and whether prior to, at or
subsequent to the termination or expiration of any such line of credit or other
agreement or arrangement.
"Default" means any event that is, or with the passing of time or giving of
notice or both would be, an Event of Default.
"Depository" means, with respect to the Notes issued in the form of one or
more Global Notes, The Depository Trust Company or another Person designated as
Depository by the Company, which Person must be a clearing agency registered
under the Exchange Act.
"Designated Senior Indebtedness," as to the Company or any Guarantor, as
the case may be, means any Senior Indebtedness or Guarantor Senior Indebtedness,
as the case may be, (i) under the Credit Facility and (ii) in an original
principal amount (or committed availability) of at least $50,000,000 if the
instrument governing the same expressly provides that such Indebtedness is
"Designated Senior Indebtedness" for purposes of the Indenture.
"Disqualified Capital Stock" means any Capital Stock of the Company or a
Restricted Subsidiary which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
maturity date of the Notes, for cash or securities constituting Indebtedness.
Without limiting the foregoing, Disqualified Capital Stock shall be deemed to
include any Pre-
6
ferred Stock of a Restricted Subsidiary. Notwithstanding the above, Preferred
Stock of the Company or any Restricted Subsidiary that is issued with the
benefit of provisions requiring a change of control offer to be made for such
Preferred Stock in the event of a change of control of the Company or such
Restricted Subsidiary, which provisions have substantially the same effect as
the provisions of Section 4.16, shall not be deemed to be Disqualified Capital
Stock solely by virtue of such provisions.
"domestic," with respect to any Person, shall mean a Person whose
jurisdiction of incorporation or formation is the United States, any state
thereof or the District of Columbia.
"EBITDA" means with respect to any Person, for any period, an amount equal
to (a) the sum of (i) Consolidated Net Income for such period, plus (ii) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof,
plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation
for such period on a consolidated basis, plus (v) amortization of intangibles
for such period on a consolidated basis, plus (vi) any other non-cash items
reducing Consolidated Net Income for such period minus (b) all non-cash items
increasing Consolidated Net Income for such period, all for such Person and its
Subsidiaries determined in accordance with GAAP.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC thereunder.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith.
"FINOVA Inventory Line of Credit" means the Dealer Loan and Security
Agreement, dated as of April 25, 1995, by and between FINOVA Capital Corporation
and the Company as amended, restated or supplemented from time to time.
"Fixed Charge Coverage Ratio" of any Person means, with respect to any
determination date, the ratio of (i) EBITDA for such Person's last four full
fiscal quarters for which financial statements are available to (ii)
Consolidated Fixed Charges of such Person for such period.
7
"foreign," with respect to any Person, shall mean a Person whose
jurisdiction of incorporation or formation is other than the United States, any
state thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles consistently applied
as in effect in the United States from time to time.
"Guarantee" means a guarantee of the Notes by a Guarantor pursuant to the
terms of Section 10 hereof.
"Guarantor" means (i) each of ENTEX Information Services of Michigan, Inc.,
a Michigan corporation, ENTEX Information Services of Colorado, Inc., a Colorado
corporation, ENTEX Services, Inc., a Delaware corporation, Erlanger Land Co.,
Inc., a Delaware corporation, FCP Technologies, Inc., a Delaware corporation and
(ii) each Restricted Subsidiary of the Company that hereafter becomes a
Guarantor pursuant to Section 4.13, and "Guarantors" means such entities,
collectively.
"Guarantor Senior Indebtedness" means, with respect to any Guarantor, the
principal of and premium, if any, and interest (including, without limitation,
interest accruing or that would have accrued but for the filing of a bankruptcy,
reorganization or other insolvency proceeding whether or not such interest
constitutes an allowable claim in such proceeding) on, and any and all other
fees, expense reimbursement obligations and other amounts due pursuant to the
terms of all agreements, documents and instruments providing for, creating,
securing or evidencing or otherwise entered into in connection with, (a) all
Indebtedness and other obligations of such Guarantor under the Credit Facility,
(b) all obligations of such Guarantor with respect to any Interest Rate
Agreement, (c) all obligations of such Guarantor to reimburse any bank or other
Person in respect of amounts paid under letters of credit, acceptances or other
similar instruments, (d) all other Indebtedness of such Guarantor which does not
provide that it is to rank pari passu with or subordinate to the Guarantee of
such Guarantor and (e) all deferrals, renewals, extensions and refundings of,
and amendments, modifications and supplements to, any of the Guarantor Senior
Indebtedness described above. Notwithstanding anything to the contrary in the
foregoing, Guarantor Senior Indebtedness will not include (i) Indebtedness of
such Guarantor to any Restricted Subsidiary, (ii) Indebtedness represented by
the Guarantee of such Guarantor, (iii) any Indebtedness which by the express
terms of the agreement or instrument creating, evidencing or governing the same
is junior or subordinate in right of payment to any item of Guarantor Senior
Indebtedness, (iv) other than obligations referred to in clause (a) above, any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary
8
course of business, or (v) Indebtedness (other than that described in clause (a)
above) incurred in violation of the Indenture.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"IBMCC" means IBM Credit Corporation.
"IBMCC Working Capital Line of Credit" means the Fourth Amended and
Restated Agreement for wholesale financing, dated as of September 15, 1995, by
and between IBMCC and the Company, as amended, restated or supplemented from
time to time.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or other obligation on the balance sheet of such Person (and
"incurrence," "incurred," "incurrable," and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any Person, any
indebtedness at any time outstanding, secured or unsecured, contingent or
otherwise, which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments or
representing the balance deferred and unpaid of the purchase price of any
Property (excluding, without limitation, any balances that constitute accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and shall also include, to the extent not otherwise included (i) any
Capitalized Lease Obligations, (ii) obligations secured by a lien to which the
property or assets owned or held by such Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed (provided,
however, that if such obligation or obligations shall not have been assumed, the
amount of such indebtedness shall be deemed to be the lesser of the principal
amount of the obligation or the fair market value of the pledged property or
assets), (iii) guarantees of items of other Persons which would be included
within this definition for such other Persons (whether or not such items would
appear upon the balance sheet of the guarantor), (iv) all obligations for the
9
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (provided that in the case of any such letters of
credit, the items for which such letters of credit provide credit support are
those of other Persons which would be included within this definition for such
other Persons), (v) Disqualified Capital Stock of such Person or, in the case of
the Company, any Restricted Subsidiary, and (vi) obligations of any such Person
under any Interest Rate Agreement applicable to any of the foregoing (if and to
the extent such Interest Rate Agreement obligations would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP). The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided (i) that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the principal amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP and (ii) that Indebtedness shall not
include any liability for federal, state, local or other taxes. Notwithstanding
any other provision of the foregoing definition, any trade payable arising from
the purchase of goods or materials or for services obtained in the ordinary
course of business shall not be deemed to be "Indebtedness" of the Company or
any Restricted Subsidiaries for purposes of this definition. Furthermore,
guarantees of (or obligations with respect to letters of credit supporting)
Indebtedness otherwise included in the determination of such amount shall not
also be included.
"Indenture" means this Indenture as amended, restated or supplemented from
time to time.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
promulgated under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Rate Agreement" means, with respect to any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement designed to protect the party indicated therein
against fluctuations in interest rates.
"Investments" means, directly or indirectly, any advance, account
receivable (other than an account receivable arising in the ordinary course of
business or acquired as part of
10
the assets acquired by the Company in connection with an acquisition of assets
which is otherwise permitted by the terms of this Indenture), loan or capital
contribution to (by means of transfers of Property to others, payments for
Property or services for the account or use of others or otherwise), the
purchase of any stock, bonds, notes, debentures, partnership or joint venture
interests or other securities of, the acquisition, by purchase or otherwise, of
all or substantially all of the business or assets or stock or other evidence of
beneficial ownership of, any Person or the making of any investment in any
Person. Investments shall exclude (i) extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices and (ii) the purchase
of securities of any Person by such Person.
"Issue Date" means the date the Notes are first issued by the Company and
authenticated by the Trustee under this Indenture.
"Junior Subordinated Debenture" means the 5 1/2% Convertible Subordinated
Debentures Due 2007 of the Company.
"Lien" means, with respect to any Property or assets of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property or assets (including,
without limitation, any Capitalized Lease Obligation, conditional sales or other
title retention agreement having substantially the same economic effect as any
of the foregoing).
"Maturity Date" means August 1, 2006.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Income" means, with respect to any Person, for any period, the net
income (loss) of such Person determined in accordance with GAAP.
"Net Investment" means the excess of (i) the aggregate amount of all
Investments in Unrestricted Subsidiaries or joint ventures made by the Company
or any Restricted Subsidiary on or after the Issue Date (in the case of an
Investment made other than in cash, the amount shall be the fair market value of
such Investment) over (ii) the sum of (A) the aggregate amount returned in cash
on or with respect to such Investments whether through interest payment,
principal payments, dividends or other distributions and (B) the net cash
proceeds received by the Company or any Restricted Subsidiary from the
disposition of all or any portion of such Investments (other than to a
Restricted Subsidiary of the Company); provided, however, that with respect
11
to all Investments made in an Unrestricted Subsidiary, the sum of clauses (A)
and (B) above with respect to such Investment shall not exceed the aggregate
amount of all such Investments made in such Unrestricted Subsidiary.
"Net Proceeds" means (a) in the case of any sale of Capital Stock by the
Company, the aggregate net proceeds received by the Company, after payment of
expenses, commissions and the like incurred in connection therewith, whether
such proceeds are in cash or in Property (valued at the fair market value
thereof at the time of receipt) and (b) in the case of any exchange, exercise,
conversion or surrender of outstanding securities of any kind for or into shares
of Capital Stock of the Company which is not Disqualified Capital Stock, the net
book value of such outstanding securities on the date of such exchange,
exercise, conversion or surrender (plus any additional amount required to be
paid by the holder to the Company upon such exchange, exercise, conversion or
surrender, less any and all payments made to the holders, e.g., on account of
fractional shares and less all expenses incurred by the Company in connection
therewith).
"Non-Payment Event of Default" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" means a person who is not a U.S. person, as defined in
Regulation S.
"Notes" means the securities that are issued under this Indenture, as
amended or supplemented from time to time pursuant to this Indenture.
"Obligations" means, with respect to any Indebtedness, any principal,
premium, interest, penalties, fees, indemnifications, reimbursements, damages
and other expenses payable under the documentation governing such Indebtedness.
"Offering" means the offering of the Notes as described in the Offering
Memorandum.
"Offering Memorandum" means the Offering Memorandum dated July 24, 1998
pursuant to which the Notes issued on the Issue Date were offered.
"Officer" means the Chairman of the Board, the Chief Executive Officer, the
President, any Executive Vice President, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, Controller, Secretary or any Vice-President
of the Company or any Subsidiary, as the case may be.
12
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the principal executive officer, principal financial officer,
treasurer or principal accounting officer of the Company.
"Opinion of Counsel" means a written opinion from legal counsel which
counsel is reasonably acceptable to the Trustee.
"Payment Default" means any default, whether or not any requirement for the
giving of notice, the lapse of time or both, or any other condition to such
default becoming an Event of Default has occurred, in the payment of principal
of (or premium, if any) or interest on or any other amount payable in connection
with any Designated Senior Indebtedness.
"Permitted Holders" means (i) Dort X. Xxxxxxx III, (ii) Xx. Xxxxxxx'x
spouse, children or other lineal descendants, the spouses of any of the
foregoing and any probate estate of any such individual and any trust, so long
as one or more of the foregoing individuals are the principal beneficiaries of
such trust and (iii) any Affiliate of any of the foregoing.
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Restricted Subsidiary arising
under or in connection with the Credit Facility in an amount not to exceed
the greater of (a) $440,000,000 less any mandatory prepayments actually
made thereunder (to the extent, in the case of payments of revolving credit
indebtedness, that the corresponding commitments have been permanently
reduced) or scheduled payments actually made thereunder or (b) the sum of
(x) 85% of consolidated accounts receivable of the Company and the
Restricted Subsidiaries and (y) 75% of consolidated inventory of the
Company and the Restricted Subsidiaries;
(ii) Indebtedness under the Notes and the Guarantees;
(iii) Indebtedness not covered by any other clause of this definition
which is outstanding on the date of this Indenture;
(iv) Indebtedness of the Company to any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary to the Company or another
Restricted Subsidiary provided that any Indebtedness of the Company and of
any Guarantor to any foreign Restricted Subsidiary is subordinated,
pursuant to a written agreement, to the Company's or such Guarantor's
obligations under the Indenture and the Notes at least to the same extent
that the Notes and the Guarantees are subor-
13
dinated to Senior Indebtedness and Guarantor Senior Indebtedness,
respectively;
(v) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred by the Company or any Restricted Subsidiary to acquire property in
the ordinary course of business which Purchase Money Indebtedness and
Capitalized Lease Obligations do not in the aggregate exceed $15,000,000 at
any time outstanding;
(vi) Interest Rate Agreements;
(vii) additional Indebtedness of the Company and the Restricted
Subsidiaries not to exceed $10,000,000 in principal amount outstanding at
any time;
(viii) additional Indebtedness of the Company or any Restricted
Subsidiary from the state of Ohio not to exceed $10,000,000 in principal
amount; and
(ix) Refinancing Indebtedness.
"Permitted Investments" means, for any Person, Investments made on or after
the Issue Date consisting of:
(i) Investments by the Company, or by a Restricted Subsidiary, in the
Company or a Restricted Subsidiary;
(ii) Temporary Cash Investments;
(iii) Investments by the Company, or by a Restricted Subsidiary, in a
Person, if as a result of such Investment (a) such Person becomes a
Restricted Subsidiary 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;
(iv) reasonable and customary loans made to employees in connection
with their relocation;
(v) an Investment that is made by the Company or a Restricted
Subsidiary in the form of any stock, bonds, notes, debentures, partnership
or joint venture interests or other securities that are issued by a third
party to the Company or such Restricted Subsidiary solely as partial
consideration for the consummation of an Asset Sale that is otherwise
permitted under Section 4.09; and
(vi) other Investments that do not exceed $15,000,000 at any time
outstanding (which amount, in the case of Investments made under this
clause (vi) in Unre-
14
stricted Subsidiaries and joint ventures, shall be determined based on the
Net Investment in such Unrestricted Subsidiaries and joint ventures).
"Permitted Junior Securities" means debt or equity securities of the
Company or any Guarantor, as the case may be, or any successor corporation
provided for by a plan of reorganization or readjustment that are subordinated
to the Notes or the Guarantee of such Guarantor, as the case may be, to the same
extent that the Notes and the Guarantees are subordinated to the payment of all
Senior Indebtedness or Guarantor Senior Indebtedness of such Guarantor, as the
case may be.
"Permitted Liens" means (i) Liens on Property or assets of, or any shares
of stock of or secured debt of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary of the Company or at the time such
corporation is merged into the Company or any Restricted Subsidiary; provided
that such Liens are not incurred in connection with, or in contemplation of,
such corporation becoming a Restricted Subsidiary of the Company or merging into
the Company or any Restricted Subsidiary, (ii) Liens securing Refinancing
Indebtedness; provided that any such Lien on subordinated Indebtedness does not
extend to or cover any Property, shares or debt other than the Property, shares
or debt securing the Indebtedness so refunded, refinanced or extended, (iii)
Liens in favor of the Company or any Restricted Subsidiary, (iv) Liens securing
industrial revenue bonds, (v) Liens to secure Purchase Money Indebtedness that
is otherwise permitted under this Indenture, provided that (a) any such Lien is
created solely for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost (including sales and excise
taxes, installation and delivery charges and other direct costs of, and other
direct expenses paid or charged in connection with, such purchase or
construction) of such Property and (b) such Lien does not extend to or cover any
Property other than such item of Property and any improvements on such item,
(vi) statutory liens or landlords', carriers', warehousemen's, mechanics',
suppliers', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which do not secure any Indebtedness and with
respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings, if a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor, (vii)
other Liens securing obligations incurred in the ordinary course of business
which obligations do not exceed $10,000,000 in the aggregate at any one time
outstanding, (viii) Liens securing Interest Rate Agreements, (ix) Liens securing
reimbursement obligations with respect to letters of credit that encumber
documents and other Property, relating to such letters of credit and the
products and proceeds thereof, (x) any extensions, substitutions, replacements
or renewals of the foregoing, (xi) Liens for taxes, assessments or governmental
15
charges that are being contested in good faith by appropriate proceedings, (xii)
Liens under the Credit Facility and (xiii) Liens securing Capital Lease
Obligations permitted to be incurred under clause (v) of the definition of
"Permitted Indebtedness," provided that such Lien does not extend to any
Property other than that subject to the underlying lease.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government (including any agency or political subdivision thereof).
"Physical Notes" means certificated Notes in registered form in
substantially the form set forth in Exhibit A.
"Preferred Stock" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth on Exhibit B.
"Product Business" means the procurement of personal computer hardware,
software and peripherals and related services.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person and its Subsidiaries under
GAAP.
"Public Equity Offering" means any underwritten public offering by the
Company of shares of its common stock (however designated and whether voting or
non-voting) and any and all rights, warrants or options to acquire such common
stock pursuant to an effective registration statement filed with the SEC in
accordance with the Securities Act.
"Purchase Money Indebtedness" means any Indebtedness incurred by a Person
to finance the cost (including the cost of construction) of an item of Property,
the principal amount of which Indebtedness does not exceed the sum of (i) 100%
of such cost and (ii) reasonable fees and expenses of such Person incurred in
connection therewith.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified
in Rule 144A promulgated under the Securities Act.
16
"Redemption Date" when used with respect to any Note to be redeemed means
the date fixed for such redemption pursuant to this Indenture.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances or
extends any Indebtedness of the Company outstanding on the Issue Date or other
Indebtedness permitted to be incurred by the Company or the Restricted
Subsidiaries pursuant to the terms of the Indenture, but only to the extent that
(i) the Refinancing Indebtedness is subordinated to the Notes to at least the
same extent as the Indebtedness being refunded, refinanced or extended, if at
all, (b) the Refinancing Indebtedness is scheduled to mature either (a) no
earlier than the Indebtedness being refunded, refinanced or extended, or (b)
after the maturity date of the Notes, (iii) the portion, if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the maturity
date of the Notes has a weighted average life to maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the
weighted average life to maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or prior to the
maturity date of the Notes, (iv) such Refinancing Indebtedness is in an
aggregate principal amount that is equal to or less than the sum of (a) the
aggregate principal amount then outstanding under the Indebtedness being
refunded, refinanced or extended, (b) the amount of accrued and unpaid interest,
if any, and premiums owed, if any, not in excess of preexisting prepayment
provisions on such Indebtedness being refunded, refinanced or extended, plus the
amount of any premium required to be paid in connection with such refinancing
pursuant to the terms of the Indebtedness refinanced or the amount of any
premium reasonably determined by the Company as necessary to accomplish such
refinancing by means of a tender offer or privately negotiated repurchase and
(c) the amount of customary fees, expenses and costs related to the incurrence
of such Refinancing Indebtedness, and (v) such Refinancing Indebtedness is
incurred by the same Person that initially incurred the Indebtedness being
refunded, refinanced or extended, except that the Company or a Guarantor may
incur Refinancing Indebtedness to refund, refinance or extend Indebtedness of
any Restricted Subsidiary of the Company.
