EXHIBIT 4.1
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XXXX GRAPHIC SYSTEMS, INC.
$225,000,000
___% SENIOR SUBORDINATED NOTES DUE 2006
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INDENTURE
Dated as of October __, 1996
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THE BANK OF NEW YORK
Trustee
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CROSS-REFERENCE TABLE
Trust Indenture
Act Section Indenture Section
310 (a)(1) .................................................... 8.10
(a)(2) .................................................... 8.10
(a)(3) .................................................... N/A
(a)(4) .................................................... N/A
(a)(5) .................................................... 8.10
(b) ....................................................... 8.10
(c) ....................................................... N/A
311 (a) ....................................................... 8.11
(b) ....................................................... 8.11
(c) ....................................................... N/A
312 (a) ....................................................... 2.05
(b) ....................................................... 12.03
(c) ....................................................... 12.03
313 (a) ....................................................... 11.02
(b)(i) .................................................... 11.02
(b)(2) .................................................... 8.06
(c) ....................................................... 8.06; 11.02
(d) ....................................................... 8.06
314 (a) ....................................................... 8.03; 11.02
(b) ....................................................... 11.03
(c)(1) .................................................... 12.04
(c)(2) .................................................... 12.04
(c)(3) .................................................... N/A
(d) ....................................................... 11.02; 11.03
(e) ....................................................... 12.05
(f) ....................................................... N/A
315 (a) ....................................................... 8.01
(b) ....................................................... 8.05; 12.02
(c) ....................................................... 8.01
(d) ....................................................... 8.01
(e) ....................................................... 7.11
316 (a)(1)(A) ................................................. 7.05
(a)(1)(B) ................................................. 7.04
(a)(2) .................................................... N/A
(b) ....................................................... 7.07
317 (a)(1) .................................................... 7.08
(a)(2) .................................................... 7.09
(b) ....................................................... 2.04
318 (a) ....................................................... 12.01
(b) ....................................................... N/A
(c) ....................................................... 12.01
Note: This Cross-Reference Table shall not, for any purpose, be deemed to
be part of the Indenture.
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TABLE OF CONTENTS
Page
PARTIES................................................................ 1
RECITALS OF THE COMPANY................................................ 1
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions........................................... 1
Section 1.02. Other Definitions..................................... 15
Section 1.03. Incorporation by Reference of Trust Indenture Act..... 15
Section 1.04. Rules of Construction................................. 16
ARTICLE II
THE NOTES
Section 2.01. Form and Dating....................................... 16
Section 2.02. Execution and Authentication.......................... 16
Section 2.03. Registrar and Paying Agent............................ 17
Section 2.04. Paying Agent to Hold Money In Trust................... 17
Section 2.05. Lists of Holders...................................... 18
Section 2.06. Transfer and Exchange................................. 18
Section 2.07. Replacement Notes..................................... 18
Section 2.08. Outstanding Notes..................................... 19
Section 2.09. Temporary Notes....................................... 19
Section 2.10. Cancellation.......................................... 19
Section 2.11. Defaulted Interest.................................... 20
Section 2.12. CUSIP Number.......................................... 20
ARTICLE III
REDEMPTION
Section 3.01. Notices to Trustee.................................... 20
Section 3.02. Selection of Notes to be Redeemed..................... 20
Section 3.03. Notice of Redemption.................................. 21
Section 3.04. Effect of Notice of Redemption........................ 21
Section 3.05. Deposit of Redemption Price........................... 22
Section 3.06. Notes Redeemed in Part................................ 22
ARTICLE IV
CHANGE OF CONTROL
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Note: This Table of Contents shall not, for any reason, be deemed to be
part of the Indenture.
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Page
Section 4.01. Change of Control..................................... 22
ARTICLE V
COVENANTS
Section 5.01. Payment of Principal, Premium and Interest............ 24
Section 5.02. Maintenance of Office or Agency....................... 24
Section 5.03. SEC Reports........................................... 24
Section 5.04. Limitation On Debt.................................... 25
Section 5.05. Limitation on Debt and Preferred Stock of
Subsidiaries.......................................... 27
Section 5.06. Limitation On Restricted Payments..................... 28
Section 5.07. Limitation On Restrictions On Distributions from
Subsidiaries.......................................... 30
Section 5.08. Limitation On Sales of Assets and Subsidiary Stock.... 31
Section 5.09. Limitation On Affiliate Transactions.................. 33
Section 5.10. Compliance Certificates............................... 34
Section 5.11. Further Instruments and Acts.......................... 34
ARTICLE VI
SUCCESSORS
Section 6.01. When the Company May Merge or Transfer Assets......... 34
Section 6.02. Successor Company Substituted......................... 35
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.01. Events of Default..................................... 35
Section 7.02. Acceleration.......................................... 37
Section 7.03. Other Remedies........................................ 37
Section 7.04. Waiver of Past Defaults............................... 37
Section 7.05. Control by Majority................................... 38
Section 7.06. Limitation On Suits................................... 38
Section 7.07. Unconditional Right of Holders to Receive Payment..... 38
Section 7.08. Collection Suit by Trustee............................ 38
Section 7.09. Trustee May File Proofs of Claim...................... 39
Section 7.10. Priorities............................................ 39
Section 7.11. Undertaking for Costs................................. 39
Section 7.12. Waiver of Stay, Extension and Usury Laws.............. 40
ARTICLE VIII
TRUSTEE
Section 8.01. Duties of Trustee..................................... 40
Section 8.02. Rights of Trustee..................................... 41
Section 8.03. Individual Rights of Trustee.......................... 42
Section 8.04. Trustee's Disclaimer.................................. 42
Section 8.05. Notice of Default..................................... 42
Section 8.06. Reports by Trustee to Holders......................... 42
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Page
Section 8.07. Compensation and Indemnity............................ 42
Section 8.08. Replacement of Trustee................................ 43
Section 8.09. Successor Trustee by Merger, Etc...................... 44
Section 8.10. Eligibility; Disqualification......................... 45
Section 8.11. Preferential Collection of Claims Against the
Company............................................... 45
Section 8.12. May Hold Securities................................... 45
ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Liability on Notes; Defeasance........... 45
Section 9.02. Conditions to Defeasance.............................. 46
Section 9.03. Application of Trust Money............................ 47
Section 9.04. Repayment to the Company.............................. 47
Section 9.05. Indemnity for Government Obligations.................. 48
Section 9.06. Reinstatement......................................... 48
ARTICLE X
AMENDMENT, SUPPLEMENT AND WAIVER
Section 10.01. Without Consent of Holders............................ 48
Section 10.02. With Consent of Holders............................... 49
Section 10.03. Compliance with Trust Indenture Act................... 50
Section 10.04. Revocation and Effect of Consents and Waivers......... 50
Section 10.05. Notation On or Exchange of Notes...................... 51
Section 10.06. Trustee to Sign Amendments, Etc....................... 51
Section 10.07. Payment for Consents.................................. 51
ARTICLE XI
SUBORDINATION OF NOTES
Section 11.02. Payment Over of Proceeds Upon Dissolution, Etc........ 52
Section 11.03. No Payment When Senior Debt in Default................ 53
Section 11.04. Acceleration of Payment of Notes...................... 54
Section 11.05. Payment Permitted If No Default....................... 54
Section 11.06. Subrogation to Rights of Holders of Senior Debt....... 54
Section 11.07. Provisions Solely to Define Relative Rights........... 54
Section 11.08. Trustee to Effectuate Subordination................... 55
Section 11.09. No Waiver of Subordination Provisions................. 55
Section 11.10. Notice to Trustee..................................... 55
Section 11.11. Reliance on Judicial Order or Certificate
of Liquidating Agent ................................. 56
Section 11.12. Trustee Not Fiduciary for holders of Senior Debt...... 56
Section 11.13. Rights of Trustee as holder of Senior Debt;
Preservation of Trustee's Rights...................... 57
Section 11.14. Article XI Applicable to Paying Agents................ 57
Section 11.15. Trust Moneys Not Subordinated......................... 57
Section 11.16. Reliance by holders of Senior Debt on
Subordination Provisions..,........................... 57
Section 11.17. Distribution or Notice to Representative.............. 57
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Section 11.18. Article XI Not To Prevent Events of Default or
Limit Right To Accelerate............................. 57
ARTICLE XII
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.......................... 58
Section 12.02. Notices............................................... 58
Section 12.03. Communication by Holders with Other Holders........... 59
Section 12.04. Certificate and Opinion as to Conditions Precedent.... 59
Section 12.05. Statements Required in Certificate or Opinion......... 59
Section 12.06. Rules by Trustee and Agents........................... 60
Section 12.07. No Personal Liability of Directors, Officers,
Employees, Incorporators and Stockholders............. 60
Section 12.08. Governing Law......................................... 60
Section 12.09. No Adverse Interpretation of Other Agreements......... 60
Section 12.10. Successors............................................ 60
Section 12.11. Severability.......................................... 60
Section 12.12. Counterpart Originals................................. 60
Section 12.13. Table of Consents, Headings, Etc...................... 61
EXHIBIT A -- Form of Note; Form of Trustee's Certificate of Authentication
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INDENTURE, dated as of October __, 1996, between Xxxx Graphic Systems,
Inc. ("the Company"), a corporation duly organized and existing under the laws
of the State of Delaware, and The Bank of New York, a New York banking
corporation, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of up to $225,000,000 aggregate principal
amount of the Company's Senior Subordinated Notes Due 2006 (the "Notes")
issuable as provided in this Indenture. All things necessary to make this
Indenture a valid agreement of the Company, in accordance with its terms, have
been done, and the Company has done all things necessary to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee hereunder
and duly issued by the Company, the valid obligations of the Company as
hereinafter provided.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Acquisition" means the acquisition by the Company of the Graphic
Systems business unit from Rockwell International Corporation pursuant to a
Stock and Asset Purchase Agreement dated as of April 26, 1996, as amended on
July 18, 1996.
"Additional Assets" means (i) any property or assets (other than Debt
and Capital Stock) used or useful in a Related Business; (ii) the Capital Stock
of a Person that becomes a Subsidiary as a result of the acquisition of such
Capital Stock by the Company or another Subsidiary or (iii) Capital Stock
constituting a minority interest in any Person that at such time is a
Subsidiary; provided, however, that any such Subsidiary described in clause (ii)
or (iii) above is primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the provisions described in Sections 5.06, 5.08 and 5.09 only,
"Affiliate" shall also mean any beneficial owner of Capital Stock representing
10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants to purchase such
Capital Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to the first sentence hereof.
Notwithstanding the foregoing, none of Bankers Trust Company, Credit Suisse or
The Bank of Nova Scotia shall be deemed to be an Affiliate of the Company and
its Subsidiaries solely as a result of the security interests held by such
entity in the Capital Stock of the Company's Subsidiaries pursuant to the Credit
Agreement.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Disposition" means any sale, transfer or other disposition (or
series of related sales, transfers or dispositions) by the Company or any
Subsidiary, including any disposition by means of a merger, consolidation or
similar transaction (each referred to for the purposes of this definition as a
"disposition"), of (i) any shares of Capital Stock of a Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be held by
a Person other than the Company or a Subsidiary), (ii) all or substantially all
the assets of any division or line of business of the Company or any Subsidiary
or (iii) any other assets of the Company or any Subsidiary outside of the
ordinary course of business of the Company or such Subsidiary (other than, in
the case of (i), (ii) and (iii) above, (v) any disposition, or related series of
dispositions, of assets with an aggregate fair market value of $1 million or
less for each such disposition or related series of dispositions, (w)
dispositions permitted under Article VI, (x) a disposition by a Subsidiary to
the Company or by the Company or a Subsidiary to a Wholly Owned Subsidiary, (y)
sales of Customer Notes to third parties (including the sale of certain customer
notes to BTCC contemporaneously with the Acquisition) and (z) for purposes of
the covenant described in Section 5.08 only, a disposition that constitutes a
Restricted Payment permitted by the covenant described under Section 5.06.
"Average Life" means, as of the date of determination, with respect to
any Debt or Preferred Stock, the quotient obtained by dividing (i) the sum of
the products of numbers of years from the date of determination to the dates of
each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the amount of
such payment by (ii) the sum of all such payments.
"Banks" means the "Lenders" as defined in the Credit Agreement.
"Bankruptcy Law" means the U.S. Bankruptcy Code, 11 U.S.C. ss. 101,
et. seq., or any similar federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"BTCC" means Bankers Trust Commercial Corporation.
"BTCC Note Guarantees" means the Guarantees by the Company of
principal and/ or interest under certain customer notes being sold to BTCC
contemporaneously with the Acquisition, which Guarantees are a condition to
BTCC's obligation to purchase such customer notes, and the related repurchase
obligations not in excess of $4 million in the aggregate and indemnity
obligations to BTCC, as set forth in the definitive agreement executed in
connection therewith.
"Business Day" means each day which is not a Legal Holiday.
2
"Capital Lease Obligations" of any Person means an obligation that is
required to be classified and accounted for as a capital lease on the face of
the balance sheet of such Person prepared in accordance with GAAP, and the
amount of Debt represented by such obligation shall be the capitalized amount of
such obligation determined in accordance with GAAP; and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in such Person (however designated) equity of such Person, including
any Preferred Stock, but excluding any debt securities convertible or
exchangeable into such equity.
