ACME INTERMEDIATE HOLDINGS, LLC
and
ACME INTERMEDIATE FINANCE, INC.,
as Issuers,
AND
WILMINGTON TRUST COMPANY,
as Trustee
-----------------
INDENTURE
Dated as of September 30, 1997
----------------
$71,634,000 Principal Amount at Maturity
12% Senior Secured Discount Notes due 2005, Series A
12% Senior Secured Discount Notes due 2005, Series B
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE
TIA Indenture
SECTION SECTION
310 (a)(1)................................................. 7.10
(a)(2)................................................. 7.10
(a)(3)................................................. N.A.
(a)(4)................................................. N.A.
(a)(5)................................................. 7.08; 7.10
(b).................................................... 7.08; 7.10;
12.02
(c).................................................... N.A.
311 (a).................................................... 7.11
(b).................................................... 7.11
(c).................................................... N.A.
312 (a).................................................... 2.05
(b).................................................... 12.03
(c).................................................... 12.03
313 (a).................................................... 7.06
(b)(1)................................................. 7.06
(b)(2)................................................. 7.06
(c).................................................... 7.06; 12.02
(d).................................................... 7.06
314 (a).................................................... 4.08; 4.10;
12.02
(b).................................................... 10.02
(c)(1)................................................. 7.02; 12.04;
12.05
(c)(2)................................................. 7.02; 12.04;
12.05
(c)(3)................................................. N.A.
(d).................................................... 10.02
(e).................................................... 12.05
(f).................................................... N.A.
315 (a).................................................... 7.01(b); 7.02
(b).................................................... 7.05; 12.02
(c).................................................... 7.01
(d).................................................... 6.05; 7.01(c);
7.02
(e).................................................... 6.11
316 (a)(last sentence)..................................... 2.09
(a)(1)(A).............................................. 6.05
(a)(1)(B).............................................. 6.04
(a)(2)................................................. 9.02
(b).................................................... 6.07
317 (a)(1)................................................. 6.08
(a)(2)................................................. 6.09
(b).................................................... 2.04
318 (a).................................................... 12.01
(c).................................................... 12.01
----------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions....................................................1
SECTION 1.02. Incorporation by Reference of TIA.............................25
SECTION 1.03. Rules of Construction.........................................26
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating...............................................26
SECTION 2.02. Execution and Authentication..................................27
SECTION 2.03. Registrar and Paying Agent....................................28
SECTION 2.04. Paying Agent To Hold Assets in Trust..........................28
SECTION 2.05. Securityholder Lists..........................................29
SECTION 2.06. Transfer and Exchange.........................................29
SECTION 2.07. Replacement Securities........................................30
SECTION 2.08. Outstanding Securities........................................30
SECTION 2.09. Treasury Securities...........................................31
SECTION 2.10. Temporary Securities..........................................31
SECTION 2.11. Cancellation..................................................31
SECTION 2.12. Defaulted Interest............................................32
SECTION 2.13. CUSIP Number..................................................32
SECTION 2.14. Deposit of Moneys.............................................32
SECTION 2.15. Book-Entry Provisions for Global Securities...................33
SECTION 2.16. Registration of Transfers and Exchanges.......................34
SECTION 2.17. Designation...................................................40
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee............................................40
SECTION 3.02. Selection of Securities To Be Redeemed........................40
SECTION 3.03. Notice of Redemption..........................................41
SECTION 3.04. Effect of Notice of Redemption................................42
SECTION 3.05. Deposit of Redemption Price...................................42
SECTION 3.06. Securities Redeemed in Part...................................43
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PAGE
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.........................................43
SECTION 4.02. Maintenance of Office or Agency...............................43
SECTION 4.03. Limitation on Restricted Payments.............................44
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness...........45
SECTION 4.05. Corporate Existence...........................................46
SECTION 4.06. Payment of Taxes and Other Claims.............................47
SECTION 4.07. Maintenance of Properties and Insurance.......................47
SECTION 4.08. Compliance Certificate; Notice of Default.....................48
SECTION 4.09. Compliance with Laws..........................................48
SECTION 4.10. Commission Reports............................................48
SECTION 4.11. Waiver of Stay, Extension or Usury Laws.......................49
SECTION 4.12. Limitation on Transactions with Affiliates....................50
SECTION 4.13. Limitation on Investments.....................................51
SECTION 4.14. Limitation on Capital Stock of Subsidiaries...................51
SECTION 4.15. Limitation on Liens...........................................51
SECTION 4.16. Change of Control.............................................51
SECTION 4.17. Limitation on Asset Sales.....................................54
SECTION 4.18. Limitation on Preferred Stock of Subsidiaries.................57
SECTION 4.19. Limitation on Sale and Lease-Back Transactions................58
SECTION 4.20. Limitation on Conduct of Business.............................58
SECTION 4.21. Limitation on Creation of Subsidiaries........................58
SECTION 4.22. Limitation on Conduct of Business of Finance..................58
SECTION 4.23. Payments for Consent..........................................58
SECTION 4.24. Impairment of Security Interest...............................59
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidations and Sale of Assets....................59
SECTION 5.02. Successor Corporation Substituted.............................60
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PAGE
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.............................................61
SECTION 6.02. Acceleration..................................................62
SECTION 6.03. Other Remedies................................................63
SECTION 6.04. Waiver of Past Defaults.......................................64
SECTION 6.05. Control by Majority...........................................64
SECTION 6.06. Limitation on Suits...........................................64
SECTION 6.07. Rights of Holders To Receive Payment..........................65
SECTION 6.08. Collection Suit by Trustee....................................65
SECTION 6.09. Trustee May File Proofs of Claim..............................66
SECTION 6.10. Priorities....................................................66
SECTION 6.11. Undertaking for Costs.........................................67
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.............................................67
SECTION 7.02. Rights of Trustee.............................................69
SECTION 7.03. Individual Rights of Trustee..................................70
SECTION 7.04. Trustee's Disclaimer..........................................70
SECTION 7.05. Notice of Default.............................................70
SECTION 7.06. Reports by Trustee to Holders.................................71
SECTION 7.07. Compensation and Indemnity....................................71
SECTION 7.08. Replacement of Trustee........................................72
SECTION 7.09. Successor Trustee by Xxxxxx, Etc..............................74
SECTION 7.10. Eligibility; Disqualification.................................74
SECTION 7.11. Preferential Collection of Claims Against Company.............74
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Legal Defeasance and Covenant Defeasance......................74
SECTION 8.02. Satisfaction and Discharge....................................78
SECTION 8.03. Survival of Certain Obligations...............................79
SECTION 8.04. Acknowledgment of Discharge by Trustee........................79
SECTION 8.05. Application of Trust Assets...................................79
SECTION 8.06. Repayment to the Issuers; Unclaimed Money.....................80
SECTION 8.07. Reinstatement.................................................80
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PAGE
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders....................................81
SECTION 9.02. With Consent of Holders.......................................81
SECTION 9.03. Compliance with TIA...........................................83
SECTION 9.04. Revocation and Effect of Consents.............................83
SECTION 9.05. Notation on or Exchange of Securities.........................84
SECTION 9.06. Trustee To Sign Amendments, Etc...............................84
ARTICLE TEN
SECURITY
SECTION 10.01. Pledge and Security Documents................................85
SECTION 10.02. Certificates and Opinions....................................85
SECTION 10.03. Authorization of Actions To Be Taken by the
Trustee Under the Security Documents...................85
SECTION 10.04. Authorization of Receipt of Funds by the Trustee
Under the Security Documents...........................86
SECTION 10.05. Specified Releases of Collateral.............................86
SECTION 10.06. Termination of Security Interest.............................87
ARTICLE ELEVEN
[INTENTIONALLY OMITTED]
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA Controls.................................................88
SECTION 12.02. Notices......................................................88
SECTION 12.03. Communications by Holders with Other Holders.................89
SECTION 12.04. Certificate and Opinion as to Conditions Precedent...........89
SECTION 12.05. Statements Required in Certificate or Opinion................90
SECTION 12.06. Rules by Trustee, Paying Agent, Registrar....................90
SECTION 12.07. Legal Holidays...............................................90
SECTION 12.08. Governing Law................................................91
SECTION 12.09. No Adverse Interpretation of Other Agreements................91
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PAGE
SECTION 12.10. No Recourse Against Others...................................91
SECTION 12.11. Successors...................................................91
SECTION 12.12. Duplicate Originals..........................................91
SECTION 12.13. Severability.................................................91
Signatures..................................................................97
Exhibit A - Form of Series A Security
Exhibit B - Form of Series B Security
Exhibit C - Form of Legend for Global Securities
Exhibit D - Transfer Certificate
Exhibit E - Transferee Certificate for Institutional
Accredited Investors
Exhibit F - Form of Transferee Certificate for
Regulation S Transfers
Exhibit G - Securities Pledge Agreement
Note: This Table of Contents shall not, for any purpose, be deemed to be
part of the Indenture.
-v-
INDENTURE dated as of September 30, 1997 among ACME INTERMEDIATE
HOLDINGS, LLC, a Delaware limited liability company (the "COMPANY"), and ACME
INTERMEDIATE FINANCE, INC., a Delaware corporation ("FINANCE" and, together with
the Company, jointly and severally, the "ISSUERS"), as Issuers, and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as Trustee (the "TRUSTEE").
The Issuers have duly authorized the creation of an issue of 12%
Senior Secured Discount Notes due 2005, Series A, and 12% Senior Secured
Discount Notes due 2005, Series B, to be issued in exchange for the 12% Senior
Notes due 2005, Series A, pursuant to the Registration Rights Agreement and, to
provide therefor, the Issuers have duly authorized the execution and delivery of
this Indenture. All things necessary to make the Securities, when duly issued
and executed by the Issuers and authenticated and delivered hereunder, the valid
and binding obligations of the Issuers and to make this Indenture a valid and
binding agreement of the Issuers, have been done.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCRETED VALUE" means, as of any date prior to September 30, 2002,
an amount per $1,000 principal amount at maturity of Securities that is equal to
the sum of (a) $558.40 and (b) the portion of the excess of the principal amount
at maturity of each Security over $558.40 which shall have been amortized on a
daily basis and compounded semiannually on each March 31 and September 30 at the
rate of 12% per annum from the Issue Date through the date of determination
computed on the basis of a 360-day year of twelve 30-day months; and, as of any
date on or after September 30, 2002, the Accreted Value of each Security shall
mean the aggregate principal amount at maturity of such Security.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person existing at
the time such Person becomes a Subsidiary or is merged into or consolidated with
any other Person or which is assumed in connection with the acquisition of
assets from such Per-
2
son and, in each case, not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary or such
merger, consolidation or acquisition.
"AFFILIATE" means, with respect to any specific Person, any other
Person that directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. For
the purposes of this definition, "CONTROL" (including, with correlative
meanings, the terms "CONTROLLING," "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH"), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that, for purposes of Section 4.12, beneficial
ownership of at least 10% of the voting securities of a Person, either directly
or indirectly, shall be deemed to be control.
"AFFILIATE TRANSACTION" has the meaning set forth in Section 4.12.
"AGENT" means the Registrar or any Paying Agent.
"ASSET ACQUISITION" means (a) an Investment by the Issuers or any
Subsidiary of the Issuers in any other Person pursuant to which such Person
shall become a Subsidiary of the Issuers or any Subsidiary of the Issuers, or
shall be merged with or into the Issuers or any Subsidiary of the Issuers, or
(b) the acquisition by the Issuers or any Subsidiary of the Issuers of the
assets of any Person (other than a Subsidiary of the Issuers) which constitute
all or substantially all of the assets of such Person or comprise any division
or line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance,
conveyance, assignment, transfer, lease or other disposition (including any Sale
and Lease-Back Transaction), other than to the Company or any of its Wholly
Owned Subsidiaries, in any single transaction or series of related transactions
of (a) any Capital Stock of or other equity interest in any Subsidiary of the
Company or (b) any other property or assets of the Company or of any Subsidiary
thereof; provided that Asset Sales shall not include (i) a transaction or series
of related transactions for which the Company or its Subsidiaries receive
aggregate consideration of less than $500,000 and (ii) the sale, lease,
conveyance, disposition or other transfer of all or substantially all of the
assets of the Company as permitted under Article Five.
3
"ASSET SALE PROCEEDS" means, with respect to any Asset Sale, (i)
cash received by the Issuers or any Subsidiary of the Issuers from such Asset
Sale (including cash received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset Sale), after (a)
provision for all income or other taxes measured by or resulting from such Asset
Sale, (b) payment of all brokerage commissions, underwriting and other fees and
expenses related to such Asset Sale, (c) provision for minority interest holders
in any Subsidiary of the Issuers as a result of such Asset Sale, (d) repayment
of Indebtedness that is required to be repaid in connection with such Asset Sale
and (e) deduction of appropriate amounts to be provided by the Issuers or a
Subsidiary of the Issuers as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed of in such Asset Sale
and retained by the Issuers or a Subsidiary after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in such Asset Sale,
and (ii) promissory notes and other non-cash consideration received by the
Issuers or any Subsidiary of the Issuers from such Asset Sale or other
disposition upon the liquidation or conversion of such notes or non-cash
consideration into cash.
"ATTRIBUTABLE INDEBTEDNESS" in respect of a Sale and Lease-Back
Transaction means, as at the time of determination, the greater of (i) the fair
value of the property subject to such arrangement and (ii) the present value of
the notes (discounted at the rate borne by the Securities, compounded
semi-annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale and Lease-Back Transaction
(including any period for which such lease has been extended).
"AVAILABLE ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, the aggregate Asset Sale Proceeds from such Asset Sale that have not been
applied in accordance with clause (iii)(a) or (iii)(b), and that have not yet
been the basis for an Excess Proceeds Offer in accordance with clause (iii)(c),
of the first paragraph of Section 4.17.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means (i) in the case of a Person that is a
corporation, the board of directors of such Person and (ii) in the case of any
other Person, the board of directors,
4
board of managers, management committee or similar governing body or any
authorized committee thereof responsible for the management of the business and
affairs of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the City of New York or Wilmington,
Delaware are required or authorized by law or other governmental action to be
closed.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated and
whether or not voting) of corporate stock, partnership or limited liability
company interests or any other participation, right or other interest in the
nature of an equity interest in such Person including, without limitation,
Common Stock and Preferred Stock of such Person, or any option, warrant or other
security convertible into any of the foregoing.
"CAPITALIZED LEASE OBLIGATIONS" means with respect to any Person,
Indebtedness represented by obligations under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such Indebtedness shall be the capitalized amount of such obligations
determined in accordance with GAAP.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation ("S&P") or Xxxxx'x
Investors Service, Inc. ("XXXXX'X"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any bank organized under the laws of
the
5
United States of American or any state thereof or the District of Columbia or
any U.S. branch of a foreign bank having at the date of acquisition thereof
combined capital and surplus of not less than $250,000,000; (v) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (v) above.