"Registration Rights Agreement" means the Registration Rights Agreement
dated the Issue Date among the Company, the Guarantors, and CIBC Xxxxxxxxxxx
Corp. and Lazard Freres & Co. LLC, as Initial Purchasers, as amended, restated
or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
17
"Restricted Payment" means any of the following: (i) the declaration or
payment of any dividend or any other distribution or payment on Capital Stock of
the Company or any Restricted Subsidiary or any payment made to the direct or
indirect holders (in their capacities as such) of Capital Stock of the Company
or any Restricted Subsidiary of the Company (other than (x) dividends or
distributions payable solely in Capital Stock (other than Disqualified Capital
Stock), and (y) in the case of Restricted Subsidiaries, dividends or
distributions payable to the Company or to a Wholly Owned Subsidiary of the
Company); (ii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company or any Restricted Subsidiary (other
than Capital Stock owned by the Company or a Wholly Owned Subsidiary of the
Company); (iii) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, of any Indebtedness which is subordinated in right of payment to the
Notes other than subordinated Indebtedness acquired in anticipation of
satisfying a scheduled sinking fund obligation, principal installment or final
maturity (in each case due within one year of the date of acquisition); (iv) the
making of any Investment in any Person other than a Permitted Investment; and
(v) forgiveness of any Indebtedness of an Affiliate of the Company to the
Company or a Restricted Subsidiary; provided, however, that the term "Restricted
Payment" does not include the declaration or payment of any dividend or any
other distribution or payment on Capital Stock of any Restricted Subsidiary
provided such dividends or other distributions or payments are made to the
Company (or a Restricted Subsidiary) on a pro rata basis (and in like form) to
all dividends or other distributions or payments so made to all other
shareholders thereof, to the extent the Company or a Restricted Subsidiary owns
shares of such series of Capital Stock. For purposes of determining the amount
expended for Restricted Payments, cash distributed or invested shall be valued
at the face amount thereof and Property other than cash shall be valued at its
fair market value.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
promulgated under the Securities Act; provided that the Trustee shall be
entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Note is a Restricted Security.
"Restricted Subsidiary" means a Subsidiary of the Company other than an
Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date. The Board of Directors of the Company may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having
18
been incurred at the time of such action), the Company could have incurred at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 4.06.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"S&P" means Standard & Poor's Ratings Service, a division of McGraw Hill,
Inc., and its successors.
"SEC" means the United States Securities and Exchange Commission as
constituted from time to time or any successor performing substantially the same
functions.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder.
"Senior Indebtedness" means the principal of and premium, if any, and
interest (including, without limitation, interest accruing or that would have
accrued but for the filing of a bankruptcy, reorganization or other insolvency
proceeding whether or not such interest constitutes an allowable claim in such
proceeding) on, and any and all other fees, expense reimbursement obligations
and other amounts due pursuant to the terms of all agreements, documents and
instruments providing for, creating, securing or evidencing or otherwise entered
into in connection with (a) all Indebtedness and other obligations of the
Company owed to lenders under the Credit Facility, (b) all obligations of the
Company with respect to any Interest Rate Agreement, (c) all obligations of the
Company to reimburse any bank or other Person in respect of amounts paid under
letters of credit, acceptances or other similar instruments, (d) all other
Indebtedness of the Company which does not provide that it is to rank pari passu
with or subordinate to the Notes and (e) all deferrals, renewals, extensions and
refundings of, and amendments, modifications and supplements to, any of the
Senior Indebtedness described above. Notwithstanding anything to the contrary in
the foregoing, Senior Indebtedness will not include (i) Indebtedness of the
Company to any Restricted Subsidiary, (ii) Indebtedness represented by the
Notes, (iii) any Indebtedness which by the express terms of the agreement or
instrument creating, evidencing or governing the same is junior or subordinate
in right of payment to any item of Senior Indebtedness, (iv) other than
obligations referred to in clause (a) above, any trade payable arising from the
purchase of goods or materials or for services obtained in the ordinary course
of business, or (v) Indebtedness (other than that described in clause (a) above)
incurred in violation of the Indenture.
19
"Significant Subsidiary" means any Restricted Subsidiary which would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act and the Exchange Act, as in effect on
the Issue Date.
"Subsidiary" of any specified Person means any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which more
than 50% of the total voting power of the Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
officers or trustees thereof is held by such first-named Person or any of its
Subsidiaries; or (ii) in the case of a partnership, joint venture, association
or other business entity, with respect to which such first-named Person or any
of its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the first-named Person for
financial statement purposes.
"Temporary Cash Investments" means (i) Investments in marketable, direct
obligations issued or guaranteed by the United States of America, or of any
governmental agency or political subdivision thereof, maturing within 365 days
of the date of purchase, (ii) Investments in United States dollar denominated
time deposits and United States dollar denominated certificates of deposit
(including Eurodollar time deposits and certificates of deposit) maturing within
365 days of the date of purchase thereof issued by any United States or Canadian
national, provincial or state (including the District of Columbia) banking
institution having capital, surplus and undivided profits aggregating at least
$250,000,000, or by any British, French, German, Japanese or Swiss national
banking institution having capital, surplus and undivided profits aggregating at
least $1,000,000,000, in each case that is (a) rated at least "A" by S&P or at
least "A-2" by Xxxxx'x, or (b) that is a party to the Credit Facility, (iii)
Investments in commercial paper maturing within 270 days after the issuance
thereof that has the highest credit rating of either of such rating agencies,
(iv) Investments in readily marketable direct obligations issued by any state of
the United States of America or any political subdivision thereof having the
highest rating obtainable from either of such rating agencies, (v) Investments
in tax exempted and tax advantaged instruments including, without limitation,
municipal bonds, commercial paper, auction rate preferred stock and variable
rate demand obligations with the highest short-term ratings by either of such
rating agencies or a long-term debt rating of AAA from S&P, (vi) Investments in
repurchase agreements and reverse repurchase agreements with institutions
described in clause (ii) above that are fully secured by obligations described
in clause
20
(i) above and (vii) Investments not exceeding 365 days in duration in money
market funds that invest substantially all of such funds' assets in the
Investments described in the preceding clauses (i) through (v).
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S. Code
xx.xx. 77aaa-77bbbb), as in effect on the date of this Indenture (except as
provided in Section 8.03 hereof).
"Triggering Default Event" means a Default or Event of Default described in
clauses (1), (2), (4), (5) or (6) under Section 6.01 or any breach or violation
under Sections 4.06 through 4.12 inclusive, Section 4.14, 4.16, 4.18 or Section
5.01.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer trust accounts.
"Trustee" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means the successor.
"Unrestricted Subsidiary" means (a) any Subsidiary of an Unrestricted
Subsidiary and (b) any Subsidiary of the Company which is classified after the
Issue Date as an Unrestricted Subsidiary by a resolution adopted by the Board of
Directors of the Company; provided that a Subsidiary organized or acquired after
the Issue Date may be so classified as an Unrestricted Subsidiary only if such
classification is in compliance with Section 4.08. The Trustee shall be given
prompt notice by the Company of each resolution adopted by the Board of
Directors of the Company under this provision, together with a copy of each such
resolution adopted.
"U.S. Government Obligations" means (a) securities that are direct
obligations of the United States of America for the payment of which its full
faith and credit are pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or a specific
21
payment of principal or interest on any such U.S. Government Obligation held by
such custodian for the account of the holder of such depository receipt.
"Wholly Owned Subsidiary" means any Restricted Subsidiary all of the
outstanding Capital Stock (other than directors' qualifying shares) of which is
owned, directly or indirectly, by the Company.
SECTION 1.02. Other Definitions
The definitions of the following terms may be found in the sections
indicated as follows:
Term Defined in Section
---- ------------------
"Acquisition" 4.06
"Affiliate Transaction" 4.10
"Agent Members" 2.14
"Authorized Person" 11.03
"Bankruptcy Law" 6.01
"Business Day" 12.08
"CEDEL" 2.14
"Change of Control Offer" 4.16
"Change of Control Payment Date" 4.16
"Covenant Defeasance" 9.03
"Custodian" 6.01
"Euroclear" 2.14
"Event of Default" 6.01
"Excess Proceeds Offer" 4.09
"Global Notes" 2.14
"Initial Blockage Period" 11.03
"Legal Defeasance" 9.02
"Legal Holiday" 12.08
"Offer Period" 4.09
"Paying Agent" 2.03
"Payment Blockage Period" 11.03
"Purchase Date" 4.09
"Registrar" 2.03
"Reinvestment Date" 4.09
"Regulation S Global Note" 2.14
"Regulation S Notes" 2.01
"Restricted Global Note" 2.14
"Restricted Period" 2.14
"Rule 144A Notes" 2.01
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act
Whenever this Indenture refers to a provision of the TIA, the portion of
such provision required to be incorporated herein in order for this Indenture to
be qualified under the TIA
22
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Notes.
"indenture securityholder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor on the indenture securities" means the Company, the Guarantors or
any other obligor on the Notes.
All other terms used in this Indenture that are defined by the TIA, defined
in the TIA by reference to another statute or defined by SEC rule have the
meanings therein assigned to them.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein, whether defined
expressly or by reference;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) words used herein implying any gender shall apply to every gender;
and
(6) for purposes of Article 4, the financial and other provisions of
any definitions provided in this Article 1, when used with respect to the
Company, shall be determined on a consolidated basis with respect to the
Company and the Restricted Subsidiaries only.
23
ARTICLE 2
THE NOTES
SECTION 2.01. Dating; Incorporation of Form in Indenture
The Notes and the Trustee's certificate of authentication with respect
thereto shall be substantially in the form set forth in Exhibit A, which is
incorporated in and forms a part of this Indenture. The Notes may have
notations, legends or endorsements required by law, rule or usage to which the
Company is subject. Any such notations, legends or endorsements shall be
furnished to the Trustee in writing. Without limiting the generality of the
foregoing, Notes offered and sold to Qualified Institutional Buyers in reliance
on Rule 144A ("Rule 144A Notes") shall bear the legend and include the form of
assignment set forth in Exhibit B and Notes offered and sold in offshore
transactions in reliance on Regulation S ("Regulation S Notes") shall bear the
legend and include the form of assignment set forth in Exhibit C. Each Note
shall be dated the date of its authentication.
The terms and provisions contained in the Notes shall constitute, and are
expressly made, a part of this Indenture and, to the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and agree to be bound thereby.
The Notes may be presented for registration of transfer and exchange at the
offices of the Registrar in the Borough of Manhattan, The City of New York,
State of New York.
SECTION 2.02. Execution and Authentication
The Notes shall be executed on behalf of the Company by two Officers of the
Company or an Officer and an Assistant Secretary of the Company. Such signature
may be either manual or facsimile. The Company's seal shall be impressed,
affixed, imprinted or reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until the Trustee manually signs the certificate
of authentication on the Note. Such signature shall be conclusive evidence that
the Note has been authenticated under this Indenture.
The Trustee or an authenticating agent shall authenticate Notes for
original issue in the aggregate principal amount
24
of $100,000,000 upon a Company Request. The aggregate principal amount of Notes
outstanding at any time may not exceed such amount except as provided in Section
2.07 hereof. Upon receipt of a Company Request, the Trustee shall authenticate
an additional series of Notes in an aggregate principal amount not to exceed
$100,000,000 for issuance in exchange for Notes tendered for exchange pursuant
to an exchange offer registered under the Securities Act or pursuant to a
Private Exchange (as defined in the Registration Rights Agreement). Exchange
Notes may have such distinctive series designation and such changes in the form
thereof as are specified in the Company Request referred to in the preceding
sentence. The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and integral multiples thereof.
The Trustee may appoint an authenticating agent 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 right as an
Agent to deal with the Company or an Affiliate.
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"), an office or agency
located in the Borough of Manhattan, City of New York, State of New York where
Notes may be presented for payment ("Paying Agent") and an office or agency
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may have one or more
co-registrars and one or more additional paying agents. Neither the Company nor
any of its Affiliates may act as Paying Agent. The Company may change any Paying
Agent, Registrar or co-registrar without notice to any Noteholder.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee of the name and address of any such Agent. If
the Company fails to maintain a Registrar or Paying Agent, or agent for service
of notices and demands, or fails to give the foregoing notice, the Trustee shall
act as such. The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of notices and demands in connection with the Notes.
25
SECTION 2.04. Paying Agent to Hold Money in Trust
On or before each due date of the principal of and interest on any Notes,
the Company shall deposit with the Paying Agent a sum sufficient to pay such
principal and interest so becoming due. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and the Trustee may at
any time during the continuance of any Payment Default, upon written request to
a Paying Agent, require such Paying Agent to forthwith pay to the Trustee all
sums so held in trust by such Paying Agent together with a complete accounting
of such sums. Upon doing so, the Paying Agent shall have no further liability
for the money.
SECTION 2.05. Noteholder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee on or before each January 15 and July 15 in each year, 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
Noteholders.
SECTION 2.06. Transfer and Exchange
Subject to Sections 2.14 and 2.15, when a Note is presented to the
Registrar with a request to register the transfer thereof, the Registrar shall
register the transfer as requested if the requirements of applicable law are met
and, when Notes are presented to the Registrar with a request to exchange them
for an equal principal amount of Notes of other authorized denominations, the
Registrar shall make the exchange as requested provided that every Note
presented or surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit transfers and
exchanges, upon surrender of any Note for registration of transfer at the office
or agency maintained pursuant to Section 2.03 hereof, the Company shall execute
and the Trustee shall authenticate Notes at the Registrar's written request. Any
exchange or transfer shall be without charge, except that the Company may
require payment by the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation to a transfer or exchange,
but this provision shall not apply to any exchange pursuant to Sections 2.09,
3.06 or 8.05 hereof. The Trustee shall not be required to register transfers of
Notes or to exchange Notes for a period of 15 days before selection of any Notes
to be redeemed. The Trustee shall not be required to exchange or register
transfers of any Notes called or
26
being called for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of the beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
Each Holder of a Note agrees to indemnify the Company and the Trustee
against any liability that may result from the transfer, exchange or assignment
of such Holders' Note in violation of any provision of this Indenture and/or
applicable U.S., Federal or state securities law.
SECTION 2.07. Replacement Notes
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note presents evidence to the satisfaction of the Company and the Trustee that
the Note has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Note if the Trustee's
requirements are met. An indemnity bond may be required by the Company or the
Trustee that is sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. In every case of destruction, loss or theft,
the applicant shall also furnish to the Company and to the Trustee evidence to
their satisfaction of the destruction, loss or the theft of such Note and the
ownership thereof. The Company and the Trustee may charge for its expenses in
replacing a Note, including reasonable fees and expenses of counsel. Every
replacement Note is an additional obligation of the Company.
SECTION 2.08. Outstanding Notes
Notes outstanding at any time are all Notes authenticated by the Trustee
except for those cancelled by it, those delivered to it for cancellation, and
those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding
until the Company and the Trustee receive proof satisfactory to each of them
that the replaced Note is held by a bona fide purchaser.
If a Paying Agent holds on a Redemption Date or Maturity Date money
sufficient to pay the principal of, premium, if any, and accrued interest on
Notes payable on that date, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
27
Subject to Section 12.06, a Note does not cease to be outstanding solely
because the Company or an Affiliate holds the Note.
SECTION 2.09. Temporary Notes
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form, and shall carry all rights, of definitive Notes but
may have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes presented to it.
SECTION 2.10. Cancellation
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee shall cancel
and destroy or return to the Company in accordance with its normal practice, all
Notes surrendered for transfer, exchange, payment or cancellation unless the
Company instructs the Trustee in writing to deliver the Notes to the Company.
Subject to Section 2.07 hereof, the Company may not issue new Notes to replace
Notes in respect of which it has previously paid all principal, premium and
interest accrued thereon, or delivered to the Trustee for cancellation. If the
Company or any Guarantor shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the Indebtedness represented by
such Notes unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.10.
SECTION 2.11. Defaulted Interest
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted amounts, plus any interest payable on defaulted amounts pursuant
to Section 4.01 hereof, to the Persons who are Noteholders on a subsequent
special record date. The Company shall fix the special record date and payment
date in a manner satisfactory to the Trustee and provide the Trustee at least 20
days notice of the proposed amount of default interest to be paid and the
special payment date. At least 15 days before the special record date, the
Company shall mail or cause to be mailed to each Noteholder at his address as it
appears on the register maintained by the Registrar a notice that states the
special record date, the payment date, and the amount to be paid. In lieu of the
foregoing procedures, the Company may pay defaulted interest in any other lawful
manner satisfactory to the Trustee.
28
SECTION 2.12. Deposit of Moneys
Prior to 11:00 a.m., New York City time, on each Interest Payment Date and
on the Maturity Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Trustee to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be. The principal and
interest on Global Notes shall be payable to the Depository or its nominee, as
the case may be, as the sole registered owner and the sole holder of the Global
Notes represented thereby. The principal and interest on Notes in certificated
form shall be payable at the office of the Paying Agent.
SECTION 2.13. CUSIP Number
The Company in issuing the Notes may use one or more "CUSIP" numbers, and
if so, the Trustee shall use the appropriate CUSIP number(s) in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number(s) printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes.
SECTION 2.14. Book-Entry Provisions for Global Notes
(a) Rule 144A Notes initially shall be represented by one or more Notes in
registered, global form without interest coupons (collectively, the "Restricted
Global Note"). Regulation S Notes initially shall be represented by one or more
Notes in registered, global form without interest coupons (collectively, the
"Regulation S Global Note," and, together with the Restricted Global Note and
any other global notes representing Notes, the "Global Notes"). The Global Notes
initially shall (i) be registered in the name of the Depository or the nominee
of such Depository, in each case for credit to an account of an Agent Member
(or, in the case of the Regulation S Global Note, Agent Members of the
Depository holding for the Euroclear System ("Euroclear") and Cedel Bank,
societe anonyme ("CEDEL")), (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear legends as set forth in Exhibit D.
Members of, or participants in, the Depository ("Agent Members") shall have
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depository, or the Trustee as its custodian, or under the Global
Note, and the Depository may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Note for
all purposes whatsoever. Notwithstanding the
29
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.