"Cash Equivalents" means (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof, or obligations
issued by any agency or instrumentality thereof and backed by the full faith and
credit of the United States of America, (ii) commercial paper rated the highest
grade by Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings Group and
maturing not more than one year from the date of creation thereof, (iii) time
deposits with, and certificates of deposit and banker's acceptances issued by,
any bank having capital surplus and undivided profits aggregating at least $500
million and maturing not more than one year from the date of creation thereof,
(iv) repurchase agreements that are secured by a perfected security interest in
an obligation described in clause (i) and are with any bank described in clause
(iii), (v) shares of any money market mutual fund that (a) has at least 95% of
its assets invested continuously in the types of investments referred to in
clauses (i) and (ii) above, (b) has net assets of not less than $500 million,
and (c) has the highest rating obtainable from either Standard & Poor's Ratings
Group or Xxxxx'x Investors Service, Inc. and (vi) readily marketable direct
obligations issued by any state of the United States of America or any political
subdivision thereof having one of the two highest rating categories obtainable
from either Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings Group.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (ii) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that (1) if the Company or any Subsidiary
has Incurred any Debt since the beginning of such period that remains
outstanding (other than Debt Incurred under the Revolving Credit Facility with
respect to which the related commitment remains outstanding) or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Incurrence of Debt, or both, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving effect on a pro forma basis to such
Debt as if such Debt had been Incurred on the first day of such period and the
discharge of any other Debt repaid, repurchased, defeased or otherwise
discharged with the proceeds of such new Debt as if such discharge had occurred
on the first day of such period, (2) if since the beginning of such period any
Debt of the Company or any Subsidiary has been repaid, repurchased, defeased or
otherwise discharged or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio will include any such repayment, repurchase,
defeasement or discharge not otherwise covered in clause (1) above, or both (in
either case other than Debt Incurred pursuant to the Revolving Credit Facility
or any similar arrangement unless such revolving credit Debt has been
permanently repaid and has not been replaced), Consolidated
3
Interest Expense for such period shall be calculated, after giving effect
thereto on a pro forma basis, as if such Debt had been repaid, repurchased,
defeased or otherwise discharged on the first day of such period, (3) if since
the beginning of such period the Company or any Subsidiary shall have made any
Asset Disposition, the EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period, or increased by an amount
equal to the EBITDA (if negative), directly attributable thereto for such period
and Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any Debt of
the Company or any Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Subsidiaries in
connection with such Asset Disposition for such period (or, if the Capital Stock
of any Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Debt of such Subsidiary to the extent the Company
and its continuing Subsidiaries are no longer liable for such Debt after such
sale), (4) if since the beginning of such period the Company or any Subsidiary
(by merger or otherwise) shall have made an Investment in any Subsidiary (or any
person which becomes a Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Debt) as if such Investment or acquisition occurred on the
first day of such period and (5) if since the beginning of such period any
Person (that subsequently became a Subsidiary or was merged with or into the
Company or any Subsidiary since the beginning of such period) shall have made
any Asset Disposition, any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (3) or (4) above if made by the
Company or a Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition occurred on the
first day of such period. For purposes of this definition, whenever pro forma
effect is to be given to an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Debt Incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting Officer of the Company. If any Debt bears a floating rate of interest
and is being given pro forma effect, the interest of such Debt shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Agreement applicable to such Debt if such Interest Rate Agreement has a
remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Subsidiaries, plus, to the
extent not included in such total interest expense, and to the extent incurred
by the Company or its Subsidiaries, (i) interest expense attributable to Capital
Lease Obligations, (ii) amortization of debt discount, (iii) capitalized
interest, (iv) non-cash interest expenses, (v) commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) net costs associated with Interest Rate Agreements (including
amortization of fees), (vii) Preferred Stock dividends in respect of all
Preferred Stock (except dividends payable solely in shares of Capital Stock of
the Company (other than Disqualified Stock of the Company)) held by Persons
other than the Company or a Wholly Owned Subsidiary, (viii) interest incurred in
connection with Investments in discontinued operations, (ix) interest accruing
on any Debt of any other Person to the extent such Debt is Guaranteed by the
Company or any Subsidiary and (x) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
4
Company) in connection with Debt Incurred by such plan or trust provided,
however, that there shall not be included in such Consolidated Interest Expense
any amount of interest expense of any Subsidiary if the net income of such
Subsidiary is excluded in the calculation of Consolidated Net Income (but only
in the same proportion as such net income is excluded) because the declaration
or payment of dividends or similar distributions by such Subsidiary of such net
income is not at the time permitted by the operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income: (i) any net income of any
Person if such Person is not a Subsidiary, except that (A) subject to the
exclusion contained in clause (iv) below, the Company's equity in the net income
of any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to a
Subsidiary, to the limitations contained in clause (iii) below) and (B) the
Company's equity in a net loss of any such Person for such period shall be
included in determining such Consolidated Net Income to the extent of any cash
actually contributed by the Company or a Subsidiary to such Person during such
Period; (ii) any net income (or loss) of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition; (iii) any net income of any Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the exclusion contained
in clause (iv) below, the Company's equity in the net income of any such
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Subsidiary during
such period to the Company or another Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution paid to
another Subsidiary, to the limitation contained in this clause) and (B) the
Company's equity in a net loss of any such Subsidiary for such period shall be
included in determining such Consolidated Net Income to the extent of any cash
actually contributed by the Company or a Subsidiary to such Person during such
Period; (iv) any gain or loss net of tax realized upon the sale or other
disposition of any assets of the Company or its consolidated Subsidiaries
(including pursuant to any sale-and-leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain or loss
net of tax realized upon the sale or other disposition of any Capital Stock of
any Person; (v) extraordinary gains or losses net of tax; (vi) the cumulative
effect of a change in accounting principles, net of tax; and (vii) in the case
of the Company, any depreciation or amortization resulting from any write-up in
the book value of any assets due to the Acquisition. Notwithstanding the
foregoing, for the purposes of Section 5.06 only, there shall be excluded from
Consolidated Net Income any dividends, repayments of loans or advances or other
transfers of assets from a Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as (i) the par
or stated value of all outstanding Capital Stock of the Company plus
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(ii) paid-in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated deficit
and (B) any amounts attributable to Disqualified Stock.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 or such other address as to which the Trustee
may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, dated as of
October __, 1996, among the Company, certain Subsidiaries of the Company,
Bankers Trust Company as agent, the co-agents named therein and the lenders
named therein, including (i) any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, modified, renewed, refunded, replaced or refinanced from
time to time, in whole or in part, and (ii) any credit agreements, notes,
guarantees, collateral documents, instruments and agreements executed in
connection with any such amendment, modification, renewal, refunding,
replacement or refinancing.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement to which such
Person is a party or a beneficiary.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Customer Notes" means notes receivable, on terms consistent with the
past practices of the Company and its Subsidiaries and with prevailing industry
practices, issued in connection with customer financing provided to purchasers
of the Company's and its Subsidiaries' products and secured by a valid and
enforceable first priority Lien on the products being purchased.
"Customer Notes Guarantees" means Guarantees by the Company and its
Subsidiaries, on terms consistent with the past practices of the Company and its
Subsidiaries and with prevailing industry practices, of all or a portion of
Customer Notes issued by the Company or its Subsidiaries and sold to third
parties, or of all or a portion of customer notes or other financing provided by
third parties to purchasers of the Company's and its Subsidiaries' products;
provided, however, that "Customer Notes Guarantees" shall not include (i) the
provision of letters of credit in respect of financing provided by a third party
to purchasers of the Company's and its Subsidiaries' products to the extent such
letters of credit are Incurred under the Revolving Credit Facility and (ii) the
BTCC Note Guarantees.
"Debt" of any Person means, without duplication, (i) the principal of
and premium (if any) in respect of (A) debt of such Person for money borrowed
and (B) debt evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person; (iii) all obligations of such Person issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (but excluding (x) trade accounts payable and other current
trade liabilities arising in the ordinary course of business and payable in
accordance with customary practices and (y) deferred purchase price obligations
where payment is due within six months of delivery); (iv) all obligations of
such Person for the reimbursement of any obligor on any letter of credit,
banker's acceptance, or other
6
similar credit transaction (other than obligations with respect to letters of
credit and related Hedging Obligations securing obligations (other than
obligations described in (i) through (iii) above) entered into in the ordinary
course of business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the third Business Day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit); (v) the amount of
all obligations of such Person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or, with respect to any Subsidiary of
such Person, any Preferred Stock (but excluding, in each case, any accrued
dividends); (vi) all Hedging Obligations of such Person (other than Hedging
Obligations excluded pursuant to clause (iv) above); (vii) all obligations of
the type referred to in clauses (i) through (v) of other Persons and all
dividends of other Persons for the payment of which, in either case, such Person
is responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee; and (viii) all obligations of
the type referred to in clauses (i) through (vi) of other Persons secured by any
Lien on any property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the obligation
so secured. The amount of Debt of any Person at any date shall be the
outstanding balance of all obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date; provided, however, that the amount
outstanding at any time of any Debt Incurred with original issue discount is the
face amount of such Debt less the remaining unamortized portion of the original
issue discount of such Debt at such time as determined in conformity with GAAP.
"Deemed Asset Value" means 75% of the fair market value of assets
(other than cash) received by the Company from the issuance or sale of its
Capital Stock or as a capital contribution, in either case as determined in good
faith by the Board of Directors; provided, however, that such determination
shall be confirmed by a nationally recognized investment banking firm or
appraisal firm in the event that the value determined by the Board of Directors
exceeds $10 million.
"Default" means any event that is, after notice or with the passage of
time or both would be, an Event of Default.
"Designated Senior Debt" means (i) Debt under the Credit Agreement and
(ii) any other Senior Debt of the Company, the principal amount of which is
$__________ or more individually at the date of determination and is
specifically designated by the Company in the instrument evidencing or governing
such Senior Debt and in a written instrument delivered to the Trustee as
"Designated Senior Debt" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund obligation
or otherwise, (ii) is convertible or exchangeable for Debt or Disqualified Stock
or (iii) is redeemable at the option of the Holder thereof, in whole or in part,
in each case on or prior to the first anniversary of the Stated Maturity of the
Notes; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving Holders thereof the right
to require such Person to repurchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more
7
favorable to the holders of such Capital Stock than the provisions described
under Section 5.08 and Article IV.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (a) all income tax expense of the
Company, (b) depreciation expense, (c) amortization expense and (d) all other
non-cash items reducing Consolidated Net Income (other than any non-cash item to
the extent it represents an accrual of, or a reserve for, cash disbursements for
any subsequent period prior to the Stated Maturity of the Notes) and less, to
the extent added in calculating Consolidated Net Income, non-cash items (other
than any non-cash item to the extent it represents an accrual for cash receipts
reasonably expected to be received within 12 months after the date of such
accrual), in each case for such period. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the depreciation and
amortization of, a Subsidiary of the Company shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income of such Subsidiary was included in calculating Consolidated Net
Income and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Subsidiary without prior
approval other than for the board of directors of such Subsidiary (that has not
been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to such Subsidiary or its stockholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Subsidiary" means a subsidiary that is organized under the
laws of any country other than the U.S. and substantially all the assets of
which are located outside of the U.S.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
(i) in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) in such other
statements by such other entity as approved by a significant segment of the
accounting profession, and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt or other obligation of any
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation of such Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise); or (ii) entered into for purposes of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb shall have a corresponding
meaning. The term "Guarantor" shall mean any Person guaranteeing any obligation.
8
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Holdings" means GGS Holdings, Inc., a Delaware corporation.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Debt or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall be deemed to be the
Incurrence of Debt.
"Indenture" means this Indenture, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed
to protect the Company or any Subsidiary against fluctuations in interest rates.
"Investment" in any Person means any loan or advance (other than
advances to customers in the ordinary course of business on commercially
reasonable terms that are recorded as accounts receivable on the balance sheet
of such Person) to, any acquisition of Capital Stock, equity interest,
obligation or other security of, or capital contribution or other investment in,
or any other credit extension to (including by way of Guarantee of any Debt of),
such Person.
"Issue Date" means the date on which the Notes are originally issued.
"Joint Venture Contract" means that certain Joint Venture Contract,
dated October 29, 1993, between Rockwell Graphic Systems, Inc. and Shanghai
Printing & Packaging Machinery Corp., as in effect on the Issue Date.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday, 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.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Management Investors" means certain members of the Company's
management who are participating in the Management Placement.
"Management Placement" means the sale of $4.0 million of common stock
of the Company to the Management Investors.
9
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Debt or other obligations relating to such
properties or assets that are the subject of such Asset Disposition or received
in any other noncash form) therefrom, in each case net of (i) all legal, title
and recording expenses, commissions and other fees and expenses incurred, and
all Federal, state, provincial, foreign and local taxes required to be accrued
as a liability under GAAP, as a consequence of such Asset Disposition; (ii) all
payments made on any Debt which is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must by its terms,
or in order to obtain a necessary consent to such Asset Disposition, or by
applicable law be repaid out of the proceeds from such Asset Disposition; (iii)
all distributions and other payments required to be made to minority interest
Holders in Subsidiaries or joint ventures as a result of such Asset Disposition;
and (iv) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with the
property or other assets disposed in such Asset Disposition and retained by the
Company or any Subsidiary after such Asset Disposition.
"Net Cash Proceeds" means with respect to any issuance or sale of
Capital Stock, the cash proceeds (including cash equivalent) of such issuance or
sale net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid
or payable as a result thereof.
"Note Register" means the register of the Notes and the transfer and
exchange of the Notes as provided in Section 2.03 of this Indenture.
"Notes" has the meaning set forth in the first recital.
"Officer" means with respect to any Person the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, Controller, Secretary or any
Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, 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, who
may be an employee of or counsel to the Company.
"Permitted Holders" means Stonington, the Fund, the Management
Investors and their respective Affiliates, including Holdings.
"Permitted Investment" means (A) an Investment by the Company or any
Subsidiary in (i) the Company or a Wholly Owned Subsidiary or a Person that
will, upon the making of such Investment, become a Wholly Owned Subsidiary; (ii)
another Person if as a result of, and contemporaneously with, such Investment
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a Wholly Owned
Subsidiary; (iii) Temporary Cash Investments; (iv) receivables owing to the
Company or
10
any Subsidiary if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; (v) payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes, that
are made in the ordinary course of business; (vi) loans or advances to
employees, officers or directors made in the ordinary course of business
consistent with past practices of the Company or a Subsidiary or made in
connection with the Management Placement and that do not in the aggregate exceed
$4 million at any time; (vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Subsidiary or in satisfaction of judgments; and (viii) any Person
to the extent such Investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to the
covenant described under Section 5.08, (B) any Investment by the Company in the
Permitted Joint Venture at the times and in the amounts and manner required by
the Joint Venture Contract and (C) Customer Notes issued following the Issue
Date by the Company and its Subsidiaries; provided that the amount of
Investments made pursuant to Customer Notes following the Issue Date, in the
aggregate, at any one time outstanding may not exceed $30 million less the
amount of Customer Notes Guarantees Incurred following the Issue Date then
outstanding pursuant to Section 5.04(b)(4) and 5.05(i).
"Permitted Joint Venture" means Shanghai Rockwell Graphic Systems Co.,
Ltd., a joint venture formed by the Company and Shanghai Printing & Packaging
Machinery Corp. pursuant to the Joint Venture Contract.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock" means, as applied to the Capital Stock of any
corporation, Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Note means the principal of the Note plus the
premium, if any, payable on the Note which is due or overdue or is to become due
at the relevant time.