A "CHANGE OF CONTROL" means the occurrence of any of the following:
(i) the adoption of a plan relating to the liquidation or dissolution of
Holdings or the Company or Holdings shall cease to be the managing member of the
Company, (ii) prior to the consummation of an Initial Public Offering, the
Permitted Holders cease to be the beneficial owners (as defined under Rule 13d-3
or any successor rule or regulation promulgated under the Exchange Act) of at
least a majority of the total voting power of the Common Stock entitled to elect
the Board of Directors of Holdings, (iii) prior to the consummation of an
Initial Public Offering, the Permitted Holders shall cease collectively to
control at least a majority of the voting power of the Board of Directors of
Holdings and (iv) in connection with or after an Initial Public Offering, any
Person (including a Person's Affiliates and associates), other than a Permitted
Holder, becomes the beneficial owner of more than 20% of the total voting power
of the Common Stock of Holdings or the Company, and the Permitted Holders
beneficially own, in the aggregate, less than 30% of the total voting power of
Holdings or the Company, as the case may be.
"CHANGE OF CONTROL DATE" has the meaning set forth in Section
4.16.
"CHANGE OF CONTROL OFFER" has the meaning set forth in Section
4.16.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning set forth in
Section 4.16.
"COLLATERAL" means the Pledged Securities and all other assets and
property subject to the Lien of the Security Documents.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 10.05.
6
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person,
for any period, the aggregate amount of interest which, in conformity with GAAP,
would be set forth opposite the caption "interest expense" or any like caption
on an income statement for such Person and its Subsidiaries on a consolidated
basis (including, but not limited to, (i) Redeemable Dividends, whether paid or
accrued, on Subsidiary Preferred Stock, (ii) imputed interest included in
Capitalized Lease Obligations, (iii) all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers' acceptance
financing, (iv) the net costs associated with Interest Rate Agreements and other
hedging obligations, (v) amortization of other financing fees and expenses, (vi)
the interest portion of any deferred payment obligation, (vii) amortization of
discount or premium, if any, and (viii) all other non-cash interest expense
(other than interest amortized to cost of sales)) plus, without duplication, all
net capitalized interest for such period and all interest incurred or paid under
any guarantee of Indebtedness (including a guarantee of principal, interest or
any combination thereof) of any Person, plus the amount of all dividends or
distributions paid on Disqualified Capital Stock (other than dividends paid or
payable in shares of Capital Stock of the Company); PROVIDED that no such
expense relating to the Securities shall be included in the definition of
Consolidated Interest Expense.
"CONSOLIDATED LEVERAGE RATIO" means, with respect to any Person, the
ratio of (i) the sum of the aggregate outstanding amount of Indebtedness of such
Person and its Subsidiaries as of the date of calculation (the "TRANSACTION
DATE") on a consolidated basis determined in accordance with GAAP (provided that
the Securities shall not be considered to be outstanding Indebtedness for
purposes of the Consolidated Leverage Ratio) to (ii) such Person's EBITDA for
the four full fiscal quarters (the "FOUR QUARTER PERIOD") ending on or prior to
the date of determination for which financial statements are available. For
purposes of
7
this definition, "EBITDA" shall be calculated after giving effect on a PRO FORMA
basis to (i) the incurrence or repayment of any Indebtedness of such Person or
any of its Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the proceeds
thereof), occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of such
Person or one of its Subsidiaries (including any Person who becomes a Subsidiary
as a result of the Asset Acquisition) incurring, assuming or otherwise being
liable for Acquired Indebtedness and also including any EBITDA (PROVIDED that
such EBITDA shall be included only to the extent includable pursuant to the
definition of "Consolidated Net Income") attributable to the assets which are
the subject of the Asset Acquisition or Asset Sale during the Four Quarter
Period) occurring during the Four Quarter Period or at any time subsequent to
the last day of the Four Quarter Period and on or prior to the Transaction Date,
as if such Asset Sale or Asset Acquisition (including the incurrence, assumption
or liability for any such Acquired Indebtedness) occurred on the first day of
the Four Quarter Period; PROVIDED that if any such Asset Acquisition relates to
the acquisition of a television broadcast station which is not an affiliate of a
Network and which had a negative Net Income for the Four Quarter Period, it may
be assumed, for purposes of such pro forma calculation, that the Net Income of
such station for such period was zero. If such Person or any of its Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the preceding
sentence shall give effect to the incurrence of such guaranteed Indebtedness as
if such Person or any Subsidiary or such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness.
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
PROVIDED, HOWEVER, that (a) the Net Income of any Person (the "other Person") in
which the Person in question or any of its Subsidiaries has less than a 100%
interest (which interest does not cause the Net Income of such other Person to
be consolidated into the Net Income
8
of the Person in question in accordance with GAAP) shall be included only to the
extent of the amount of dividends or distributions paid to the Person in
question or the Subsidiary, (b) for purposes of calculating Consolidated Net
Income in calculating EBITDA (x) for purposes of determining whether the Company
(but not any of its Subsidiaries) is able to incur Indebtedness pursuant to the
first paragraph of Section 4.04 and (y) for purposes of determining whether a
Restricted Payment identified in clauses (i), (ii), (iii) and (v) of the
definition of Restricted Payment can be made pursuant to Section 4.03, the Net
Income of any Subsidiary of the Person in question that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or limitation,
(c)(i) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition and (ii) any
net gain (but not loss) resulting from an Asset Sale by the Person in question
or any of its Subsidiaries other than in the ordinary course of business shall
be excluded, (d) extraordinary gains and losses shall be excluded, (e) income or
loss attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued) shall be excluded, and (f) in the case of a
successor to the referent Person by consolidation or merger or as a transferee
of the referent Person's assets, any earnings of the successor corporation prior
to such consolidation, merger or transfer of assets shall be excluded.
"CONSOLIDATED NET WORTH" means with respect to any Person at any
date, the consolidated stockholders' equity or members' capital of such Person
less the amount of such stockholders' equity or members' capital attributable to
Disqualified Capital Stock of such Person and its subsidiaries, as determined in
accordance with GAAP.
"COVENANT DEFEASANCE" has the meaning set forth in Section 8.01.
"CUMULATIVE CONSOLIDATED INTEREST EXPENSE" means, with respect to
any Person, as of any date of determination, Consolidated Interest Expense from
October 1, 1997 to the end of the Company's most recently ended full fiscal
quarter prior to such date, taken as a single accounting period.
"CUMULATIVE EBITDA" means, with respect to any Person, as of any
date of determination, EBITDA from October 1, 1997 to the end of such Person's
most recently ended full fiscal quarter prior to such date, taken as a single
accounting period.
9
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DEPOSITORY" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock of a Person or
a Subsidiary thereof which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
maturity date of the Securities, for cash or securities constituting
Indebtedness. Without limitation of the foregoing, Disqualified Capital Stock
shall be deemed to include any Preferred Stock of a Person or a Subsidiary of
such Person, with respect to either of which, under the terms of such Preferred
Stock, by agreement or otherwise, such Person or Subsidiary is obligated to pay
current dividends or distributions in cash during the period prior to the
maturity date of the Securities; provided, however, that (i) Preferred Stock of
a Person or any Subsidiary thereof that is issued with the benefit of provisions
requiring a change of control offer to be made for such Preferred Stock in the
event of a change of control of such Person or Subsidiary which provisions have
substantially the same effect as the provisions of Section 4.16 shall not be
deemed to be Disqualified Capital Stock solely by virtue of such provisions; and
(ii) Capital Stock of any limited liability company or other pass-through entity
for federal income tax purposes shall not be deemed to be Disqualified Capital
Stock solely by virtue of the fact that its holders are entitled to Permitted
Tax Distributions.
"EBITDA" means, with respect to any Person and its Subsidiaries, for
any period, an amount equal to (a) the sum of (i) Consolidated Net Income for
such period, plus (ii) the provision for taxes for such period based on income
or profits to the extent such income or profits were included in computing
Consolidated Net Income and any provision for taxes utilized in comput-
10
ing net loss under clause (i) hereof, plus (iii) Consolidated Interest Expense
for such period (but only including Redeemable Dividends in the calculation of
such Consolidated Interest Expense to the extent that such Redeemable Dividends
have not been excluded in the calculation of Consolidated Net Income), plus (iv)
depreciation for such period on a consolidated basis, plus (v) amortization of
intangibles and television programming obligations (net of cash payments with
respect to television programming obligations) for such period on a consolidated
basis, plus (vi) any other non-cash items reducing Consolidated Net Income for
such period, minus (b) all non-cash items increasing Consolidated Net Income for
such period, all for such Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP; provided, however, that, for
purposes of calculating EBITDA during any fiscal quarter, cash income from a
particular Investment of such Person shall be included only (x) if cash income
has been received by such Person with respect to such Investment during each of
the previous four fiscal quarters, or (y) if the cash income derived from such
Investment is attributable to Cash Equivalents.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"FAIR MARKET VALUE" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Company acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Company
delivered to the Trustee.
"FINAL MATURITY DATE" means September 30, 2005.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.
11
"GLOBAL SECURITY" means a security evidencing all or a portion of
the Securities issued to the Depository or its nominee in accordance with
Section 2.01 and bearing the legend set forth in EXHIBIT C.
"HOLDINGS" means ACME Television Holdings, LLC, a Delaware limited
liability company.
"INCUR" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "INCURRENCE," "INCURRED," "INCURRABLE" and "INCURRING" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness.
"INDEBTEDNESS" means (without duplication), with respect to any
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding, without limitation, any balances that
constitute accounts payable or trade payables, and other accrued liabilities
arising in the ordinary course of business) if and to the extent any of the
foregoing indebtedness would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, and shall also include, to the extent
not otherwise included (i) any Capitalized Lease Obligations of such Person,
(ii) obligations secured by a lien to which the property or assets owned or held
by such Person are subject, whether or not the obligation or obligations secured
thereby shall have been assumed, (iii) guarantees of items of other Persons
which would be included within this definition for such other Persons (whether
or not such items would appear upon the balance sheet of the guarantor), (iv)
all obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (v) Disqualified Capital
Stock of such Person or any Subsidiary thereof, and (vi) obligations of any such
Person under any currency agreement or any Interest Rate Agreement applicable to
any of the foregoing (if and to the extent such currency agreement or Interest
Rate Agreement obligations would appear as a liability upon a balance sheet of
12
such Person prepared in accordance with GAAP). The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect to contingent
obligations, the maximum liability upon the occurrence of the contingency giving
rise to the obligation; provided that (i) the amount outstanding at any time of
any Indebtedness issued with original issue discount is the principal amount of
such Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with GAAP
and (ii) Indebtedness shall not include any liability for federal, state, local
or other taxes. Notwithstanding any other provision of the foregoing definition,
(i) any trade payable arising from the purchase of goods or materials or for
services obtained and (ii) television programming obligations entered into in
the ordinary course of business shall not be deemed to be "Indebtedness" of the
Company or any of its Subsidiaries for purposes of this definition. Furthermore,
guarantees of (or obligations with respect to letters of credit supporting)
Indebtedness otherwise included in the determination of such amount shall not
also be included.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means an investment banking firm of
national reputation in the United States (i) which does not, and whose
directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"INITIAL PUBLIC OFFERING" means an underwritten public offering of
Common Stock of the Company or a Parent registered under the Securities Act
(other than a public offering registered on Form S-8 under the Securities Act)
that results in net proceeds of at least $25.0 million to the Company or such
Parent, as the case may be.
"INITIAL PURCHASER" means CIBC Wood Gundy Securities Corp.
"INSTITUTIONAL ACCREDITED INVESTOR" or "ACCREDITED INVESTOR" means
an institution that is an "accredited investor" as that term is defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.
13
"INTEREST PAYMENT DATE" means the stated maturity of an
installment of interest on the Securities.
"INTEREST RATE AGREEMENT" means, with respect to any Person, any
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement designed to protect the party indicated
therein against fluctuations in interest rates.
"INVESTMENTS" means, with respect of any Person, directly or
indirectly, any advance, account receivable (other than an account receivable
arising in the ordinary course of business of such Person), loan or capital
contribution to (by means of transfers of property to others, payments for
property or services for the account or use of others or otherwise), the
purchase of any Capital Stock, bonds, notes, debentures, partnership or joint
venture interests or other securities of, the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person or the making of any
investment in any Person. Investments shall exclude (i) extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices of such Person and (ii) the repurchase of securities of any Person by
such Person. For the purposes of Section 4.03, the amount of any Investment
shall be the original cost of such Investment plus the cost of all additional
Investments by the Issuers or any of their Subsidiaries, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment, reduced by the payment of dividends or
distributions in connection with such Investment or any other amounts received
in respect of such Investment; provided that no such payment of dividends or
distributions or receipt of any such other amounts shall reduce the amount of
any Investment if such payment of dividends or distributions or receipt of any
such amounts would be included in Consolidated Net Income. If the Issuers or any
Subsidiary of the Issuers sells or otherwise disposes of any Common Stock of any
direct or indirect Subsidiary of the Issuers such that, after giving effect to
any such sale or disposition, the Issuers no longer own, directly or indirectly,
greater than 50% of the outstanding Common Stock of such Subsidiary, the Issuers
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Common Stock of such
Subsidiary not sold or disposed of.
"ISSUE DATE" means the date of original issuance of the Securities
under this Indenture.
14
"LEGAL DEFEASANCE" has the meaning set forth in Section 8.01.
"LIEN" means, with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention agreement having substantially the same economic effect as
any of the foregoing).
"NET INCOME" means, with respect to any Person, for any period, the
net income (loss) of such Person determined in accordance with GAAP.
"NET PROCEEDS" means (a) in the case of any sale of Capital Stock by
or equity contribution to any Person, the aggregate net proceeds received by
such Person, after payment of expenses, commissions and the like incurred in
connection therewith, whether such proceeds are in cash or in property (valued
at the fair market value thereof, as determined in good faith by the Board of
Directors of such Person, at the time of receipt) and (b) in the case of any
exchange, exercise, conversion or surrender of outstanding securities of any
kind for or into shares of Capital Stock of the Issuers which is not
Disqualified Capital Stock, the net book value of such outstanding securities on
the date of such exchange, exercise, conversion or surrender (plus any
additional amount required to be paid by the holder to such Person upon such
exchange, exercise, conversion or surrender, less any and all payments made to
the holders, e.g., on account of fractional shares and less all expenses
incurred by such Person in connection therewith).
"NETWORK" means (i) each of the American Broadcasting Company, CBS,
Inc., Fox Broadcasting Company, National Broadcasting Co., Inc., The WB
Television Network, United Paramount Network and (ii) any successor Person of a
Person identified in clause (i) of this definition.
"OBLIGATIONS" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person (other than the
Trustee), the Chairman of the Board, the Chief Executive Of-
15
xxxxx, the President, any Vice President, the Chief Financial Officer, the
Controller, or the Secretary of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers of each Issuer.
"OPINION OF COUNSEL" means a written opinion from legal counsel, who
may be counsel for the Company, which opinion and counsel are reasonably
acceptable to the Trustee.
"PARENT" means any Person which owns all or substantially all of
the Common Stock of the Company.
"PARTICIPANTS" has the meaning set forth in Section 2.15.
"PAYING AGENT" has the meaning set forth in Section 2.03.