(b) Transfers of Global Notes shall be limited to transfer in whole, but
not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depository and the provisions of Section 2.15. In addition, a Global Note shall
be exchangeable for Physical Notes if (i) the Depository (x) notifies the
Company that it is unwilling or unable to continue as depository for such Global
Note and the Company thereupon fails to appoint a successor depository within 90
days of such notice or (y) has ceased to be a clearing agency registered under
the Exchange Act and the Company thereupon fails to appoint a successor
depository within 90 days of such notice or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of such
Physical Notes. In all cases, Physical Notes delivered in exchange for any
Global Note or beneficial interests therein shall be registered in the names,
and issued in any approved denominations, requested by or on behalf of the
Depository (in accordance with its customary procedures).
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall upon receipt of a written order from the
Company authenticate and make available for delivery, one or more Physical Notes
of like tenor and amount.
(d) In connection with the transfer of Global Notes as an entirety to
beneficial owners pursuant to paragraph (b), the Global Notes shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in writing in exchange for its beneficial interest
in the Global Notes, an equal aggregate principal amount of Physical Notes of
authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in a Global Note pursuant to paragraph (b), (c) or (d)
shall, except as otherwise
30
provided by paragraphs (a)(i)(x) and (c) of Section 2.15, bear the Private
Placement Legend or, in the case of the Regulation S Global Note, the legend set
forth in Exhibit C, in each case, unless the Company determines otherwise in
compliance with law.
(f) On or prior to the 40th day after the later of the commencement of the
offering of the Notes represented by a Regulation S Global Note and the original
issue date of such Notes (such period through and including such 40th day, the
"Restricted Period"), a beneficial interest in the Regulation S Global Note may
be held only through Euroclear or CEDEL, as indirect participants in the
Depository, unless transferred to a Person who takes delivery in the form of an
interest in the corresponding Restricted Global Note, only upon receipt by the
Trustee of a written certification from the transferor to be effect that such
transfer is being made (i)(a) to a Person whom the transferor reasonably
believes is a Qualified Institutional Buyer in a transaction meeting the
requirements of Rule 144A or (b) pursuant to another exemption from the
registration requirements under the Securities Act which is accompanied by an
Opinion of Counsel in form reasonably acceptable to the Company and the
Registrar regarding the availability of such exemption and (ii) in accordance
with all applicable securities laws of any state of the United States or any
other jurisdiction.
(g) Beneficial interests in the Restricted Global Note may be transferred
to a Person who takes delivery in the form of an interest in the Regulation S
Global Note, whether before or after the expiration of the Restricted Period,
only if the transferor first delivers to the Trustee a written certificate to
the effect that such transfer is being made in accordance with Rule 903 or 904
of Regulation S or Rule 144 (if available) and that, if such transfer occurs
prior to the expiration of the Restricted Period, the interest transferred will
be held immediately thereafter through Euroclear or CEDEL.
(h) Any beneficial interest in one of the Global Notes that is transferred
to a Person who takes delivery in the form of any interest in another Global
Note shall, upon transfer, cease to be an interest in such Global Note and
become an interest in such other Global Note and, accordingly, shall thereafter
be subject to all transfer restrictions and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(i) The Holder of any Global Note may grant proxies and otherwise authorize
any person, including Agent Members and persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
31
SECTION 2.15. Special Transfer Provisions
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S.
Persons. The following provisions shall apply with respect to the registration
of any proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note constituting
a Restricted Note, whether or not such Note bears the Private Placement
Legend, if (x) the requested transfer is after July 29, 2000 or such other
date as such Note shall be freely transferable under Rule 144 as certified
in an Officers' Certificate or (y)(1) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons), the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit E hereto or (2) in the
case of a transfer to a Non-U.S. Person (including a QIB), the proposed
transferor has delivered to the Registrar a certificate substantially in
the form of Exhibit F hereto; provided that in the case of a transfer of a
Note bearing the Private Placement Legend for a Note not bearing the
Private Placement Legend, the Registrar has received an Officers'
Certificate authorizing such transfer and an Opinion of Counsel in form and
substance reasonably acceptable to the Company and the Registrar stating
that the transfer restrictions contained in the legend are no longer
applicable; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a Global Note, upon receipt by the Registrar of (x)
the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the Registrar's
procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of the applicable Global Note in an amount
equal to the principal amount of the beneficial interest in such Global Note to
be transferred, and (b) (1) in the case of a transferee which is an
Institutional Accredited Investor, the Company shall execute and the Trustee
shall authenticate and make available for delivery one or more Physical Notes of
like tenor and amount and (2) in the case of a transferee which is a Non-U.S.
Person, the Registrar shall reflect on its books and records the date and an
increase in the Regulation S Global Note in an amount equal to the amount
transferred.
32
(b) Transfers to QIBs. The following provisions shall apply with respect to
the registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
such Holder's Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on such Holder's Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) Private Placement Legend. Upon the transfer, exchange or replacement of
Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Securities bearing the Private Placement Legend, the Registrar
shall deliver only Notes that bear the Private Placement Legend unless (i) the
circumstances contemplated by paragraph (a)(i)(x) of this Section 2.15 exist,
(ii) there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or (iii) such Note
has been sold pursuant to
33
an effective registration statement under the Securities Act and the Registrar
has received an Officers' Certificate from the Company to such effect.
(c) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.14 or this Section 2.15. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable notice to the Registrar.
ARTICLE 3
REDEMPTION
SECTION 3.01. Notices to Trustee
If the Company elects to redeem Notes pursuant to paragraph 6 of the Notes
at least 30 days but not more than 60 days prior to the Redemption Date (or such
other period as the Trustee may agree to), the Company shall notify the Trustee
in writing of the Redemption Date, the principal amount of Notes to be redeemed
and the redemption price, and deliver to the Trustee an Officers' Certificate
stating that such redemption will comply with the conditions contained in
Section 3.07 hereof, as appropriate. Any such notice may be cancelled at any
time prior to notice of such redemption being mailed to any Holder and shall
thereafter be void and of no effect.
SECTION 3.02. Selection by Trustee of Notes to Be Redeemed
In the event that fewer than all of the Notes are to be redeemed, the
Trustee shall select the Notes to be redeemed, if the Notes are listed on a
national securities exchange, in accordance with the rules of such exchange or,
if the Notes are not so listed, on either a pro rata basis or by lot, or such
other method as it shall deem fair and equitable; provided, however, that if a
partial redemption is made with the proceeds of a Public Equity Offering,
selection of the Notes or portion thereof for redemption shall be made by the
Trustee on a pro rata basis, unless such a method is prohibited. The Trustee
shall promptly notify the Company of the Notes selected for redemption and, in
the case of any Notes selected for partial redemption, the principal amount
thereof to be redeemed. The Trustee may select for redemption portions of the
principal of the Notes that
34
have denominations larger than $1,000. Notes and portions thereof the Trustee
selects shall be redeemed in amounts of $1,000 or whole multiples of $1,000. For
all purposes of this Indenture unless the context otherwise requires, provisions
of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption
At least 30 days, and no more than 60 days, before a Redemption Date, the
Company shall mail, or cause to be mailed, a notice of redemption by first-class
mail to each Holder of Notes to be redeemed at his or her last address as the
same appears on the registry books maintained by the Registrar pursuant to
Section 2.03 hereof.
The notice shall identify the Notes to be redeemed (including the CUSIP
number(s) thereof) 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 and upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(6) that unless the Company defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date;
(7) the subparagraph of the Notes hereof pursuant to which the Notes
called for redemption are being redeemed; and
(8) the aggregate principal amount of Notes that are being redeemed.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's sole expense.
35
SECTION 3.04. Effect of Notice of Redemption
Once the notice of redemption described in Section 3.03 is mailed, Notes
called for redemption become due and payable on the Redemption Date and at the
redemption price, including any premium, plus interest accrued to the Redemption
Date. Upon surrender to the Paying Agent, such Notes shall be paid at the
redemption price, including any premium, plus interest accrued to the Redemption
Date; provided that if the Redemption Date is after a regular interest payment
record date and on or prior to the Interest Payment Date, the accrued interest
shall be payable to the Holder of the redeemed Notes registered on the relevant
record date; and provided, further, that if a Redemption Date is a Legal
Holiday, payment shall be made on the next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
SECTION 3.05. Deposit of Redemption Price
On or prior to 11:00 A.M., New York City time, on each Redemption Date, the
Company shall deposit with the Paying Agent in immediately available funds money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date other than Notes or portions thereof called for
redemption on that date which have been delivered by the Company to the Trustee
for cancellation.
On and after any Redemption Date, if money sufficient to pay the redemption
price of and accrued interest on Notes called for redemption shall have been
made available in accordance with the preceding paragraph, the Notes called for
redemption will cease to accrue interest and the only right of the Holders of
such Notes will be to receive payment of the redemption price of and, subject to
the first proviso in Section 3.04, accrued and unpaid interest on such Notes to
the Redemption Date. If any Note called for redemption shall not be so paid,
interest will be paid, from the Redemption Date until such redemption payment is
made, on the unpaid principal of the Note and any interest not paid on such
unpaid principal, in each case, at the rate and in the manner provided in the
Notes.
SECTION 3.06. Notes Redeemed in Part
Upon surrender of a Note that is redeemed in part, the Trustee shall
authenticate for a Holder a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
36
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes
The Company shall pay the principal of and interest (including all
Additional Interest as provided in the Registration Rights Agreement) on the
Notes on the dates and in the manner provided in the Notes and this Indenture.
An installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent holds on that date money designated for
and sufficient to pay such installment.
The Company shall pay interest on overdue principal (including
post-petition interest in a proceeding under any Bankruptcy Law), and overdue
interest, to the extent lawful, at the rate specified in the Notes.
SECTION 4.02. SEC Reports
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Trustee and
to the holders of the Notes at the same time it is or would have been required
to file them with the SEC, (i) all annual and quarterly financial information
that would be required to be contained in a filing with the SEC on Forms 10-K
and 10-Q (without exhibits) if the Company were required to file such forms,
including a section entitled "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 independent certified public accountants
and (ii) all current reports that would be required to be filed with the SEC on
Form 8-K (without exhibits) if the Company were required to file such reports.
In addition, whether or not required by the rules and regulations or the SEC,
the Company will file a copy of all such information and reports with the SEC
for public availability (unless the SEC will not accept such a filing). Upon
qualification of this Indenture under the TIA, the Company shall also comply
with the provisions of TIA ss. 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
(b) The Company will, upon request, provide to any Holder of Notes or any
prospective transferee of any such Holder any information concerning the Company
(including financial statements) necessary in order to permit such Holder to
sell or
37
transfer Notes in compliance with Rule 144A under the Securities Act.
SECTION 4.03. Waiver of Stay, Extension or Usury Laws
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead (as a defense or otherwise) or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company from paying all or any portion of the principal of, premium, if any,
and/or interest on the Notes as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 4.04. Compliance Certificate
(a) The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year and on or before 60 days after the end of the first, second
and third quarters of each fiscal year, an Officers' Certificate (one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Company) stating that a review of
the activities of the Company and its Restricted Subsidiaries during such fiscal
year or fiscal quarter, as the case may be, has been made under the supervision
of the signing Officers with a view to determining whether each has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge each has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all or
such Defaults or Events of Default of which he or she may have knowledge and
what action each is taking or proposes to take with respect thereto) and that to
the best of his or her knowledge no event has occurred and remains in existence
by reason of which payments on account of the principal of or interest, if any,
on the Notes is prohibited or if such event has occurred, a description of the
event and what action each is taking or proposes to take with respect thereto.
38
(b) The Company will, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
SECTION 4.05. Taxes
The Company shall, and shall cause each of its Subsidiaries to, pay prior
to delinquency all material taxes, assessments and governmental levies except as
contested in good faith and by appropriate proceedings.
SECTION 4.06. Limitation on Additional Indebtedness
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness); provided, that the Company and any Guarantor may incur
Indebtedness if (i) after giving effect to the incurrence of such Indebtedness
and the receipt and application of the proceeds thereof, the Company's Fixed
Charge Coverage Ratio (determined on a pro forma basis) is at least 2.0 to 1, if
such Indebtedness is incurred on or prior to August 1, 2000, and 2.5 to 1 if
such Indebtedness is incurred thereafter, and (ii) no Triggering Default Event
shall have occurred and be continuing at the time or as a consequence of the
incurrence of such Indebtedness. For purposes of computing the Fixed Charge
Coverage Ratio, (A) if the Indebtedness which is the subject of a determination
under this provision is Acquired Indebtedness, or Indebtedness incurred in
connection with the simultaneous acquisition (by way of merger, consolidation or
otherwise) of any Person, business, property or assets (an "Acquisition") or
Indebtedness of an Unrestricted Subsidiary being designated as a Restricted
Subsidiary, then such ratio shall be determined by giving effect (on a pro forma
basis, as if the transaction or redesignation had occurred at the beginning of
the four-quarter period used to make such calculation) to both the incurrence or
assumption of such Acquired Indebtedness or such other Indebtedness and the
inclusion in the Company's EBITDA of the EBITDA of the acquired Person,
business, property or assets or redesignated Subsidiary, (B) if any Indebtedness
outstanding or to be incurred (x) bears a floating rate of interest, the
interest expense on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account on a pro forma basis any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term as at the date of determination in excess of 12 months), (y) bears, at the
option of the Company or a Restricted Subsidiary, a fixed or floating rate of
interest, the interest expense on such Indebtedness shall be computed by
applying, at
39
the option of the Company or such Restricted Subsidiary, either a fixed or
floating rate and (z) was incurred under a revolving credit facility, the
interest expense on such Indebtedness shall be computed based upon the average
daily balance of such Indebtedness during the applicable period, (C) the Fixed
Charge Coverage Ratio shall not take into account Permitted Indebtedness that is
incurred at the same time as Indebtedness under this paragraph, (D) for any
quarter included in the calculation of such ratio prior to the date that any
Asset Sale was consummated, or that any Indebtedness was incurred, or that any
Acquisition was effected, by the Company or any Restricted Subsidiary, such
calculation shall be made on a pro forma basis, giving effect to each Asset
Sale, incurrence of Indebtedness or Acquisition, as the case may be, and the use
of any proceeds therefrom, as if the same had occurred at the beginning of the
four-quarter period used to make such calculation and (E) for any quarter prior
to the date hereof included in the calculation of such ratio, such calculation
shall be made on a pro forma basis, giving effect to the issuance of the Notes
and the use of the net proceeds therefrom as if the same had occurred at the
beginning of the four-quarter period used to make such calculation.
Notwithstanding the foregoing, (i) the Company and its Restricted
Subsidiaries may incur Permitted Indebtedness, without meeting the Indebtedness
incurrence provisions of the preceding paragraph, and (ii) neither the Company
nor any of its Restricted Subsidiaries may incur Indebtedness that ranks junior
in right of payment to the Notes that has a maturity or mandatory sinking fund
payment prior to the maturity of the Notes.
SECTION 4.07. Limitation on Capital Stock of
Restricted Subsidiaries
The Company shall not (i) sell, pledge, hypothecate or otherwise convey or
dispose of any Capital Stock of any Restricted Subsidiary (other than under the
Credit Facility, under the terms of any Designated Senior Indebtedness or, in
the case of any Person which becomes a Restricted Subsidiary after the Issue
Date, a pledge of the Capital Stock of such Person in connection with the
financing of such acquisition) or (ii) permit any Restricted Subsidiary to issue
any Capital Stock, other than directors qualifying shares or to the Company or
to a Wholly Owned Subsidiary of the Company. The foregoing restrictions shall
not apply to an Asset Sale made in compliance with Section 4.09 hereof or any
Restricted Payment that is not prohibited by the provisions of Section 4.08
hereof.
40
SECTION 4.08. Limitation on Restricted Payments
The Company shall not make, and shall not permit any Restricted Subsidiary
to, directly or indirectly, make, any Restricted Payment, unless:
(a) no Triggering Default Event shall have occurred and be continuing
at the time of or immediately after giving effect to such Restricted
Payment;
(b) immediately after giving pro forma effect to such Restricted
Payment, the Company could incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.06; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the Issue Date
does not exceed the sum of (1) $10,000,000 plus (2) (i) 50% of the
cumulative Consolidated Net Income of the Company subsequent to March 31,
1998 (or minus 100% of any cumulative deficit in Consolidated Net Income
during such period); (ii) 100% of the aggregate Net Proceeds and the fair
market value of securities or other property received by the Company from
the issue or sale, after the Issue Date, of Capital Stock (other than
Disqualified Capital Stock or Capital Stock of the Company issued to any
Restricted Subsidiary) of the Company or any Indebtedness or other
securities of the Company convertible into or exercisable or exchangeable
for Capital Stock (other than Disqualified Capital Stock) of the Company
which has been so converted or exercised or exchanged, as the case may be;
(iii) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment made after the Issue Date, an amount
equal to the lesser of the return of capital with respect to such
Investment and the initial amount of such Investment, in either case, less
the cost of the disposition of such Investment; and (iv) in the event
Capital Stock of an Unrestricted Subsidiary is paid as a dividend or other
distribution or payment on Capital Stock of the Company, the lesser of an
amount equal to any Investment in such Unrestricted Subsidiary which
constituted a Restricted Payment made after the Issue Date or the fair
market value of the Capital Stock so dividend or distributed. For purposes
of determining under this clause (c) the amount expended for Restricted
Payments, cash distributed shall be valued at the face amount thereof and
property other than cash shall be valued at its fair market value.
The provisions of this Section 4.08 will not prohibit (i) the payment of
any distribution within 60 days after the date of declaration thereof, if at
such date of declaration such payment would comply with the provisions of this
Indenture; (ii)
41
the repurchase, redemption or other acquisition or retirement of any shares of
Capital Stock of the Company or Indebtedness subordinated to the Notes by
conversion into, or by or in exchange for, shares of Capital Stock (other than
Disqualified Capital Stock), or out of the Net Proceeds of the substantially
concurrent sale (other than to a Restricted Subsidiary) of other shares of
Capital Stock of the Company (other than Disqualified Capital Stock); (iii) the
repurchase, redemption or other acquisition or retirement of Indebtedness of the
Company subordinated to the Notes in exchange for, by conversion into, or out of
the Net Proceeds of, a substantially concurrent sale or incurrence of
Indebtedness (other than any Indebtedness owed to a Restricted Subsidiary) of
the Company that is contractually subordinated in right of payment to the Notes
to at least the same extent as the Indebtedness subordinated to the Notes being
redeemed or retired; (iv) the retirement of any shares of Disqualified Capital
Stock by conversion into, or by exchange for, shares of Disqualified Capital
Stock, or out of the Net Proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary) of other shares of Disqualified Capital Stock;
(v) the mandatory repurchase of Capital Stock of the Company by the Company upon
the death or disability of certain current and former employees of the Company
pursuant to the terms of Section 5(c) of the Stockholders' Agreement, as amended
and in effect on the Issue Date; (vi) the repurchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Company held by
any member of the Company's (or any of its Subsidiaries') current or former
employees; provided, that the aggregate price paid pursuant to this clause (vi)
for all such repurchased, redeemed, acquired or retired Capital Stock shall not
exceed $2,000,000; (vii) any Investment made with the proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary) of shares
of Capital Stock of the Company (other than Disqualified Capital Stock); and
(viii) the purchase, repurchase, redemption or other acquisition or retirement
for value of Junior Subordinated Debentures (each, a "repurchase") which would
otherwise constitute a Restricted Payment; provided that the aggregate amount
expended in connection with repurchases under this clause (viii) may not exceed
the excess of $4,100,000 over the aggregate amount expended in connection with
repurchases under this clause (viii) with respect to Junior Subordinated
Debentures that are subsequently applied to repay the Junior Subordinated
Debentures in accordance with their terms; provided, that, for purposes of
determining whether Restricted Payments can be made pursuant to the previous
paragraph, all payments made pursuant to clauses (i), (v) (net of any amounts
received by the Company from insuring the lives of current or former employees),
(vi) and (vii) of this paragraph will reduce the amount that would otherwise be
available for such Restricted Payments and payments made pursuant to the other
clauses of this paragraph shall not so reduce the amount available for
Restricted Payments.