"Public Equity Offering" means a primary public offering of common
stock of the Company or Holdings pursuant to an effective registration statement
under the Securities Act.
"Public Market" means any time after (x) a Public Equity Offering has
been consummated, and (y) at least 15% of the total issued and outstanding
common stock of the Company or Holdings, as the case may be, has been
distributed by means of an effective registration statement under the Securities
Act or sales pursuant to Rule 144 under the Securities Act.
"Refinance" means, with respect to any Debt, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other Debt
in exchange or replacement for, such indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Debt" means Debt that Refinances any Debt of the Company
or any Subsidiary existing on the Issue Date or Incurred in compliance with this
Indenture including
11
Debt that Refinances Refinancing Debt; provided, however, that (i) such
Refinancing Debt has a Stated Maturity no earlier than the Stated Maturity of
the Debt being Refinanced; (ii) such Refinancing Debt has an Average Life at the
time such Refinancing Debt is Incurred that is equal to or greater than the
Average Life of the Debt being Refinanced; (iii) such Refinancing Debt has an
aggregate principal amount (or if Incurred with original issue discount, an
aggregate issue price) that is equal to or less than the aggregate principal
amount (or if Incurred with original issue discount, the aggregate accredited
value) then outstanding or committed (plus fees and expenses, including any
premium and defeasance costs) under the Debt being Refinanced; and (iv) with
respect to any Refinancing Debt of Debt other than Senior Debt, such Refinancing
Debt shall rank no more senior, and shall be at least as subordinated, in right
of payment to the Notes as the Debt being so extended, renewed, refunded or
refinanced; provided, further, however, that Refinancing Debt shall not include
Debt of a Subsidiary that Refinances Debt of the Company.
"Related Business" means the business of the Company and its
Subsidiaries on the Issue Date and any business related, ancillary or
complementary to the businesses of the Company and its Subsidiaries on the Issue
Date.
"Representative" means any trustee, agent or representative (if any)
for an issue of Senior Debt of the Company.
"Responsible Officer" means, when used with respect to the Trustee,
any officer within the Corporate Trust Office of the Trustee (or any successor
group of the Trustee) or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect Holders of its Capital Stock (other than dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) or rights to
acquire its Capital Stock (other than Disqualified Stock)) and dividends or
distributions payable solely to the Company or a Subsidiary, and other than pro
rata dividends or other distributions made by a Subsidiary that is not a Wholly
Owned Subsidiary to minority stockholders (or owners of an equivalent interest
in the case of a Subsidiary that is an entity other than a corporation), (ii)
the purchase, redemption or other acquisition or retirement for value of any
Capital Stock of the Company held by any Person or of any Capital Stock of a
Subsidiary held by any Affiliate of the Company (other than a Subsidiary),
including the exercise of any option to exchange any Capital Stock (other than
into Capital Stock of the Company that is not Disqualified Stock), (iii) the
purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment of any Subordinated Obligations (other than the purchase,
repurchase or other acquisition of Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of acquisition) or
(iv) the making of any Investment in any Person (other than a Permitted
Investment).
"Revolving Credit Facility" means the provisions of the Credit
Agreement pursuant to which lenders thereunder have committed to make available
to the Company and its Subsidiaries a revolving credit facility.
"SEC" means the Securities and Exchange Commission.
12
"Secured Debt" means any Debt of the Company or a Subsidiary secured
by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means (i) Debt of the Company, whether outstanding on
the Issue Date or thereafter incurred (including, without limitation, Debt (and
other obligations including for fees, expenses, reimbursements, indemnities or
otherwise) Incurred pursuant to the Credit Agreement, any Interest Rate
Agreement or Currency Agreement and any Guarantee by the Company of any Debt or
monetary obligation of any of its Subsidiaries under the Credit Agreement, any
Interest Rate Agreement or Currency Agreement) and (ii) accrued and unpaid
interest thereon (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or a
Subsidiary at the rate otherwise applicable thereto whether or not post-filing
interest is allowed in such proceeding) unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Notes;
provided, however, that Senior Debt shall not include (1) any obligation of the
Company to any Subsidiary, (2) any liability for Federal, state, local or other
taxes owed or owing by the Company, (3) any accounts payable or other liability
to trade creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities), (4) any Debt of
the Company (and any accrued and unpaid interest in respect thereof) which is
subordinate or junior in any respect to any other Debt or other obligation of
the Company, (5) that portion of any Debt which at the time of Incurrence is
Incurred in violation of the Indenture, (6) Debt owed, due, or guaranteed on
behalf of, any director, officer or employee of the Company or any Subsidiary
(including, without limitation, amounts owed for compensation), and (7) Debt
which when Incurred and without respect to any election under Section 1111 (b)
of Title 11 U.S. Code, is without recourse to the Company (other than Capital
Lease Obligations or secured purchase money obligations).
"Senior Subordinated Debt" means the Notes and any other Debt of the
Company that specifically provides that such Debt is to rank pari passu with the
Notes in right of payment and is not subordinated by its terms in right of
payment to any Debt or other obligation of the Company which is not Senior Debt.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company as such term is defined in Rule 1-02 of
Regulation S-X, promulgated by the SEC.
"Stated Maturity" means with respect to any security the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the Holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Stonington" means Stonington Partners, Inc.
"Subordinated Obligation" means any Debt of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which by its written terms
is subordinate or junior in right of payment to the Notes.
13
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person;
(ii) such Person and one or more Subsidiaries of such Person; or (iii) one or
more Subsidiaries of such Person.
"Tangible Property" means all land, buildings, machinery and equipment
and leasehold interests and improvements which would be reflected on a balance
sheet of the Company prepared in accordance with generally accepted accounting
principles, excluding (i) all rights, contracts and other intangible assets of
any nature whatsoever; and (ii) all inventories and other current assets.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 270 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the U.S. of America, any state thereof or any foreign country recognized by the
U.S., and which bank or trust company has capital, surplus and undivided profits
aggregating in excess of $50,000,000 (or the foreign currency equivalent
thereof) and has outstanding debt which is rated "A" (or such similar equivalent
rating) or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
investments in commercial paper, maturing not more than 180 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America, any
jurisdiction thereof or any foreign country recognized by the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Group, and (v) investments in
securities with maturities of nine months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by Standard & Poor's Ratings Group or "A" by Xxxxx'x
Investors Service, Inc.
"Term Loan Facility" means the provisions of the Credit Agreement
pursuant to which lenders thereunder have committed to make term loans available
to the Company and its Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter such term shall mean such successor serving hereunder.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including
14
any agency or instrumentality thereof) for the payment of which the full faith
and credit of the United States of America is pledged and which are not callable
at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock of
which (other than directors' qualifying shares and shares held by other Persons
to the extent such shares are required by applicable law to be held by a Person
other than the Company or a Subsidiary) is owned by the Company or one or more
Wholly Owned Subsidiaries.
Section 1.02. Other Definitions.
Defined in
Term Article/Section
---- ---------------
"Affiliate Transaction"..... Section 5.09
"Blockage Notice"........... Section 11.03
"Change of Control"......... Article IV
"covenant defeasance"....... Section 9.01
"Default Amount"............ Section 7.02
"Excess Proceeds Offer"..... Section 5.08
"Excess Proceeds Payment" .. Section 5.08
"Event of Default".......... Section 7.01
"Final Payment Default"..... Section 7.01
"legal defeasance".......... Section 9.01
"Non-payment Default"....... Section 7.01
"Notes Payment"............. Section 11.02
"Paying Agent".............. Section 2.03
"parent corporation"........ Article IV
"Payment Blockage Period" .. Section 11.03
"Proceeding"................ Section 11.02
"Registrar"................. Section 2.03
"specified corporation"..... Article IV
"Successor Company"......... Section 6.01
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
(i) "indenture securities" means the Notes;
(ii) "indenture security holder" means a Holder or Noteholder;
(iii) "indenture to be qualified" means this Indenture;
15
(iv) "indenture trustee" or "institutional trustee" means the
Trustee;
(v) "obligor" upon the Notes means each of the Company and any
successor obligor upon the Notes.
All other terms used in this Indenture that are (i) defined by the
TIA; (ii) defined by TIA reference to another statute; or (iii) defined by SEC
rule under the TIA have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) the word "or" shall not be deemed to be exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular; and
(v) provisions apply to successive events and transactions.
ARTICLE II
THE NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. The Notes may have such
notations, legends or endorsements approved as to form by the Company and
required, as applicable, by law, stock exchange rule, agreements to which the
Company is subject and/or usage. Each Note shall be dated the date of its
authentication. The Notes shall be issuable only in denominations of $1,000 and
integral multiples thereof.
Section 2.02. Execution and Authentication.
Two Officers of the Company shall sign the Notes for the Company by
manual or facsimile signature. The Company's seal shall be reproduced on the
Notes.
If an Officer whose signature is on a Note no longer holds that office
at the time such Note is authenticated, such Note shall be valid nevertheless.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that a
Note has been authenticated in accordance with the terms of this Indenture.
16
The Trustee, upon a written order of the Company signed by two
Officers of the Company, shall authenticate the Notes for original issue up to
an aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time shall not exceed the amount
set forth therein except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate the Notes. Unless limited by the terms of such
appointment, any such authenticating agent may authenticate the Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such authenticating agent of the Trustee. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where the Notes may
be presented for registration of transfer or for exchange (including any
co-registrar, the "Registrar"); and (ii) an office or agency where the Notes may
be presented for payment ("Paying Agent"). The Registrar shall keep a register
of the Holders and of the transfer and exchange of the Notes (the "Note
Register"). The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" shall include any such
additional paying agent. The Company may change any Paying Agent, Registrar or
co-registrar without prior notice to any Holder. The Company shall notify the
Trustee and the Trustee shall notify the Holders of the name and address of any
Agent not a party to this Indenture. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar. The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. Any such agency agreement shall implement the provisions of this
Indenture that relate to such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such, as appropriate, and shall be entitled to appropriate
compensation in accordance with Section 8.07.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
Section 2.04. Paying Agent to Hold Money In Trust.
On or prior to each due date of the principal of, premium, if any, and
interest on any Note, the Company shall deposit with the Paying Agent a sum
sufficient to pay such principal, premium, if any, and interest when so becoming
due. The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, and interest on the Notes, and shall notify the
Trustee of any Default by the Company in making any such payment. While any such
Default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or its domestically incorporated Wholly
Owned Subsidiaries) shall have no further liability for the money delivered to
the Trustee. If the Company or its domestically incorporated Wholly Owned
Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying Agent.
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Section 2.05. Lists of Holders.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders.
Section 2.06. Transfer and Exchange.
Notes shall be issued in registered form and shall be transferable
only upon the surrender of a Note for registration of transfer. When Notes are
presented to the Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Notes of other denominations, the
Registrar shall register the transfer or make the exchange; provided, however,
that any Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar and the Trustee duly executed by the Holder
thereof or by his attorney duly authorized in writing. To permit registrations
of transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's request.
Neither the Company nor the Registrar shall be required to (i) issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection of
Notes for redemption under Section 3.02; (ii) register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (iii) register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before an interest payment date and ending at the close of
business on the interest payment date.
No service charge shall be made to any Holder of a Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith.
Prior to due presentment to the Trustee for registration of the
transfer of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered in the Note Register as the
absolute owner of such Note for the purpose of receiving payment of principal
of, premium, if any, and interest on such Note and for all other purposes
whatsoever, whether or not such Note is overdue, and none of the Trustee, any
Agent nor the Company shall be affected by any notice to the contrary.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee shall authenticate
a replacement Note if the Company's and the Trustee's reasonable requirements
for the replacements of Notes are met. If required by the Trustee or the
Company, an indemnity bond shall be supplied by the Holder that is sufficient in
the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent
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or any authenticating agent from any loss which any of them may suffer if a Note
is replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Note.
Every replacement Note shall be an obligation of the Company.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee, except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding. A Note
does not cease to be outstanding because the Company, a Subsidiary of the
Company or an Affiliate of the Company holds such Note.
If a Note is replaced pursuant to Section 2.07, it shall cease to be
outstanding unless the Trustee receives proof satisfactory to it that such
replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to
Section 2.07.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Holders on that date
pursuant to the terms of this Indenture, then on and after that date such Notes
(or portions thereof) shall cease to be outstanding and interest thereon shall
cease to accrue.
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 of definitive Notes but may have such variations as
the Company and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee shall authenticate
definitive Notes in exchange for temporary Notes. Until such exchange, temporary
Notes shall be entitled to the same rights, benefits and privileges as
definitive Notes.
Section 2.10. 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 registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation, and may, but shall
not be required to, destroy such cancelled Notes (subject to the record
retention requirement of the Exchange Act), and make available for delivery a
certificate of such destruction to the Company, unless the Company directs
cancelled Notes to be returned to them. The Company may not issue new Notes to
replace Notes it has redeemed, paid or delivered to the Trustee for
cancellation.
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Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, the
Company shall pay such defaulted interest in any lawful manner and shall pay
interest on defaulted installments of interest at the rate borne by the Notes to
the extent lawful. The Company may pay such defaulted interest to the Persons
who are Holders of the Notes on a subsequent special record date, which date
shall be at the earliest practicable date but in all events at least five
Business Days prior to the payment date, in each case at the rate provided in
the Notes. The Company shall fix or cause to be fixed any such special record
date and payment date, and, at least 15 days prior to the special record date,
the Company shall mail or cause to be mailed to each Holder of a Note a notice
that states such special record date, such related payment date and the amount
of any such defaulted interest to be paid to Holders of the Notes.
Section 2.12. CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and, if the
Company shall do so, the Trustee shall use such CUSIP number in notices of
redemption or exchange as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in such notice or on the Notes and that
reliance may be placed only on the other identification numbers printed on the
Notes. The Company will notify the Trustee of any change in a CUSIP number.
ARTICLE III
REDEMPTION
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to paragraph 5 of the
Notes, the Company shall notify the Trustee in writing of the redemption date,
the principal amount of Notes to be redeemed, the CUSIP number of such Notes and
the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section 3.01 at least 60 but not more than 90 days before the redemption date
unless the Trustee consents to a shorter period. Such notice shall be
accompanied by an Officers' Certificate and an Opinion of Counsel from the
Company to the effect that such redemption will comply with the conditions
herein. If fewer than all of the Notes are to be redeemed, the record date
relating to such redemption shall be selected by the Company and given to the
Trustee, which record date shall not be less than 15 days after the date of
notice to the Trustee.