"PERMITTED ASSET SWAP" means any transfer of properties or assets by
the Company or any of its Subsidiaries in which 90% of the consideration
received by the transferor consists of properties or assets (other than cash)
that will be used in the business of the transferor; provided, that (i) the
aggregate fair market value (as determined in good faith by the Board of
Directors of Holdings) of the property or assets being transferred by the
Company or such Subsidiary is not greater than the aggregate fair market value
(as determined in good faith by the Board of Directors) of the property or
assets received by the Company or such Subsidiary in such exchange and (ii) the
aggregate fair market value (as determined in good faith by the Board of
Directors) of all property or assets transferred by the Company and any of its
Subsidiaries in connection with exchanges in any period of twelve consecutive
months shall not exceed 15% of the total assets of the Company on the last day
of the preceding fiscal year.
"PERMITTED HOLDERS" means (i) BancBoston Capital, (ii) Alta
Communications, Inc., Alta Communications VI L.P., Alta-Com S by S, LLC, Alta
Subordinated Debt Partners III, L.P. (iii) CEA Capital Partners, CEA Capital
Partners USA, L.P., (iv) Trust Company of the West, (v) any Person controlled by
a Person identified in clauses (i)-(iv) of this definition, (vi) Xxxxx Xxxxxxx,
(vii) Xxxxxxx Xxxxx, (viii) Xxxxxx Xxxxx, (ix) ACME Parent and (x) any
partnership, corporation or other entity all of the partners, shareholders,
members or owners of which are any one or more of the foregoing.
16
"PERMITTED INDEBTEDNESS" means:
(i) Indebtedness of the Company or any Subsidiary of the Company arising
under or in connection with the Senior Credit Facility in an aggregate
principal amount not to exceed $40 million outstanding at any time;
(ii) Indebtedness under the Subsidiary Senior Discount Notes;
(iii) Indebtedness under the Securities;
(iv) Indebtedness not covered by any other clause of this
definition which is outstanding on the Issue Date;
(v) Indebtedness of the Company to any Wholly Owned
Subsidiary and Indebtedness of any Wholly Owned Subsidiary to
the Company or another Wholly Owned Subsidiary;
(vi) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business which
Purchase Money Indebtedness and Capitalized Lease Obligations do not in
the aggregate exceed $20 million;
(vii) Interest Rate Agreements;
(viii) Refinancing Indebtedness;
(ix) fidelity and surety bonds incurred in the ordinary
course of business; and
(x) additional Indebtedness of the Company and its Subsidiaries not to
exceed $5 million in aggregate principal amount at any one time
outstanding.
"PERMITTED INVESTMENTS" means Investments made on or after the
Issue Date consisting of
(i) Investments by the Company, or by a Subsidiary thereof,
in the Company or a Subsidiary of the Company;
(ii) Investments by the Company, or by a Subsidiary thereof, in a Person,
if as a result of such In-
17
vestment (a) such Person becomes a Subsidiary of the Company or (b) such
Person is merged, consolidated or amalgamated with or into, or transfers
or conveys substantially all of its assets to, or is liquidated into, the
Company or a Subsidiary thereof;
(iii) Investments in cash and Cash Equivalents;
(iv) reasonable and customary loans made to employees in connection with
their relocation or for travel expenses or advances not to exceed $1
million in the aggregate at any one time outstanding;
(v) an Investment that is made by the Company or a Subsidiary thereof in
the form of any Capital Stock, bonds, notes, debentures, partnership or
joint venture interests or other securities that are issued by a third
party to the Company or such Subsidiary solely as partial consideration
for the consummation of an Asset Sale that is otherwise permitted under
Section 4.17;
(vi) Interest Rate Agreements entered into in the ordinary
course of the Company's or its Subsidiaries business;
(vii) options to purchase television broadcast station licenses and
related assets (or Capital Stock of Persons owning such assets) having an
exercise price of any amount not in excess of $100,000 entered into in
connection with the execution of local marketing agreements and
Investments pursuant to local marketing agreements to operate television
broadcast stations which are combined with such an option;
(viii) deposits made pursuant to legally binding agreements to acquire,
or pursuant to local marketing agreements with options to acquire
broadcast television station licenses and related assets (or Capital Stock
of Persons owning such assets), in an amount not to exceed 10% of the
purchase price; provided that the station to be acquired will be owned by
the Company or a Subsidiary upon consummation of the contemplated
acquisition and provided, further, that deposits made under this clause
shall cease to be treated as Permitted Investments upon forfeit of such
deposit for any reason; and
18
(ix) additional Investments not to exceed $1 million at any
one time outstanding.
"PERMITTED LIENS" means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or claims
either (i) not delinquent or (ii) contested in good faith by appropriate
proceedings and as to which the Issuers shall have set aside on their
books such reserves as may be required pursuant to GAAP;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made in respect thereof;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(d) judgment Liens not giving rise to an Event of Default;
(e) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Issuers;
(f) any interest or title of a lessor under any Capitalized Lease
Obligation; provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(g) Liens securing Purchase Money Indebtedness of the Issuers;
provided, however, that (i) the Purchase Money Indebtedness shall not be
secured by any property or assets of the Issuers other than the property
and assets so acquired
19
and (ii) the Lien securing such Indebtedness shall be created within 90
days of such acquisition;
(h) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(i) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Issuers, including rights of offset and set-off;
(j) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under the
Indenture; and
(k) Liens securing Acquired Indebtedness incurred in accordance with
Section 4.04 provided that (i) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by an Issuer and were not granted in connection with, or in
anticipation of, the incurrence of such Acquired Indebtedness by an Issuer
and (ii) such Liens do not extend to or cover any property or assets of an
Issuer other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of an Issuer and are no more favorable to the lienholders
than those securing the Acquired Indebtedness prior to the incurrence of
such Acquired Indebtedness by an Issuer.
"PERMITTED TAX DISTRIBUTIONS" means, subject to the limitations set
forth in clause (v) of the second paragraph of Section 4.03, distributions by
the Company to Holdings from time to time in an amount approximately equal to
the income tax liability for interest or penalties thereon) of the members of
Holdings resulting from (i) the taxable income of the Company (after taking into
account all of the Company's prior tax losses, to the extent such losses have
not previously been deemed to reduce the taxable income of the Company), based
on the approximate highest combined tax rate that applies to any one of such
members; and (ii) any audit of such member (or the Company or Holdings) with
respect to a prior taxable year and paid or payable by such member during the
most recent taxable year, as and to the extent that such amounts are
attributable to the member being allocated more taxable income than was
previously reported to such member as a result of any position taken by the
Company or by
20
Holdings in determining and reporting its taxable income for the year in
question.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
"PHYSICAL SECURITIES" has the meaning set forth in Section 2.01.
"PLEDGE AGREEMENT" means the Security Pledge Agreement dated as of
the Issue Date between the Pledgors and the Trustee in the form attached hereto
as Exhibit G.
"PLEDGED SECURITIES" means (i) the Capital Stock of ACME Television
LLC and (ii) the Capital Stock of each Subsidiary of the Company directly owned
by the Company made subject to the Lien of this Indenture and the Security
Documents pursuant to Section 4.21.
"PLEDGOR " means each of the Company and ACME Subsidiary Holdings
II, LLC, as a Pledgor under the Pledge Agreement.
"PREFERRED STOCK" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on
the Securities in the form set forth on Exhibit A.
"PROPERTY" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"PUBLIC EQUITY OFFERING" means a public offering by the Company or
any Parent of shares of its Common Stock (however designated and whether voting
or non-voting) and any and all rights, warrants or options to acquire such
Common Stock.
"PURCHASE AGREEMENT" means the purchase agreement dated as of
September 24, 1997 by and between the Issuers and the Initial Purchaser.
21
"PURCHASE MONEY INDEBTEDNESS" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including the cost
of construction) of an item of property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"RECORD DATE" means the applicable Record Date specified in the
Securities.
"REDEEMABLE DIVIDEND" means, for any dividend or distribution with
regard to Disqualified Capital Stock, the quotient of the dividend or
distribution divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such Disqualified Capital Stock.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"REFINANCING INDEBTEDNESS" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company or its Subsidiaries
outstanding on the Issue Date or other Indebtedness permitted to be incurred by
the Company or its Subsidiaries pursuant to the first paragraph of Section 4.04
or by the Company or its Subsidiaries pursuant to clause (iii) of the definition
of "Permitted Indebtedness", but only to the extent that (i) the Refinancing
Indebtedness is subordinated to the Securities to at least the same extent as
the Indebtedness being refunded, refinanced or extended, if at all, (ii) the
Refinancing Indebtedness is scheduled to mature either (a) no earlier than the
Indebtedness being refunded, refinanced or extended, or (b) after the maturity
date of the Securities, (iii) the portion, if any, of the Refinancing
Indebtedness that is scheduled to mature on or prior to the maturity date of the
Securities has a weighted average life to maturity at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the weighted average
life to maturity of the portion of the Indebtedness being refunded,
22
refinanced or extended that is scheduled to mature on or prior to the maturity
date of the Securities, (iv) such Refinancing Indebtedness is in an aggregate
principal amount that is equal to or less than the sum of (a) the aggregate
principal amount then outstanding under the Indebtedness being refunded,
refinanced or extended, (b) the amount of accrued and unpaid interest, if any,
and premiums owed, if any, not in excess of preexisting prepayment provisions on
such Indebtedness being refunded, refinanced or extended and (c) the amount of
customary fees, expenses and costs related to the incurrence of such Refinancing
Indebtedness, and (v) such Refinancing Indebtedness is incurred by the same
Person that initially incurred the Indebtedness being refunded, refinanced or
extended, except that the Company may incur Refinancing Indebtedness to refund,
refinance or extend Indebtedness of any Wholly Owned Subsidiary of the Company.
"REGISTERED EXCHANGE OFFER" means the offer to exchange the Series B
Securities for all of the outstanding Series A Securities in accordance with the
Registration Rights Agreement.
"REGISTRAR" has the meaning set forth in Section 2.03.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated as of the Issue Date between the Issuers and the Initial
Purchaser.
"REGULATION S" means Regulation S under the Securities Act.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee,
any officer in the Corporate Trust Office of the Trustee including any vice
president, assistant vice president, assistant secretary, treasurer, assistant
treasurer, or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"RESTRICTED PAYMENT" means any of the following: (i) the declaration
or payment of any dividend or any other distribution or payment on Capital Stock
of the Company or any Subsidiary of the Company or any payment made to the
direct or indirect holders (in their capacities as such) of Capital Stock of the
Company or any Subsidiary of the Company (other than (x) dividends or
distributions payable solely in Capital Stock (other than Disqualified Capital
Stock) or in options, warrants or other rights to purchase such Capital Stock
(other than Disqualified
23
Capital Stock), and (y) in the case of Subsidiaries of the Company, dividends or
distributions payable to the Company or to a Wholly Owned Subsidiary of the
Company), (ii) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company or any of its Subsidiaries (other than
Capital Stock owned by the Company or a Wholly Owned Subsidiary of the Company,
excluding Disqualified Capital Stock) or any option, warrants or other rights to
purchase such Capital Stock, (iii) the making of any principal payment on, or
the purchase, defeasance, repurchase, redemption or other acquisition or
retirement for value, prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, of any Indebtedness which is subordinated in
right of payment to the Securities (other than subordinated Indebtedness
acquired in anticipation of satisfying a scheduled sinking fund obligation,
principal installment or final maturity, in each case due within one year of the
date of acquisition), (iv) the making of any Investment or guarantee of any
Investment in any Person other than a Permitted Investment, and (v) forgiveness
of any Indebtedness of an Affiliate of the Company to the Company or a
Subsidiary of the Company. For purposes of determining the amount expended for
Restricted Payments, cash distributed or invested shall be valued at the face
amount thereof and property other than cash shall be valued at its fair market
value.
"RESTRICTED SECURITY" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; PROVIDED that the Trustee shall be entitled to request
and conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"RULE 144A" means Rule 144A under the Securities Act.
"SALE AND LEASE-BACK TRANSACTION" means any arrangement with any
Person providing for the leasing by the Company or any Subsidiary of the Company
of any real or tangible personal property, which property has been or is to be
sold or transferred by the Company or such Subsidiary to such Person in
contemplation of such leasing.
"SECURITIES" means the Series A Securities and the Series B
Securities treated as a single class of securities, as amended or supplemented
from time to time in accordance with the terms of this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.
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"SECURITY DOCUMENTS" means, collectively, the Pledge Agreement,
substantially in the form of Exhibit G hereto, and all other instruments
evidencing or creating any security interest in favor of the Trustee for the
benefit of the Holders, as the same may be amended from time to time in
accordance with their terms.
"SECURITYHOLDER" or "HOLDER" means the Person whose name a Security
is registered on the Registrar's books.
"SENIOR CREDIT FACILITY" means the Credit Agreement to be entered
into between ACME Television, LLC, the lenders party thereto in their capacities
as lenders thereunder and Canadian Imperial Bank of Commerce, New York Agency,
as agent, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by the
"Limitation on Additional Indebtedness" covenant) or adding Subsidiaries of the
Company as additional borrowers or guarantors thereunder) all or any portion of
the Indebtedness under such agreement or any successor or replacement agreement
and whether by the same or any other agent, lender or group of lenders.
"SERIES A SECURITIES" means the 12% Senior Secured Discount Notes
due 2005, Series A, of the Issuers issued pursuant to this Indenture and sold
pursuant to the Purchase Agreement.
"SERIES B SECURITIES" means the 12% Senior Secured Discount Notes
due 2005, Series B, of the Issuers to be issued in exchange for the Series A
Securities pursuant to the Registered Exchange Offer and the Registration Rights
Agreement.
"SUBSIDIARY" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise
25
or if in accordance with GAAP such entity is consolidated with the first-named
Person for financial statement purposes.
"SUBSIDIARY SENIOR DISCOUNT NOTES " means the 10 7/8% Senior
Discount Notes due 2004 of ACME Television, LLC and ACME Finance Corporation.
"TIA" means the Trust Indenture act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"U.S. GOVERNMENT OBLIGATIONS" shall have the meaning set forth in
Section 8.01.
"U.S. LEGAL TENDER" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary, all of the
outstanding voting securities (other than directors' qualifying shares) of which
are owned, directly or indirectly, by the Company.
SECTION 1.02. INCORPORATION BY REFERENCE OF XXX.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Issuers or any
other obligor on the Securities.
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All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Series A Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of EXHIBIT A hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Series B Securities and the Trustee's certificate of authentication thereof
shall be substantially in the form of EXHIBIT B hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. The Issuers shall approve the form of the Securities and any notation,
legend or endorsement on them; the Issuers shall furnish any such legends,
notations or endorsements to the Trustee in writing. Each Security shall be
dated the date of its authentication and shall show the date of its issuance.