42
Not later than the date of making any Restricted Payment which may only be
made pursuant to subclause (c) above, 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 this Section
4.08 were computed, which calculations may be based upon the Company's latest
available financial statements, and that no Triggering Default Event exists and
is continuing and no Triggering Default Event will occur immediately after
giving effect to such Restricted Payment.
SECTION 4.09. Limitation on Certain Asset Sales
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, consummate an Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such sale
or other disposition at least equal to the fair market value thereof; (ii) not
less than 75% of the consideration received by the Company and its Restricted
Subsidiaries is in the form of cash or Temporary Cash Investments; and (iii) the
Asset Sale Proceeds received by the Company or such Restricted Subsidiary are
applied (a) first, to the extent the Company elects, or is required, to prepay,
repay or purchase debt under any then existing Senior Indebtedness or Guarantor
Senior Indebtedness within 365 days following the receipt of the Asset Sale
Proceeds from any Asset Sale, provided that any such repayment results in a
permanent reduction of the commitments thereunder in an amount equal to the
principal amount so repaid; (b) second, to the extent of the balance of Asset
Sale Proceeds after application as described above, to the extent the Company
elects, to an investment in assets (including Capital Stock or other securities
purchased in connection with the acquisition of Capital Stock or property of
another Person) used or useful in businesses similar or ancillary to the
business of the Company or Restricted Subsidiary as conducted at the time of
such Asset Sale, provided that such investment occurs on or prior to the 365th
day following receipt of such Asset Sale Proceeds (the "Reinvestment Date"); and
(c) third, if on the Reinvestment Date the Available Asset Sale Proceeds with
respect to any Asset Sale exceed $5,000,000, the Company shall apply an amount
equal to such Available Asset Sale Proceeds to an offer to purchase the Notes
(which offer may, at the option of the Company, also be made on a pro rata basis
to holders of all other Indebtedness of the Company ranking pari passu with the
Notes or the Guarantees), at a purchase price (in the case of the Notes) in cash
equal to 100% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase (an "Excess Proceeds Offer"). If an Excess
Proceeds Offer is not fully subscribed, the Company may retain the portion of
the Available Asset Sale Proceeds not required to repurchase Notes. Pending the
final application of any such Asset Sale Proceeds in
43
accordance with this paragraph, the Company or such Restricted Subsidiary may
invest such Asset Sale Proceeds in any manner not prohibited by the Indenture
including, without limitation, the temporary repayment of Indebtedness.
(b) If the Company is required to make an Excess Proceeds Offer, the
Company shall mail, within 30 days following the Reinvestment Date, a notice to
the Holders stating: (1) that such Holders have the right to require the Company
to apply the Available Asset Sale Proceeds to repurchase such Notes at a
purchase price in cash equal to 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase; (2) the purchase
date (the "Purchase Date"), which shall be no earlier than 30 days and not later
than 60 days from the date such notice is mailed; (3) the instructions,
determined by the Company, that each Holder must follow in order to have such
Notes repurchased; and (4) the calculations used in determining the amount of
Available Asset Sale Proceeds to be applied to the repurchase of such Notes. The
Excess Proceeds Offer shall remain open for a period of 20 Business Days
following its commencement or such longer period as may be required by law (the
"Offer Period"). The notice, which shall govern the terms of the Excess Proceeds
Offer, shall also state:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.09 and the Offer Period;
(2) the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that any Note accepted for payment pursuant to the Excess Proceeds
Offer shall cease to accrue interest on and after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to any
Excess Proceeds Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Company, a depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice at least three Business
Days before the Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Company, depositary or Paying Agent, as the case may be, receives, not
later than the expiration of the Offer Period, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Note the Holder delivered
44
for purchase and a statement that such Holder is withdrawing his election
to have the Note purchased;
(7) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Available Asset Sale Proceeds, the Company shall select
the 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
(8) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
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, Notes or
portions thereof tendered pursuant to the Excess Proceeds Offer, deposit with
the Paying Agent U.S. legal tender sufficient to pay the purchase price plus
accrued interest, if any, on the Notes to be purchased and 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 4.09. The Paying Agent 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 Note tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee shall authenticate and mail or make available for delivery
such new Note to such Holder equal in principal amount 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 will
publicly announce the results of the Excess Proceeds Offer on the Purchase Date.
If an Excess Proceeds Offer is not fully subscribed, the Company may retain that
portion of the Available Asset Sale Proceeds not required to repurchase Notes.
SECTION 4.10. Limitation on Transactions with Affiliates
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with any Affiliate
(including entities in which the Company or any Restricted Subsidiaries owns a
minority interest) or holder of 10% or more of the Company's Common Stock (an
"Affiliate Transaction") or extend, renew, waive or otherwise modify the terms
of any Affiliate Transaction entered into prior to the Issue Date unless (i)
such
45
Affiliate Transaction is between or among the Company and its Wholly Owned
Subsidiaries or (ii) the terms of such Affiliate Transaction are fair and
reasonable to the Company or such Restricted Subsidiary, as the case may be, and
the terms of such Affiliate Transaction 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 between
unaffiliated parties. In any Affiliate Transaction involving an amount or having
a fair market value in excess of $1,000,000 which is not permitted under clause
(i) above, the Company must obtain a resolution of the Board of Directors
certifying that such Affiliate Transaction complies with clause (ii) above. In
transactions with a fair market value in excess of $5,000,000 which are not
permitted under clause (i) above, the Company must obtain a written opinion as
to the fairness of such a transaction to the Company or a Restricted Subsidiary
from a financial point of view from an independent investment banking,
accounting or appraisal firm.
(b) The limitations set forth in Section 4.10(a) shall not apply to (i) any
Restricted Payment that is not prohibited by Section 4.08 hereof,(ii) fees and
compensation paid to, and indemnity provided on behalf of, officers, directors
or employees of the Company or any Restricted Subsidiary of the Company as
determined in good faith by the Board of Directors of the Company, (iii) any
agreement as in effect as of the Issue Date or any amendment, modification or
replacement thereof or any transaction contemplated thereby so long as any such
amendment, modification or replacement is not more disadvantageous to the
holders of the Notes in any material respect than the original agreement or
transaction as in effect on the Issue Date, (iv) the payment to Airlie
Enterprises L.L.C. of an overhead allocation fee of $15,000 per month and (v)
the payment to Knowledge Alliance Holdings, Inc. on an annual basis in
connection with the training of Company employees of an amount not to exceed the
expenses incurred by the Company during its fiscal year ended June 28, 1998 in
connection with the comparable training of Company employees.
SECTION 4.11. Limitations on Liens
The Company shall not, and shall not permit any Restricted Subsidiary to,
create, incur or otherwise cause or suffer to exist any Liens of any kind (other
than Permitted Liens) upon any property or asset of the Company or such
Restricted Subsidiary to secure Indebtedness which is pari passu with or
subordinate in right of payment to the Notes or the Guarantees, as the case may
be, unless (i) if such Lien secures Indebtedness which is pari passu with the
Notes or the Guarantees, the Notes or the Guarantees, as the case may be, are
secured on an equal and ratable basis with the obligation so secured until such
time as such obligation is no longer secured
46
by a Lien and (ii) if such Lien secures Indebtedness which is subordinated to
the Notes or the Guarantees, such Indebtedness secured by such Lien and such
Lien shall be subordinated to the Lien granted to the Holders of the Notes to
the same extent as such Indebtedness is subordinated to the Notes or the
Guarantees, as the case may be.
SECTION 4.12. Limitation on Other Senior Subordinated
Debt
The Company shall not, and shall not permit any Guarantor, to incur any
Indebtedness that is both (i) subordinate in right of payment to any Senior
Indebtedness of the Company or any Guarantor Senior Indebtedness of such
Guarantor, as the case may be, and (ii) senior in right of payment to the Notes
or the Guarantee of such Guarantor, as the case may be. For purposes of this
Section 4.12, Indebtedness is deemed to be senior in right of payment to the
Notes or any of the Guarantees, as the case may be, if it is not explicitly
subordinate in right of payment to Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be, at least to the same extent as the Notes and
the Guarantee, as the case may be, are subordinate to Senior Indebtedness or
Guarantor Senior Indebtedness, as the case may be.
SECTION 4.13. Additional Guarantees
If the Company or any of its Restricted Subsidiaries acquires, creates,
organizes or designates a domestic Restricted Subsidiary, the fair market value
of which exceeds $25,000, then such newly acquired, created, organized or
designated domestic Restricted Subsidiary shall, within 30 days after the date
of its acquisition, creation, organization or designation, (i) execute and
deliver to the Trustee a supplemental indenture in form reasonably satisfactory
to the Trustee pursuant to which such domestic Restricted Subsidiary shall
unconditionally guarantee all of the Company's obligations under the Notes and
this Indenture and (ii) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture has been duly authorized, executed and delivered by such
domestic Restricted Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such domestic Restricted Subsidiary, subject to normal
exceptions.
SECTION 4.14. Payments for Consent
Neither the Company nor any Restricted Subsidiaries shall, 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 agreed
to be paid to all Holders of the Notes which so consent, waive or agree to amend
in the time frame set
47
forth in solicitation documents relating to such consent, waiver or agreement.
SECTION 4.15. Corporate Existence
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each Restricted
Subsidiary, in accordance with the respective organizational documents (as the
same may be amended from time to time) of each Restricted Subsidiary and the
rights (charter and statutory), licenses and franchises of the Company and its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Restricted Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.16. Change of Control
(a) Within 30 days of the occurrence of a Change of Control, the Company
shall notify the Trustee in writing of such occurrence and shall make an offer
to purchase (the "Change of Control Offer") the outstanding Notes at a purchase
price equal to 101% of the principal amount thereof plus any accrued and unpaid
interest thereon to the Change of Control Payment Date (such purchase price
being hereinafter referred to as the "Change of Control Purchase Price") in
accordance with the procedures set forth in this Section 4.16.
If the Credit Facility is in effect, or any amounts are owing thereunder or
in respect thereof, at the time of the occurrence of a Change of Control, prior
to the mailing of the notice to Holders described in paragraph (b) below, but in
any event within 30 days following any Change of Control, the Company covenants
to (i) repay in full all obligations under or in respect of the Credit Facility
or offer to repay in full all obligations under or in respect of the Credit
Facility and repay the obligations under or in respect of the Credit Facility
who has accepted such offer or (ii) obtain the requisite consent under the
Credit Facility to permit the repurchase of the Notes pursuant to this Section
4.16. The Company must first comply with the covenant described in the preceding
sentence before it shall be required to purchase Notes in the event of a Change
of Control; provided that the Company's failure to comply with the covenant
described in the preceding sentence constitutes an Event of Default described in
clause (3) under Section 6.01 hereof if
48
not cured within 60 days after the notice required by such clause.
(b) Within 30 days of the occurrence of a Change of Control, the Company
also shall (i) cause a notice of the Change of Control Offer to be sent at least
once to the Dow Xxxxx News Service or similar business news service in the
United States and (ii) send by first-class mail, postage prepaid, to the Trustee
and to each Holder of the Notes, at the address appearing in the register
maintained by the Registrar of the Notes, a notice stating:
(i) that the Change of Control Offer is being made pursuant to this
Section 4.16 and that all Notes tendered will be accepted for payment, and
otherwise subject to the terms and conditions set forth herein;
(ii) the Change of Control Purchase Price and the purchase date (which
shall be a Business Day no earlier than 30 days from the date such notice
is mailed (the "Change of Control Payment Date"));
(iii) that any Note not tendered will continue to accrue interest;
(iv) that, unless the Company defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(v) that Holders accepting the offer to have their 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 Note completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their acceptance if the
Paying Agent receives, not later than the close of business on the third
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Notes delivered for purchase and a
statement that such Holder is withdrawing his election to have such Notes
purchased;
(vii) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in
49
principal amount to the unpurchased portion of the Notes surrendered,
provided that each Note purchased and each such new Note issued shall be in
an original principal amount in denominations of $1,000 and integral
multiples thereof;
(viii) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(ix) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (i) accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent money sufficient
to pay the purchase price of all Notes or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee Notes so accepted together with
an Officers' Certificate stating the Notes or portions thereof tendered to the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
accepted payment in an amount equal to the purchase price for such Notes, and
the Company shall execute and issue, and the Trustee shall promptly authenticate
and mail to such Holder, a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered; provided that each such new Note shall be
issued in an original principal amount in denominations of $1,000 and integral
multiples thereof.
(c) (i) If the Company or any Restricted Subsidiary thereof has issued any
outstanding (A) Indebtedness that is subordinated in right of payment to the
Notes or (B) Preferred Stock, and the Company or such Restricted Subsidiary is
required to make an offer to repurchase such Indebtedness, or make an offer to
redeem such Preferred Stock, in the event of a Change of Control or to make a
distribution with respect to such subordinated Indebtedness or Preferred Stock
in the event of a Change of Control, the Company shall not consummate any such
offer or distribution with respect to such subordinated Indebtedness or
Preferred Stock until such time as the Company shall have paid the Change of
Control Purchase Price in full to the Holders of Notes that have accepted the
Company's Change of Control Offer and shall otherwise have consummated the
Change of Control Offer made to Holders of the Notes and (ii) the Company will
not issue Indebtedness that is subordinated in right of payment to the Notes or
Preferred Stock with change of control provisions requiring the payment of such
Indebtedness or Preferred Stock prior to the payment of the Notes properly
tendered pursuant to a Change of Control Offer in the event of a Change in
Control under this Indenture.
50
In the event that a Change of Control occurs and the Holders of Notes
exercise their right to require the Company to purchase Notes, if such purchase
constitutes a "tender offer" for purposes of Rule 14e-1 under the Exchange Act
at that time, the Company will comply with the requirements of Rule 14e-1 as
then in effect with respect to such purchase.
SECTION 4.17. Maintenance of Office or Agency
The Company shall maintain an office or agency where Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee as set forth in Section 12.02.
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. The Company shall
give prompt written notice to the Trustee of such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of the
Trustee set forth in Section 12.02 as such office of the Company.
SECTION 4.18. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) (i) pay dividends or make any other distributions to the
Company or any other Restricted Subsidiary (A) on its Capital Stock or (B) with
respect to any other interest or participation in, or measured by, its profits,
or (ii) pay any Indebtedness owed to the Company or any Restricted Subsidiary or
(b) make loans or advances to the Company or any other Restricted Subsidiary or
(c) transfer any of its properties or assets to the Company or any other
Restricted Subsidiary, except for such encumbrances or restrictions existing
under or by reasons of (i) encumbrances or restrictions existing on the Issue
Date to the extent and in the manner such encumbrances and restrictions are in
effect on the Issue Date, (ii) the Indenture, the Notes and the Guarantees,
(iii) the Credit Facility, (iv) applicable law, (v) customary nonassignment
51
provisions in leases, (vi) permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Refinancing Indebtedness
shall not be materially more restrictive than those contained in the agreements
governing the Indebtedness being refinanced, (vii) customary restrictions
imposed in connection with Purchase Money Indebtedness or Capital Lease
Obligations permitted under Section 4.06 as long as such customary restrictions
are not materially more restrictive than those set forth in the Credit Facility
on the Issue Date (except that they may impose restrictions on the transfer of
the asset so financed), (viii) restrictions in agreements with Persons acquired
by the Company or any Restricted Subsidiary which do not extend to Property or
assets other than the Property or assets of such Persons, (ix) customary
restrictions in security agreements or mortgages securing Indebtedness of the
Company or a Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements and mortgages or
(x) customary restrictions with respect to a Restricted Subsidiary pursuant to
an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such Restricted Subsidiary.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. Limitation on Consolidation, Merger and
Sale Assets
(a) The Company shall not consolidate with, merge with or into, or transfer
all or substantially all of its assets (as an entirety or substantially as an
entirety in one transaction or a series of related transactions) to, any Person
unless: (i) the Company shall be the continuing Person, or the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or to which the properties and assets of the Company are transferred
shall be a corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia and shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all of the obligations of the Company under
the Notes and the Indenture, and the obligations under the Indenture shall
remain in full force and effect; (ii) immediately before and immediately after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing; and (iii) immediately after giving effect to such
transaction on a pro forma basis the Company or such Person could incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) under
Section 4.06, provided that a Person that is a Restricted Subsidiary may merge
into the Company
52
or another Person that is a Restricted Subsidiary without complying with this
clause (iii). Notwithstanding the foregoing, in no event need clause (i) of the
preceding sentence be complied with in the event of a transfer, through merger
or otherwise, of the Company's Product Business; however, in the event such
Product Business constitutes all or substantially all of the Company's assets,
clauses (ii) and (iii) of the preceding sentence must be complied with in the
event of such a transfer. For purposes of this Section 5.01, the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the Properties or assets of one or
more Restricted Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the Properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
assets of the Company.
(b) The Company shall not permit any Guarantor to consolidate with, merge
with and into, or transfer all or substantially all of its assets (as an
entirety or substantially as an entirety in one transaction or series of related
transactions) to, any Person unless: (i) the transaction complies with Section
4.09, or (ii) (A) the Person into or to which such Guarantor consolidates,
merges or transfers its assets is (x) the Company or a Guarantor or (y) a
corporation organized and existing under the laws of the United States or any
State thereof or the District of Columbia and shall expressly assume, by
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of such Guarantor under its
Guarantee and the Indenture, (B) immediately before and immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
and be continuing and (C) immediately after giving effect to such transaction on
a pro forma basis the Company or such Person could incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) under Section 4.06.