Section 3.02. Selection of Notes to be Redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed by lot or by such other methods as the Trustee
in its sole discretion shall deem to be fair and appropriate and that comply
with the applicable legal and securities exchange requirements, if any. The
Trustee shall make the selection from outstanding Notes not previously called
for redemption. The Trustee may select for redemption portions of the principal
of Notes that have denominations larger than $1,000. Notes and portions of Notes
the Trustee selects shall
20
be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption. The Trustee shall notify the Company promptly of
the Notes or portions of Notes to be redeemed.
Section 3.03. Notice of Redemption.
The Company shall, at least 30 days but not more than 60 days before a
redemption date, mail or cause to be mailed, by first class-mail, a notice of
redemption to each Holder the Notes of which are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Notes called for
redemption ceases to accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or the Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, at least five Business Days prior to the
date upon which such notice is to be mailed unless the Trustee consents to a
shorter period, the Trustee shall give the notice of redemption in the Company's
name and at the Company's expense. In such event, the Company shall provide the
Trustee with the information required by this Section 3.03.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption shall become due and payable on the redemption date
and at the redemption price stated in such notice of redemption. Upon surrender
to the Paying Agent, such Notes shall be paid at the redemption price stated in
such notice of redemption, plus accrued interest to the redemption date. Failure
to give notice to a Holder or any defect in any notice shall not affect the
validity of any notice to any other Holder.
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Section 3.05. Deposit of Redemption Price.
On or prior to any redemption date, the Company shall deposit with the
Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of and
accrued interest on all Notes to be redeemed on that date. The Trustee or the
Paying Agent shall promptly return to the Company any money deposited with the
Trustee or the Paying Agent by the Company in excess of the amounts necessary to
pay the redemption price of, and accrued interest on, all Notes to be redeemed
on that date other than Notes or portions of Notes called for redemption which
have been delivered by the Company to the Trustee for cancellation.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder (at the expense of the
Company) a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
ARTICLE IV
CHANGE OF CONTROL
Section 4.01. Change of Control. (a) Upon the occurrence of any of the
following events (each a "Change of Control"), each Holder shall have the right
to require that the Company repurchase such Holder's Notes at a purchase price
in cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
(i) prior to the earlier to occur of the first public offering of
common stock of the Company or the first public offering of common
stock of Holdings, the Permitted Holders cease to be the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of a majority in the aggregate of the total
voting power of the Voting Stock of the Company or Holdings, whether
as a result of issuance of securities of the Company or Holdings, any
merger, consolidation, liquidation or dissolution of the Company or
Holdings, any direct or indirect transfer of securities or otherwise
(for purposes of this clause (i) and clause (ii) below, the Permitted
Holders shall be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other
corporation (the "parent corporation") so long as the Permitted
Holders beneficially own (as so defined), directly or indirectly, in
the aggregate a majority of the voting power of the Voting Stock of
the parent corporation);
(ii) on or after the earlier to occur of the first public
offering of common stock of the Company or of Holdings referred to in
clause (i) above, (A) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in clause (i)
above, except that for purposes of this clause (ii) such person shall
be deemed to have "beneficial ownership" of all shares that any such
person has the right to acquire, whether such right is
22
exercisable immediately or only after the passage of time), directly
or indirectly, of more than 40% of the total voting power of the
Voting Stock of the Company or Holdings; provided, however, that the
Permitted Holders beneficially own (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the
total voting power of the voting stock of the Company or Holdings 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 (for the purposes of this clause
(ii), such other person shall be deemed to beneficially own any voting
stock of a specified corporation held by a parent corporation, if such
other person is the beneficial owner (as defined in this clause (ii)),
directly or indirectly, of more than 40% of the voting power of the
Voting Stock of such parent corporation and the Permitted Holders
beneficially own (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the voting power
of the Voting Stock of such parent corporation and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such
parent corporation);
(iii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of
the Company or Holdings (together with any new directors whose
election by such Board of Directors or whose nomination for election
by the shareholders of the Company or Holdings, as the case may be,
was approved by a vote of not less than 66-2/3% of the directors of
the Company or Holdings, as the case may be, then still in office who
were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors then
in office; or
(iv) the merger or consolidation of the Company or Holdings with
or into another Person or the merger of another Person with or into
the Company or Holdings or the sale or transfer in one or a series of
transactions of all or substantially all the assets of the Company or
Holdings to another Person, and, in the case only of any such merger
or consolidation, the securities of the Company or Holdings, as the
case may be, that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of
the Voting Stock of the Company or Holdings are changed into or
exchanged for cash, securities or property unless pursuant to such
transaction such securities are changed into or exchanged for, in
addition to any other consideration, securities of the surviving
corporation that represent immediately after such transaction, at
least a majority, of the aggregate voting power of the Voting Stock of
the surviving corporation.
(b) Notwithstanding the foregoing, if at the time of the occurrence of
a Change of Control the terms of the Credit Agreement restrict or prohibit the
repurchase of Notes pursuant to Section 4.01(a), then, prior to the mailing of
the notice to Holders provided for in Section 4.01(c) but in any event within 30
days following any such Change of Control, the Company shall (i) repay in full
all Debt under the Credit Agreement or offer to repay in full all such Debt and
repay the Debt of each Bank that has accepted such offer or (ii) obtain any
required consent or waiver under the Credit Agreement to permit the repurchase
of the Notes as provided for in Section 4.01(a).
23
(c) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder with a copy to the Trustee stating: (1) that a
Change of Control has occurred and that such Holder has the right to require the
Company to purchase such Holder's Notes at a purchase price in cash equal to
101% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); (2) the circumstances and, to the extent available, relevant facts
regarding such Change of Control (including information with respect to pro
forma historical income, cash flow and capitalization after giving effect to
such Change of Control); (3) the repurchase date (which shall be no earlier than
30 days nor later than 60 days from the date such notice is mailed); and (4) the
instructions, determined by the Company consistent with the covenant described
hereunder, that a Holder must follow in order to have its Notes purchased.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to the
provisions of this Article IV. To the extent that the provisions of any
securities laws and regulations conflict with the provisions of this Section
4.01, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Article IV by virtue thereof.
ARTICLE V
COVENANTS
Section 5.01. Payment of Principal, Premium and Interest.
The Company shall duly and punctually pay the principal of (and
premium, if any) and interest on the Notes in accordance with the terms of this
Indenture and the Notes.
Section 5.02. Maintenance of Office or Agency.
The Company shall maintain an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in such location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company also from time to time may designate one or more
additional offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and from time to time may rescind any such
designation; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
for such purposes. The Company shall give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.
Section 5.03. SEC Reports.
24
So long as any of the Notes remain outstanding, the Company shall
cause copies of all quarterly and annual financial reports and of the
information, documents, and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the Note Register maintained by the Registrar, in each
case, within 5 Business Days of filing with the SEC. If the Company is not
subject to the requirements of such Section 13 or 15(d) of the Exchange Act, the
Company shall nevertheless continue to file with the SEC, in conformity with
Section 13 or Section 15(d) of the Exchange Act, and provide the Trustee and
Holders with such annual and quarterly reports (without exhibits in the case of
documents provided to the Trustee and Holders) and such information, documents
and other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which are specified in Section 13 or
Section 15(d) of the Exchange Act. 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 convenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 5.04. Limitation On Debt.
(a) The Company shall not Incur, directly or indirectly, any Debt
unless, on the date of such Incurrence, the Consolidated Coverage Ratio exceeds
2.0 to 1.0.
(b) Notwithstanding the foregoing paragraph (a), the Company may Incur
any or all of the following Debt:
(i) Debt Incurred pursuant to the Revolving Credit Facility;
provided, however, that, after giving effect to any such Incurrence,
the aggregate principal amount of such Debt then outstanding does not
exceed the greater of (x) $150 million less the amount of any Debt
then outstanding Incurred by Foreign Subsidiaries pursuant to Section
5.05(e) and (y) the sum of (A) 65% of the gross book value of the
inventory of the Company and its Subsidiaries (other than any Foreign
Subsidiary that has Debt then outstanding Incurred pursuant to Section
5.05(e) and (B) 85% of the gross book value of the accounts receivable
of the Company and its Subsidiaries (other than any Foreign Subsidiary
that has Debt then outstanding Incurred pursuant to Section 5.05(e));
(ii) Debt Incurred pursuant to the Term Loan Facility in an
aggregate outstanding principal amount not to exceed $75 million less
the aggregate amount of all principal repayments of any such Debt
actually made after the Issue Date (other than any such principal
repayments made as a result of the Refinancing of any such Debt) and
less the amount of any Debt then outstanding Incurred by Foreign
Subsidiaries under Section 5.05(f);
(iii) Guarantees by the Company of Debt of a Foreign Subsidiary
described in Section 5.05(e) and Section 5.05(f);
25
(iv) Customer Notes Guarantees Incurred following the Issue Date
in an aggregate amount at any one time outstanding not to exceed $30
million less the amount of Customer Notes Guarantees Incurred
following the Issue Date then outstanding pursuant to Section 5.05(i)
and less the amount of Investments in Customer Notes made following
the Issue Date then outstanding pursuant to clause (C) of the
definition of "Permitted Investment";
(v) the BTCC Note Guarantees;
(vi) Debt owed to and held by a Wholly Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any
Capital Stock which results in any such Wholly Owned Subsidiary
ceasing to be a Wholly Owned Subsidiary or any subsequent transfer of
such Debt (other than to another Wholly Owned Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Debt by the
Company;
(vii) the Notes;
(viii) Debt (including without limitation Customer Notes
Guarantees) outstanding on the Issue Date (other than Debt described
in clauses (i), (ii), (iii), (iv), (v), (vi) or (vii) of this Section
5.04);
(ix) Refinancing Debt in respect of Debt Incurred pursuant to
paragraph (a) above or pursuant to clause (vii) or (viii) above or
this clause (ix);
(x) Hedging Obligations with respect to (1) Debt permitted to be
Incurred by the Company or its Subsidiaries pursuant to this Indenture
or (2) transactions denominated in foreign currencies; and
(xi) Debt (which Debt may, but need not, be Incurred in whole or
in part under the Credit Agreement) in an aggregate principal amount
which, together with all other Debt of the Company outstanding on the
date of such Incurrence (other than Debt permitted by clauses (i)
through (x) of this paragraph (b) or paragraph (a) above), and giving
effect to any concurrent Refinancing of Debt permitted by the
Indenture, does not exceed $10 million.
For purposes of determining compliance with this paragraph (b), (i) in the event
that an item of Debt meets the criteria of more than one of the types of Debt
described in paragraph (b), the Company, in its sole discretion, will classify
such item of Debt and only be required to include the amount and type of such
Debt in one of the clauses of paragraph (b); and (ii) an item of Debt may be
divided and classified in more than one of the types of Debt in paragraph (b).
(c) Notwithstanding paragraph (a) and paragraph (b) above, the Company
shall not Incur any Debt if the proceeds thereof are used, directly or
indirectly, to Refinance any Subordinated Obligations unless such Debt shall be
subordinated to the Notes to at least the same extent as such Subordinated
Obligations.
(d) Notwithstanding paragraph (a) and paragraph (b) above, (i) the
Company shall not Incur any Debt if such Debt is subordinated or junior in
ranking to any Senior Debt, unless such Debt is Senior Subordinated Debt or is
expressly subordinated in right of payment
26
to Senior Subordinated Debt; and (ii) the Company shall not issue any Secured
Debt which is not Senior Debt unless contemporaneously therewith effective
provision is made to secure the Notes equally and ratably with such Secured Debt
for so long as such Secured Debt is secured by a Lien.
Section 5.05. Limitation on Debt and Preferred Stock of Subsidiaries.
The Company shall not permit any Subsidiary to Incur, directly or
indirectly, any Debt or Preferred Stock except:
(a) Guarantees by the Subsidiaries of Debt of the Company described in
clause (b)(i), (ii) and (iv) of Section 5.04, other Debt of the Company Incurred
under the Credit Agreement which is permitted to be Incurred pursuant to the
terms of this Indenture, and Debt of Foreign Subsidiaries described in clauses
(e) and (f) below;
(b) Debt or Preferred Stock issued to and held by the Company or a
Wholly Owned Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock which results in any such Wholly Owned Subsidiary
ceasing to be a Wholly Owned Subsidiary or any subsequent transfer of such Debt
or Preferred Stock (other than to the Company or a Wholly Owned Subsidiary)
shall be deemed, in each case, to constitute the issuance of such Debt or
Preferred Stock by the issuer thereof;
(c) Debt or Preferred Stock of a Subsidiary Incurred and outstanding
on or prior to the date on which such Subsidiary was acquired by the Company
(other than Debt or Preferred Stock Incurred in connection with, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Subsidiary
became a Subsidiary or was acquired by the Company); provided, however, that on
the date of such acquisition and after giving effect thereto, the Company would
have been able to Incur at least $1.00 of additional Debt pursuant to Section
5.04(a);
(d) Debt or Preferred Stock outstanding on the Issue Date (other than
Debt described in clause (a), (b) or (c));
(e) Debt of a Foreign Subsidiary Incurred pursuant to the Revolving
Credit Facility; provided, however, that, after giving effect to any such
Incurrence, the aggregate principal amount of Debt outstanding of such Foreign
Subsidiary pursuant to this clause (e) does not exceed the greater of (x) $125
million and (y) the sum of 85% of the gross book value of the accounts
receivable of such Foreign Subsidiary and 65% of the gross book value of the
inventories of such Foreign Subsidiary;
(f) Debt of a Foreign Subsidiary Incurred pursuant to the Term Loan
Facility; provided that, after giving effect to any such Incurrence, the
aggregate principal amount of Debt Incurred by all Foreign Subsidiaries pursuant
to this clause (f) may not exceed $50 million less the aggregate amount of all
principal repayments of any such Debt actually made after the Issue Date (other
than any such principal repayments made as a result of the Refinancing of any
such Debt);
(g) Refinancing Debt Incurred in respect of Debt or Preferred Stock
referred to in clause (a), (c) or (d) or this clause (g); provided, however,
that to the extent such Refi-
27
nancing Debt directly or indirectly Refinances Debt or Preferred Stock of a
Subsidiary described in clause (c), such Refinancing Debt shall be Incurred only
by such Subsidiary;
(h) Hedging Obligations by a Subsidiary with respect to (x) Debt
permitted to be Incurred by such Subsidiary pursuant to the Indenture and (y)
transactions by such Subsidiary denominated in foreign currencies; and
(i) Customer Notes Guarantees Incurred following the Issue Date in an
aggregate amount at any one time outstanding not to exceed $30 million less the
amount of Customer Notes Guarantees Incurred following the Issue Date then
outstanding pursuant to Section 5.04(b)(iv) and less the amount of Investments
in Customer Notes made following the Issue Date then outstanding pursuant to
clause (C) of the definition of "Permitted Investment."