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Securities initially offered and sold by the Initial Purchasers (i)
to Qualified Institutional Buyers in reliance on Rule 144A, (ii) to Accredited
Investors or (iii) in offshore transactions in reliance on Regulation S shall,
unless the applicable Holder requests Securities in the form of Certificated
Securities in registered form ("PHYSICAL SECURITIES") (which shall be in
substantially the form set forth in EXHIBIT A), each to be issued initially in
the form of one or more permanent Global Securities in registered form,
substantially in the form set forth in EXHIBIT A, deposited with the Trustee, as
custodian for the Depository, and shall bear the legend set forth on EXHIBIT C.
One or more separate Global Securities shall be issued to represent Securities
held by (i) Qualified Institutional Buyers (a "QIB GLOBAL SECURITY"), (ii)
Accredited Investors (an "ACCREDITED INVESTOR GLOBAL SECURITY") and (iii)
Persons acquiring Securities in offshore transactions in reliance on Regulation
S (a "REGULATION S GLOBAL SECURITY"). The Issuers shall cause the QIB Global
Securities, Accredited Investor Global Securities and Regulation S Global
Securities to have separate CUSIP numbers. The aggregate principal amount of any
Global Security may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers, or an Officer and an Assistant Secretary, of each
Issuer shall sign, or one Officer of each Issuer shall sign and one Officer or
an Assistant Secretary (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) of each Issuer shall attest to,
the Securities for the Issuers by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Series A Securities for original
issue in the aggregate principal amount at maturity not to exceed $71,634,000
and (ii) Series B Securities from time to time only in exchange for a like
principal amount at maturity
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of Series A Securities, in each case upon a written order of the Issuers in the
form of an Officers' Certificate. The Officers' Certificate shall specify the
amount of Securities to be authenticated, the series of Securities and the date
on which the Securities are to be authenticated. The aggregate principal amount
at maturity of Securities outstanding at any time may not exceed $71,634,000,
except as provided in Section 2.07. Upon receipt of a written order of the
Issuers in the form of an Officers' Certificate, the Trustee shall authenticate
Securities in substitution for Securities originally issued to reflect any name
change of an Issuer.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuers to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuers and Affiliates of the Issuers.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 principal amount at maturity and any integral
multiple thereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Issuers shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("REGISTRAR"), (b)
Securities may be presented or surrendered for payment ("PAYING AGENT") and (c)
notices and demands in respect of the Securities and this Indenture may be
served. The Registrar shall keep a register of the Securities and of their
transfer and exchange. The Issuers, upon notice to the Trustee, may have one or
more additional Paying Agents reasonably acceptable to the Trustee. The term
"Paying Agent" includes any additional Paying Agent. Each Issuer initially
appoints the agent of the Trustee identified in Section 4.02 as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has been
appointed. Neither the Issuers nor any Affiliate of the Issuers may act as
Paying Agent.
SECTION 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Issuers shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets
29
held by the Paying Agent for the payment of principal of, or interest on, the
Securities, and shall notify the Trustee of any Default by the Issuers in making
any such payment. The Issuers at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Issuers to the Paying Agent, the Paying Agent shall have no
further liability for such assets.
SECTION 2.05. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Issuers shall furnish to the
Trustee before each Record Date and at such other times as the Trustee may
request in writing a list as of such date and in such form as the Trustee may
reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. TRANSFER AND EXCHANGE.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar with a request to register the transfer of such
Securities or to exchange such Securities for an equal principal amount at
maturity of Securities of other authorized denominations of the same series, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; PROVIDED, HOWEVER, that the
Securities surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Issuers and the Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing. To permit registrations of transfers and exchanges,
the Issuers shall execute and the Trustee shall authenticate Securities at the
Registrar's written request. No service charge shall be made for any
registration of transfer or exchange, but the Issuers may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or other
governmental charge payable upon exchanges or transfers pursuant to Section
2.02, 2.10, 3.06, 3.07, 4.16, 4.17 or 9.05). The Registrar shall not be required
to register the transfer of or exchange of any Security (i) during a period
beginning at the
30
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in part.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by the Depository
(or its agent), and that ownership of a beneficial interest in a Global Security
shall be required to be reflected in a book entry.
SECTION 2.07. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Issuers shall issue and the Trustee shall authenticate a
replacement Security if the Trustee's requirements are met. Each such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both the Issuers and the Trustee, to protect the Issuers, the Trustee and any
Agent from any loss which any of them may suffer if a Security is replaced. The
Issuers may charge such Holder for its reasonable out-of-pocket expenses in
replacing a Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the
Issuers.
SECTION 2.08. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those canceled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
Subject to Section 2.09, a Security does not cease to be outstanding because
either Issuer or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a BONA FIDE purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
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If on a Redemption Date or the Final Maturity Date the Paying Agent
holds U.S. Legal Tender sufficient to pay all of the Accreted Value or principal
and interest due on the Securities payable on that date, then on and after that
date such Securities cease to be outstanding and Accreted Value ceases to
accrete and interest on them ceases to accrue, as the case may be.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount
at maturity of Securities have concurred in any direction, waiver or consent,
Securities owned by an Issuer, the Guarantors or any of their respective
Affiliates shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that the Trustee knows are so owned shall be
disregarded.
The Trustee may require an Officers' Certificate listing Securities
owned by the Issuers or their respective Affiliates.
SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Issuers may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Issuers consider
appropriate for temporary Securities. Without unreasonable delay, the Issuers
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and shall dispose of all Securities surrendered
for transfer, exchange, payment or cancellation (subject to the record retention
requirements of the Exchange Act) and
32
shall deliver a certificate of destruction to the Issuers. Subject to Section
2.07, the Issuers may not issue new Securities to replace Securities that they
have paid or delivered to the Trustee for cancellation. If an Issuer shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuers default in a payment of Accreted Value, principal or
interest on the Securities, they shall pay interest in cash on overdue Accreted
Value and principal and on overdue installments of interest (without regard to
any applicable grace periods) at the rate shown on the Security on each interest
payment date (to the holders of record on the applicable preceding Record Date)
during any interest period during which the Issuers are so in default.
SECTION 2.13. CUSIP NUMBER.
The Issuers in issuing the Securities will use a "CUSIP" numbers and
the Trustee shall use the CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; PROVIDED that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP numbers
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and the Final Maturity Date, the Issuers shall have deposited with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such Interest Payment Date or Final Maturity Date, as the case may
be, in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date or Final Maturity Date, as the case may
be. The Issuers shall deliver an Officer's Certificate to the Trustee no later
than 3 business days prior to any payment date when Damage Amounts (as defined
in the Registration Rights Agreement) are payable. Such certificate shall state
the dollar amount payable per $1,000 aggregate principal amount at maturity of
the Securities.
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SECTION 2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in EXHIBIT C.
Members of, or participants in, the Depository ("PARTICIPANTS")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under any Global Security, and the Depository may be treated by the Issuers, the
Trustee and any agent of the Issuers or the Trustee as the absolute owner of any
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuers, the Trustee or any agent of the
Issuers or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16. In
addition, Physical Securities shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Issuers that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Issuers within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute, and the Trustee shall upon written
instructions from the Issuers authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
34
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. REGISTRATION OF TRANSFERS AND EXCHANGES.
(a) TRANSFER AND EXCHANGE OF PHYSICAL SECURITIES. When Physical
Securities are presented to the Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal number of
Physical Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.16 for such
transactions are met; PROVIDED, HOWEVER, that the Physical Securities presented
or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing; and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the Issuers, by
the following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the Registrar
by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that
effect (substantially in the form of EXHIBIT D hereto); or
35
(B) if such Physical Security is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A, a
certification to that effect (substantially in the form of
EXHIBIT D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification
to that effect (substantially in the form of EXHIBIT D hereto)
and a Transferee Certificate for Institutional Accredited
Investors substantially in the form of EXHIBIT E hereto; or
(D) if such Physical Security is being transferred in reliance
on Regulation S, delivery of a certification to that effect
(substantially in the form of EXHIBIT D hereto) and a
Transferee Certificate for Regulation S Transfers
substantially in the form of EXHIBIT F hereto and an
Opinion of Counsel reasonably satisfactory to the Issuers
to the effect that such transfer is in compliance with the
Securities Act; or
(E) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification
to that effect (substantially in the form of EXHIBIT D hereto)
and an Opinion of Counsel reasonably satisfactory to the
Issuers to the effect that such transfer is in compliance with
the Securities Act; or
(F) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of EXHIBIT D hereto) and an Opinion of Counsel
reasonably acceptable to the Issuers to the effect that such
transfer is in compliance with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A PHYSICAL SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Physical Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a Physical
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Registrar, together with:
36
(A) certification, substantially in the form of EXHIBIT D hereto,
that such Physical Security is being transferred (I) to a
Qualified Institutional Buyer, (II) to an Accredited Investor
or (III) in an offshore transaction in reliance on Regulation
S; and
(B) written instructions directing the Registrar to make, or to
direct the Depository to make, an endorsement on the
applicable Global Security to reflect an increase in the
aggregate amount of the Securities represented by the Global
Security,
then the Registrar shall cancel such Physical Security and cause, or direct the
Depository to cause, in accordance with the standing instructions and procedures
existing between the Depository and the Registrar, the principal amount at
maturity of Securities represented by the applicable Global Security to be
increased accordingly. If no Global Security representing Securities held by
Qualified Institutional Buyers, Accredited Investors or Persons acquiring
Securities in offshore transactions in reliance on Regulation S, as the case may
be, is then outstanding, the Issuers shall issue and the Trustee shall, upon
written instructions from the Issuers in accordance with Section 2.02,
authenticate such a Global Security in the appropriate principal amount. The
Issuers shall take such other actions as may be necessary to establish a Global
Security.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
thought the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar of written instructions, or such other
instruction as is customary for the Depository, from the Depository or its
nominee, requesting the registration of transfer of an interest in a QIB Global
Security, an Accredited Investor Global Security or Regulation S Global
Security, as the case may be, to another type of Global Security, together with
the applicable Global Securities (or, if the applicable type of Global Security
required to represent the interest as requested to be transferred is not then
outstanding, only the Global Security representing the interest being
transferred), the Registrar shall cancel such Global Securities (or Global
Security) and the Issuers shall issue and the Trustee shall, upon written
instructions from the Issuers in accordance with Section 2.02, authenticate new
Global Securities of the types so canceled (or the type so canceled and
applicable type required to represent the interest
37
as requested to be transferred) reflecting the applicable increase and decrease
of the principal amount at maturity of Securities represented by such types of
Global Securities, giving effect to such transfer. If the applicable type of
Global Security required to represent the interest as requested to be
transferred is not outstanding at the time of such request, the Issuers shall
issue and the Trustee shall, upon written instructions from the Issuers in
accordance with Section 2.02, authenticate a new Global Security of such type in
principal amount at maturity equal to the principal amount at maturity of the
interest requested to be transferred.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR A
PHYSICAL SECURITY.
(i) Any Person having a beneficial interest in a Global Security
may upon request exchange such beneficial interest for a Physical
Security. Upon receipt by the Registrar of written instructions, or such
other form of instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a beneficial
interest in a Global Security and upon receipt by the Trustee of a written
order or such other form of instructions as is customary for the
Depository or the Person designated by the Depository as having such a
beneficial interest containing registration instructions and, in the case
of any such transfer or exchange of a beneficial interest in Securities
the offer and sale of which have not been registered under the Securities
Act, the following additional information and documents:
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the
beneficial owner, a certification from such Person to
that effect (substantially in the form of EXHIBIT D
hereto); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule
l44A, a certification to that effect (substantially in
the form of EXHIBIT D hereto); or
(C) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form
of EXHIBIT D
38
hereto) and a Certificate for Institutional Accredited
Investors substantially in the form of EXHIBIT E
hereto; or
(D) if such beneficial interest is being transferred in
reliance on Regulation S, delivery of a certification
to that effect (substantially in the form of EXHIBIT
D hereto) and a Transferee Certificate for Regulation
S Transfers Substantially in the form of EXHIBIT F
hereto and an Opinion of Counsel reasonably
satisfactory to the Issuers to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act, delivery
of a certification to that effect (substantially in the
form of EXHIBIT D hereto) and an Opinion of Counsel
reasonably satisfactory to the Issuers to the effect
that such transfer is in compliance with the Securities
Act; or
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect (substantially in the form of EXHIBIT D
hereto) and an Opinion of Counsel reasonably
satisfactory to the Issuers to the effect that such
transfer is in compliance with the Securities Act,
then the Registrar will cause, in accordance with the standing
instructions and procedures existing between the Depository and the
Registrar, the aggregate principal amount at maturity of the
applicable Global Security to be reduced and, following such
reduction, the Issuers will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and
deliver to the transferee a Physical Security.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in
such names and in such authorized de-
39
nominations as the Depository, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Registrar or
co-Registrar in writing. The Registrar or co-Registrar shall deliver such
Physical Securities to the Persons in whose names such Physical Securities
are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless, and the Trustee is hereby authorized by an
Officers' Certificate of the Issuers to deliver Securities without the Private
Placement Legend if, (i) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Issuers and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act or (ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act. Upon the effectiveness of a Registration Statement
covering the Securities or a change in the status of a Registration Statement
covering the Securities, the Issuers shall deliver an Officers' Certificate to
the Trustee notifying the Trustee of such change and instructing the Trustee of
the appropriate action to be taken in connection with such change.
(g) GENERAL. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16 as
required by law. The Issuers shall have the right to inspect and make copies of
all such let-
40
xxxx, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
SECTION 2.17. DESIGNATION.
The Indebtedness evidenced by the Securities is hereby irrevocably
designated as "senior indebtedness" or such other term denoting seniority for
the purposes of any future Indebtedness of the Issuers which the Issuers make
subordinate to any senior indebtedness or such other term denoting seniority.
ARTICLE THREE
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuers elect to redeem Securities pursuant to Paragraph 5 or
Paragraph 6 of the Securities, they shall notify the Trustee in writing of the
Redemption Date, the Redemption Price and the principal amount at maturity of
Securities to be redeemed. The Issuers shall give notice of redemption to the
Paying Agent and Trustee at least 45 days but not more than 60 days before the
Redemption Date (unless a shorter notice shall be agreed to by the Trustee in
writing), together with an Officers' Certificate stating that such redemption
will comply with the conditions contained herein.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
In the event that less than all of the Securities are to be redeemed
at any time, selection of such Securities for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a PRO RATA basis, by lot
or by such method as the Trustee shall deem fair and appropriate (and in such
manner as complies with applicable legal requirements); PROVIDED, HOWEVER, that
no Securities of a principal amount at maturity of $1,000 or less shall be
redeemed in part; and PROVIDED, FURTHER, that if a partial redemption is made
with the proceeds of a Public Equity Offering, selection of the Securities or
portions thereof for redemption shall be made by the Trustee only on a PRO RATA
basis or on as nearly a PRO RATA
41
basis as is practicable (subject to the procedures of the Depository), unless
such method is otherwise prohibited.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Issuers
in writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount at maturity
thereof to be redeemed. Securities in denominations of $1,000 principal amount
at maturity or less may be redeemed only in whole. The Trustee may select for
redemption portions (equal to $1,000 principal amount at maturity or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000 principal amount at maturity. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Issuers shall mail a notice of redemption by first class mail, postage
prepaid, to each Holder whose Securities are to be redeemed at its registered
address. At the Issuers' request made at least 45 days before the Redemption
Date, the Trustee shall give the notice of redemption in the Issuers' name and
at the Issuers' expense. Each notice for redemption shall identify the
Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if
any, to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Issuers default in making the redemption
payment, principal of Securities called for redemption ceases to accrete
or interest on Securities called for redemption ceases to accrue, as the
case may be, on and after the Redemption Date, and the only remaining
right of the Holders of such Securities is to receive payment of the
Redemption Price plus accrued and unpaid interest, if any, upon surrender
to the Paying Agent of the Securities redeemed;
42
(6) if any Security is being redeemed in part, the portion of the
principal amount at maturity of such Security to be redeemed and that,
after the Redemption Date, and upon surrender of such Security, a new
Security or Securities in aggregate principal amount equal to the
unredeemed portion thereof will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount at maturity of
Securities to be redeemed and the aggregate principal amount at maturity
of Securities to be outstanding after such partial redemption; and
(8) the Paragraph of the Securities pursuant to which the
Securities are to be redeemed; and
(9) 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
Securities.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Securities called for redemption shall be paid at
the Redemption Price (which shall include accrued interest thereon to the
Redemption Date), but installments of interest, the maturity of which is on or
prior to the Redemption Date, shall be payable to Holders of record at the close
of business on the relevant Record Dates.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before 10:00 a.m. New York Time on the Redemption Date, the
Issuers shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price of plus accrued interest, if any, on all Securities to be
redeemed on that date.