(c) In connection with any consolidation, merger or transfer of assets
contemplated by this Section 5.01, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this Section 5.01 and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
SECTION 5.02. Successor Person Substituted
Upon any consolidation or merger, or any transfer of all or substantially
all of the assets of the Company or any Guarantor in accordance with Section
5.01 above, the successor corporation formed by such consolidation or into which
the
53
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Guarantor under this Indenture with the same effect as if such successor
corporation had been named as the Company or such Guarantor herein, and
thereafter the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default
An "Event of Default" occurs if
(1) there is a default in the payment of any principal of, or premium,
if any, on the Notes when the same becomes due and payable at maturity,
upon acceleration, redemption or otherwise, whether or not such payment is
prohibited by the provisions of Article 11 hereof;
(2) there is a default in the payment of any interest on any Note when
the same becomes due and payable and the Default continues for a period of
30 days, whether or not such payment is prohibited by the provisions of
Article 11 hereof;
(3) the Company or any Guarantor defaults in the observance or
performance of any other covenant in the Notes or this Indenture for 60
days after written notice from the Trustee or the Holders of not less than
25% in the aggregate principal amount of the Notes then outstanding;
(4) there is a default in the payment at final maturity (within the
grace period provided by such Indebtedness) of principal, interest or
premium in an aggregate amount of $10,000,000 or more with respect to any
Indebtedness of the Company or any Restricted Subsidiary, or the
acceleration of any such Indebtedness aggregating $10,000,000 or more,
which default or acceleration shall not be cured, waived or postponed
pursuant to an agreement with the holders of such Indebtedness within 60
days after written notice, or such acceleration shall not be rescinded or
annulled within 20 days after written notice to the Company of such Default
by the Trustee or any Holder;
54
(5) a court of competent jurisdiction enters a final judgment or
judgments which can no longer be appealed for the payment of money in
excess of $10,000,000 against the Company or any Restricted Subsidiary
(other than a judgment or portion thereof as to which an insurance company
of national reputation has accepted full liability) and such judgment shall
not be discharged or fully bonded for any period of 60 consecutive days
during which a stay of enforcement of such judgment shall not be in effect;
(6) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(C) consents to the appointment of a Custodian of it or for 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 Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property of the
Company or any Significant Subsidiary, or
(C) orders the liquidation of the Company or any Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
55
The Trustee may withhold notice to the Holders of the Notes of any Default
(except in payment of principal or premium, if any, or interest on the Notes) if
the Trustee considers it to be in the best interest of the Holders of the Notes
to do so.
SECTION 6.02. Acceleration
If an Event of Default (other than an Event of Default arising under
Section 6.01(6) or (7) with respect to the Company) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of not less than 25% in
aggregate principal amount of the Notes then outstanding may by written notice
to the Company and the Trustee declare to be immediately due and payable the
entire principal amount of all the Notes then outstanding plus accrued but
unpaid interest to the date of acceleration and (i) such amounts with respect to
the Notes shall become immediately due and payable or (ii) if there are any
amounts outstanding under or in respect of the Credit Facility, such amounts
with respect to the Notes shall become due and payable upon the first to occur
of an acceleration of amounts under or in respect of the Credit Facility or five
Business Days after receipt by the Company and the Representative of notice of
the acceleration of the Notes; provided, however, that after such acceleration
but before a judgment or decree based on such acceleration is obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
outstanding Notes may rescind and annul such acceleration and its consequences
if (i) all existing Events of Default, other than the nonpayment of accelerated
principal, premium, if any, or interest that has become due solely because of
the acceleration, have been cured or waived, (ii) to the extent the payment of
such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid and (iii) if the rescission would not conflict with
any judgment or decree. No such rescission shall affect any subsequent Default
or impair any right consequent thereto. In case an Event of Default specified in
Section 6.01(6) or (7) with respect to the Company occurs, such principal,
premium, if any, and interest with respect to all of the Notes shall be due and
payable immediately without any declaration or other act on the part of the
Trustee or the Holders of the Notes. In addition, upon the effectiveness of an
acceleration under this Article 6, the Trustee shall promptly make a demand for
payment on the Notes under the Guarantee provided for in Article 10.
SECTION 6.03. Other Remedies
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, or premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture and may take any
56
necessary action requested of it as Trustee to settle, compromise, adjust or
otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Noteholder in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults and Events of
Default
Subject to Sections 6.02, 6.07 and 8.02 hereof, the Holders of a majority
in principal amount of the Notes then outstanding have the right to waive any
existing Default or Event of Default or compliance with any provision of this
Indenture or the Notes. Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 6.05. Control by Majority
The Holders of a majority in principal amount of the Notes then outstanding
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee by this Indenture. The Trustee, however, may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines may be unduly prejudicial to the rights of another Noteholder not
taking part in such direction, and the Trustee shall have the right to decline
to follow any such direction if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully be taken or if the
Trustee in good faith shall, by a Trust Officer, determine that the proceedings
so directed may involve it in personal liability; provided that the Trustee may
take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 6.06. Limitation on Suits
Subject to Section 6.07 below, a Noteholder may not institute any
proceeding or pursue any remedy with respect to this Indenture or the Notes
unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
57
(2) the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60 day period by the Holders of a majority in
aggregate principal amount of the Notes then outstanding.
A Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
SECTION 6.07. Rights of Holders to Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of, or premium, if any, and
interest on the Note on or after the respective due dates expressed in the Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates, is absolute and unconditional and shall not be impaired or
affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee
If an Event of Default in payment of principal, premium or interest
specified in Section 6.01(1) or (2) hereof occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company or the Guarantors (or any other obligor on the Notes) for the whole
amount of unpaid principal and accrued interest remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate then borne by the Notes, and such further amounts as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. Trustee May File Proofs of Claim
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the
58
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Noteholders allowed in any judicial proceedings
relative to the Company or the Guarantors (or any other obligor upon the Notes),
any of their respective creditors or any of their respective properties and
shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same
after deduction of its charges and expenses to the extent that any such charges
and expenses are not paid out of the estate in any such proceedings and any
custodian in any such judicial proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceedings.
SECTION 6.10. Priorities
If the Trustee collects any money pursuant to this Article 6, or any other
provision in this Indenture, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to Noteholders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest as to each, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes; and
THIRD: to the Company or, to the extent the Trustee collects any
amounts from any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 6.10.
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
Trustee, a court in its discre-
59
tion may require the filing by any party litigant in the suit of an undertaking
to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 hereof or
a suit by Holders of more than 10% in principal amount of the Notes then
outstanding.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the same circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture but, in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer,
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unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02 and 6.05 hereof.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity satisfactory to it against
such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, paragraphs (a), (b), (c)
and (d) of this Section 7.01 shall govern every provision of this Indenture that
in any way relates to the Trustee.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by the law.
SECTION 7.02. Rights of Trustee
Subject to Section 7.01 hereof:
(1) The Trustee may rely on any document reasonably believed by it to
be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both, which shall
conform to the provisions of Sections 12.04 and 12.05 hereof. The Trustee
shall be protected and shall not be liable for any action it takes or omits
to take in good faith in reliance on such certificate or opinion.
(3) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed by it with due
care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
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(5) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may make loans to, accept deposits from, perform services
for or otherwise deal with the Company, or any Affiliates thereof, with the same
rights it would have if it were not Trustee. Any Agent may do the same with like
rights. The Trustee, however, shall be subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. Trustee's Disclaimer
The Trustee 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 sale of Notes or any money paid to the Company pursuant to the
terms of this Indenture and it shall not be responsible for any statement in the
Notes other than its certificate of authentication.
SECTION 7.05. Notice of Defaults
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to each Noteholder notice of the Default within 90 days
after it occurs. Except in the case of a Default in payment of the principal of,
or premium, if any, or interest on any Note the Trustee may withhold the notice
if and so long as the board of directors of the Trustee, the executive committee
or any trust committee of such board and/or its Trust Officers in good faith
determine(s) that withholding the notice is in the interest of the Noteholders.
SECTION 7.06. Reports by Trustee to Holders
If required by TIA ss. 313(a), within 60 days after May 15 of any year,
commencing the May 15 following the date of this Indenture, the Trustee shall
mail to each Noteholder a brief report dated as of such May 15 that complies
with TIA ss. 313(a). The Trustee shall also comply with TIA ss. 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c)
and TIA ss. 313(d). The Company shall promptly notify the Trustee when the Notes
are listed on any stock exchange.
Reports pursuant to this Section 7.06 shall be transmitted by mail:
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(1) to all registered Holders of Notes, as the names and addresses of
such Holders appear on the Registrar's books; and
(2) to such Holder of Notes as have, within the two years preceding
such transmission, filed their names and addresses with the Trustee for
that purpose.
SECTION 7.07. Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation for its services rendered hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust). The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it in connection with its
duties under this Indenture, including the reasonable fees and expenses of the
Trustee's agents and counsel.
The Company shall indemnify on an after-tax basis the Trustee (in its
individual capacity and in its capacity as Trustee hereunder) and each of its
directors, officers, employees, agents and representatives (each an "Indemnified
Party") for, and hold it harmless against, any and all loss, damage, claim,
liabilities, taxes (other than taxes attributable to the Trustee's compensation
for serving as Trustee hereunder) or reasonable expenses incurred by it in
connection with the acceptance or performance of its duties under this Indenture
including, without limitation, the reasonable costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder (including, without
limitation, fees and expenses of counsel and settlement costs). Each Indemnified
Party shall notify the Company in writing promptly of any claim asserted against
such Indemnified Party for which it may seek indemnity. However, the failure by
such Indemnified Party to so notify the Company shall not relieve the Company of
its obligations hereunder except to the extent the Company is prejudiced
thereby.
Notwithstanding the foregoing, the Company need not reimburse any
Indemnified Party for any expense or indemnify it against any loss or liability
incurred by such Indemnified Party through its gross negligence, bad faith or
willful misconduct. To secure the payment obligations of the Company and the
Guarantors in this Section 7.07, the Trustee shall have a lien prior to the
Notes on all money or property held or collected by the Trustee except such
money or property held in trust to pay principal of and interest on particular
Notes. The obligations of the Company under this Section 7.07 to compensate and
indemnify each Indemnified Party and to pay or reimburse each Indemnified Party
for expenses, disbursements and advances shall survive
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the satisfaction and discharge of this Indenture and the resignation or removal
of such Indemnified Party.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
For purposes of this Section 7.07, the term "Trustee" shall include the
Paying Agent, the Registrar and any trustee appointed pursuant to Article 9.
SECTION 7.08. Replacement of Trustee
The Trustee may resign by so notifying the Company in writing. The Holders
of a majority in principal amount of the outstanding Notes may remove the
Trustee by notifying the removed Trustee in writing and may appoint a successor
Trustee with the Company's written consent which consent shall not be
unreasonably withheld. The Company may remove the Trustee at its election if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company.
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Immediately following such delivery, the retiring Trustee shall, subject to its
rights under Section 7.07 hereof, transfer all property held by it as Trustee to
the successor Trustee, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Noteholder. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Consolidation, Merger
or Conversion
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust assets to, another corporation,
subject to Section 7.10 hereof, the successor corporation without any further
act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1), (2) and (5) in every respect. The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b), including the provision in ss. 310(b)(1).
SECTION 7.11. Preferential Collection of Claims Against
Company
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311 (b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
SECTION 7.12. Paying Agents
The Company shall cause each Paying Agent other than the Trustee to execute
and deliver to it and the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provisions of this Section 7.12:
(a) that it will hold all sums held by it as agent for the payment of
principal of, or premium, if any, or interest on, the Notes (whether such sums
have been paid to it by the Company or by any obligor on the Notes) in trust for
the benefit of Holders of the Notes or the Trustee;
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(b) that it will at any time during the continuance of any Event of
Default, upon written request from the Trustee, deliver to the Trustee all sums
so held in trust by it together with a full accounting thereof; and
(c) that it will give the Trustee written notice within three (3) Business
Days of any failure of the Company (or by any obligor on the Notes) in the
payment of any installment of the principal of, premium, if any, or interest on,
the Notes when the same shall be due and payable.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01. Without Consent of Holders
Without notice to or consent of any Noteholder the Company, the Guarantors
and the Trustee, at any time and from time to time, may amend or supplement this
Indenture or the Notes:
(1) to comply with Section 5.01 hereof;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to comply with any requirements of the SEC under the TIA;
(4) to cure any ambiguity, defect or inconsistency, or to make any
other change that does not materially and adversely affect the rights of
any Noteholder; or
(5) to make any other change that does not, in the opinion of the
Trustee, adversely affect in any material respect the rights of any
Noteholders hereunder.
The Trustee is hereby authorized to join with the Company and the
Guarantors in the execution of any supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations which may be therein contained, but the Trustee
shall not be obligated to enter into any such supplemental indenture which
adversely affects its own rights, duties or immunities under this Indenture.
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SECTION 8.02. With Consent of Holders
The Company, the Guarantors and the Trustee may modify or supplement this
Indenture or the Notes with the written consent of the Holders of not less than
a majority in aggregate principal amount of the outstanding Notes without notice
to any Noteholder. The Holders of not less than a majority in aggregate
principal amount of the outstanding Notes may waive compliance in a particular
instance by the Company and the Guarantors with any provision of this Indenture
or the Notes without notice to any Noteholder. Subject to Section 8.04, without
the consent of each Noteholder affected, however, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver to this Indenture or the Notes;
(2) reduce the rate of or change the time for payment of interest on
any Note;
(3) reduce the principal of or premium on or change the stated
maturity of any Note;
(4) make any Note payable in money other than that stated in the Note
or change the place the Note may be presented for payment from New York,
New York;
(5) change the amount or time of any payment required by the Notes or
reduce the premium payable upon any redemption of the Notes in accordance
with paragraph 6 of the Notes, or change the time before which no such
redemption may be made;
(6) waive a default in the payment of the principal of, or interest
on, or redemption payment with respect to, any Note (including after the
Company's obligation to purchase Notes arises thereunder, a Change of
Control Offer or an Excess Proceeds Offer or modify any of the provisions
or definitions with respect to such offers);
(7) make any changes in Sections 6.04 or 6.07 hereof or this sentence
of Section 8.02; or
(8) affect the ranking of the Notes in a manner adverse to the
Holders.
After an amendment, supplement or waiver under this Section 8.02 becomes
effective, the Company shall mail to the Holders a notice briefly describing the
amendment, supplement or waiver.
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Upon the request of the Company, accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
receipt by the Trustee of evidence reasonably satisfactory to the Trustee of the
consent of the Noteholders as aforesaid and upon receipt by the Trustee of the
documents described in Section 8.06 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
SECTION 8.03. Compliance with Trust Indenture Act
Every amendment to or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
SECTION 8.04. Revocation and Effect of Consents
Until an amendment, supplement, waiver or other action becomes effective, a
consent to it by a Holder of a Note is a continuing consent conclusive and
binding upon such Holder and every subsequent Holder of the same Note or portion
thereof, and of any Note issued upon the transfer thereof or in exchange
therefor or in place thereof, even if notation of the consent is not made on any
such Note. Any such Holder or subsequent Holder, however, may revoke the consent
as to his Note or portion of a Note, if the Trustee receives the notice of
revocation before the date the amendment, supplement, waiver or other action
becomes effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only such Persons, shall be entitled to
consent to such amendment, supplement, or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date unless the consent of the requisite number of Holders has
been obtained.
After an amendment, supplement, waiver or other action becomes effective,
it shall bind every Noteholder, unless it makes a change described in any of
clauses (1) through (8) of
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Section 8.02 hereof. In that case the amendment, supplement, waiver or other
action shall bind each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note.
SECTION 8.05. Notation on or Exchange of Notes
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee shall (upon the written direction of the Company) request the Holder of
the Note to deliver it to the Trustee. In such case, the Trustee shall place an
appropriate notation on the Note about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Note shall issue and the Trustee shall authenticate a new
security that reflects the changed terms. Failure to make the appropriate
notation or issue a new Note shall not affect the validity and effect of such
amendment supplement or waiver.
SECTION 8.06. Trustee to Sign Amendments, etc
The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article 8 if the amendment, supplement or waiver does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign it. In signing or refusing to
sign such amendment, supplement or waiver the Trustee shall be entitled to
receive and, subject to Section 7.01 hereof, shall be fully protected in relying
upon an Officers' Certificate and an Opinion of Counsel stating that such
amendment, supplement or waiver is authorized or permitted by this Indenture.
The Company and the Guarantors may not sign an amendment or supplement until the
Board of Directors of each of the Company and the Guarantors approves it.
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Discharge of Indenture
The Company and the Guarantors may terminate their obligations under the
Notes, the Guarantees and this Indenture, except the obligations referred to in
the last paragraph of this Section 9.01, if there shall have been cancelled by
the Trustee or delivered to the Trustee for cancellation all Notes theretofore
authenticated and delivered (other than any Notes that are asserted to have been
destroyed, lost or stolen and that shall have been replaced as provided in
Section 2.07 hereof) and the Company has paid all sums payable by it hereunder
or deposited all required sums with the Trustee.
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After such delivery the Trustee upon request shall acknowledge in writing
the discharge of the Company's and the Guarantors' obligations under the Notes,
the Guarantees and this Indenture except for those surviving obligations
specified below.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company in Sections 7.07, 9.05 and 9.06 hereof shall survive.
SECTION 9.02. Legal Defeasance
The Company may at its option, by Board Resolution, be discharged from its
obligations with respect to the Notes, and the Guarantors may be discharged from
their obligations under the Guarantees, on the date the conditions set forth in
Section 9.04 below are satisfied (hereinafter, "Legal Defeasance"). For this
purpose, such Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Notes and to have
satisfied all its other obligations under such Notes and this Indenture insofar
as such Notes are concerned (and the Trustee, at the expense of the Company,
shall, subject to Section 9.06 hereof, execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (A) the rights of Holders of outstanding
Notes to receive solely from the trust funds described in Section 9.04 hereof
and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments are
due, (B) the Company's obligations with respect to such Notes under Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.08 and 4.17 hereof, (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder (including claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof) and (D) this
Article 9. Subject to compliance with this Article 9, the Company may exercise
its option under this Section 9.02 with respect to the Notes notwithstanding the
prior exercise of its option under Section 9.03 below with respect to the Notes.
SECTION 9.03. Covenant Defeasance
At the option of the Company, pursuant to a Board Resolution, the Company
and the Guarantors shall be released from their respective obligations under
Sections 4.02 through 4.16 hereof, inclusive, Section 4.18, and clause (a)(iii)
of Section 5.01 hereof with respect to the outstanding Notes on and after the
date the conditions set forth in Section 9.04 hereof are satisfied (hereinafter,
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means that
the Company and the Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section or portion thereof, whether directly or
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indirectly by reason of any reference elsewhere herein to any such specified
Section or portion thereof or by reason of any reference in any such specified
Section or portion thereof to any other provision herein or in any other
document, but the remainder of this Indenture and the Notes shall be unaffected
thereby.