Section 5.06. Limitation On Restricted Payments.
(a) The Company shall not, and shall not permit any Subsidiary,
directly or indirectly, to make a Restricted Payment if at the time the Company
or such Subsidiary makes such Restricted Payment:
(i) a Default shall have occurred and be continuing (or would
result therefrom);
(ii) the Company, after giving pro forma effect to such
Restricted Payment, would not be permitted to Incur an additional
$1.00 of Debt pursuant to Section 5.04(a); or
(iii) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum
of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal quarter
during which the Notes were originally issued to the end of the most recent
fiscal quarter ending at least 45 days prior to the date of such Restricted
Payment (or, in case such Consolidated Net Income shall be a deficit, minus
100% of such deficit); (B) the aggregate Net Cash Proceeds and aggregate
Deemed Asset Value received by the Company from the issue or sale of its
Capital Stock (other than Disqualified Stock) or capital contributions with
respect thereto subsequent to the Issue Date (other than an issuance or
sale to a Subsidiary of the Company and except as set forth in clause (C)
other than an issuance or sale to an employee stock ownership plan or to a
trust established by the Company or any of its Subsidiaries for the benefit
of their employees); (C) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than
Disqualified Stock) to an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries for the benefit of
their employees subsequent to the date on which the Notes were originally
issued, other than any such issuance or sale to the extent the purchase by
such plan or trust is financed by Debt of such plan or trust and for which
the Company is liable as guarantor or otherwise; and (D) the amount by
which Debt of the Company is reduced on the Company's balance sheet upon
the conversion or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date, of any Debt of the Company convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the
Company (less the amount of any cash, or the fair value of any
28
other property, distributed by the Company upon such conversion or
exchange, except to the extent that such distribution results in a
reduction in Consolidated Net Income reflected pursuant to clause (A)
above).
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(i) any purchase or redemption of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the
Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees to the extent the
purchase by such plan or trust is financed by Debt of such plan or
trust and for which the Company or any Subsidiary is liable as
guarantor or otherwise), provided, however, that (A) such purchase or
redemption shall be excluded in the calculation of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale shall
be excluded from the calculation of amounts under clauses (iii)(B) and
(iii)(C) of paragraph (a) above;
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations
together with any premium payable in connection therewith made by
exchange for, or out of the proceeds of the substantially concurrent
sale of, Debt of the Company which is permitted to be Incurred
pursuant to Section 5.04; provided, however, that such purchase,
repurchase, redemption, defeasance or other acquisition or retirement
for value shall be excluded in the calculation of the amount of
Restricted Payments;
(iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have
complied with this covenant; provided, however, that at the time of
declaration of such dividend, no other Default shall have occurred and
be continuing (or would result therefrom); and provided, further,
however, that such dividend shall be included in the calculation of
the amount of Restricted Payments;
(iv) the repurchase of shares of, or options to purchase shares
of, common stock of the Company or any of its Subsidiaries from
employees, former employees, directors or former directors of the
Company or any of its Subsidiaries (or permitted transferees of such
employees, former employees, directors or former directors), pursuant
to the terms of the agreements (including employment agreements) or
plans (or amendments thereto) approved by the Board of Directors under
which such individuals purchase or sell or are granted the option to
purchase or sell, shares of such common stock; provided, however, that
the aggregate amount of such repurchases in any calendar year shall
not exceed the sum of (x) $2 million and (y) the aggregate Net Cash
Proceeds from any reissuance during such calendar year of Capital
Stock to employees, officers or directors of the Company or its
Subsidiaries; provided further, however, that to the extent that the
aggregate amount of such repurchases is less than $2 million in any
calendar year, the unused portion of such $2 million may be carried
forward to the succeeding calendar year (provided that the aggregate
amount of the repurchases in any calendar year shall, in no event,
exceed $4 million plus the amount of
29
aggregate Net Cash Proceeds from any reissuance of Capital Stock
described above) in any calendar year; and provided, further, however,
that such repurchases shall be excluded in the calculation of the
amount of Restricted Payments;
(v) Investments in any Person primarily engaged in a Related
Business in an aggregate amount not to exceed $10 million; provided,
however, that the amount of such Investments shall be excluded in the
calculation of the amount of Restricted Payments;
(vi) the payment of any cash dividend on the Common Stock of the
Company following a Public Equity Offering by the Company or,
following a Public Equity Offering by Holdings, a payment to Holdings
used solely to pay dividends on the Common Stock of Holdings, in each
case as long as no Default or Event of Default has occurred and is
continuing or would thereby result; provided that the aggregate amount
of all such dividends and payments under this clause (vi) shall not
exceed 6% of the Net Cash Proceeds received by the Company and
Holdings in any such Public Equity Offering in any calendar year;
provided further, however, that such dividends and payments shall be
included in the calculation of Restricted Payments;
(vii) Investments in customer notes to the extent such
Investments are in existence on the Issue Date; provided, however,
that the amount of such Investments shall be excluded in the
calculation of the amount of Restricted Payments; or
(viii) Restricted Payments in an aggregate amount not to exceed
$10 million; provided, however, that the amount of such Restricted
Payments shall be excluded in the calculation of the amount of
Restricted Payments.
Section 5.07. Limitation On Restrictions On Distributions from Subsidiaries.
(a) The Company shall not, and shall not permit any Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to:
(i) pay dividends or make any other distributions on its Capital
Stock to the Company or a Subsidiary or pay any Debt owed to the
Company,
(ii) make any loans or advances to the Company or
(iii) transfer any of its property or assets to the Company,
except:
(1) any encumbrance or restriction pursuant to an agreement in
effect or entered into on the Issue Date or pursuant to the issuance
of the Notes;
(2) any encumbrance or restriction with respect to a Subsidiary
pursuant to an agreement relating to any Debt Incurred by such
Subsidiary on or prior to the date on which such Subsidiary was
acquired by the Company (other than Debt Incurred as consideration in,
or to provide all or any portion of the funds or credit support
utilized to consummate, the transaction or series of related
transactions
30
pursuant to which such Subsidiary became a Subsidiary or was acquired
by the Company) and outstanding on such date;
(3) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Debt Incurred pursuant to an agreement
referred to in clause (1) or (2) or contained in any amendment to an
agreement referred to in clause (1) or clause (2); provided, however,
that the encumbrances and restrictions contained in any of such
refinancing agreement or amendment are no less favorable to the
Noteholders than encumbrances and restrictions with respect to such
Subsidiary contained in such agreements;
(4) any such encumbrance or restriction (A) that restricts in a
customary manner the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract or
similar property or asset the subject of such encumbrance or
restriction, (B) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or
assets of the Company or any Subsidiary not otherwise prohibited by
the Indenture or (C) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of property
or assets of the Company or any Subsidiary in any manner material to
the Company or any Subsidiary; provided that, in each case, such
encumbrance or restriction relates to, and restricts dealings with,
only the property or asset the subject of such encumbrance or
restriction; provided further, that such encumbrance or restriction
does not prohibit, limit or otherwise restrict the making or payment
of any dividend or other distribution to the Company or any
Subsidiary;
(5) in the case of this clause (iii), restrictions contained in
security agreements or mortgages securing Debt of a Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements or mortgages;
(6) any encumbrance or restriction imposed solely upon a Foreign
Subsidiary pursuant to an agreement relating to Indebtedness Incurred
by such Foreign Subsidiary which is permitted under the covenant
described in Section 5.05; and
(7) any restriction with respect to a Subsidiary imposed pursuant
to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Subsidiary
pending the closing of such sale or disposition.
Section 5.08. Limitation On Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless
(i) the Company or such Subsidiary receives consideration at the
time of such Asset Disposition at least equal to the fair market
value, as determined in good faith by the Board of Directors
(including as to the value of all non-cash
31
consideration), of the shares and assets subject to such Asset
Disposition and at least 75% of the consideration thereof received by
the Company or such Subsidiary is in the form of cash or Cash
Equivalents, and
(ii) the Company (x) within 180 days (in the case of (A) below)
or 360 days (in the case of (B) below) after receipt of such Net
Available Cash, (A) to the extent the Company so elects (or is so
required by the terms of any Senior Debt), applies an amount equal to
100% of the Net Available Cash to repay, prepay, redeem or purchase
Senior Debt of the Company or Debt (other than any Disqualified Stock)
of a Wholly Owned Subsidiary (in each case other than Debt owed to the
Company or an Affiliate of the Company) or (B) invests or commits to
invest the balance of such Net Available Cash not applied pursuant to
clause (A), in Additional Assets; provided, however, that in the case
of any commitment to invest such investment must be made within one
month thereafter, and any amount not so invested shall be treated as
Excess Proceeds (as defined below); and (y) applies the balance of
such Net Available Cash not applied pursuant to clause (x), as
provided in the following paragraphs of this covenant. Notwithstanding
the foregoing provisions of this paragraph, the Company and its
Subsidiaries shall not be required to apply any Net Available Cash in
accordance with this paragraph except to the extent that the aggregate
Net Available Cash from all Asset Dispositions which are not applied
in accordance with this paragraph exceeds $10 million. The amount of
Net Available Cash required to be applied and not applied as so
required shall constitute "Excess Proceeds". Pending application of
Net Available Cash pursuant to this covenant, such Net Available Cash
shall be invested in Temporary Cash Investments or applied to repay
Debt Incurred under the Revolving Credit Facility without commitment
reduction thereunder.
For the purposes of this covenant, the following are deemed to be cash
equivalents: (x) the assumption of Debt of the Company or any Subsidiary and the
release of the Company or such Subsidiary from all liability on such Debt in
connection with such Asset Disposition, (y) Temporary Cash Investments, and (z)
securities received by the Company or any Subsidiary from the transferee that
are promptly converted by the Company or such Subsidiary into cash.
(b) If, as of the first day of any calendar month, the aggregate
amount of Excess Proceeds not theretofore subject to an Excess Proceeds Offer
(as defined below) totals at least $10 million, the Company must, not later than
the fifteenth Business Day of such month, make an offer (an "Excess Proceeds
Offer") to purchase from the Holders (and to purchase Debt from the holders of
any other Senior Subordinated Debt) on a pro rata basis an aggregate principal
amount of Notes equal to the Excess Proceeds (rounded down to the nearest
multiple of $1,000) on such date, at a purchase price equal to 100% of the
principal amount of such Notes, plus, in each case, accrued interest (if any) to
the date of purchase (or, in respect of such other Senior Subordinated Debt,
such lesser price, if any, as may be provided for by the terms of such Senior
Subordinated Debt) (the "Excess Proceeds Payment").
(c) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 5.08. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 5.08, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this clause by virtue thereof.
32
Section 5.09. Limitation On Affiliate Transactions.
(a) The Company shall not, and shall not permit any Subsidiary to,
enter into or permit to exist any transaction or series of similar transactions
(including the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of the terms thereof any service)
with any Affiliate of the Company (an "Affiliate Transaction") unless the terms
thereof:
(i) are no less favorable to the Company or such Subsidiary as
terms than those that could be obtained at the time of such
transaction in arm's length dealings with a Person who is not such an
Affiliate,
(ii) if such Affiliate Transaction involves an amount in excess
of $3 million, (1) are set forth in writing and (2) have been approved
by a majority of the members of the Board of Directors having no
personal stake in such Affiliate Transaction, and
(iii) if such Affiliate Transaction involves an amount in excess
of $15 million, have been determined by a nationally recognized
investment banking firm to be fair, from a financial standpoint to the
Company and its Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(i) any Restricted Payment permitted to be paid pursuant to
Section 5.06;
(ii) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans
approved by the Board of Directors;
(iii) the grant of stock options or similar rights to employees
and directors of the Company pursuant to plans approved by the Board
of Directors;
(iv) loans or advances to employees in the ordinary course of
business in accordance with the past practices of the Company or its
Subsidiaries and their predecessors including loans or advances to
Management Investors in connection with the Management Placement, but
in any event not to exceed $4 million in the aggregate outstanding at
any one time;
(v) the payment of reasonable and customary fees to directors of
the Company and its Subsidiaries who are not employees of the Company
or its Subsidiaries;
(vi) any Affiliate Transaction between the Company and a Wholly
Owned Subsidiary or between Wholly Owned Subsidiaries; and
(vii) the payment of a one-time fee to Stonington in connection
with the Acquisition in an aggregate amount not to exceed $6 million
plus reasonable expenses.
33
Section 5.10. Compliance Certificates.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during the preceding fiscal year
has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such Officers' Certificate, that to the best of his or her knowledge the
Company has kept, observed, performed and fulfilled each covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action each is taking or
proposes to take with respect thereto). The Company shall also comply with TIA
ss. 314(a)(4).
Section 5.11. Further Instruments and Acts.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
ARTICLE VI
SUCCESSORS
Section 6.01. When the Company May Merge or Transfer Assets.
The Company shall not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Notes and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Debt which becomes an obligation of the Successor Company
or any Subsidiary of the Successor Company as a result of such
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of Debt
pursuant to Section 5.04(a);
34
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount which
is not less than the Consolidated Net Worth of the Company prior to
such transaction; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with the terms of this Indenture.
Section 6.02. Successor Company Substituted.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Notes.
ARTICLE VII
DEFAULTS AND REMEDIES
Section 7.01. Events of Default.