If the Issuers comply with the preceding paragraph, then, unless the
Issuers default in the payment of such Redemption Price plus accrued interest,
if any, interest on the Securities to be redeemed will cease to accrue on and
after the applicable Redemption Date, whether or not such Securities are
presented for payment.
43
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part only,
the Trustee shall upon written instruction from the Issuers authenticate for the
Holder a new Security or Securities in a principal amount at maturity equal to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
The Issuers, jointly and severally, will pay the Accreted Value or
principal of and interest on the Securities in the manner provided in the
Securities. An installment of Accreted Value or principal of or interest on the
Securities shall be considered paid on the date it is due if the Trustee or
Paying Agent holds on that date U.S. Legal Tender designated for and sufficient
to pay the installment.
The Issuers, jointly and severally, will pay, to the extent such
payments are lawful, interest in cash on overdue Accreted Value or principal and
it shall pay interest on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the rate borne by the
Securities. Interest will be computed on the basis of a 360-day year comprised
of twelve 30-day months.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
Each of the Issuers will maintain in the Borough of Manhattan, The
City of New York, the office or agency required under Section 2.03 (which may be
an office or agency of the Trustee) where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuers in respect of the Securities and this Indenture may be served. The
Issuers shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuers
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.02. The Issuers hereby initially designate the office of
Wilmington Trust Company, c/o Har-
44
ris Trust Company of New York, 00 Xxxx Xxxxxx, 00xx Xxxxx, Xxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, as their office or agency in the Borough of Manhattan,
The City of New York.
SECTION 4.03. LIMITATION ON RESTRICTED PAYMENTS.
The Issuers will not make, and will not permit any of their
Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or immediately after giving effect to such
Restricted Payment;
(b) immediately after giving pro forma effect to such Restricted
Payment, the Issuers could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 4.04; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the Issue Date
does not exceed the sum of (1) 100% of the Company's Cumulative EBITDA
minus 1.4 times the Company's Cumulative Consolidated Interest Expense,
(2) 100% of the aggregate Net Proceeds received by the Company from the
issue or sale after the Issue Date of Capital Stock (other than
Disqualified Capital Stock or Capital Stock of the Company issued to any
Subsidiary of the Company) of the Company or any Indebtedness or other
securities of the Company convertible into or exercisable or exchangeable
for Capital Stock (other than Disqualified Capital Stock) of the Company
which has been so converted, exercised or exchanged, as the case may be,
and (3) without duplication of any amounts included in clause (c)(2)
above, 100% of the aggregate Net Proceeds received by the Company from any
equity contribution from a holder of the Company's Capital Stock,
excluding, in the case of clauses (c)(2) and (3), any Net Proceeds from a
Public Equity Offering to the extent used to redeem the Securities. For
purposes of determining under this clause (c) the amount expended for
Restricted Payments, cash distributed shall be valued at the face amount
thereof and property other than cash shall be valued at its fair market
value.
The provisions of this covenant shall not prohibit (i) the payment
of any distribution within 60 days after the date of declaration thereof, if at
such date of declaration such payment would comply with the provisions of this
Indenture, (ii) the re-
45
purchase, redemption or other acquisition or retirement of any shares of Capital
Stock of the Company or Indebtedness subordinated to the Securities by
conversion into, or by or in exchange for, shares of Capital Stock of the
Company (other than Disqualified Capital Stock), or out of the Net Proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company) of
other shares of Capital Stock of the Company (other than Disqualified Capital
Stock), (iii) the redemption or retirement of Indebtedness of the Company
subordinated to the Securities in exchange for, by conversion into, or out of
the Net Proceeds of, a substantially concurrent sale or incurrence of
Indebtedness of the Company (other than any Indebtedness owed to a Subsidiary)
that is contractually subordinated in right of payment to the Securities to at
least the same extent as the Indebtedness being redeemed or retired, (iv) the
retirement of any shares of Disqualified Capital Stock of the Company by
conversion into, or by exchange for, shares of Disqualified Capital Stock of the
Company, or out of the Net Proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Company) of other shares of Disqualified Capital
Stock of the Company, (v) Permitted Tax Distributions and (vi) the forfeit of a
deposit that was a Permitted Investment under clause (viii) of the definition of
"Permitted Investment" at the time such deposit was made; provided that in
calculating the aggregate amount of Restricted Payments made subsequent to the
Issue Date for purposes of clause (c) of the immediately preceding paragraph,
amounts expended pursuant to clauses (i), (ii) and (vi) shall be included in
such calculation.
Not later than the date of making any Restricted Payment, the
Issuers shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the covenant described above were computed, which
calculations may be based upon the Issuers' latest available financial
statements, and that no Default or Event of Default has occurred and is
continuing and no Default or Event of Default will occur immediately after
giving effect to any such Restricted Payments.
SECTION 4.04. Limitation on Incurrence of
ADDITIONAL INDEBTEDNESS.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, incur (as defined) any Indebtedness (including
Acquired Indebtedness); PROVIDED that if no Default or Event of Default shall
have occurred and be continuing at the time or as a consequence of the
incurrence of such Indebtedness, the Company and its Subsidiaries may incur
Indebt-
46
edness (including Acquired Indebtedness) if after giving effect to the
incurrence of such Indebtedness and the receipt and application of the proceeds
thereof, the Company's Consolidated Leverage Ratio is less than 7.0 to 1. The
accretion of original issue discount and accrual of interest on the Securities
and the Subsidiary Senior Discount Notes shall not be deemed an incurrence of
Indebtedness for purposes of this covenant.
Notwithstanding the foregoing, the Company and its Subsidiaries may
incur Permitted Indebtedness; PROVIDED that the Company will not incur any
Permitted Indebtedness that ranks junior in right of payment to the Notes that
has a maturity or mandatory sinking fund payment prior to the maturity of the
Securities.
The Issuers will not incur any Indebtedness which by its terms (or
by the terms of any agreement governing such Indebtedness) is subordinated in
right of payment to any other Indebtedness of the Issuers unless such
Indebtedness is also by its terms (or by the terms of any agreement governing
such Indebtedness) made expressly subordinate in right of payment to the
Securities pursuant to subordination provisions that are substantively identical
to the subordination provisions of such Indebtedness (or such agreement) that
are most favorable to the holders of any other Indebtedness of the Issuers.
SECTION 4.05. CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence as a limited liability company or corporation and the
limited liability company, corporate, partnership or other existence of each of
its Subsidiaries in accordance with the respective organizational documents of
each such Subsidiary and the rights (charter and statutory) and material
franchises of the Company and each of its Subsidiaries; PROVIDED, HOWEVER, that
the Company shall not be required to preserve any such right or franchise, or
the corporate existence of any such Subsidiary, if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and each of its Subsidiaries, taken
as a whole, and that the loss thereof is not, and will not be, adverse in any
material respect to the Holders.
47
SECTION 4.06. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of its Subsidiaries or
upon the income, profits or property of it or any of its Subsidiaries and (b)
all lawful claims for labor, materials and supplies which, in each case, if
unpaid, might by law become a material liability or Lien upon the property of it
or any of its Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which appropriate
provision has been made.
SECTION 4.07. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall cause all material properties owned by or
leased by it or any of its Subsidiaries used or useful to the conduct of its
business or the business of any of its Subsidiaries to be improved or maintained
and kept in normal condition, repair and working order and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may
be necessary, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section 4.07 shall prevent the Company or any of its
Subsidiaries from discontinuing the use, operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Board of Directors of the Company or any such Subsidiary
concerned, or of an officer (or other agent employed by the Company or of any of
its Subsidiaries) of the Company or any of its Subsidiaries having managerial
responsibility for any such property, desirable in the conduct of the business
of the Company or any such Subsidiary, and if such discontinuance or disposal is
not adverse in any material respect to the Holders.
(b) The Company shall maintain, and shall cause its Subsidiaries to
maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers' compensation and
interruption of business insurance.
48
SECTION 4.08. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Issuers shall deliver to the Trustee, within 90 days after
the close of each fiscal year and 45 days after the close of each of its first
three fiscal quarters an Officers' Certificate stating that a review of the
activities of the Company has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Issuers during such preceding fiscal year or fiscal quarter, as the case may be,
have kept, observed, performed and fulfilled each and every such covenant and no
Default or Event of Default occurred during such year or quarter, as the case
may be, and at the date of such certificate there is no Default or Event of
Default that has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe its status with
particularity. The Officers' Certificate shall also notify the Trustee should
the Company elect to change the manner in which it fixes its fiscal year end.
(b) The Issuers shall deliver to the Trustee, forthwith upon
becoming aware of any Default or Event of Default in the performance of any
covenant, agreement or condition contained in this Indenture, an Officers'
Certificate specifying the Default or Event of Default and describing its status
with particularity.
SECTION 4.09. COMPLIANCE WITH LAWS.
The Company will comply, and will cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Company and
its Subsidiaries taken as a whole.
SECTION 4.10. COMMISSION REPORTS.
(a) The Issuers will file with the Commission all information,
documents and reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act,
49
whether or not the Issuers are subject to such filing requirements so long as
the Commission will accept such filings. The Issuers will file with the Trustee
within 15 days after it files them with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may by rules and regulations
prescribe) which the Issuers file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act. Upon qualification of this Indenture under the TIA,
the Issuers shall also comply with the provisions of TIA ss. 314(a).
(b) Regardless of whether the Issuers are required to furnish such
reports to its stockholders pursuant to the Exchange Act, the Issuers shall
cause their consolidated financial statements, comparable to that which would
have been required to appear in annual or quarterly reports, to be delivered to
the Trustee and the Holders. The Issuers will also make such reports available
to prospective purchasers of the Securities, securities analysts and
broker-dealers upon their request.
(c) For so long as any of the Securities remain outstanding, the
Issuers will make available to any prospective purchaser of the Securities or
beneficial owner of the Securities in connection with any sale thereof the
information required by Rule 144A(d)(4) under the Securities Act during any
period when the Company is not subject to Section 13 or 15(d) under the Exchange
Act.
SECTION 4.11. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Issuers covenant (to the extent that they may lawfully do so)
that they will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Issuers from paying
all or any portion of the Accreted Value or principal of and/or interest on the
Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture, and (to the extent that they may lawfully do so) the Issuers hereby
expressly waive all benefit or advantage of any such law, and covenant that they
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
50
SECTION 4.12. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Issuers will not, and will not permit any of their Subsidiaries
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with any Affiliate
(each, an "AFFILIATE TRANSACTION") or extend, renew, waive or otherwise modify
the terms of any Affiliate Transaction entered into prior to the Issue Date
unless (i) such Affiliate Transaction is between or among the Issuers and their
Wholly Owned Subsidiaries; or (ii) the terms of such Affiliate Transaction are
fair and reasonable to the Issuers or such Subsidiary, as the case may be, and
the terms of such Affiliate Transaction are at least as favorable as the terms
which could be obtained by the Issuers or such Subsidiary, as the case may be,
in a comparable transaction made on an arm's-length basis between unaffiliated
parties. In any Affiliate Transaction (or any series of related Affiliate
Transactions which are similar or part of a common plan) involving an amount or
having a fair market value in excess of $1 million which is not permitted under
clause (i) above, the Issuers must obtain a resolution of the Board of Directors
of the Issuers certifying that such Affiliate Transaction complies with clause
(ii) above. In any Affiliate Transaction (or any series of related Affiliate
Transactions which are similar or part of a common plan) involving an amount or
having a fair market value in excess of $5 million which is not permitted under
clause (i) above, the Issuers must obtain a favorable written opinion as to the
fairness of such transaction or transactions, as the case may be, from an
Independent Financial Advisor.
The foregoing provisions will not apply to (i) any Restricted
Payment that is not prohibited by the provisions of Section 4.03, or (ii)
reasonable fees, compensation and equity incentives in the form of Capital Stock
(other than Disqualified Capital Stock) paid to and indemnity provided on behalf
of, officers, directors or employees of the Issuers or any Subsidiary of the
Issuers as determined in good faith by the Company's Board of Directors or
senior management or (iii) any agreement as in effect as of the Issue Date or
any amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) in any replacement agreement thereto so long
as any such amendment or replacement agreement is not more disadvantageous to
the holders in any material respect than the original agreement as in effect on
the Issue Date or (iv) any affiliation agreements with the WB Television
Network.
51
SECTION 4.13. LIMITATION ON INVESTMENTS.
The Issuers will not, and will not permit any of their Subsidiaries
to, make any Investment other than (i) a Permitted Investment or (ii) an
Investment that is made as a Restricted Payment in compliance with Section 4.03
after the Issue Date.
SECTION 4.14. LIMITATION ON CAPITAL STOCK OF SUBSIDIARIES.
The Issuers will not (i) sell, pledge, hypothecate or otherwise
convey or dispose of any Capital Stock of a Subsidiary of the Company or (ii)
permit any of its direct Subsidiaries to issue any Capital Stock, other than to
the Issuers or a Wholly Owned Subsidiary of the Issuers. The foregoing
restrictions shall not apply to (x) an Asset Sale made in compliance with
Section 4.17 or the issuance of Preferred Stock in compliance with Section 4.04,
(y) Liens securing the Securities or (z) a Permitted Lien. In no event will the
Company sell, pledge, hypothecate or otherwise convey or dispose of any Capital
Stock of Finance (other than pursuant to the Security Documents) or will Finance
sell any Capital Stock.
SECTION 4.15. LIMITATION ON LIENS.