SECTION 9.04. Conditions to Legal Defeasance or Covenant
Defeasance
The following shall be the conditions to application of Section 9.02 or
Section 9.03 hereof to the outstanding Notes:
(1) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 hereof who shall agree to comply with the provisions of
this Article 9 applicable to it) as funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Notes, (A) money in
an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms will provide, not later than the due date of any payment, money
in an amount, or (C) a combination thereof, sufficient, in the opinion of a
nationally-recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of, premium, if any, and
accrued interest on the outstanding Notes at the maturity date of such
principal, premium, if any, or interest, or on dates for payment and
redemption of such principal, premium, if any, and interest selected in
accordance with the terms of this Indenture and of the Notes;
(2) no Event of Default or Default with respect to the Notes shall
have occurred and be continuing on the date of such deposit, or shall have
occurred and be continuing at any time during the period ending on the 91st
day after the date of such deposit or, if longer, ending on the day
following the expiration of the longest preference period under any
Bankruptcy Law applicable to the Company in respect of such deposit (it
being understood that this condition shall not be deemed satisfied until
the expiration of such period);
(3) such Legal Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest for purposes of the TIA with respect
to any securities of the Company;
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(4) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute default under any other agreement or
instrument to which the Company is a party or by which it is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that, as a result of such Legal Defeasance or Covenant
Defeasance, neither the trust nor the Trustee will be required to register
as an investment company under the Investment Company Act of 1940, as
amended;
(6) in the case of an election under Section 9.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling to the effect that or (ii) there has been a change
in any applicable Federal income tax law with the effect that, and such
opinion shall confirm that, the Holders of the outstanding Notes or persons
in their positions will not recognize income, gain or loss for Federal
income tax purposes solely as a result of such Legal Defeasance and will be
subject to Federal income tax on the same amounts, in the same manner,
including as a result of prepayment, and at the same times as would have
been the case if such Legal Defeasance had not occurred;
(7) in the case of an election under Section 9.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the outstanding Notes will not recognize income, gain
or loss for 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;
(8) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the Legal Defeasance under
Section 9.02 hereof or the Covenant Defeasance under Section 9.03 hereof
(as the case may be) have been complied with;
(9) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit under clause (1) was not made by the
Company with the intent of defeating, hindering, delaying or defrauding any
creditors of the Company or others; and
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(10) the Company shall have paid or duly provided for payment under
terms mutually satisfactory to the Company and the Trustee all amounts then
due to the Trustee pursuant to Section 7.07 hereof.
SECTION 9.05. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions
All money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee pursuant to Section 9.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent 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 accrued interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company and the Guarantors shall on a joint and several basis pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
9.04 hereof or the principal, premium, if any, and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the outstanding Notes.
Anything in this Article 9 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon a Company Request any
money or U.S. Government Obligations held by it as provided in Section 9.04
hereof which, in the opinion of a nationally-recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 9.06. Reinstatement
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and each Guarantor's obligations under this
Indenture, the Notes and the Guarantees shall be revived and reinstated as
though no deposit had occurred pursuant to this Article 9 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof; provided,
however, that if the Company or the Guarantors have
73
made any payment of principal of, premium, if any, or accrued interest on any
Notes because of the reinstatement of their obligations, the Company and the
Guarantors shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
SECTION 9.07. Moneys Held by Paying Agent
In connection with the satisfaction and discharge of this Indenture, all
moneys then held by any Paying Agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee, or if sufficient
moneys have been deposited pursuant to Section 9.01 hereof, to the Company (or,
if such moneys had been deposited by the Guarantors, to such Guarantors), and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
SECTION 9.08. Moneys Held by Trustee
Any moneys deposited with the Trustee or any Paying Agent for the payment
of the principal of, premium, if any, or interest on any Note that are not
applied but remain unclaimed by the Holder of such Note for two years after the
date upon which the principal of, premium, if any, or interest on such Note
shall have respectively become due and payable shall be repaid to the Company
(or, if appropriate, the Guarantors) upon a Company Request, or if such moneys
are then held by the Company or the Guarantors in trust, such moneys shall be
released from such trust; and the Holder of such Note entitled to receive such
payment shall thereafter, as an unsecured general creditor, look only to the
Company and the Guarantors for the payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Trustee or any such Paying Agent, before
being required to make any such repayment, may, at the expense of the Company
and the Guarantors, either mail to each Noteholder affected, at the address
shown in the register of the Notes maintained by the Registrar pursuant to
Section 2.03 hereof, or cause to be published once a week for two successive
weeks, in a newspaper published in the English language, customarily published
each Business Day and of general circulation in the City of New York, New York,
a notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such mailing or
publication, any unclaimed balance of such moneys then remaining will be repaid
to the Company. After payment to the Company or the Guarantors or the release of
any money held in trust by the Company or any Guarantors, as the case may be,
Noteholders entitled to the money must look only to the Company and the
Guarantors for payment as general creditors unless applicable abandoned property
law designates another person.
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ARTICLE 10
GUARANTEE OF NOTES
SECTION 10.01. Guarantee.
Subject to the provisions of this Article 10, each Guarantor, by execution
of a Guarantee substantially in the form of Exhibit G hereto, jointly and
severally unconditionally guarantees to each Holder and to the Trustee, (i) the
due and punctual payment of the principal of, premium, if any, and interest on
each Note, when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal of, premium, if any, and interest on the Notes, to the
extent lawful, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee (including without limitation amounts
due the Trustee under Section 7.07) all in accordance with the terms of such
Note and this Indenture, and (ii) in the case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, at stated maturity, by acceleration or otherwise.
Each Guarantor, by execution of the Guarantee, agrees that its obligations
thereunder and hereunder shall be absolute and unconditional, irrespective of,
and shall be unaffected by, any invalidity, irregularity or unenforceability of
any such Note or this Indenture, any failure to enforce the provisions of any
such Note or this Indenture, any waiver, modification or indulgence granted to
the Company with respect thereto by the Holder of such Note or the Trustee, or
any other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or such Guarantor.
Each Guarantor, by execution of the Guarantee, waives diligence,
presentment, demand for payment, filing of claims with a court in the event of
merger or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to any such Note or the
Indebtedness evidenced thereby and all demands whatsoever, and covenants that
this Guarantee will not be discharged as to any such Note except by payment in
full of the principal thereof, premium if any, and interest thereon and as
provided in Section 9.01 and Section 9.02 or this Article 10. Each Guarantor, by
execution of the Guarantee, further agrees that, as between such Guarantor, on
the one hand, and the Holders and the Trustee, on the other hand (i) the
maturity of the Obligations guaranteed hereby may be accelerated as provided in
Article 6 hereof for the purposes of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Obligations as provided in Article 6 hereof,
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such Obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Guarantee.
A Guarantee shall not be valid or become obligatory for any purpose with
respect to a Note until the certificate of authentication on such Note shall
have been signed by or on behalf of the Trustee.
SECTION 10.02. Execution and Delivery of Guarantees.
A Guarantee shall be executed on behalf of a Guarantor by the manual or
facsimile signature of an Officer of such Guarantor.
If an Officer of a Guarantor whose signature is on this Indenture or the
Guarantee no longer holds that office, such Guarantee shall be valid
nevertheless.
Each Person becoming a Guarantor after the Issue Date in accordance with
Section 4.13 hereof shall issue a Guarantee, satisfactory in form and substance
to the Trustee (and with such other documentation relating thereto as the
Trustee shall reasonably require, including, without limitation, a supplement or
amendment to this Indenture and an Opinion of Counsel as to the enforceability
of such Guarantee) with the same effect and to the same extent as if such Person
had been named herein as a Guarantor.
SECTION 10.03. Limitation of Guarantee.
The obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor (including, without limitation, any Guarantor Senior Indebtedness) and
after giving effect to any collections from or payments made by or on behalf of
any other Guarantor in respect of the obligations of such other Guarantor under
its Guarantee or pursuant to its contribution obligations under this Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under federal, state or
applicable foreign law. Each Guarantor that makes a payment or distribution
under a Guarantee shall be entitled to a contribution from each other Guarantor
in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
SECTION 10.04. Release of Guarantor.
A Guarantor shall be released from all of its obligations under its
Guarantee if:
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(a) all of its Capital Stock is disposed of in a Restricted Payment that is
not prohibited by the provisions of Section 4.08;
(b) the Guarantor has sold all or substantially all of its assets or the
Company and its Restricted Subsidiaries have sold all of the Capital Stock of
the Guarantor owned by them, in each case in a transaction in compliance with
Sections 4.15 and 5.01 hereof; or
(c) the Guarantor merges with or into or consolidates with, or transfers
all or substantially all of its assets to, the Company or another Guarantor in a
transaction in compliance with Section 5.01 hereof;
and in each case, such Guarantor has delivered to the Trustee an Officers,
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transaction have been complied
with.
Each Guarantor that is designated as an Unrestricted Subsidiary in
accordance with this Indenture shall be released from its Guarantee and the
related obligations set forth in this Indenture so long as it remains an
Unrestricted Subsidiary.
SECTION 10.05. Guarantee Obligations Subordinated
to Guarantor Senior Indebtedness.
Each Guarantor covenants and agrees, and each Holder of Notes, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 10, the Indebtedness
represented by the Guarantee and the payment of the principal of, premium, if
any, and interest on the Notes pursuant to the Guarantee by such Guarantor are
hereby expressly made subordinate and subject in right of payment as provided in
this Article 10 to the prior payment and satisfaction in full in cash of all
Guarantor Senior Indebtedness of such Guarantor.
This Article 10 shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of or continue to hold Guarantor
Senior Indebtedness of any Guarantor; and such provisions are made for the
benefit of the holders of Guarantor Senior Indebtedness of each Guarantor; and
such holders are made obligees hereunder and they or each of them may enforce
such provisions.
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SECTION 10.06. Payment Over of Proceeds Upon
Dissolution, etc., of a Guarantor.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any liquidation, dissolution or other winding-up of any Guarantor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (c) any general assignment for the benefit of creditors or other marshalling
of assets or liabilities of any Guarantor, then and in any such event:
(1) the holders of all Guarantor Senior Indebtedness of such Guarantor
shall be entitled to receive payment and satisfaction in full in cash of
all amounts due on or in respect of all such Guarantor Senior Indebtedness,
before the Holders of the Notes are entitled to receive or retain, pursuant
to the Guarantee of such Guarantor, any payment or distribution of any kind
or character (other than a payment or distribution in the form of Permitted
Junior Securities) by such Guarantor on account of any of its Obligations
on its Guarantee; and
(1) any payment or distribution of assets of such Guarantor of any
kind or character (other than a payment or distribution in the form of
Permitted Junior Securities), whether in cash, property or securities, by
set-off or otherwise, to which the Holders or the Trustee would be entitled
but for the provisions of this Article 10 shall be paid by the liquidating
trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Guarantor Senior Indebtedness of such
Guarantor or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of
such Guarantor Senior Indebtedness may have been issued, ratably according
to the aggregate amounts remaining unpaid on account of such Guarantor
Senior Indebtedness held or represented by each, to the extent necessary to
make payment in full in cash of all such Guarantor Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of such Guarantor
Senior Indebtedness; and
(2) in the event that, notwithstanding the foregoing provisions of
this Section 10.06, the Trustee or the Holder of any Note shall have
received any payment or
78
distribution of assets of such Guarantor of any kind or character, whether
in cash, property or securities, including, without limitation, by way of
set-off or otherwise, in respect of any of its Obligations on its Guarantee
before all Guarantor Senior Indebtedness of such Guarantor is paid and
satisfied in full in cash, then and in such event such payment or
distribution (other than a payment or distribution in the form of Permitted
Junior Securities) shall be held by the recipient, in trust for the benefit
of the holders of such Guarantor Senior Indebtedness and shall be
immediately paid over or delivered forthwith to the trustee in bankruptcy,
receiver liquidating trustee or agent, custodian, assignee, agent or other
Person making payment or distribution of assets of such Guarantor for
application to the payment of all such Guarantor Senior Indebtedness
remaining unpaid, to the extent necessary to pay all of such Guarantor
Senior Indebtedness in full in cash after giving effect to any concurrent
payment or distribution, or provision therefor, to or for the holders of
such Guarantor Senior Indebtedness.
The consolidation of a Guarantor with, or the merger of a Guarantor with or
into, another Person or the liquidation or dissolution of a Guarantor following
the transfer of all of its assets (as an entirety or substantially as an
entirety) to another Person upon the terms and conditions set forth in Article 5
hereof shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of such Guarantor for the purposes of this Article 10 if the
Person formed by such consolidation or the surviving entity of such merger or
the Person which acquires by transfer such assets (as an entirety or
substantially as an entirety) shall, as a part of such consolidation, merger or
transfer, comply with the conditions set forth in such Article 5 hereof.
SECTION 10.07. Suspension of Guarantee Obligations
When Guarantor Senior Indebtedness
in Default
(a) Unless Section 10.06 hereof shall be applicable, after the occurrence
of a Payment Default with respect to any Designated Senior Indebtedness which
constitutes Guarantor Senior Indebtedness, no payment or distribution (other
than a payment or distribution in the form of Permitted Junior Securities) of
any assets or securities of any Guarantor or any Subsidiary of such Guarantor of
any kind or character (including, without limitation, cash, property and any
payment or distribution which may be payable or deliverable by reason of the
payment of any other Indebtedness of such Guarantor being subordinated to its
Obligations on its Guarantee) may be made by or on behalf of such
79
Guarantor or any Subsidiary of such Guarantor, including, without limitation, by
way of set-off or otherwise, for or on account of its Obligations on its
Guarantee, or for or on account of the purchase, defeasance or acquisition of
any Notes and neither the Trustee nor any holder or owner of any Notes shall
take or receive from any Guarantor or any Subsidiary of such Guarantor, directly
or indirectly in any manner, payment in respect of all or any portion of its
Obligations on its Guarantee following the occurrence of a Payment Default on
Designated Senior Indebtedness which constitutes Guarantor Senior Indebtedness,
and in any such event, such prohibition shall continue until such Payment
Default is cured, waived in writing or ceases to exist. At such time as the
prohibition set forth in the preceding sentence shall no longer be in effect,
subject to the provisions of the following paragraph (b), such Guarantor shall
resume making any and all required payments in respect of its Obligations on its
Guarantee.
(b) Unless Section 10.06 hereof shall be applicable, upon the occurrence of
a Non-Payment Event of Default with respect to any Designated Senior
Indebtedness which constitutes Guarantor Senior Indebtedness of any Guarantor,
no payment or distribution (other than a payment or distribution in the form of
Permitted Junior Securities) of any assets of such Guarantor of any kind or
character (including, without limitation, cash, property and any payment or
distribution which may be payable or deliverable by reason of the payment of any
other Indebtedness of such Guarantor being subordinated to its Obligations on
its Guarantee) shall be made by such Guarantor, including, without limitation,
by way of set-off or otherwise, for or on account of any of its Obligations on
its Guarantee, or for or on account of the purchase, defeasance or acquisition
of any Notes and neither the Trustee nor any holder or owner of any Notes shall
take or receive from any Guarantor or any Subsidiary of such Guarantor, directly
or indirectly in any manner, payment in respect of all or any portion of its
Obligations on its Guarantee for a period (a "Guarantee Payment Blockage
Period") commencing on the date of receipt by the Trustee of written notice from
an authorized person on behalf of the holders of Designated Senior Indebtedness
which constitutes Guarantor Senior Indebtedness (the "Guarantor Representative")
of such Non-Payment Event of Default, unless and until (subject to any blockage
of payments that may then be in effect under the preceding paragraph (a)) the
earliest to occur of the following events: (w) more than 179 days shall have
elapsed since the date of receipt of such written notice by the Trustee, (x)
such Non-Payment Event of Default shall have been cured or waived in writing or
shall have ceased to exist, (y) such Designated Senior Indebtedness shall have
been paid in full in cash or (z) such Guarantee Payment Blockage Period shall
have been terminated by written notice to such Guarantor or the Trustee from the
Guarantor Representative, after which, in the case of clause (w), (x), (y) or
(z), such Guarantor shall resume making any and all required payments in respect
of its Xxxxxx-
00
tions on its Guarantee. In no event shall a Guarantee Payment Blockage Period
extend beyond 179 days from the date of the receipt by the Trustee of the notice
referred to in this Section 10.07(b) (the "Initial Guarantee Blockage Period").
No event of default with respect to any Designated Senior Indebtedness which
constitutes Guarantor Senior Indebtedness (other than a Payment Default) which
existed or was continuing on the date of the commencement of any Guarantee
Payment Blockage Period initiated by the Guarantor Representative shall be, or
be made, the basis for the commencement of a second Guarantee Payment Blockage
Period initiated by the Guarantor Representative whether or not within the
Initial Guarantee Blockage Period, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days. Any number of
additional Guarantee Payment Blockage Periods may be commenced during the
Initial Guarantee Blockage Period; provided, however, that no such additional
Guarantee Payment Blockage Period shall extend beyond the Initial Guarantee
Blockage Period. After the expiration of the Initial Guarantee Blockage Period,
no Guarantee Payment Blockage Period may be commenced under this Section
10.07(b) and no Payment Blockage Period may be commenced under Section 11.03(b)
hereof until at least 180 consecutive days have elapsed from the last day of the
Initial Guarantee Blockage Period. Notwithstanding any other provisions of this
Indenture, no Non-Payment Event of Default with respect to any Designated Senior
Indebtedness which existed or was continuing on the date of the commencement of
any Guarantee Payment Blockage Period initiated by the Guarantor Representative
shall be, or be made, the basis for the commencement of a second Guarantor
Representative Payment Blockage Period initiated by such Guarantor
Representative, whether or not within the Initial Guarantee Blockage Period,
unless such event of default shall have been cured or waived for a period of not
less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Trustee or the
Holder of any Note shall have received any payment from a Guarantor prohibited
by the foregoing provisions of this Section 10.07, then and in such event upon
written notice to the Trustee or the Holder of such Note, as the case may be,
such payment shall be paid over and delivered forthwith to the holders of
Guarantor Senior Indebtedness or their representative or representatives or to
the trustee or trustees under any indenture under which any instruments
evidencing any of such Guarantor Senior Indebtedness may have been issued,
ratably according to the aggregate amounts remaining unpaid on account of the
Guarantor Senior Indebtedness held or represented by each, if no amount are then
due in respect of Guarantor Senior Indebtedness, promptly returned to the
Guarantor, or as a court of competent jurisdiction shall direct.
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SECTION 10.08. Subrogation to Rights of Holders
of Guarantor Senior Indebtedness.