Each of the following shall constitute an "Event of Default":
(i) the Company defaults in any payment of interest on any Note
when the same becomes due and payable, whether or not such payment
shall be prohibited by Article XI, and such default continues for a
period of 30 days;
(ii) the Company defaults in the payment of the principal of any
Note when the same becomes due and payable at its Stated Maturity,
upon optional redemption, upon declaration, upon required repurchase
or otherwise, whether or not such payment shall be prohibited by
Article XI;
(iii) the Company fails to comply with Article VI;
(iv) the Company fails to comply for 30 days after the notice
specified in this Section 7.01 with any of its obligations contained
in Article IV (other than a failure to purchase Notes), Section 5.03,
Section 5.04, Section 5.05, Section 5.06, Section 5.07, Section 5.08
(other than a failure to purchase Notes), or Section 5.09;
(v) the Company fails to comply with any of its agreements in
this Indenture (other than those referred to in clause (i), clause
(ii), clause (iii) or clause (iv) of this Section 7.01) and such
failure continues for 60 days after the notice specified in this
Section 7.01;
(vi) a default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Debt for money borrowed by the Company or any of its
Subsidiaries (or the payment of
35
which is Guaranteed by the Company or any of its Subsidiaries) whether
such Debt or Guarantee now exists, or is created after the date of
this Indenture, which default (1) is caused by failure to pay
principal of or premium, if any, or interest on such Debt within any
applicable grace period after final maturity ("Final Payment
Default"), or (2) results in the acceleration of such Debt prior to
its final stated maturity and, in each case, the principal amount of
any such Debt, together with the principal amount of any other such
Debt under which there has been a Final Payment Default or the
maturity of which has been so accelerated, aggregates $10 million or
more and such default or acceleration continues for 30 days after the
notice specified in this Section 7.01;
(vii) the Company or any Significant Subsidiary of the Company
pursuant to or within the meaning of Bankruptcy Law: (1) commences a
voluntary case, (2) consents to the entry of an order for relief
against it in an involuntary case, (3) consents to the appointment of
a Custodian of it or for all or substantially all of its property; or
(4) makes a general assignment for the benefit of its creditors;
(viii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (1) is for relief against the
Company or any Significant Subsidiary of the Company in an involuntary
case, (2) appoints a Custodian of the Company or any Significant
Subsidiary of the Company or for all or substantially all of the
property of the Company or any Significant Subsidiary of the Company,
or (3) orders the liquidation of the Company or any Significant
Subsidiary of the Company, and any such order or decree remains
unstayed and in effect for 60 consecutive days; and
(ix) any final non-appealable judgment or decree for the payment
of money in excess of $10 million is rendered against the Company or a
Significant Subsidiary, remains outstanding for a period of 60 days
following such judgment and is not discharged, waived or stayed within
10 days after notice; provided that, the amount of such money judgment
or decree shall be calculated net of any insurance coverage that the
Company has determined in good faith is available in whole or in part
with respect to such money, judgment or decree.
A Default under clauses (iv), (v), (vi) or (ix) will not constitute an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the outstanding Notes notify the Company of the Default and the
Company does not cure such Default within the time specified after receipt of
such notice.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, an Officers' Certificate of any Event of Default pursuant to
clause (iii), clause (vii) or clause (viii) and any event which with the giving
of notice or the lapse of time would become an Event of Default pursuant to
clauses (iv), (v), (vi) or (ix), its status and what action the Company is
taking or proposes to take in respect thereof.
36
Section 7.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (vii) or clause (viii) of Section 7.01) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes, may declare the principal of and accrued but unpaid interest
on all the Notes to be due and payable (collectively, the "Default Amount") by
notice in writing to the Company, the administrative agent under the Credit
Agreement (if any Debt is then outstanding under the Credit Agreement) and the
Trustee specifying the respective Event of Default and that it is a "notice of
acceleration"; provided, however, that the failure to so notify the
administrative agent under the Credit Agreement shall not affect the validity of
such acceleration. Upon such a declaration, the Default Amount shall be due and
payable immediately, subject to Article IX of this Indenture. Notwithstanding
the foregoing, in case of an Event of Default specified in clause (vii) or
clause (viii) of Section 7.01, all outstanding Notes shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Holders of the Notes. Under certain circumstances, the
Holders of a majority in aggregate principal amount of the then outstanding
Notes by written notice to the Trustee may on behalf of all of the Holders
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
Section 7.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes and this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any such Notes in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon any Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in such Event of Default. No remedy
shall be exclusive of any other remedy. All remedies shall be cumulative to the
extent permitted by law.
Section 7.04. Waiver of Past Defaults.
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive an existing Default and its consequences, except (i) a Default in
the payment of the principal of, premium, if any, or interest on, the Notes; or
(ii) a Default in respect of a provision that under Section 10.02 cannot be
amended without the consent of each Holder affected thereby. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
37
Section 7.05. Control by Majority.
Subject to certain restrictions, Holders of a majority in principal
amount of the Notes then outstanding may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or the terms of this
Indenture or if, subject to Section 8.01, the Trustee reasonably determines that
such action, if taken, would be unduly prejudicial to the rights of other
Holders or may involve the Trustee in personal liability.
Section 7.06. Limitation On Suits.
Except to enforce the right to receive payment of principal, premium,
if any, or interest when due, no Holder of a Note may pursue any remedy with
respect to this Indenture or the Notes, unless:
(i) such Holder has previously given the Trustee written notice
that an Event of Default is continuing;
(ii) Holders of at least 25% in principal amount of the Notes
then outstanding have made a written request to the Trustee to pursue
the remedy;
(iii) such Holders have offered the Trustee reasonable security
or indemnity against any loss, liability or expense;
(iv) the Trustee has not complied with such request within 60
days after the receipt thereof and the offer of security or indemnity;
and
(v) Holders of a majority in principal amount of the Notes then
outstanding have not given the Trustee a direction inconsistent with
such request within such 60-day period.
A Holder of a Note shall not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 7.07. Unconditional Right 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, premium, if any, and
interest on such Note, on or after the respective due dates expressed in such
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of any
such Holder of a Note.
Section 7.08. Collection Suit by Trustee.
If an Event of Default specified in Section 7.01(i) or Section
7.01(ii) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the entire
amount then due and owing, plus the amounts provided for in Section 8.07.
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Section 7.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders of the Notes allowed in any judicial proceedings
relative to the Company, the Company's creditors or the Company's property, and,
unless prohibited by law or applicable regulations, may vote on behalf of the
Holders in any election of a trustee in bankruptcy or other Person performing
similar functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee, and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due to Trustee under Section 8.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 7.10. Priorities.
If the Trustee collects any money pursuant to this Article VII, it
shall pay out the money in the following order:
(i) FIRST: to the Trustee for amounts due to it under Section
8.07;
(ii) SECOND: to holders of Senior Debt to the extent required by
Article XI;
(iii) THIRD: to Holders for amounts due and unpaid on the Notes
for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any, and interest,
respectively; and
(iv) FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 7.10.
Section 7.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require 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 7.11 shall not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 7.07, or a suit by Holders of more than 10% in principal
amount of the Notes then outstanding.
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Section 7.12. Waiver of Stay, Extension and Usury Laws.
The Company (to the extent that it may lawfully do so) shall not at
any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE VIII
TRUSTEE
Section 8.01. Duties of Trustee.
(a) If an Event of Default of which a Responsible Officer of the
Trustee is aware 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 circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default of which a
Responsible Officer of the Trustee is aware:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee shall not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct or bad faith, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 8.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with a
direction received by it pursuant to Section 7.05.
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(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraph
(a), paragraph (b) and paragraph (c) of this Section 8.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(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.
(g) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 8.01 and to the provisions of the TIA.
Section 8.02. Rights of Trustee.
(a) The Trustee may rely upon 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 any such document.
(b) Before the Trustee acts or refrains from taking any action, the
Trustee may require an Officers' Certificate or an Opinion of Counsel or both.
The Trustee shall not be liable for any action taken or omitted to be taken by
it in good faith in reliance on such Officers' Certificate or such Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent; provided, however, that any such
agent is appointed by the Trustee with due care.
(d) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith which it reasonably believes to be authorized or
within its rights or powers conferred upon it by this Indenture; provided,
however, that the Trustee's conduct does not constitute negligence, willful
misconduct or bad faith.
(e) The Trustee may consult with counsel of its selection, and the
written advice or opinion of counsel with respect to legal matters shall be full
and complete authorization and protection from liability in respect to any
action taken, omitted or suffered by the Trustee hereunder in good faith and in
accordance with the advice or opinion of such counsel.
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Section 8.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights as it would have if the Trustee
were not the Trustee hereunder. However, in the event the Trustee acquires any
conflicting interest in accordance with the TIA it must eliminate such
conflicting interest within 90 days, apply to the SEC for permission to continue
as Trustee or resign. Any Paying Agent, Registrar or co-registrar may do the
same with like rights and duties. The Trustee shall at all times remain subject
to Section 8.10 and Section 8.11.
Section 8.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validly or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds of the Notes and it shall not
be responsible for any statement contained herein or any statement contained in
the Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than the Trustee's certificates of
authentication.
Section 8.05. Notice of Default.
If a Default occurs and is continuing and if such Default is known to
the Responsible Officer of the Trustee, the Trustee must mail to each Holder a
notice of such Default within 90 days (or such shorter period as may be required
by applicable law) after such Default occurs. Except in the case of a Default in
payment of principal of, premium, if any, or interest on any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders.
Section 8.06. Reports by Trustee to Holders.
Within 60 days after each _______, beginning with _______ following
the date of this Indenture, the Trustee shall mail to Holders of the Notes a
brief report dated as of such reporting date that complies with TIA ss. 313(a)
to the extent such a report is required by TIA ss. 313(a). The Trustee also
shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to the Holders shall
be mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Notes may be listed. The Company shall promptly notify the Trustee
upon the Notes being listed on any stock exchange and any delisting thereof.
Section 8.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time compensation as
such parties shall agree in writing for the Trustee's acceptance of this
Indenture and its services hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of the Trustee of an express
trust. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee for all reasonable out-of-pocket expenses incurred or made by it in the
course of its services hereunder. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts.
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The Company shall indemnify the Trustee and any predecessor Trustee
and their agents against any and all loss, liability or reasonable expense
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) incurred by this in connection with the administration of
this trust including attorneys fees and expenses and the performance of its
duties under this Indenture, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its power or duties hereunder, except any such loss,
liability or expense attributable to the negligence, willful misconduct or bad
faith of the Trustee.
The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder except to the extent that the
Company may be materially prejudiced by such failure. The Company shall defend
the claim and the Trustee shall cooperate in the defense of such claim. The
Trustee may have separate counsel of its selection and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own negligence, willful misconduct or bad faith.
The Company need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.
The Company's payment obligations under this Section 8.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations under this Section 8.07,
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 that is held by it in
trust for the benefit of Holders to pay principal and interest on particular
Notes.
If the Trustee shall incur expenses after the occurrence of a Default
specified in Section 7.01(vii) or Section 7.01(viii), such expenses (including
the reasonable fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under Bankruptcy Law.
Section 8.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 8.08.
The Trustee may resign at any time and be discharged from the trust
hereby created by so notifying the Company in writing. The Holders of not less
than a majority in principal amount of the Notes then outstanding may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company
shall remove the Trustee if:
(i) the Trustee fails to comply with Section 8.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a Custodian or other public officer takes charge of the
Trustee or its property; or
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(iv) 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 Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee gives notice of its resignation or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee after written request by any Holder who has been a
Holder for at least six months fails to comply with Section 8.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Any successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all of the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the Lien provided for
in Section 8.07. Notwithstanding replacement of the Trustee pursuant to this
Section 8.08, the Company's obligations under Section 8.07 shall continue for
the benefit of the retiring Trustee.
Section 8.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee entity without any further act shall constitute the successor
Trustee; provided, however, that such entity shall be otherwise qualified and
eligible under this Article VIII.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Notes shall have been authenticated but not delivered, any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated, and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes or
in this Indenture provided that the certificate of the Trustee shall have.
44
Section 8.10. Eligibility; Disqualification.
This Indenture at all times shall have a Trustee which satisfies the
requirements of TIA ss. 310(a). Trustee shall be a corporation organized and
doing business under the laws of the United States of America or of any State
thereof authorized under such laws to exercise corporate trustee power, shall be
subject to supervision or examination by federal or state authority and shall
have a combined capital and surplus of at least $50 million as set forth in its
most recently published annual report of condition. The Trustee shall be subject
to TIA ss. 310(b).
Section 8.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee which has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
Section 8.12. May Hold Securities.
The Trustee, any authenticating agent, any paying agent, any registrar
or any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to Sections __ and __,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, authenticating agent, paying agent, security registrar or such
other agent.
ARTICLE IX
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Liability on Notes; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding Notes
(other than Notes replaced pursuant to Section 2.07) for cancellation or (ii)
all outstanding Notes have become due and payable, whether at maturity or as a
result of the mailing of a notice of redemption pursuant to Article III of this
Indenture and the Company irrevocably deposits with the Trustee funds sufficient
to pay at maturity or upon redemption all outstanding Notes including interest
thereon to maturity or such redemption date (other than Notes replaced pursuant
to Section 2.07), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 9.01(c),
cease to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
(b) Subject to Section 9.01(c) and Section 9.02, the Company at any
time may terminate (i) all of the Company obligations under the Notes and this
Indenture ("legal defeasance"), except for certain obligations, including those
respecting the defeasance trust and obligations to register the transfer or
exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and
to maintain a registrar and paying agent in respect of the Notes; or (ii) its
obligations under Article IV, Section 5.03, Section 5.04, Section 5.05, Section
5.06, Section 5.07, Section 5.08, Section 5.09, Section 5.10, Section 6.01(iii),
Section 6.01(iv) and the operation of Section 7.01(iv), Section 7.01(vi),
Section 7.01(vii) (with respect only to Significant
45
Subsidiaries), Section 7.01(viii) (with respect only to Significant
Subsidiaries) and Section 7.01(ix) ("covenant defeasance"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Notes may not be accelerated because of an Event of Default specified in Section
7.01 (iv), Section 7.01(vi), Section 7.01(vii) (with respect only to Significant
Subsidiaries), Section 7.01(viii) (with respect only to Significant
Subsidiaries) or Section 7.01(ix), or because of the failure of the Company to
comply with Article IV or Section 6.01(iii) or Section 6.01(iv).
Upon satisfaction of the conditions set forth herein and at the
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations of the Company terminated thereby.
(c) Notwithstanding clause (a) and clause (b) above, the Company's
obligations contained in Section 2.03, Section 2.04, Section 2.05, Section 2.06,
Section 2.07, Section 8.07, Section 8.08 and this Article IX shall survive until
the Notes have been paid in full. Thereafter, the Company's obligations
contained in Section 8.07, Section 9.04 and Section 9.05 shall survive.