The Issuers will not create, incur or otherwise cause or suffer to
exist or become effective any Liens of any kind (a) (other than Permitted Liens)
upon any property or asset of the Issuers unless (i) if such Lien secures
Indebtedness which is PARI PASSU with the Securities, then the Securities are
secured on an equal and ratable basis with the obligations so secured until such
time as such obligation is no longer secured by a Lien or (ii) if such Lien
secures Indebtedness which is subordinated to the Securities, any such Lien
shall be subordinated to the Lien granted to the holders of the Securities to
the same extent as such Indebtedness is subordinated to the Securities and (b)
on any of the Collateral (other than Liens created by the Security Documents).
SECTION 4.16. CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Issuers shall be
obligated to make an offer to purchase (the "CHANGE OF CONTROL OFFER") each
Holder's outstanding Securities at a purchase price (the "CHANGE OF CONTROL
PURCHASE PRICE") equal to (x) 101% of the Accreted Value thereof, if the Change
of Control Payment Date (as defined) is on or prior to September 30, 2002, or
(y) 101% of the principal amount at maturity, plus accrued and unpaid interest,
if any, to the Change of Control Payment Date,
52
if the Change of Control Payment Date is after September 30, 2002, in each case
in accordance with the procedures set forth below.
Within 20 days of the occurrence of a Change of Control, the Issuers
shall (i) cause a notice of the Change of Control Offer to be sent at least once
to the Dow Xxxxx News Service or similar business news service in the United
States and (ii) send by first-class mail, postage prepaid, to the Trustee and to
each Holder of the Securities, at the address appearing in the register
maintained by the Registrar of the Securities, a notice stating:
(1) that the Change of Control Offer is being made pursuant to this
covenant and that all Securities tendered will be accepted for payment;
(2) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 30 days nor later than 45
days from the date such notice is mailed (the "CHANGE OF CONTROL PAYMENT
DATE"));
(3) that any Security not tendered will continue to accrete
Accreted Value or accrue interest, as the case may be;
(4) that, unless the Issuers default in the payment of the Change of
Control Purchase Price, any Securities accepted for payment pursuant to
the Change of Control Offer shall cease to accrete Accreted Value or
accrue interest, as the case may be, after the Change of Control Payment
Date;
(5) that Holders accepting the offer to have their Securities
purchased pursuant to a Change of Control Offer will be required to
surrender the Securities to the Paying Agent at the address specified in
the notice prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their acceptance if
the Paying Agent receives, not later than the close of business on the
third Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Securities delivered for
purchase, and a statement that such Xxxxxx is withdrawing his or her
election to have such Securities purchased;
53
(7) that Holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount at maturity to the
unpurchased portion principal amount at maturity of the Securities
surrendered;
(8) any other procedures that a Holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
On the Change of Control Payment Date, the Issuers shall, to the
extent lawful, (i) accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities or portions thereof
so tendered and (iii) deliver or cause to be delivered to the Trustee Securities
so accepted together with an Officers' Certificate stating the Securities or
portions thereof tendered to the Issuers. The Paying Agent shall promptly mail
to each holder of Securities so accepted payment in an amount equal to the
purchase price for such Securities, and the Issuers shall execute and issue, and
the Trustee shall promptly authenticate and mail to such holder, a new Security
equal in principal amount at maturity to any unpurchased portion of the
Securities surrendered; PROVIDED that each such new Security shall be issued in
an original principal amount in denominations of $1,000 principal amount at
maturity and integral multiples thereof.
If the Senior Credit Facility is in effect and/or any Subsidiary
Senior Discount Notes are outstanding, or any amounts are owing thereunder or in
respect thereof, at the time of the occurrence of a Change of Control, prior to
the mailing of the notice to Holders described in the second preceding
paragraph, but in any event within 20 days following any Change of Control, the
Issuers, on a joint and several basis, covenant to (i) repay in full all
obligations and terminate all commitments under or in respect of the Senior
Credit Facility and/or the Subsidiary Senior Discount Notes, as the case may be,
or offer to repay in full all obligations and terminate all commitments under or
in respect of the Senior Credit Facility and/or the Subsidiary Senior Discount
Notes, as the case may be, and repay the Indebtedness owed to each such lender
and holder who has accepted such offer or (ii) obtain the requisite consents
under the Senior Credit Facility and/or the Subsidiary Senior Discount Notes to
permit the repurchase of the Securities as described above. The Issuers must
first comply with the covenant described in the preceding sentence before it
shall be required to purchase Notes in the event
54
of a Change of Control; PROVIDED that the Issuers' failure to comply with the
covenant described in the preceding sentence constitutes an Event of Default
described in clause (c) of Section 6.01 if not cured within 30 days after the
notice required by such clause.
If either Issuer or any Subsidiary thereof has issued any
outstanding (i) Indebtedness that is subordinated in right of payment to the
Securities or (ii) Preferred Stock, and such Issuer or such Subsidiary is
required to make a change of control offer or to make a distribution with
respect to such subordinated Indebtedness or Preferred Stock in the event of a
Change of Control, the Issuers shall not consummate any such offer or
distribution with respect to such subordinated Indebtedness or Preferred Stock
until such time as the Issuers shall have paid the Change of Control Purchase
Price in full to the Holders of Securities that have accepted the Issuers'
Change of Control Offer and shall otherwise have consummated the Change of
Control Offer made to Holders of the Securities and the Issuers will not issue
Indebtedness that is subordinated in right of payment to the Securities or
Preferred Stock with change of control provisions requiring the payment of such
Indebtedness or Preferred Stock prior to the payment of the Securities in the
event of a Change in Control under this Indenture.
The Issuers will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of this Indenture, the Issuers shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached their
obligations under this Indenture by virtue thereof.
SECTION 4.17. LIMITATION ON ASSET SALES.
The Issuers will not, and will not permit any of their Subsidiaries
to, consummate an Asset Sale unless (i) the Issuers or such applicable
Subsidiary, as the case may be, receives consideration at the time of such sale
or other disposition at least equal to the fair market value of the assets sold
or otherwise disposed of (as determined in good faith by the Board of Directors
of the Company, and evidenced by a board resolution); (ii) not less than 80% of
the consideration received by the Company or such applicable Subsidiary, as the
case may be, is in the form of cash or Cash Equivalents other than in the case
where the Company
55
is undertaking a Permitted Asset Swap; and (iii) the Asset Sale Proceeds
received by the Company or such Subsidiary are applied (a) first, to the extent
the Company or any such Subsidiary, as the case may be, elects, or is required,
to prepay, repay or purchase indebtedness under the Senior Credit Facility, the
Subsidiary Senior Discount Notes and/or any other Indebtedness of a Subsidiary
of the Company incurred in compliance with the Indenture within 180 days
following the receipt of the Asset Sale Proceeds from any Asset Sale; PROVIDED
that any such repayment shall result in a permanent reduction of the commitments
thereunder in an amount equal to the principal amount so repaid; (b) second, to
the extent of the balance of Asset Sale Proceeds after application as described
above, to the extent the Company elects, to an investment in assets (including
Capital Stock or other securities purchased in connection with the acquisition
of Capital Stock or property of another Person) used or useful in businesses
similar or ancillary to the business of the Company or any such Subsidiary as
conducted on the Issue Date; PROVIDED that (1) such investment occurs or the
Company or any such Subsidiary enters into contractual commitments to make such
investment, subject only to customary conditions (other than the obtaining of
financing), within 180 days following receipt of such Asset Sale Proceeds and
(2) Asset Sale Proceeds so contractually committed are so applied within 270
days following the receipt of such Asset Sale Proceeds; and (c) third, if on
such 180th day in the case of clauses (iii)(a) and (iii)(b)(1) or on such 270th
day in the case of clause (iii)(b)(2) with respect to any Asset Sale, the
Available Asset Sale Proceeds exceed $5 million, the Company shall apply an
amount equal to such Available Asset Sale Proceeds to an offer to repurchase the
Securities, at a purchase price in cash equal to 100% of the Accreted Value
thereof plus accrued and unpaid interest, if any, to the purchase date (an
"EXCESS PROCEEDS OFFER"). If an Excess Proceeds Offer is not fully subscribed,
the Company may retain the portion of the Available Asset Sale Proceeds not
required to repurchase Securities.
If the Issuers are required to make an Excess Proceeds Offer, the
Issuers shall mail, within 30 days following the date specified in clause
(iii)(c) above, a notice to the holders stating, among other things:
(1) that such holders have the right to require the Issuers to apply
the Available Asset Sale Proceeds to repurchase such Securities at a
purchase price in cash equal to (x) 100% of the Accreted Value thereof, if
the applicable purchase date is on or prior to September 30, 2002, or (y)
100% of the principal amount at maturity thereof, plus
56
accrued and unpaid interest, if any, to the purchase date, if the purchase
date is after September 30, 2002;
(2) the purchase date, which shall be no earlier than 30 days and
not later than 45 days from the date such notice is mailed;
(3) the instructions that each holder must follow in order to
have such Securities purchased;
(4) the calculations used in determining the amount of
Available Asset Sale Proceeds to be applied to the purchase of such
Securities;
(5) that if the Accreted Value of Securities tendered in the Asset
Sale Offer exceeds the aggregate amount of Available Asset Sale Proceeds,
the Issuers shall select the Securities to be purchased on a pro rata
basis;
(6) that any Security not tendered will continue to accrete
Accreted Value and accrue interest;
(7) that, unless the Issuers default in making payment therefor, any
Security accepted for payment pursuant to the Asset Sale Offer shall cease
to accrete Accreted Value and accrue interest after the purchase date;
(8) that Holders electing to have a Security purchased pursuant to
the Asset Sale Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Asset Sale Offer purchase
date;
(9) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Asset Sale Offer purchase date, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount at maturity of the
Security the Holder delivered for purchase and a statement that such
Xxxxxx is withdrawing his election to have such Security purchased; and
(10) that Holders whose Securities are purchased only in part will
be issued new Securities in a principal amount at maturity equal to the
unpurchased portion of the Securities surrendered.
57
On or before the Asset Sale Offer purchase date, the Issuers shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Asset Sale Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the purchase price, plus accrued interest, if any, of all
Securities to be purchased and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to the Holders of Securities so accepted payment in an amount equal to the
purchase price, plus accrued interest, if any, thereon. For purposes of this
Section 4.13, the Trustee shall act as the Paying Agent.
In the event of the transfer of substantially all of the property
and assets of the Issuers and their Subsidiaries as an entirety to a Person in a
transaction permitted under Article Five, the successor Person shall be deemed
to have sold the properties and assets of the Issuers and their Subsidiaries not
so transferred for purposes of this covenant, and shall comply with the
provisions of this covenant with respect to such deemed sale as if it were an
Asset Sale.
The Issuers shall comply with all tender offer rules under state and
federal securities laws, including, but not limited to, Section 14(e) under the
Exchange Act and Rule l4e-1 thereunder, to the extent applicable to such offer.
To the extent that the provisions of any securities laws or regulations conflict
with the foregoing provisions of this Indenture, the Issuers shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under the foregoing provisions of this Indenture by
virtue thereof.
SECTION 4.18. Limitation on Preferred Stock of
SUBSIDIARIES.
The Issuers will not permit any of their Subsidiaries to issue any
Preferred Stock (except Preferred Stock issued to the Company or a Wholly Owned
Subsidiary of the Company) or permit any Person (other than the Company or a
Wholly Owned Subsidiary of the Company) to hold any such Preferred Stock unless
the Company or such Subsidiary would be entitled to incur or assume Indebtedness
under Section 4.04 (other than Permitted Indebtedness) in the aggregate
principal amount equal to the aggregate liquidation value of the Preferred Stock
to be issued.
58
SECTION 4.19. Limitation on Sale and Lease-Back
TRANSACTIONS.
The Issuers will not, and will not permit any of their Subsidiaries
to, enter into any Sale and Lease-Back Transaction unless (i) the consideration
received in such Sale and Lease-Back Transaction is at least equal to the fair
market value of the property sold, as determined in good faith by the Board of
Directors of the Company and evidenced by a Board Resolution and (ii) the
Issuers could incur the Attributable Indebtedness in respect of such Sale and
Lease-Back Transaction in compliance with Section 4.04.
SECTION 4.20. LIMITATION ON CONDUCT OF BUSINESS.
The Issuers and their Subsidiaries will not engage in any businesses
which are not the same, similar or related to the businesses in which the
Company and its Subsidiaries are engaged in on the Issue Date.
SECTION 4.21. LIMITATION ON CREATION OF SUBSIDIARIES.
The Company will not create or acquire any direct Subsidiary other
than a Subsidiary the Capital Stock of which is, to the extent owned by the
Company, pledged to the Trustee in accordance with Article Ten and the Security
Documents.
SECTION 4.22. LIMITATION ON CONDUCT OF BUSINESS OF FINANCE.
Finance will not own any operating assets or other properties or
conduct any business other than to serve as an Issuer and an obligor on the
Securities.
SECTION 4.23. PAYMENTS FOR CONSENT.
The Issuers will not, and will not permit any of their Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any holder of any Securities for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture, the Security Documents or the Securities unless
such consideration is offered to be paid or agreed to be paid to all holders of
the Securities which so consent, waive or agree to amend in the time frame set
forth in solicitation documents relating to such consent, waiver or agreement.
59
SECTION 4.24. IMPAIRMENT OF SECURITY INTEREST.
The Issuers shall not, and not permit any of their Subsidiaries to,
take or omit to take any action which action or omission would impair the
security interest in favor of the Trustee, on behalf of itself and the holders
of the Notes with respect to the Collateral required to be pledged under this
Indenture, and the Issuers will not create, otherwise incur or suffer to exist,
in favor of any Person (other than the Trustee on behalf of itself and the
holders of the Notes) any interest whatsoever in the Collateral.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. MERGERS, CONSOLIDATIONS AND SALE OF ASSETS.
(a) Neither of the Issuers will consolidate with, merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets (as an entirety or substantially as an entirety
in one transaction or a series of related transactions), to any Person unless
(in the case of the Company): (i) the Company shall be the continuing Person, or
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or to which the properties and assets of the Company
are sold, assigned, transferred, leased, conveyed or otherwise disposed of shall
be a corporation or a limited liability company organized and existing under the
laws of the United States or any State thereof or the District of Columbia and
shall expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, in form satisfactory to the Trustee, all of the obligations of the
Company under this Indenture, the Security Documents and the Securities and the
obligations thereunder shall remain in full force and effect; PROVIDED, that at
any time the Company or its successor is a limited liability company, there
shall be a co-issuer of the Securities that is a corporation; (ii) immediately
before and immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; (iii) immediately after
giving effect to such transaction or series of transactions on a pro
60
forma basis, the Consolidated Net Worth of the Company or the surviving entity
as the case may be is at least equal to the Consolidated Net Worth of the
Company immediately before such transaction or series of transactions; and (iv)
immediately after giving effect to such transaction on a pro forma basis the
Company or such Person could incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.04. In connection with any
consolidation, merger or transfer of assets contemplated by this provision, the
Issuers shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or transfer
and the supplemental indenture in respect thereto comply with this provision and
that all conditions precedent herein provided for relating to such transaction
or transactions have been complied with.