Upon the payment in full of all Guarantor Senior Indebtedness of a
Guarantor, the Holders shall be subrogated to the rights of the holders of such
Guarantor Senior Indebtedness to receive payments and distributions of cash,
property and securities of such Guarantor made on such Guarantor Senior
Indebtedness until all amounts due to be paid under the Guarantee shall be paid
in full. For the purposes of such subrogation, no payments or distributions to
holders of Guarantor Senior Indebtedness of any cash, property or securities to
which Holders of the Notes or the Trustee would be entitled except for the
provisions of this Article 10, and no payments over pursuant to the provisions
of this Article 10 to holders of Guarantor Senior Indebtedness by Holders of the
Notes or the Trustee, shall, as among each Guarantor, its creditors other than
holders of Guarantor Senior Indebtedness and the Holders of the Notes, be deemed
to be a payment or distribution by such Guarantor to or on account of such
Guarantor Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article 10 shall have been applied,
pursuant to the provisions of this Article 10, to the payment of all amounts
payable under Guarantor Senior Indebtedness, then and in such case, the Holders
shall be entitled to receive from the holders of such Guarantor Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of Guarantor Senior Indebtedness in excess of the amount sufficient
to indefeasibly pay in full in cash all amounts payable under or in respect of
such Guarantor Senior Indebtedness in full in cash.
SECTION 10.09. Guarantee Subordination Provisions
Solely To Define Relative Rights.
The subordination 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 Guarantor Senior Indebtedness on the other hand.
Nothing contained in this Article 10 or elsewhere in this Indenture or in the
Notes is intended to or shall (a) impair, as among each Guarantor, its creditors
other than holders of its Guarantor Senior Indebtedness and the Holders of the
Notes, the obligation of such Guarantor, which is absolute and unconditional, to
make payments to the Holders in respect of its Obligations on its Guarantee in
accordance with its terms; or (b) affect the relative rights against such
Guarantor of the Holders of the Notes and creditors of such Guarantor other than
the holders of the Guarantor Senior Indebtedness; or (c) prevent the Trustee or
the Holder of any Note from exercising all remedies otherwise permitted by
applicable law upon a Default or an Event of Default under
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this Indenture, subject to the rights, if any, under this Article 10 of the
holders of Guarantor Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding-up, assignment for the benefit of
creditors or other marshaling of assets and liabilities referred to in Section
10.06 hereof, to receive, pursuant to and in accordance with such Section, cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder, or (2) under the conditions specified in Section 10.07 hereof, to
prevent any payment prohibited by such Section or enforce their rights pursuant
to Section 10.07(c) hereof.
The failure by any Guarantor to make a payment in respect of its
Obligations on its Guarantee by reason of any provision of this Article 10 shall
not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
SECTION 10.10. Application of Certain
Article 11 Provisions.
The provisions of Sections 11.04, 11.07, 11.08, 11.09, 11.10, 11.11, 11.12
and 11.13 hereof shall apply, mutatis mutandis, to each Guarantor and their
respective holders of Guarantor Senior Indebtedness and the rights, duties and
obligations set forth therein shall govern the rights, duties and obligations of
each Guarantor, the holders of Guarantor Senior Indebtedness, the Holders and
the Trustee with respect to the Guarantee and all references therein to Article
11 hereof shall mean this Article 10.
ARTICLE 11
SUBORDINATION OF NOTES
SECTION 11.01. Notes Subordinate to Senior Indebtedness
The Company covenants and agrees, and each Holder of Notes, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article 11, the Indebtedness
represented by the Notes and the payment of the principal of, premium, if any,
and interest on the Notes are hereby expressly made subordinate and subject in
right of payment as provided in this Article 11 to the prior payment in full in
cash of all Senior Indebtedness.
This Article 11 shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of or continue to hold Senior
Indebtedness; and such provisions are made for the benefit of the holders of
Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
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SECTION 11.02. Payment Over of Proceeds upon Dissolution,
etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, arrangement, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, whether voluntary or involuntary or (b) any
liquidation, dissolution or other winding-up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (c) any
general assignment for the benefit of creditors or other marshaling of assets or
liabilities of the Company, then and in any such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment and satisfaction in full in cash of all amounts due on or in
respect of all Senior Indebtedness, before the Holders of the Notes are
entitled to receive any payment or distribution of any kind or character
(other than a payment or distribution in the form of Permitted Junior
Securities) on account of principal of, premium, if any, or interest on the
Notes; and
(2) any payment or distribution of assets of the Company of any kind
or character (other than a payment or distribution in the form of Permitted
Junior Securities), whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article 11 shall be paid by the liquidating trustee
or agent or other Person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of such Senior
Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 11.02, the Trustee or the Holder of any Note shall have
received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, including, without
limitation, by way of set-off or
84
otherwise, in respect of principal of, premium, if any, and interest on the
Notes before all Senior Indebtedness is paid and satisfied in full in cash,
then and in such event such payment or distribution (other than a payment
or distribution in the form of Permitted Junior Securities) shall be held
by the recipient, in trust, for the benefit of holders of Senior
Indebtedness and shall be immediately paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets of
the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full in cash after giving effect to any concurrent payment or distribution,
or provision therefor, to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with or
into, another Person or the liquidation or dissolution of the Company following
the conveyance, transfer or lease of its properties and assets substantially as
an entirety to another Person upon the terms and conditions set forth in Article
5 hereof shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of the Company for the purposes of this Article 11 if the Person
formed by such consolidation or the surviving entity of such merger or the
Person which acquires by conveyance, transfer or lease such properties and
assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions set forth in such Article 5 hereof.
SECTION 11.03. Suspension of Payment When Senior
Indebtedness in Default
(a) Unless Section 11.02 hereof shall be applicable, after the occurrence
of a Payment Default no payment or distribution (other than a payment or
distribution in the form of Permitted Junior Securities) of any assets or
securities of the Company or any Subsidiary of any kind or character (including,
without limitation, cash, property and any payment or distribution which may be
payable or deliverable by reason of the payment of any other Indebtedness of the
Company being subordinated to the payment of the Notes by the Company) may be
made by or on behalf of the Company or any Subsidiary, including, without
limitation, by way of set-off or otherwise, for or on account of principal of,
premium, if any, or interest on the Notes, or for or on account of the purchase,
redemption, defeasance or other acquisition of any Notes, and neither the
Trustee nor any holder or owner of any Notes shall take or receive from the
Company or any
85
Subsidiary, directly or indirectly in any manner, payment in respect of all or
any portion of Notes following the occurrence of a Payment Default, and in any
such event, such prohibition shall continue until such Payment Default is cured,
waived in writing or ceases to exist. At such time as the prohibition set forth
in the preceding sentence shall no longer be in effect, subject to the
provisions of the following paragraph (b), the Company shall resume making any
and all required payments in respect of the Notes, including any missed
payments.
(b) Unless Section 11.02 hereof shall be applicable, upon the occurrence of
a Non-Payment Event of Default, no payment or distribution (other than a payment
or distribution in the form of Permitted Junior Securities) of any assets of the
Company or any Subsidiary of any kind or character (including, without
limitation, cash, property and any payment or distribution which may be payable
or deliverable by reason of the payment of any other Indebtedness of the Company
being subordinated to the payment of the Notes by the Company) shall be made by
or on behalf of the Company, including, without limitation, by way of set-off or
otherwise, for or on account of any principal of, premium, if any, or interest
on the Notes or for or on account of the purchase, redemption, defeasance or
other acquisition of any Notes, and neither the Trustee nor any holder or owner
of any Notes shall take or receive from the Company or any Subsidiary, directly
or indirectly, in any manner, payment in respect of all or any portion of the
Notes for a period (a "Payment Blockage Period") commencing on the date of
receipt by the Trustee of written notice from an authorized Person on behalf of
the holders of Designated Senior Indebtedness of the Company (the "Authorized
Person") of such Non-Payment Event of Default unless and until (subject to any
blockage of payments that may then be in effect under the preceding paragraph
(a)) the earliest to occur of the following events: (w) more than 179 days shall
have elapsed since the date of receipt of such written notice by the Trustee,
(x) such Non-Payment Event of Default shall have been cured or waived in writing
or shall have ceased to exist, (y) such Designated Senior Indebtedness shall
have been paid in full in cash or (z) such Payment Blockage Period shall have
been terminated by written notice to the Company or the Trustee from such
Authorized Person initiating such Payment Blockage Period, after which, in the
case of clause (w), (x), (y) or (z), the Company shall resume making any and all
required payments in respect of the Notes, including any missed payments. In no
event shall a Payment Blockage Period extend beyond 179 days from the date of
the receipt by the Trustee of the notice referred to in this Section 11.03(b)
(the "Initial Blockage Period"). Any number of additional Payment Blockage
Periods may be commenced during the Initial Blockage Period; provided, however,
that no such additional Payment Blockage Period shall extend beyond the Initial
Blockage Period. After the expiration of the Initial Blockage Period, no Payment
Blockage Period may be commenced under this
86
Section 10.03(b) until at least 180 consecutive days have elapsed from the last
day of the Initial Blockage Period. Notwithstanding any other provisions of this
Indenture, no Non-Payment Event of Default with respect to Designated Senior
Indebtedness which existed or was continuing on the date of the commencement of
any Payment Blockage Period initiated by such Authorized Person shall be, or be
made, the basis for the commencement of a second Payment Blockage Period
initiated by such Authorized Person, whether or not within the Initial Brokerage
Period, unless such event of default shall have been cured or waived for a
period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Trustee or the
Holder of any Note shall have received any payment prohibited by the foregoing
provisions of this Section 11.03, then and in such event such payment shall be
paid over and delivered forthwith to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, or, if
no amounts are then due in respect of Senior Indebtedness, promptly returned to
the Company, or otherwise as a court of competent jurisdiction shall direct.
SECTION 11.04. Trustee's Relation to Senior Indebtedness
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 11, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall mistakenly pay
over or deliver to Holders, the Company or any other Person moneys or assets to
which any holder of Senior Indebtedness shall be entitled by virtue of this
Article 11 or otherwise.
SECTION 11.05. Subrogation to Rights of Holders of Senior
Indebtedness
Upon the payment in full of all Senior Indebtedness, the Holders of the
Notes shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest on the Notes shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which
87
the Holders of the Notes or the Trustee would be entitled except for the
provisions of this Article 11, and no payments over pursuant to the provisions
of this Article 11 to the holders of Senior Indebtedness by Holders of the Notes
or the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Notes, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the provisions of this Article 11 shall have been applied,
pursuant to the provisions of this Article 11, to the payment of all amounts
payable under the Senior Indebtedness of the Company, then and in such case the
Holders shall be entitled to receive from the holders of such Senior
Indebtedness at the time outstanding any payments or distributions received by
such holders of such Senior Indebtedness in excess of the amount sufficient to
pay all amounts payable under or in respect of such Senior Indebtedness in full
in cash.
SECTION 11.06. Provisions Solely to Define Relative
Rights
The provisions of this Article 11 are and are intended solely for the
purpose of defining the relative rights of the Holders of the Notes on the one
hand and the holders of Senior Indebtedness on the other hand. Nothing contained
in this Article 11 or elsewhere in this Indenture or in the Notes is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Notes, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Notes the
principal of, premium, if any, and interest on the Notes as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Notes and creditors of
the Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Note from exercising all remedies otherwise
permitted by applicable law upon a Default or an Event of Default under this
Indenture, subject to the rights, if any, under this Article 11 of the holders
of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding-up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 11.02 hereof, to
receive, pursuant to and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder, or
(2) under the conditions specified in Section 11.03, to prevent any payment
prohibited by such Section or enforce their rights pursuant to Section 11.03(c)
hereof.
88
The failure to make a payment on account of principal of, premium, if any,
or interest on the Notes by reason of any provision of this Article 11 shall not
be construed as preventing the occurrence of a Default or an Event of Default
hereunder.
SECTION 11.07. Trustee to Effectuate Subordination
Each Holder of a Note by his acceptance thereof authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article 11 and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of the
Company whether in bankruptcy, insolvency, receivership proceedings or
otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of the Company owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved. If the Trustee does
not file such a claim prior to 30 days before the expiration of the time to file
such a claim, the holders of Senior Indebtedness, or any Authorized Person, may
file such a claim on behalf of Holders of the Notes.
SECTION 11.08. No Waiver of Subordination Provisions
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of subsection (a) of this Section
11.08, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article 11 or the
obligations hereunder of the Holders of the Notes to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
event shall any such actions limit the right of the Holders
89
of the Notes to take any action to accelerate the maturity of the Notes pursuant
to Article 6 hereof or to pursue any rights or remedies hereunder or under
applicable laws if the taking of such action does not otherwise violate the
terms of this Indenture.
SECTION 11.09. Notice to Trustee
(a) The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee at its Corporate Trust Office in respect of the Notes. Notwithstanding
the provisions of this Article 11 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in respect of the
Notes, unless and until the Trustee shall have received written notice thereof
from the Company or a holder of Senior Indebtedness or from any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of this Section 11.09, shall be
entitled in all respects to assume that no such facts exist.
(b) Subject to the provisions of Section 7.01 hereof, the Trustee shall be
entitled to rely on the delivery to it of a written notice to the Trustee and
the Company by a Person representing itself to be a holder of Senior
Indebtedness (or a trustee, fiduciary or agent therefor) to establish that such
notice has been given by a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor); provided, however, that failure to give such
notice to the Company shall not affect in any way the ability of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 11, 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 11, 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 11.10. Reliance on Judicial Order or Certificate
of Liquidating Agent
Upon any payment or distribution of assets of the Company referred to in
this Article 11, the Trustee, subject to the provisions of Section 7.01 hereof,
and the Holders shall be entitled to rely upon any order or decree entered by
any court of competent jurisdiction in which such insolvency, bankruptcy,
90
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 11; provided that the foregoing shall
apply only if such court has been fully apprised of the provisions of this
Article 11.
SECTION 11.11. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's
Rights
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article 11 with respect to any Senior Indebtedness which may
at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article 11 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 7.07, or any other
provision hereof.
SECTION 11.12. Article Applicable to Paying Agents
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 11 shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article 11 in addition to or in place of the Trustee.
SECTION 11.13. No Suspension of Remedies
Nothing contained in this Article 11 shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under this Article 11 of
the holders, from time to time, of Senior Indebtedness.
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ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 12.02. Notices
Any notice or communication shall be given in writing and delivered in
person, sent by facsimile, delivered by commercial courier service or mailed by
first-class mail, postage prepaid, addressed as follows:
If to the Company or any Guarantor:
ENTEX Information Services, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxx Xxxx 00000
Attention: General Counsel
Copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
If to the Trustee:
Marine Midland Bank
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Corporate Trust Services
Such notices or communications shall be effective when received and shall
be sufficiently given if so given within the time prescribed in this Indenture.
The Company, the Guarantors or the Trustee by written notice to the others
may designate additional or different addresses for subsequent notices or
communications.
92
Any notice or communication mailed to a Noteholder shall be mailed to him
by first-class mail, postage prepaid, at his address shown on the register kept
by the Registrar.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication to a Noteholder is mailed in the manner provided above,
it shall be deemed duly given, whether or not the addressee receives it.
In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice as required by
this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 12.03. Communications by Holders with Other
Holders
Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
Precedent
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee:
(1) an Officers' Certificate (which shall include the statements set
forth in Section 12.05 below) stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set
forth in Section 12.05 below) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 12.05. Statements Required in Certificate and
Opinion
Each certificate and opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
93
(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, it or he has made
such examination or investigation as is necessary to enable it or him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of such Person,
such covenant or condition has been complied with.
SECTION 12.06. When Treasury Notes Disregarded
In determining whether the Holders of the required aggregate principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or any other obligor on the Notes or by any Affiliate of any of
them shall be disregarded, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes which the Trustee actually knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Notes and that the pledgee is not
the Company or any other obligor upon the Notes or any Affiliate of any of them.
SECTION 12.07. Rules by Trustee and Agents
The Trustee may make reasonable rules for action by or meetings of
Noteholders. The Registrar and Paying Agent may make reasonable rules for their
functions.
SECTION 12.08. Business Days; Legal Holidays
A "Business Day" is a day that is not a Legal Holiday. A "Legal Holiday" is
a Saturday, a Sunday, a federally-recognized holiday or a day on which banking
institutions are not required to be open in the State of New York. If a payment
date is a Legal Holiday 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.
94
SECTION 12.09. Governing Law
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES.
SECTION 12.10. No Adverse Interpretation of Other
Agreements
This Indenture may not be used to interpret another indenture, loan,
security or debt agreement of the Company or any Subsidiary thereof. No such
indenture, loan, security or debt agreement may be used to interpret this
Indenture.
SECTION 12.11. No Recourse Against Others
A director, officer, employee, stockholder or incorporator, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Notes, the Guarantees or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creations. Each Noteholder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
SECTION 12.12. Successors
Subject to the terms of this Indenture, all agreements of the Company and
the Guarantors in this Indenture and the Notes shall bind their respective
successors. All agreements of the Trustee, any additional trustee and any Paying
Agents in this Indenture shall bind its successor.
SECTION 12.13. Multiple Counterparts
The parties may sign multiple counterparts of this Indenture. Each signed
counterpart shall be deemed an original, but all of them together represent one
and the same agreement.
SECTION 12.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
95
SECTION 12.15. Separability
Each provision of this Indenture shall be considered separable and if for
any reason any provision which is not essential to the effectuation of the basic
purpose of this Indenture or the Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
96
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed all as of the date and year first written above.
ENTEX INFORMATION SERVICES, INC.
By: /s/ Xxxx X. XxXxxxx
----------------------------------
Name: Xxxx X. XxXxxxx
Title: President
GUARANTORS:
ENTEX INFORMATION SERVICES OF
MICHIGAN, INC.
ENTEX INFORMATION SERVICES OF
COLORADO, INC.
ENTEX SERVICES, INC.
ERLANGER LAND CO., INC.
FCP TECHNOLOGIES, INC.
By:/s/ Xxxx X. XxXxxxx
-----------------------------------
Name: Xxxx X. XxXxxxx
Title: President
MARINE MIDLAND BANK,
as Trustee
By:/s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
EXHIBIT A
[FORM OF FACE OF NOTE]
CUSIP Number
ENTEX INFORMATION SERVICES, INC.
12 1/2% SENIOR SUBORDINATED NOTE DUE 2006
ENTEX Information Services, Inc., a Delaware corporation (the "Company,"
which term includes any successor corporation), for value received promises to
pay to __________ or registered assigns the principal sum of __________
($________) on August 1, 2006.
Interest Payment Dates: Feburary 1 and August 1, commencing February 1,
1999.
Record Dates: January 15 and July 15.
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit of the Indenture (as hereinafter defined)
or be valid or obligatory for any purpose.
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by
facsimile by their duly authorized officers.
ENTEX INFORMATION SERVICES, INC.