Section 9.02. Conditions to Defeasance.
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(i) the Company irrevocably deposits in trust (the "defeasance
trust") with the Trustee money or U.S. Government Obligations for the
payment of principal, premium (if any) and interest on the Notes to
maturity or redemption, as the case may be;
(ii) such defeasance does not result in a breach or violation of,
or constitute a default under, this Indenture, the Credit Agreement or
any other material agreement or instrument to which the Company is a
party or by which it is bound;
(iii) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and
interest when due on all the Notes to maturity or redemption, as the
case may be;
(iv) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 7.01(vii) or Section
7.01(viii) in either case with respect to the Company occurs which is
continuing at the end of the period;
(v) the deposit does not result in a breach or violation of, or
constitute a default under, this Indenture (including, without
limitation, Article XI hereof),
46
the Credit Agreement or any other material agreement or instrument to
which the Company is a party or by which the Company is bound;
(vi) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the U.S. Investment Company Act of 1940, as amended;
(vii) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States stating that (1) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling, or (2)
since the date of this Indenture there has been a change in the
applicable U.S. Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain or loss for U.S. Federal
income tax purposes as a result of such defeasance and will be subject
to U.S. Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such deposit and
defeasance had not occurred;
(viii) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel in the
United States to the effect that the Holders will not recognize
income, gain or loss for U.S. Federal income tax purposes as a result
of such covenant defeasance and will be subject to U.S. Federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred;
and
(ix) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Notes as contemplated by this
Article IX have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of the Notes at a future date in
accordance with Article III.
Section 9.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article IX. The Trustee shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
of, premium, if any, and interest on the Notes.
Section 9.04. Repayment to the Company.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of
47
principal or interest that remains unclaimed for two years, and, thereafter,
Holders entitled to the money shall look to the Company for payment as general
creditors.
Section 9.05. Indemnity for Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
Section 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article IX by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to this Article IX until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with this Article IX; provided,
however, that, if the Company has made any payment of interest on or principal
of any of the Notes because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE X
AMENDMENT, SUPPLEMENT AND WAIVER
Section 10.01. Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or
the Notes without the consent of any Holder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to provide for the assumption of the Company's obligations
to the Holders in the case of a merger or consolidation pursuant to
Article VI;
(iii) to provide for uncertificated Notes in addition to or in
place of certificated Notes (provided that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the
Code, or in a manner such that the uncertificated Notes are described
in Section 163(f)(2)(B) of the Code);
(iv) to add guarantees with respect to the Notes;
(v) to secure the Notes;
(vi) to add to the covenants of the Company and its Subsidiaries
hereunder for the benefit of the Holders or to surrender any right or
power conferred upon the Company;
48
(vii) to make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect the
rights hereunder of any Holder; or
(viii) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA.
No amendment may be made to any provision of Article XI that would
adversely affect the rights of any holder of Senior Debt then outstanding unless
the holders of such Senior Debt (or their Representative) consent to such
change.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such amended
or supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 10.06, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations which may be contained therein, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture which affects its
own rights, duties or immunities under this Indenture or otherwise.
After an amendment, supplement or waiver under this Section 10.01
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing any such amendment, supplement or waiver. Any failure
of the Company to mail such notice, or any defect therein, shall not in any way
impair or affect the validity of any such amended or supplement Indenture or
waiver. Subject to Section 7.04 and Section 7.07, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive compliance by
the Company in any particular instance with any provision of this Indenture or
the Notes.
Section 10.02. With Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture,
the Notes or any amended or supplemental Indenture with the written consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection with
a Lender offer or exchange for the Notes) and any existing Event of Default and
its consequences or compliance with any provision of this Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the Notes then outstanding. However, without the consent of each Holder of an
outstanding Note affected thereby, any amendment, supplement or waiver may not,
among other things:
(i) reduce the amount of Notes the Holders of which must consent
to an amendment;
(ii) reduce the rate of or extend the time for payment of
interest on any Note;
(iii) reduce the principal of or extend the Stated Maturity of
any Note;
(iv) reduce the premium payable upon the redemption of any Note
or change the time at which any Note may be redeemed in accordance
with Article III;
49
(v) make any Note payable in money other than that stated in the
Note;
(vi) impair the right of any Holder of the Notes to receive
payment of principal of and interest on such Holder's Notes on or
after the due dates therefor or to institute suit for the enforcement
of any payment on or with respect to such Holder's Notes;
(vii) make any change in Section 7.04 or Section 7.07 or the
second sentence of this Section 10.02; or
(viii) make any change in any provision of Article XI that
adversely affects the interests of any Holder.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such amended
or supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory with the Trustee of the consent of the Holders as aforesaid and
upon receipt by the Trustee of the documents described in Section 10.06, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing any such amendment, supplement or waiver. Any failure
of the Company to mail such notice, or any defect therein, shall not in any way
impair or affect the validity of any such amended or supplemental Indenture or
waiver. Subject to Section 7.04 and Section 7.07, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive compliance by
the Company in any particular instance with any provision of this Indenture or
the Notes.
Section 10.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 10.04. Revocation and Effect of Consents and Waivers.
Until an amendment, supplement or waiver becomes effective, a consent
to such amendment, supplement or waiver by a Holder is a continuing and binding
consent by the Holder and every subsequent Holder of the Notes or portion of a
Note that evidences the same Debt as the consenting Holder's Note, even if a
notation of the consent or waiver is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to its Note if the Trustee
receives written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver shall become
effective in accordance with its terms and thereafter shall bind every Holder.
50
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, such Persons which were Holders at such record
date (or their duly designated proxies), and only such Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
Section 10.05. Notation On or Exchange of Notes.
If an amendment or supplement changes the terms of a Note, the Trustee
may require the Holder to deliver such Note to the Trustee. The Trustee may
place an appropriate notation on the Note regarding the changed terms and return
it to the Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for such Note shall issue and the Trustee shall
authenticate a new Note that reflects such changed terms. Failure to make the
appropriate notation or to issue a new Note shall not affect the validity of
such amendment or supplement.
Section 10.06. Trustee to Sign Amendments, Etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article X if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment or
supplement the Trustee shall be entitled to receive, and (subject to Section
8.01) shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that such amendment or supplement is authorized or
permitted pursuant to this Indenture. The Company shall not sign any amendment
or supplemental Indenture until the Board of Directors approves any such
amendment or supplemental Indenture.
Section 10.07. Payment for Consents.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any Holder for or as an inducement to
any consent, amendment, supplement or waiver with respect to any term or
provision of this Indenture or the Notes, unless such consideration is offered
to be paid or agreed to be paid to all Holders that consent, waive or agree to
amend or supplement in the time frame set forth in the solicitation documents
relating to any such consent, waiver or agreement to amend or supplement.
ARTICLE XI
SUBORDINATION OF NOTES
Section 11.01. Agreement to Subordinate.
The Company agrees, and each Holder by accepting the Notes agrees,
that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article XI, to the
prior payment in full in cash or Cash Equivalents of
51
all Senior Debt and that the subordination is for the benefit of and enforceable
by the holders of Senior Debt. The Notes shall in all respects rank pari passu
with all other Senior Subordinated Debt of the Company and only Indebtedness of
the Company which is Senior Debt shall rank senior to the Notes in accordance
with the provisions set forth herein. All provisions of this Article XI shall be
subject to Section 11.15 hereof.
Section 11.02. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (i) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets; or (ii) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy; or (iii) any assignment for the benefit of creditors
or any other marshalling of assets or liabilities of the Company, then and in
any such event specified in clause (i), clause (ii) or clause (iii) above (each
such event, if any, herein sometimes referred to as a "Proceeding"):
(1) the holders of Senior Debt will be entitled to receive
payment of such Senior Debt in full in cash or Cash Equivalents before
the Noteholders are entitled to receive any payment or distribution of
cash, securities or other property with respect to the principal of,
premium, (if any), or interest on or other obligations in respect of
the Notes, or on account of any purchase or other acquisition of Notes
by the Company (all such payments, distributions, purchases and
acquisitions herein referred to, individually and collectively, as a
"Notes Payment"), and to that end the holders of Senior Debt of the
Company shall be entitled to receive, for application to the payment
thereof, any Notes Payment which may be payable or deliverable in
respect of the Notes in any such Proceeding; and
(2) until the Senior Debt is paid in full in cash or Cash
Equivalents, any Notes Payment to which Noteholders would be entitled
but for this Article XI will be made to holders of such Senior Debt as
their interests may appear. If a Notes Payment is made to Noteholders
that, due to this Article XI should not have been made to them such
Noteholders are required to hold it in trust for the holders of Senior
Debt and pay it over to them as their interests may appear.
In the event that, notwithstanding the foregoing provisions of this
Section 11.02, the Trustee receives payment or distribution of assets of the
Company of any kind or character, before all the Senior Debt of the Company is
paid in full in cash or Cash Equivalents, then and in such event, such Notes
Payment shall be 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 Debt of the Company remaining unpaid, to the extent necessary to
pay the Senior Debt of the Company in full in cash or Cash Equivalents, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt of the Company.
The consolidation of the Company with, or the merger of the Company
into, another person or the liquidation or dissolution of the Company following
the conveyance or transfer of all or substantially all of its properties and
assets as an entirety to another person upon the terms and conditions set forth
in Article VI shall not be deemed a Proceeding for the purposes of this Section
11.02 if the person formed by such consolidation or into which the Company is
52
merged or the person which acquires by conveyance or transfer such properties
and assets as an entirety, as the case may be, shall, as part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article VI.
Section 11.03. No Payment When Senior Debt in Default.
The Company may not make any Notes Payment or make any deposit
pursuant to the provisions described under "Defeasance" Article IX if (i) any
Designated Senior Debt is not paid when due or (ii) any other default on
Designated Senior Debt occurs and the maturity of such Designated Senior Debt is
accelerated in accordance with its terms unless, in either case, the default has
been cured or waived or has ceased to exist and any such acceleration has been
rescinded or such Designated Senior Debt has been discharged or paid in full;
provided, however, that the Company may make Notes Payments or make any deposit
pursuant to the provisions described under "Defeasance" Article IX without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representative of the Designated Senior Debt
with respect to which either of the events set forth in clause (i) or (ii) of
the immediately preceding sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the second preceding sentence) (a "non-payment default") with respect to any
Designated Senior Debt pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such accelerations) or the expiration of any applicable grace periods,
the Company may not make Notes Payments for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to the Company)
of written notice (a "Blockage Notice") of such default from the Representative
of the holders of such Designated Senior Debt specifying an election to effect a
Payment Blockage Period and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Trustee and
the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because Designated Senior Debt has been discharged or repaid in full).
Notwithstanding the provisions described in the immediately preceding sentence,
unless an event described in clause (i) or (ii) of the first sentence of this
paragraph has occurred, the Company may resume payments on the Notes after the
end of such Payment Blockage Period. The Notes shall not be subject to more than
one Payment Blockage Period in any consecutive 360-day period. For all purposes
of this paragraph, no non-payment default with respect to Designated Senior Debt
that existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt initiating such
Payment Blockage Period will be, or can be, made the basis for the commencement
of a second Payment Blockage Period, unless such default has been cured or
waived for a period of not less than 90 consecutive days.
In the event that, notwithstanding the foregoing, the Company shall
make any Notes Payment to the Trustee or any Holder prohibited by the foregoing
provisions of this Section 11.03, then and in such event, such Notes Payment
shall be paid over and delivered forthwith to the holders of the Senior Debt of
the Company remaining unpaid, to the extent necessary to pay in full in cash or
Cash Equivalents all the Senior Debt of the Company.
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of Designated
Senior Debt or the Representative of such holders of the acceleration.
53
The provisions of this Section 11.03 shall not apply to any Notes
Payment with respect to which Section 11.02 would be applicable.
Section 11.04. Acceleration of Payment of Notes.
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of all Designated
Senior Debt (or the Representative of such holders) of the acceleration. If any
Designated Senior Debt is outstanding none of the Company or any Guarantor may
pay the Notes until five Business Days after the Representative of all
Designated Senior Debt receives notice of such acceleration and, thereafter, may
pay the Notes only if such payments are otherwise permitted pursuant to this
Article 11 at such time.
Section 11.05. Payment Permitted If No Default.
Nothing contained in this Article XI or elsewhere in this Indenture or
in any of the Notes shall prevent the Company, at any time except during the
pendency of any Proceeding referred to in Section 11.02 or under the conditions
described in Section 11.03, from making Notes Payments.
Section 11.06. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on
or in respect of Senior Debt of the Company, or the provision for such payment,
in cash or Cash Equivalents or otherwise in a manner satisfactory to the holders
of Senior Debt of the Company, the Holders shall be subrogated (equally and
ratably with the holders of all Debt of the Company, if any, which by its
express terms is subordinated to Senior Debt of the Company to substantially the
same extent as the Notes are subordinated to the Senior Debt of the Company and
is entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Debt) in right of payment to the
rights of the holders of such Senior Debt of the Company to receive payments and
distributions of cash, property and securities applicable to the Senior Debt of
the Company until the principal of (and 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 the Senior Debt of the Company of any cash,
property or securities to which the Holders or the Trustee would be entitled
except for the provisions of this Article XI, and no payments over pursuant to
the provisions of this Article XI to the holders of Senior Debt of the Company
by Holders or the Trustee, shall, as among the Company, its creditors other than
holders of Senior Debt and the Holders, be deemed to be a payment or
distribution by the Company to or on account of the Senior Debt of the Company.
Section 11.07. Provisions Solely to Define Relative Rights.
The provisions of this Article XI are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Debt of the Company on the other hand. Nothing contained in
this Article XI or elsewhere in this Indenture or in the Notes is intended to or
shall (i) impair, as among the Company, its creditors other than holders of
Senior Debt and the Holders, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders the principal of (and premium, if any)
and interest on the Notes as and when the same shall become due and payable in
accordance with their terms; or (ii) affect the relative rights against the
Company of the Holders and creditors of the Company
54
other than the holders of Senior Debt; or (iii) prevent the Trustee or the
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
XI of the holders of Senior Debt of the Company to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
Section 11.08. Trustee to Effectuate Subordination.