(b) For purposes of the foregoing paragraph (a), the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any such consolidation, merger, conveyance, lease or transfer
in accordance with the foregoing provisions of this Article Five, the successor
Person formed by such consolidation or into which the applicable Issuer is
merged or to which such conveyance, lease or transfer is made will succeed to,
and be substituted for, and may exercise every right and power of, such Issuer
under this Indenture, the Security Documents and the Securities with the same
effect as if such successor had been named as such Issuer therein, and
thereafter (except in the case of a sale, assignment, transfer, lease,
conveyance or other disposition) the predecessor corporation will be relieved of
all further obligations and covenants under this Indenture, the Securities, the
Security Documents and the Registration Rights Agreement; PROVIDED that solely
for purposes of computing amounts described in Section 4.03, any successor
Person shall only be deemed to have succeeded to and be substituted for such
Issuer with respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) there is a default in payment of any Accreted Value, principal
of, or premium, if any, on the Securities whether at maturity, upon
redemption or otherwise;
(b) there is a default for 30 days in payment of any interest on
the Securities;
(c) there is a default by the Issuers or any Subsidiary of the
Company in the observance or performance of any other covenant in the
Securities or this Indenture for 30 days after written notice from the
Trustee or the Holders of not less than 25% in aggregate principal amount
at maturity of the Securities then outstanding (except in the case of a
default with respect to Section 4.16 or Article Five which shall
constitute an Event of Default with such notice requirement but without
such passage of time requirement);
(d) there is a failure to pay when due principal, interest or
premium in an aggregate amount of $5 million or more with respect to any
Indebtedness of the Issuers or any Subsidiary thereof, or the acceleration
of any such Indebtedness aggregating $5 million or more which default
shall not be cured, waived or postponed pursuant to an agreement with the
holders of such Indebtedness within 60 days after written notice as
provided in this Indenture, or such acceleration shall not be rescinded or
annulled within 20 days after written notice as provided in this
Indenture;
(e) any final judgment or judgments which can no longer be appealed
for the payment of money in excess of $5 million shall be rendered against
the Issuers or any Subsidiary thereof, and shall not be discharged for any
period of 60 consecutive days during which a stay of enforcement shall not
be in effect;
(f) the Company or any of its Subsidiaries (i) admits in writing its
inability to pay its debts generally as they become due, (ii) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (iii) con-
62
sents to the entry of a judgment, decree or order for relief against it in
an involuntary case or proceeding under any Bankruptcy Law, (iv) consents
to the appointment of a Custodian of it or for substantially all of its
property, (v) consents to or acquiesces in the institution of a bankruptcy
or an insolvency proceeding against it, (vi) makes a general assignment
for the benefit of its creditors or (vii) takes any partnership or
corporate action, as the case may be, to authorize or effect any of the
foregoing;
(g) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any of its Subsidiaries in
an involuntary case or proceeding under any Bankruptcy Law, which shall
(i) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company or any of
its Subsidiaries, (ii) appoint a Custodian of the Company or any of its
Subsidiaries or for substantially all of any of their property or (iii)
order the winding-up or liquidation of its affairs; and such judgment,
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(h) any breach by a Pledgor of any representation or warranty set
forth in the Pledge Agreement, or any default by a Pledgor in the
performance of any covenant set forth in the Pledge Agreement, or any
repudiation by a Pledgor of any of its obligations under the Pledge
Agreement or the unenforceability of the Pledge Agreement against a
Pledgor for any reason which, in any case or in the aggregate, results in
a material impairment of the rights intended to be afforded thereby.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (f) or (g) above) shall occur and be continuing, the Trustee or the
Holders of at least 25% in principal amount at maturity of outstanding
Securities may declare the Accreted Value of, premium, if any, and accrued and
unpaid interest, if any, on all the Securities to be due and payable by notice
in writing to the Issuers and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration", and (i) the same shall become
immediately due and payable or (ii) if there are any amounts outstanding under
the Senior Credit Facility and or the Subsidiary Senior Discount Notes, shall
become immediately due and payable upon the first to occur of an acceleration
under the Senior Credit Facility or 5 Business
63
Days after receipt by the Company and the representative under the Senior Credit
Facility and/or the Trustee in respect of the Subsidiary Senior Discount Notes
of a notice of acceleration by the Trustee hereunder. If an Event of Default
specified in clause (f) or (g) above occurs and is continuing, then all unpaid
Accreted Value of, and premium, if any, and accrued and unpaid interest, if any,
on all of the outstanding Securities shall IPSO FACTO become and be immediately
due and payable without any declaration or other at on the part of the Trustee
or any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount at maturity of the Securities may rescind and cancel such
declaration and its consequences (a) if the rescission would not conflict with
any judgment or decree, (b) if all existing Events of Default have been cured or
waived except nonpayment of Accreted Value, premium or interest that has become
due solely because of the acceleration, (c) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
Accreted Value, which has become due otherwise than by such declaration of
acceleration, has been paid, (d) if the Issuers have paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (e) in the event of the cure or waiver of an
Event of Default of the type described in clause (f) or (g) of the description
of Events of Default above, the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture or the Security
Documents.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
64
Each Securityholder, by accepting a Security, (a) acknowledges that
the exercise of remedies by the Trustee with respect to the Collateral is
subject to the terms and conditions of the Security Documents and the proceeds
received upon realization of the Collateral shall be applied by the Trustee in
accordance with Section 6.10 hereof and (b) acknowledges and consents to the
terms of the Security Documents and to the Trustee's performance of its
agreements thereunder.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of not less
than a majority in principal amount at maturity of the outstanding Securities by
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of Accreted Value or principal of
or interest on any Security as specified in clauses (a) and (b) of Section 6.01.
The Issuers shall deliver to the Trustee an Officers' Certificate stating that
the requisite percentage of Holders have consented to such waiver and attaching
copies of such consents. When a Default or Event of Default is waived, it is
cured and ceases.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of not less than a majority in principal amount at
maturity of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. Subject to Section 7.01, however, the
Trustee may refuse to follow any direction that conflicts with any law or this
Indenture or any Security Document, that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder, or that may involve the
Trustee in personal liability; PROVIDED that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture or any Security Document, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
any loss or expense caused by taking such action or following such direction.
SECTION 6.06. LIMITATION ON SUITS.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities or any Security Document unless:
65
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holder or Holders of at least 25% in principal amount at
maturity of the outstanding Securities make a written request to the
Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 30-day period the Holder or Holders of a majority in
principal amount at maturity of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of Accreted Value or principal of and interest on
a Security, on or after the respective due dates expressed in such Security, 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 the
Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of Accreted Value or principal or
interest specified in clause (a) or (b) of Section 6.01 occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Issuers or any other obligor on the Securities for
the whole amount of Accreted Value or principal and accrued interest and fees
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate PER ANNUM borne by the Securities and such
further amount as shall be sufficient to cover the costs and expenses of
collec-
66
tion, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relating to the Issuers,
their creditors or their property and shall be entitled and empowered to collect
and receive any monies or other property payable or deliverable on any such
claims and to distribute the same, and any Custodian in any such judicial
proceedings is hereby authorized by each Securityholder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Securityholders, to pay to the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts due the Trustee
under Section 7.07. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07 and for
amounts due under the Security Documents;
Second: to Holders for amounts due and unpaid on the Securities
for Accreted Value or principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for Accreted Value or principal and interest,
respectively; and
Third: to the Issuers, as their respective interests may appear.
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The Trustee, upon prior notice to the Issuers, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount at maturity of the outstanding Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default actually known to the Trustee has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and the Security Documents and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs. The Trustee will be under no obligation to exercise any of its rights
or powers under this Indenture or the Security Documents at the request of any
of the Holders of Securities, unless they shall have offered to the Trustee
security and indemnity satisfactory to it.
(b) Except during the continuance of an Event of Default actually
known to a Responsible Officer of the Trustee:
(1) The Trustee need perform only those duties as are specifically
set forth herein and no others and no implied covenants or obligations
shall be read into this Indenture against the Trustee.
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(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions and such
other documents delivered to it pursuant to Section 12.04 hereof 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 may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture or the Security Documents shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or to take
or omit to take any action under this Indenture or the Security Documents or
take any action at the request or direction of Holders if it shall have
reasonable grounds for believing that repayment of such funds is not assured to
it or it does not receive an indemnity satisfactory to it in its sole discretion
against such risk, liability, loss, fee or expense which might be incurred by it
in compliance with such request or direction.
(e) Every provision of this Indenture and the Security Documents
that in any way relates to the Trustee is subject to this Section 7.01.
(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 Issuers.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and an Opinion of Counsel, which shall conform to
the provisions of Section 12.05. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent (other
than an agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion
of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or the Security Documents
at the request, order or direction of any of the Holders pursuant to the
provisions of this Indenture or the Security Documents, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
satisfactory to it against the costs, expenses and liabilities which may
be incurred therein or thereby.
(g) Subject to Section 9.02 hereof, the Trustee may (but shall not
be obligated to), without the consent of the Holders, give any consent,
waiver or approval required under the Security Documents or by the terms
hereof with respect to the Collateral, but shall not without the consent
of the Holders of not less than a majority in aggregate principal amount
at maturity of the Securities at the time outstanding
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(i) give any consent, waiver or approval or (ii) agree to any amendment
or modification of the Security Documents, in each case, that shall have
a material adverse effect on the interests of any Holder. The Trustee
shall be entitled to request to whether any consent, waiver, approval,
amendment or modification shall have a material adverse effect on the
interests of any Holder
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Issuers, their
respective Subsidiaries, or their respective Affiliates with the same rights it
would have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the value of the Collateral, or any part thereof, or the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Issuers' use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Issuers in this Indenture or the Security
Documents or any document issued in connection with the sale of Securities or
any statement in the Securities other than the Trustee's certificate of
authentication. The Trustee makes no representations with respect to the
effectiveness or adequacy of this Indenture, the Securities or any Security
Document or the validity or perfection, if any, of liens as granted under this
Indenture or any Security Document.
SECTION 7.05. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such event, the Trustee shall mail to each
Securityholder, as their names and addresses appear on the Securityholder list
described in Section 2.05, notice of the uncured Default or Event of Default
within 60 days after the Trustee receives such notice. Except in the case of a
Default or an Event of Default in payment of principal of, or interest on, any
Security, including the failure to make payment on (i) the Change of Control
Payment Date pursuant to a Change of Control Offer or (ii) the Asset Sale Offer
payment date pursuant to an Asset Sale Offer, or the Trustee may withhold the
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Respon-
71
sible Officers, of the Trustee in good faith determines that withholding the
notice is in the interest of the Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
This Section 7.06 shall not be operative as a part of this Indenture
until this Indenture is qualified under the TIA, and, until such qualification,
this Indenture shall be construed as if this Section 7.06 were not contained
herein.
Within 60 days after each October 1, the Trustee shall, to the
extent that any of the events described in TIA ss. 313(a) occurred within the
previous twelve months, but not otherwise, mail to each Securityholder a brief
report dated as of such October 1, that complies with TIA ss. 313(a). The
Trustee also shall comply with TIA xx.xx. 313(b) 313(c) and 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Issuers and filed with the Commission and each securities
exchange, if any, on which the Securities are listed.
The Issuers shall notify the Trustee if the Securities become listed
on any securities exchange or of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuers, jointly and severally, shall pay to the Trustee from
time to time such compensation for its services hereunder and under the Security
Documents (which shall be agreed to from time to time by the Issuers and the
Trustee). The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuers, jointly and
severally, shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances (including reasonable fees and expenses of
counsel) incurred or made by it in addition to the compensation for its
services, except any such disbursements, expenses and advances as may be
attributable to the Trustee's negligence or willful misconduct. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents, accountants, experts and counsel and any taxes or other
expenses incurred by a trust created pursuant to Section 8.01 hereof.
The Issuers, jointly and severally, shall indemnify the Trustee and
each predecessor trustee for, and hold it harmless against, any loss, liability,
claim, damage or expense incurred
72
by the Trustee without negligence or willful misconduct on its part arising out
of or in connection with the administration of this trust and its duties under
this Indenture and the Security Documents, including the reasonable expenses and
attorneys' fees of defending itself against any claim of liability arising
hereunder. The Trustee shall notify the Issuers promptly of any claim asserted
against the Trustee for which it may seek indemnity. However, the failure by the
Trustee to so notify the Issuers shall not relieve the Issuers of their
obligations hereunder. The Issuers shall defend the claim and the Trustee shall
cooperate in the defense (and may employ its own counsel) at the Issuers'
expense. The Issuers need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee as a result of the violation of this
Indenture by the Trustee if such violation arose from the Trustee's negligence
or willful misconduct.
To secure the Issuers' payment obligations in this Section 7.07, the
Trustee shall have a senior claim and lien prior to the Securities against all
money or property held or collected by the Trustee, in its capacity as Trustee.
When the Trustee incurs expenses or renders services after an Event
of Default specified in clause (f) or (g) of Section 6.01 occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Issuers' obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Issuers' obligations pursuant to
Article Eight and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Issuers in
writing. The Holders of a majority in principal amount at maturity of the
outstanding Securities may remove the Trustee by so notifying the Issuers and
the Trustee in writing and may appoint a successor trustee with the Issuers'
consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
72
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuers shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount at
maturity of the Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holders of at least 10% in principal amount at maturity of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Any resignation or removal of the Trustee pursuant to this Indenture
shall be deemed to be a resignation or removal of the Trustee in its capacity as
Trustee under the Security Documents and any appointment of a successor Trustee
pursuant to this Indenture shall be deemed to be an appointment of a successor
Trustee under the Security Documents and such successor shall assume all of the
obligations of the Trustee in its capacity as Trustee under the Security
Documents.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Issuers' obligations under Section 7.07 shall continue for the benefit
of the retiring Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee (and successor Trustee
under the Security Documents).
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA xx.xx. 310(a)(1) and 310(a)(5). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); PROVIDED, HOWEVER, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Issuers
are outstanding, if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of
CLAIMS AGAINST COMPANY.
The Trustee, in its capacity as Trustee hereunder and under the
Security Documents, shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) The Issuers may, at their option by Board Resolutions, at any
time, with respect to the Securities, elect to have either paragraph (b) or
paragraph (c) below be applied to the outstanding Securities upon compliance
with the conditions set forth in paragraph (d).
(b) Upon the Issuers' exercise under paragraph (a) of the option
applicable to this paragraph (b), the Issuers shall be
75
deemed to have been released and discharged from their obligations with respect
to the outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, such Legal
Defeasance means that the Issuers shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of the Sections
and matters under this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned, except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Securities to receive solely from the trust fund
described in paragraph (d) below and as more fully set forth in such paragraph,
payments in respect of the principal of and interest on such Securities when
such payments are due, and (ii) obligations listed in Section 8.03, subject to
compliance with this Section 8.01. The Issuers may exercise their option under
this paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) below with respect to the Securities.