By:
-------------------------------
Name:
Title:
Trustee's Certificate of Authentication:
This is one of the Notes referred
to in the within-mentioned Indenture
Dated:
MARINE MIDLAND BANK, as Trustee
By:
---------------------------------
Authorized Signatory
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ENTEX INFORMATION SERVICES, INC.
12 1/2% SENIOR SUBORDINATED NOTE DUE 2006
1. INTEREST.
ENTEX INFORMATION SERVICES, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note semi-annually on
February 1 and August 1 of each year (each an "Interest Payment Date"),
commencing on February 1, 1999, at the rate of 12 1/2% per annum. Interest will
be computed on the basis of a 360-day year of twelve 30-day months. Interest on
the Notes will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from the date of the original issuance of the
Notes.
The Issuers shall pay interest on overdue principal and on overdue
interest, to the extent lawful, at the rate equal to the rate borne by the
Notes.
2. METHOD OF PAYMENT.
The Company will pay interest on this Note provided for in Paragraph 1
above (except defaulted interest) to the person who is the registered Holder of
this Note at the close of business on the January 15 or July 15 immediately
preceding the Interest Payment Date (whether or not such day is a Business Day).
The Holder must surrender this Note to a Paying Agent to collect principal
payments. The Company will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts; provided, however, that the Company may pay principal,
premium, if any, and interest by check payable in such money. The Company may
mail an interest check to the Holder's registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, Marine Midland Bank (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to the Holders of the Notes. Neither the Company nor any of its or Affiliates
may act as Paying Agent, but may act as Registrar.
4. INDENTURE; RESTRICTIVE COVENANTS.
The Company issued this Note under an Indenture dated as of July 29, 1998
(the "Indenture") among the Company, the Guarantors and the Trustee. The terms
of the Note include those stated in the Indenture and those made part of this
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code Section
00xxx-
X-0
77bbbb) as in effect on the date of this Indenture. This Note is subject to all
such terms, and the Holder of this Note is referred to the Indenture and said
Trust Indenture Act for a statement of them. All capitalized terms in this Note,
unless otherwise defined, have the meanings assigned to them by the Indenture.
The Notes are general unsecured obligations of the Company limited to
$100,000,000 aggregate principal amount. The Indenture imposes certain
restrictions on, among other things, the incurrence of indebtedness, the
incurrence of liens by the Company and its Restricted Subsidiaries, mergers and
sale of assets, the payments of dividends on, or the repurchase of, capital
stock of the Company and its Restricted Subsidiaries, certain other restricted
payments by the Company and its Restricted Subsidiaries, certain transactions
with, Affiliates and a provision regarding change-of-control transactions.
5. SUBORDINATION.
The Indebtedness evidenced by the Notes is, to the extent and in the manner
provided in the Indenture, subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness (as defined in the Indenture),
and this Note is issued subject to such provisions. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose.
6. OPTIONAL REDEMPTION.
(a) The Company, at its option, may redeem the Notes, in whole or in part,
at any time or from time to time on or after August 1, 2003, at the following
Redemption Prices (expressed as a percentage of principal amount), together, in
each case, with accrued and unpaid interest to the Redemption Date, if redeemed
during the twelve-month period beginning on of each year listed below:
Year Redemption Price
---- ----------------
2003 ..................................................... 106.250%
2004 ..................................................... 103.125%
2005 and thereafter ...................................... 100.000%
(b) Notwithstanding the foregoing, upon a Change of Control on or prior to
August 1, 2000, the Company, at its option, may redeem all but not less than all
of the Notes outstanding at a redemption price equal to 112 1/2% of the
aggregate
A-4
principal amount of the Notes so redeemed plus accrued interest, if any, to the
date of such redemption. In addition, the Company may redeem in the aggregate up
to 35% of the original principal amount of Notes at any time and from time to
time prior to August 1, 2000 at a redemption price equal to 112 1/2% of the
aggregate principal amount so redeemed, plus accrued interest to the Redemption
Date out of the Net Proceeds of one or more Public Equity Offerings; provided
that at least $65,000,000 of the principal amount of Notes originally issued
remain outstanding immediately after the occurrence of any such redemption and
that any such redemption occurs within 90 days following the closing of any such
Public Equity Offering.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed by first class mail at least 30 days
but not more than 60 days prior to the Redemption Date to each Holder of Notes
to be redeemed at its last address as it shall appear on the register maintained
by the Registrar of the Notes. On and after any Redemption Date, interest will
cease to accrue on the Notes or portions thereof called for redemption unless
the Company shall fail to redeem any such Note.
8. OFFERS TO PURCHASE.
The Indenture requires that certain proceeds from Asset Sales be used,
subject to further limitations contained therein, to make an offer to purchase
certain amounts of Notes in accordance with the procedures set forth in the
Indenture. The Company is also required to make an offer to purchase the Notes
upon the occurrence of a Change of Control in accordance with procedures set
forth in the Indenture.
9. REGISTRATION RIGHTS.
Pursuant to the Registration Rights Agreement among the Company, the
Guarantors and CIBC Xxxxxxxxxxx Corp. and Lazard Freres & Co. LLC, as initial
purchasers of the Notes, the Company will be obligated to consummate an exchange
offer pursuant to which the Holder of this Note shall have the right to exchange
this Note for Notes issued under the Indenture (or a trust indenture
substantially identical to the Indenture in accordance with the terms of the
Registration Rights Agreement) which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects to the Notes. The Holders shall be entitled to receive certain
additional interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.
A-5
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Notes are in registered form in denominations of $1,000 and integral
multiples thereof. A Holder may register the transfer or exchange of Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Note selected for redemption
or register the transfer of or exchange of any Note for a period of 15 days
before the mailing of notice of redemption of Notes to be redeemed or any Note
after it is called for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
11. PERSONS DEEMED OWNERS.
The registered Holder of this Note may be treated as the owner of it for
all purposes.
12. UNCLAIMED MONEY.
If money for the payment of principal of, premium, if any, or interest on
any Note remains unclaimed for two years, the Trustee or Paying Agent will pay
the money back to the Company at its written request. After such payment,
Holders entitled to money must look only to the Company for payment as general
creditors unless applicable abandoned property law designates another person.
13. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be modified,
amended or supplemented by the Company, the Guarantors and the Trustee with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding and any existing Default or compliance with any
provision may be waived in a particular instance with the consent of the Holders
of a majority in aggregate principal amount of the Notes then outstanding.
Without the consent of Holders, the Company, the Guarantors and the Trustee may
amend the Indenture or the Notes or supplement the Indenture for certain
specified purposes including providing for uncertificated Notes in addition to
certificated Notes, curing any ambiguity, defect or inconsistency, or making any
other change that does not adversely affect the interests of the Holders in any
material respect.
14. SUCCESSOR ENTITY.
When a successor corporation assumes all the obligations of its predecessor
under the Notes and the Indenture and immediately
A-6
before and thereafter no Default exists and certain other conditions are
satisfied, the predecessor corporation will be released from those obligations.
15. DEFAULTS AND REMEDIES.
Events of Default are set forth in the Indenture. If an Event of Default
(other than an Event of Default pursuant to Section 6.01(6) or (7) of the
Indenture with respect to the Company) occurs and is continuing, the Trustee or
the Holders of not less than 25% in aggregate principal amount of the Notes then
outstanding, by notice to the Company, may declare to be immediately due and
payable, the entire principal amount of all the Notes then outstanding plus
accrued interest to the date of acceleration and (i) such amounts shall become
immediately due and payable or (ii) if there are any amounts outstanding under
or in respect of the Credit Facility, such amounts with respect to the Notes
shall become due and payable upon the first to occur of an acceleration of
amounts under or in respect of the Credit Facility or five Business Days after
receipt by the Company and the Representative of notice of the acceleration of
the Notes; provided, however, that after such acceleration but before a judgment
or decree based on such acceleration is obtained by the Trustee, the Holders of
a majority in aggregate principal amount of the outstanding Notes may, under
certain circumstances, rescind and annul such acceleration if (a) all Events of
Default, other than nonpayment of principal, premium, if any, or interest, that
has become due solely because of acceleration, have been cured or waived as
provided in the Indenture; (b) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; and (c) if the recission would not conflict with any judgement or
decree. In case an Event of Default specified in Section 6.01(6) or (7) of the
Indenture with respect to the Company or any Significant Subsidiary occurs, the
principal, premium, if any, and interest with respect to all of the Notes, shall
be due and payable immediately without any declaration or other act on the part
of the Trustee or the Holders of the Notes.
16. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee, in its individual or any other capacity, may become the owner
or pledgee of Notes and may make loans to, accept deposits from, and perform
services or otherwise deal with the Company, any Guarantor or their respective
Affiliates, as if it were not the Trustee.
A-7
17. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a stockholder, officer, employee,
director or incorporator, as such, of the Company or any Guarantor shall not
have any liability for any obligations of the Company or any Guarantor under the
Notes, the Guarantees or the Indenture or for any claim based on, in respect or
by reason of, such obligations or their creation. The Holder of this Note by
accepting this Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Note.
18. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of the entire indebtedness
on this Note and for defeasance of certain covenants in the Indenture upon
compliance by the Company with certain conditions set forth in the Indenture.
19. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder of a Note 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).
20. 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 has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Holders of the Notes. 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.
21. GOVERNING LAW.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.
THE COMPANY WILL FURNISH TO ANY HOLDER OF A NOTE UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO: ENTEX
INFORMATION SERVICES, INC., Six
X-0
Xxxxxxxxxxxxx Xxxxx, Xxx Xxxxx, Xxx Xxxx 00000, Attention: General Counsel.
22. GUARANTEES BY SUBSIDIARIES.
The Notes are guaranteed by certain Subsidiaries for the benefit of the
Holders. Reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and obligations thereunder of
the Guarantors, the Trustee and the Holders.
23. THE GLOBAL NOTE
So long as this Global Note is registered in the name of the Depository or
its nominee, members of, or participants in, the Depository ("Agent Members")
shall have no rights under the Indenture with respect to this Global Note held
on their behalf by the Depository or the Trustee as its custodian, and the
Depository may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of this Global Note for all
purpose. Notwithstanding the foregoing, nothing herein shall (i) prevent the
Company, the Trustee or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or (ii) impair, as between the Depository and its Agent Members,
the operation of customary practices governing the exercise of the rights of a
Holder of Notes.
The Holder of this Global Note may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests in this
Global Note through Agent Members, to take any action which a Holder of Notes is
entitled to take under the Indenture or the Notes.
Whenever, as a result of optional redemption by the Company, a Change of
Control Offer, an Excess Proceeds Offer, an Exchange Offer or an exchange for
Physical Notes, this Global Note is redeemed, repurchased or exchanged in part,
this Global Note shall be surrendered by the Holder thereof to the Trustee who
shall cause an adjustment to be made to Schedule A hereof so that the principal
amount of this Global Note will be equal to the portion not redeemed,
repurchased or exchanged and shall thereafter return this Global Note to such
Holder; provided that this Global Note shall be in a principal amount at
Maturity of $1,000 or an integral multiple of $1,000.*
----------
* Include for Global Notes only.
A-9
SCHEDULE A
SCHEDULE OF PRINCIPAL AMOUNT
The initial principal amount at Maturity of this Global Note shall be
($______________). The following decreases/increases in the principal amount of
this Global Note have been made:
Notation
Total Principal Made by
Date of Decrease in Increase in Amount Following or on
Decrease/ Principal Principal such Decrease/ Behalf of
Increase Amount Amount Increase Trustee
-------------------------------------------------------------------------------
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]*
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* Include for Global Notes only.
A-10
ASSIGNMENT
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
Date:__________ Your Signature:_________________________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:____________________________
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by the
Company pursuant to Section 4.09 or Section 4.16 of the Indenture, check the
appropriate box:
[ ] Section 4.09 [ ] Section 4.16
If you want to have only part of the Note purchased by the Company pursuant to
Section 4.09 or Section 4.16 of the Indenture, state the amount (in an integral
multiple of $1,000) you elect to have purchased: $
Date: __________ Your Signature:________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guaranteed:__________________________
A-12
EXHIBIT B
[FORM OF LEGEND FOR 144A NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS,
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE
IN AN "OFFSHORE TRANSACTION" PURSUANT TO REGULATION S (WITHIN THE MEANING OF
RULE 903 (c) (2) OF REGULATION S UNDER THE SECURITIES ACT) AND (2) AGREES THAT
IT WILL NOT, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") THAT
IS TWO YEARS (OR SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY RULE 144 (k) (OR
ANY SUCCESSOR PROVISION THEREOF) UNDER THE SECURITIES ACT) AFTER THE LATER OF
THE ORIGINAL ISSUE DATE AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE
THEREOF WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED
STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A LETTER SIGNED
BY SUCH INVESTOR CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE), (E) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT
TO ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE)
AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. PRIOR TO ANY OFFER, SALE OR OTHER TRANSFER OF THIS NOTE
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE PURSUANT TO CLAUSES (D) AND (F)
ABOVE, THE HOLDER WILL BE REQUIRED TO FURNISH TO THE TRUSTEE AND THE COMPANY
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSAC-
B-1
TION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
B-2
[FORM OF ASSIGNMENT FOR 144A NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Sections 2.14 and 2.15 of the Indenture shall have been
satisfied.
Date: __________ Your Signature:________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:___________________________
B-3
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:___________ _________________________________________________
NOTICE: To be executed by an executive officer
B-4
EXHIBIT C
[FORM OF LEGEND FOR REGULATION S NOTE]
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS UNLESS REGISTERED UNDER THE SECURITIES
ACT OR EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
C-1
[FORM OF ASSIGNMENT FOR REGULATION S NOTE]
I or we assign and transfer this Note to:
(Insert assignee's social security or tax I.D. number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
and irrevocably appoint:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Agent to transfer this Note on the books of the Company. The Agent may
substitute another to act for him.
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act provided by Rule 144A thereunder.
or
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Sections 2.14 and 2.15 of the Indenture shall have been
satisfied.
Date: ___________ Your Signature:________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:___________________________
C-2
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:__________ __________________________________________________
NOTICE: To be executed by an executive officer
C-3
EXHIBIT D
[FORM OF LEGEND FOR GLOBAL NOTE]
Any Global Note authenticated and delivered hereunder shall bear a legend
(which would be in addition to any other legends required in the case of a
Restricted Note or Regulation S Note) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER
THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (A NEW YORK CORPORATION) ("DTC") TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
D-1
EXHIBIT E
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[Trustee]
[Address]
Re: ENTEX INFORMATION SERVICES, INC. ( the "Company")
12 1/2% Senior Subordinated Notes due 2006 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed purchase of Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture relating
to the Notes, and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
2. We understand that the Notes have not been registered under the
Securities Act or any other applicable securities laws, the Notes have not
been and will not be qualified for sale under the securities laws of any
non-U.S. jurisdiction, and the Notes may not be offered, sold, pledged or
otherwise transferred except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell or otherwise transfer
any Notes prior to the date (the "Resale Restriction Termination Date")
which is two years (or such shorter period as may be required by Rule
144(k) (or any successor provision) under the Securities Act) after the
later of the original issuance of the Notes or the last date on which the
Company or any affiliate (within the meaning of Rule 144 under the
Securities Act) of the Company was the owner of such securities (or any
predecessor thereto), we will do so only (a) to the Company or any of its
subsidiaries, (b) pursuant to an effective registration statement under the
Securities Act, (c) for so long as such securities are eligible for resale
pursuant to Rule 144A under the Securities Act ("Rule 144A"), in accordance
with Rule 144A to a "qualified institutional buyer" (as defined in Rule
144A), (d) to an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnishes (or has furnished on its
E-1
behalf by a U.S. broker-dealer) to the Trustee (as defined in the Indenture
relating to the Notes), a signed letter containing certain representations
and agreements relating to the restrictions on transfer of the Notes (the
form of which letter can be obtained from the Trustee), (e) to non-U.S.
Persons outside the United States in an offshore transaction in accordance
with Regulation S under the Securities Act, or (f) pursuant to any other
available exemption from the registration requirements of the Securities
Act, and we further agree to provide to any person purchasing any of the
Notes from us a notice advising such purchaser that resales of the Notes
are restricted as stated herein.
3. We understand that, on any proposed resale of any Notes prior to
the Resale Restriction Termination Date pursuant to clauses (d) or (f) in
paragraph 2 above, we will be required to deliver to the Trustee and the
Company such certifications, legal opinions and other information as either
of them may reasonably require to confirm that such transaction is being
made pursuant to an exemption from or in a transaction not subject to the
registration requirements of the Securities Act. We further understand that
the Notes purchased by us will bear a legend to the foregoing effect. We
acknowledge that the Trustee and the Company will rely upon the truth and
accuracy of such information, and we agree that if any such information is
no longer accurate, we shall promptly notify the Trustee and the Company.
4. We are an institutional "accredited investor" (as defined in Rule
501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
5. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
6. We are not acquiring the Notes with a view toward the distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any state of the United States or any other applicable
jurisdiction.
You, the Company and others 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
E-2
legal proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------------
Authorized Signature
E-3
EXHIBIT F
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
[Trustee]
[Address]
Attention:
Re: ENTEX INFORMATION SERVICES, INC. (the "Company")
12 1/2% Senior Subordinated Notes due 2006 (the "Notes")
Dear Sirs:
In connection with our proposed sale of $
aggregate principal amount of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
1. the offer of the Notes was not made to a U.S. person or to a person
in the United States;
2. either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither we nor any person acting
on our behalf knows that the transaction has been prearranged with a buyer
in the United States;
3. no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
4. the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
5. we have advised the transferee of the transfer restrictions
applicable to the Notes.
F-1
You, the Company and others are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferee]
By:
-------------------------------
Authorized Signature
F-2
EXHIBIT G
[FORM OF GUARANTEE]
The undersigned (the "Guarantor") hereby unconditionally guarantees,
jointly and severally with all other guarantors under the Indenture dated as of
July 29, 1998 by and among ENTEX Information Services, Inc., a Delaware
corporation, the Guarantors named therein and Marine Midland Bank, as trustee
(as amended, restated or supplemented from time to time, the "Indenture"), to
the extent set forth in the Indenture and subject to the provisions of the
Indenture, (a) the due and punctual payment of the principal of, premium, if
any, and interest on the Notes, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on overdue principal of, and
premium, if any, and interest on the Notes, to the extent lawful, and the due
and punctual performance of all other obligations of the Company to the
Noteholders or the Trustee, all in accordance with the terms set forth in
Article 10 of the Indenture, and (b) in the case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
The obligations of the Guarantor to the Noteholders and to the Trustee
pursuant to this Guarantee and the Indenture are expressly set forth in Article
10 of the Indenture and reference is hereby made to the Indenture for the
precise terms and limitations of this Guarantee.
[GUARANTOR]
By:_______________________________
Name:__________________________
Title:_________________________
G-1