Each Holder of a Note by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XI and appoints the Trustee his attorney-in-fact for any and all such
purposes. If the Trustee does not file a proper claim or proof of debt in the
form required in any bankruptcy, insolvency or receivership proceeding prior to
30 days before the expiration of the time to file such claim or claims, then the
holders of the Senior Debt or their Representative are hereby authorized to file
an appropriate claim for and on behalf of the Holders. Nothing herein contained
shall be deemed to authorize the Trustee or the holders of Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arraignment, adjudication or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee for the holder of Senior Debt or their Representative to vote in respect
of the claim of any Holder in any such proceeding.
Section 11.09. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt of the
Company 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 noncompliance by the Company with the terms, provisions and
covenants of this Indenture.
Without in any way limiting the generality of the foregoing paragraph,
the holders of the Senior Debt may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Holders and without impairing or releasing the
Subordination provided in this Article or the obligations hereunder of the
Holders to the holders of Senior Debt, do any one or more of the following: (a)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Debt or any instrument evidencing the same or any
agreement under which Senior Debt is outstanding; provided, however, that any
such alteration shall not increase the amount of Senior Debt outstanding in a
manner prohibited by this Indenture; (b) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior Debt; (c)
release any Person liable in any manner for the collection of Senior Debt; and
(d) exercise of refrain from exercising any rights against the Company or any
other Person; provided, however, that in no event shall any such actions limit
the right of the Holder to take any action to accelerate the maturity of the
Notes in accordance with the provisions set forth in Article V or to pursue any
rights or remedies under the Indenture or under applicable laws if the taking of
such action does not otherwise violate the terms of this Article.
Section 11.10. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Notes. Notwithstanding the provisions of this
Article XI or any other provision of this
55
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which could 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 specifically referencing this Article XI from the Company or a
holder of Senior Debt of the Company or from any Representative or trustee
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 8.01, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 11.10 at least two
Business Days prior to the date upon which by the terms hereof any money may
became payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Note), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purpose
for which such money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date.
Subject to the provisions of Section 8.01, the Trustee and the Holders
shall be entitled to rely on the Representative for the holders of Senior Debt
for the purpose of ascertaining the Persons entitled to participate in any
payment or distribution pursuant to this Article XI. 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 Debt of the Company to
participate in any payment or distribution pursuant to this Article XI, the
Trustee may request each person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of the Company 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 XI, 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 11.11. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article XI, the Trustee, subject to the provisions of Section 8.01, and
the Holders shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such 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 the Senior Debt of the Company and other Debt 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
XI.
Section 11.12. Trustee Not Fiduciary for holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of the Company and shall not be liable to any such
holders if it shall mistakenly in the absence of gross negligence or willful
misconduct pay over or distribute to Holders or to the Company or to any other
person cash, property or securities to which any holders of Senior Debt of the
Company shall be entitled by virtue of this Article XI or otherwise. With
respect to the holders of Senior Debt of the Company, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article XI and no implied covenants or
obligations with respect to holders of Senior Debt of the Company shall be read
into this Indenture against the Trustee.
56
Section 11.13. Rights of Trustee as holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XI with respect to any Senior Debt of the
Company which may at any time be held by it, to the same extent as any other
holder of Senior Debt of the Company, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article XI shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.07.
Section 11.14. Article XI 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 XI 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 XI in addition to or in place of the Trustee; provided,
however, that Section 11.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 11.15. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article IX by the Trustee for the payment of principal of, premium, if any, and
interest on the Notes shall not be subordinated to the prior payment of any
Senior Debt or subject to the restrictions on this Article XI, and none of the
Trustee or the Holders shall be obligated to pay over any such amount to the
Company or any holder of Senior Debt of the Company or any other creditor of the
Company.
Section 11.16. Reliance by holders of Senior Debt on Subordination Provisions.
Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt, whether such Senior Debt
was created or acquired before or after the issuance of the Notes, to acquire
and continue to hold, or to continue to hold, such Senior Debt and such holder
of Senior Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt.
Section 11.17. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative (if any).
Section 11.18. Article XI Not To Prevent Events of Default or Limit Right To
Accelerate.
The failure to make a payment pursuant to the Notes by reason of any
provision in this Article XI shall not be construed as preventing the occurrence
of a Default. Nothing in
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this Article XI shall have any effect on the right of the Holders or the Trustee
to accelerate the maturity of the Notes.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss. 318(c), such imposed duties shall control.
Section 12.02. Notices.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Xxxx Graphic Systems, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: M. Xxxx Xxxxxxxxx
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx - 00X
Xxx Xxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Corporate Trust Trustee Administration
The Company or the Trustee, by notice each to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the Note
Register. Any notice or communication shall also be so mailed to any Person
described in TIA ss. 313(c), to the extent required by the TIA. Failure
58
to mail a notice or communication to a Holder or any defect in such notice shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner set forth above
within the time prescribed, such notice or communication shall be deemed to be
duly given whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03. Communication by Holders with Other Holders.
Holders pursuant to TIA ss. 312(b) may communicate with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar, the Paying Agent and any other Person 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 to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all conditions and covenants have been satisfied.
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant contained in this Indenture shall include:
(i) a statement that the Person making such certificate or
opinion has read such condition or covenant;
(ii) 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;
(iii) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether such condition
or covenant has been satisfied; and
(iv) a statement as to whether, in the opinion of such Person.
such condition or covenant has been satisfied.
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Section 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar and Paying Agent may make reasonable rules and set
reasonable requirements for their functions.
Section 12.07. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations. Each Holder by
accepting a Note waives and releases all such liability. Such waiver and release
form a part of the consideration for issuance of the Notes.
Section 12.08. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICT OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not he used to interpret another indenture, loan or
debt agreement of the Company or its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 12.10. Successors.
All agreements of the Company contained in this Indenture and the
Notes shall bind the Company and its successors. All agreements of the Trustee
in this Indenture shall bind the Trustee and its successors.
Section 12.11. Severability.
In case any provision 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.
Section 12.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each such
signed copy shall be deemed to be an original, and all of such signed copies
together shall represent one and the same agreement.
60
Section 12.13. Table of Consents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience only,
and shall not, for any reason, be deemed to be part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
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SIGNATURES
Dated as of ___________, 1996 XXXX GRAPHIC SYSTEMS, INC.
By:_________________________________________
Name:
Title:
Dated as of __________, 1996 THE BANK OF NEW YORK,
as Trustee
By:_________________________________________
Name:
Title:
62
EXHIBIT A
FORM OF FACE OF NOTE
XXXX GRAPHIC SYSTEMS, INC.
No.________ Principal Amount $
CUSIP No.
% Senior Subordinated Notes Due 2006
XXXX GRAPHIC SYSTEMS, INC., a Delaware corporation, promises to pay to
___________________________________, or registered assigns, the principal sum of
_________ Dollars on _______,2006.
Interest Payment Dates: [ and .]
Record Dates: [ and .]
Additional provisions of this Note are set forth on the reverse side
of this Note.
Dated:____________
[Seal] XXXX GRAPHIC SYSTEMS, INC.
By______________________________________
Title:
By______________________________________
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of the
Notes referred to in the
Indenture.
Dated: October __, 1996
By___________________________
Authorized Signatory
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FORM OF REVERSE SIDE OF NOTE
% Senior Subordinated Notes Due 2006
1. Interest
XXXX GRAPHIC SYSTEMS, INC., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called "the Company"), promises to pay interest on the principal
amount of this Note at the rate per annum shown above. The Company will pay
interest semi-annually on ______ and ______ of each year, commencing ______,
1997. 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 ______, 1997.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Notes and shall pay interest on overdue installments of interest at such
rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Notes (except defaulted interest)
to the Persons who are registered holders of Notes at the close of business on
the ______ or ______ next preceding the interest payment date even if Notes are
cancelled after the record date and on or before the interest payment date.
Holders must surrender Notes to a Paying Agent to collect principal payments.
The Company will pay principal and interest in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Company may pay principal and interest by check payable in such
money. It may mail an interest check to a Holder's registered address.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Notes under an Indenture dated as of October
__, 1996 (the "Indenture"), between the Company and the Trustee. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and Holders
are referred to the Indenture and the TIA for a statement of those terms.
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The Notes are unsecured senior subordinated obligations of the Company
limited to $225,000,000 aggregate principal amount. The Indenture imposes
certain limitations on the incurrence of additional indebtedness by the Company
and certain of its subsidiaries, the payment of dividends on, and the redemption
of, capital stock of the Company and certain of its Subsidiaries, the making of
Investments, restrictions on distributions from certain Subsidiaries, the use of
proceeds from the sale of assets and Subsidiary stock and transactions with
affiliates. The Indenture also restricts the ability of the Company to
consolidate or merge with or into, or to transfer all or substantially all its
assets to, another person.
5. Optional Redemption
Except as set forth in the following paragraph, the Notes will not be
redeemable at the option of the Company prior to ______, 2001. Thereafter, the
Notes will be redeemable, at the Company's option, in whole or in part, at any
time and from time to time on or after ______, 2001, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at the following redemption prices (expressed in percentages
of principal amount), plus accrued interest to the redemption date (subject to
the right of Holders of record on the relevant record date to receive interest
due on the relevant interest payment date), if redeemed during the 12-month
period commencing on or after __________ of the years set forth below:
Redemption
Year Price
---- ----------
2001 . . . . . . . . %
2002 . . . . . . . . %
2003 . . . . . . . . %
2004 . . . . . . . . 100.000%
In addition, at any time and from time to time prior to , 1999, the
Company may redeem in the aggregate up to 35% of the original principal amount
of the Notes with the net proceeds of one or more Public Equity Offerings
following which there is a Public Market, or private sales of common stock or
contributions to the common equity capital of the Company or Holdings at a
redemption price (expressed as a percentage of principal amount) of ___%, plus
accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that at least
$__________ aggregate principal amount of the Notes must remain outstanding
after each such redemption.
In the case of any partial redemption, selection of the Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate and in compliance with the applicable legal and securities exchange
requirements, if any, and, although no Note of $1,000 in original principal
amount or less shall be redeemed in part. If any Note is to be redeemed in part
only, the notice of redemption relating to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note.
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6. Notice of Redemption
Notice of redemption shall be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Notes to be redeemed
at its registered address. Notes in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of and accrued interest on all Notes (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or
such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder will have the right to cause the
Company to repurchase all or any part of the Notes of such Holder at a purchase
price equal to 101% of the principal amount of the Notes to be repurchased plus
accrued interest to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the interest
payment date) as provided in, and subject to the terms of, the Indenture.
8. Subordination
The Notes are subordinated to Senior Debt, as such term is defined in
the Indenture. To the extent provided in the Indenture, Senior Debt must be paid
in full in cash or Cash Equivalents before the Notes may be paid. The Company
agrees, and each Holder by accepting a Note agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give effect
to such subordination provisions and appoints the Trustee as attorney-in-fact
for such purpose.
9. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000. Holders may transfer or exchange Notes
in accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements or 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 (except, in the case of a Note to be redeemed in part, the portion of
the Note not to be redeemed) or any Notes for a period of 15 days before a
selection of Notes to be redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Note may be treated as the sole owner of
such Note for all purposes.
11. Unclaimed Money
Subject to applicable abandoned property law, if money for the payment
of principal or interest remains unclaimed for two years, the Trustee or Paying
Agent shall
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pay the money back to the Company at its request. After any such payment,
Holders entitled to the money must look only to the Company and not to the
Trustee or Paying Agent for payment as general creditors.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Notes and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Notes to redemption or maturity, as the case
may be.
13. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in principal amount outstanding of the Notes; and (ii) any
default or compliance with any provision may be waived with the written consent
of the Holders of a majority in principal amount of the Notes then outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Holder, the Company and the Trustee may amend the Indenture or the Notes to
cure any ambiguity, omission, defect or inconsistency, or to comply with Article
VI of the Indenture, or to provide for uncertificated Notes, in addition to or
in place of certificated Notes, or to add guarantees with respect to the Notes
or add additional covenants or surrender rights and powers conferred on the
Company, or to make any change that would provide additional rights or benefits
to the Holders or that does not adversely affect the rights of any Holder or to
comply with requirements of the SEC in connection with the qualification of the
Indenture under the TIA.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest; (ii) default in payment of principal on the Notes at
maturity, upon redemption, upon declaration, upon required repurchase or
otherwise; (iii) failure by the Company to comply with other covenants in the
Indenture or the Notes, in certain cases subject to notice and lapse of time;
(iv) certain accelerations (including failure to pay within any grace period
after final maturity) of other Debt of the Company or any of its Subsidiaries if
the amount accelerated (or so unpaid) aggregates $10 million or more; (v)
certain events of bankruptcy or insolvency with respect to the Company and its
Significant Subsidiaries; and (vi) certain judgments or decrees for the payment
of money in excess of $10 million. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Notes may declare all the Notes to be due and payable immediately. Certain
events of bankruptcy or insolvency are Events of Default which will result in
the Notes being due and payable immediately upon the occurrence of such Events
of Default.
Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in principal amount of the Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default
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(except a Default in payment of principal or interest) if it determines that
withholding such notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A past, present or future director, officer, employee or stockholder,
as such, of the Company or the Trustee shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations. By accepting a Note,
each Holder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Notes.
17. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the face of this Note.
18. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICT OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
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20. CUSIP Numbers
Pursuant to the 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 such CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
--------------------------
The Company will furnish to any Holder upon written request and
without charge to such Holder a copy of the Indenture which contains the text of
this Note in larger type. Requests may be made to:
Xxxx Graphic Systems, Inc.
000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000
Attention: M. Xxxx Xxxxxxxxx
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================================================================================
ASSIGNMENT FORM
To assign this Note, complete the form below:
I or we assign and transfer this Note to:
[Print or type assignee's name, address and zip code]
[Insert assignee's soc. sec. or tax I.D. No. ]
and irrevocably appoint ___________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to
act for him.
================================================================================
Date: _______________________ Your Signature: __________________________________
================================================================================
Sign exactly as your name appears on the face of this Note.
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OPTION OF HOLDER OF NOTE TO ELECT PURCHASE
If you elect to have this Note purchased by the Company pursuant to
Article IV, check the box:
|_|
If you elect to have only part of this Note purchased by the Company
pursuant to Article IV, state the amount:
$________________________
Date: ___________________________ Your Signature: ______________________________
(Sign exactly as your name
appears on the face of the
Note)
Guaranteed:_____________________________________________________________________
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