(c) Upon the Issuers' exercise under paragraph (a) of the option
applicable to this paragraph (c), the Issuers shall be released and discharged
from its obligations under any covenant contained in Article Five and in
Sections 4.03 through 4.23 with respect to the outstanding Securities on and
after the date the conditions set forth below are satisfied (hereinafter,
"COVENANT DEFEASANCE"), and the Securities shall thereafter be deemed to be not
"outstanding" for the purpose of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Issuers, their Subsidiaries and any Pledgor
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(c), nor shall any event referred to in
Section 6.01(d), (e), (h) or (i) thereafter constitute a Default or an Event of
Default thereunder but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.
76
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(1) The Issuers shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form
and substance satisfactory to the Trustee, U.S. Legal Tender or direct
non-callable obligations of, or non-callable obligations guaranteed by,
the United States of America for the payment of which obligation or
guarantee the full faith and credit of the United States of America is
pledged ("U.S. GOVERNMENT OBLIGATIONS") maturing as to principal and
interest in such amounts and at such times as are sufficient, without
consideration of the reinvestment of such interest and after payment of
all Federal, state and local taxes or other charges or assessments in
respect thereof payable by the Trustee, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof (in form and substance reasonably satisfactory to
the Trustee) delivered to the Trustee, to pay the principal of, premium,
if any, and interest on all the outstanding Securities on the dates on
which any such payments are due and payable in accordance with the terms
of this Indenture and of the Securities;
(2) Such deposits shall not cause the Trustee to have a
conflicting interest as defined in and for purposes of the TIA;
(3) The Trustee shall have received Officers' Certificates stating
that no Default or Event of Default or event which with notice or lapse of
time or both would become a Default or an Event of Default with respect to
the Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Section 6.01(f) or (g) is concerned, at any time
during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period);
(4) The Trustee shall have received Officers' Certificates stating
that such deposit will not result in a Default under this Indenture or a
breach or violation of, or constitute a default under, any other material
instrument or agreement to which either Issuer or any of their
Subsidiaries is a party or by which it or its property is bound;
77
(5) (i) In the event the Issuers elect paragraph (b) hereof, the
Issuers shall deliver to the Trustee an Opinion of Counsel in the United
States, in form and substance reasonably satisfactory to the Trustee to
the effect that (A) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the Issue
Date, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall state that Holders of the Securities will not recognize income gain
or loss for Federal income tax purposes as a result of such deposit and
the defeasance contemplated hereby and will be subject to Federal income
taxes in the same manner and at the same times as would have been the case
if such deposit and defeasance had not occurred, or (ii) in the event the
Issuers elect paragraph (c) hereof, the Issuers shall deliver to the
Trustee an Opinion of Counsel in the United States, in form and substance
reasonably satisfactory to the Trustee, to the effect that Holders of the
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and the defeasance contemplated
hereby and will be subject to Federal income tax in the same amounts and
in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred;
(6) The deposit shall not result in either Issuer, the Trustee or
the trust becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940;
(7) The Issuers shall have delivered to the Trustee an Officer's
Certificate, in form and substance reasonably satisfactory to the Trustee,
stating that the deposit under clause (1) was not made by the Issuers or
any Subsidiary of either Issuer with the intent of preferring the Holders
over any other creditors of the Issuers defeating, hindering, delaying or
defrauding any other creditors of the Issuers or any Subsidiary of either
Issuer or others;
(8) The Issuers shall have delivered to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee, to
the effect that (A) the trust funds will not be subject to the rights of
holders of Indebtedness of either Issuer other than the Securities and (B)
assuming no intervening bankruptcy of either Issuer between the date of
deposit and the 91st day following the deposit and that no Holder of
Securities is an insider of ei-
78
ther Issuer, after the passage of 90 days following the deposit, the trust
funds will not be subject to any applicable bankruptcy, insolvency,
reorganization or similar law affecting creditors' rights generally; and
(9) The Issuers have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the defeasance contemplated by this
Section 8.01 have been complied with; PROVIDED, HOWEVER, that no deposit
under clause (1) above shall be effective to terminate the obligations of
the Issuers under the Securities, the Security Documents or this Indenture
prior to 90 days following any such deposit.
In the event all or any portion of the Securities are to be redeemed
through such irrevocable trust, the Issuers must make arrangements satisfactory
to the Trustee, at the time of such deposit, for the giving of the notice of
such redemption or redemptions by the Trustee in the name and at the expense of
the Issuers.
SECTION 8.02. SATISFACTION AND DISCHARGE.
This Indenture will be discharged and will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
the Securities, as expressly provided for in this Indenture) as to all
outstanding Securities when:
(1) either (a) all the Securities, theretofore authenticated and
delivered (except lost, stolen or destroyed Securities which have been
replaced or paid and Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Issuers and
thereafter repaid to the Issuers or discharged from such trust) have been
delivered to the Trustee for cancellation or (b) all Securities not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Issuers have irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay and
discharge the entire Indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for principal of, premium, if
any, and interest on the Securities to the date of deposit together with
irrevocable instructions from the Issuers directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case
may be;
79
(2) the Issuers have paid all other sums payable under this
Indenture by the Issuers; and
(3) the Issuers have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction and discharge
of this Indenture have been complied with.
SECTION 8.03. SURVIVAL OF CERTAIN OBLIGATIONS.
Notwithstanding the satisfaction and discharge of this Indenture and
of the Securities referred to in Section 8.01 or 8.02, the respective
obligations of the Issuers and the Trustee under Sections 2.02, 2.03, 2.04,
2.05, 2.06, 2.07, 2.10, 2.12, 2.13, 4.01, 4.02, 6.07, Article Seven, Sections
8.05, 8.06 and 8.07 shall survive until the Securities are no longer
outstanding, and thereafter the obligations of the Issuers and the Trustee under
Sections 7.07, 8.05, 8.06 and 8.07 shall survive. Nothing contained in this
Article Eight shall abrogate any of the obligations or duties of the Trustee
under this Indenture.
SECTION 8.04. ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
Subject to Section 8.07, after (i) the conditions of Section 8.01 or
8.02 have been satisfied, (ii) the Issuers have paid or caused to be paid all
other sums payable hereunder by the Issuers and (iii) the Issuers have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent referred to in clause (i) above relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee upon written request shall acknowledge in writing the discharge of the
Issuers' and the Guarantors' obligations under this Indenture except for those
surviving obligations specified in Section 8.03.
SECTION 8.05. APPLICATION OF TRUST ASSETS.
The Trustee shall hold any U.S. Legal Tender or U.S. Government
Obligations deposited with it pursuant to this Article Eight in the irrevocable
trust established pursuant to Section 8.01. The Trustee shall apply the
deposited U.S. Legal Tender or the U.S. Government Obligations, together with
earnings thereon, through the Paying Agent, in accordance with this Indenture
and the terms of the irrevocable trust agreement established pursuant to Section
8.01, to the payment of principal of and interest on the Securities. The U.S.
Legal Tender or U.S. Government Obligations so held in trust and deposited with
the Trustee in compli-
80
ance with Section 8.01 shall not be part of the trust estate under this
Indenture, but shall constitute a separate trust fund for the benefit of all
Holders entitled thereto.
SECTION 8.06. REPAYMENT TO THE ISSUERS; UNCLAIMED MONEY
Subject to Sections 7.07 and 8.01, the Trustee shall promptly pay to
the Issuers, upon receipt by the Trustee of an Officers' Certificate, any excess
money, determined in accordance with Section 8.01, held by it at any time. The
Trustee and the Paying Agent shall pay to the Issuers upon receipt by the
Trustee or the Paying Agent, as the case may be, of an Officers' Certificate,
any money held by it for the payment of principal, premium, if any, or interest
that remains unclaimed for one year after payment to the Holders is required;
PROVIDED, HOWEVER, that the Trustee and the Paying Agent before being required
to make any payment may, but need not, at the expense of the Issuers cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein, which shall be at least 30
days from the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Issuers. After payment to the
Issuers, Securityholders entitled to money must look solely to the Issuers for
payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee or Paying Agent with
respect to such money shall thereupon cease.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with this Indenture 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, then and only then the Issuers', if any, obligations under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had been made pursuant to this Indenture until such time as the Trustee
is permitted to apply all such U.S. Legal Tender or U.S. Government Obligations
in accordance with this Indenture; PROVIDED, HOWEVER, that if the Issuers have
made any payment of principal of, premium, if any, or interest on any Securities
because of the reinstatement of its obligations, the Issuers shall be,
subrogated to the rights of the holders of such Securities to receive such
payment from the U.S. Legal Tender or U.S. Government Obligations held by the
Trustee or Paying Agent.
81
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Issuers and the Trustee, together, may amend or supplement this
Indenture, the Security Documents or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to evidence the succession in accordance with Article Five
hereof of another Person to an Issuer and the assumption by any such
successor of the covenants of the such Issuer herein and in the
Securities;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(4) to make any other change that does not materially and
adversely affect the rights of any Securityholders; or
(5) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
PROVIDED that the Issuers have delivered to the Trustee an Opinion of Counsel
and an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, the Issuers and the Trustee, together, with
the written consent of the Holder or Holders of at least a majority in aggregate
principal amount at maturity of the outstanding Securities, may amend or
supplement this Indenture, the Security Documents or the Securities, without
notice to any other Securityholders. Subject to Section 6.07, the Holder or
Holders of a majority in aggregate principal amount at maturity of the
outstanding Securities may waive compliance by the Issuers with any provision of
this Indenture, the Security Documents or the Securities without notice to any
other Securityholder. Without the consent of each Securityholder affected,
however, no amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may:
82
(i) reduce the amount of Securities whose Holders must consent
to an amendment, supplement, or waiver to this Indenture;
(ii) reduce the rate of or change the time for payment of
interest, including defaulted interest, on any Security;
(iii) reduce the Accreted Value of or premium on or change the stated
maturity of any Security or change the date on which any Securities may be
subject to redemption or repurchase or reduce the redemption or repurchase
price therefor;
(iv) make any Security payable in money other than that stated in the
Security or change the place of payment from New York, New York;
(v) waive a default on the payment of the Accreted Value of,
interest on, or redemption payment with respect to any Security;
(vi) make any change in provisions of this Indenture protecting the
right of each Holder of Securities to receive payment of Accreted Value of
and interest on such Security on or after the due date thereof or to bring
suit to enforce such payment, or permitting Holders of a majority in
principal amount at maturity of Securities to waive Defaults or Events of
Default;
(vii) make any changes in Section 6.04, 6.07 or this Section 9.02;
(viii) modify or change any provision of this Indenture or the related
definitions affecting the ranking of the Securities in a manner which
adversely affects the Holders;
(ix) amend, modify or change in any material respect the obligation
of the Company to make and consummate a Change of Control Offer in the
event of a Change of Control or make and consummate an Excess Proceeds
Offer with respect to any Asset Sale that has been consummated or, modify
any of the provisions or definitions with respect thereto; or
(x) release any Collateral, except in compliance with the terms of
this Indenture or the Security Documents, or adversely affect the ranking
of any Lien created by the Security Documents.
83
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Issuers shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuers to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. COMPLIANCE WITH XXX.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture, the Security Documents
or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by notice to the
Trustee or the Issuers received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
The Issuers may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a
84
change described in any of clauses (i) through (x) of Section 9.02, in which
case, the amendment, supplement or waiver shall bind only each Holder of a
Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security; PROVIDED that any such waiver shall not impair or affect the right of
any Holder to receive payment of Accreted Value or principal of and interest on
a Security, on or after the respective due dates expressed in such Security, or
to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a
Security, the Issuers may require the Holder of the Security to deliver it to
the Trustee. The Issuers may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Issuers or
the Trustee so determines, the Issuers in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; PROVIDED that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and the Security Documents and constitutes the legal, valid and
binding obligations of the Issuers enforceable in accordance with its terms.
Such Opinion of Counsel shall be at the expense of the Issuers, and the Trustee
shall have a Lien under Section 7.07 for any such expense.
85
ARTICLE TEN
SECURITY
SECTION 10.01. PLEDGE AND SECURITY DOCUMENTS.
Each Holder, by accepting any Securities, agrees to all of the terms
and provisions of the Security Documents as the same may be in effect or may be
amended from time to time and authorizes and directs the Trustee to act as
secured party with respect thereto. The due and punctual payment of the Accreted
Value of principal of and interest on the Securities when and as the same shall
be due and payable, whether on an Interest Payment Date, at maturity, by
acceleration, call for redemption or otherwise, and interest on the overdue
Accreted Value of principal and interest, if any, of the Securities and payment
and performance of all other obligations of the Issuers to the Holders or the
Trustee under this Indenture and the Securities, according to the terms
hereunder or thereunder, shall be secured as provided in the Security Documents.
SECTION 10.02. CERTIFICATES AND OPINIONS.
The Issuers shall cause (a) TIA ss. 314(b), relating to Opinions of
Counsel regarding the Lien of the Security Documents and (b) TIA ss. 314(d),
relating to Officers' Certificate or other documents regarding the fair value of
the Collateral, to be complied with.
SECTION 10.03. Authorization of Actions To Be Taken by
THE TRUSTEE UNDER THE SECURITY DOCUMENTS.
The Trustee may (but shall not be obligated to), in its sole
discretion and without the consent of the Holders of the Securities, take all
actions it deems necessary or appropriate in order to (a) enforce or effect the
Security Documents and (b) collect and receive any and all amounts payable in
respect of the obligations of the Issuers hereunder. Such actions shall include,
but not be limited to, advising, instructing or otherwise directing any agent
appointed by it in connection with enforcing or effecting any term or provision
of the Security Documents. Subject to the provisions of the Security Documents
and this Indenture, the Trustee shall have power to institute and to maintain
such suits and proceedings as it may deem ex-
86
pedient to prevent any impairment of the Collateral by any acts which may be
unlawful or in violation of the Security Documents or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders in the Collateral (including
power to institute and maintain suits or proceedings to restrain the enforcement
of or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the security
hereunder or be prejudicial to the interests of the Holders of Securities or of
the Trustee). Except as otherwise expressly provided in this Indenture, the
Trustee shall not be obligated to take any action with respect to the exercise
of any rights or remedies, or to inquire into or give any notice of default,
under the Security Documents or with respect to the creation, perfection or
preservation of the security interest in the Collateral granted by the Security
Documents.
SECTION 10.04. Authorization of Receipt of Funds by the
TRUSTEE UNDER THE SECURITY DOCUMENTS.
The Trustee is authorized to receive any funds for the benefit of
the Securityholders distributed under the Security Documents, and to make
further distributions of such funds to the Holders in accordance with the
provisions of this Indenture.
SECTION 10.05. SPECIFIED RELEASES OF COLLATERAL.
(a) SATISFACTION AND DISCHARGE; DEFEASANCE. The Company and its
applicable Subsidiaries shall be entitled to obtain a full release of all of the
Collateral from the Liens of this Indenture and of the Security Documents upon
compliance with the conditions precedent set forth in Section 8.02 for
satisfaction and discharge of this Indenture or for defeasance pursuant to
Section 8.01(d). Upon delivery by the Issuers to the Trustee of an Officers'
Certificate and an Opinion of Counsel, each to the effect that such conditions
precedent have been complied with (and which may be the same Officers'
Certificate and Opinion of Counsel required by Article Eight), the Trustee shall
forthwith take all necessary action (at the request of and the expense of the
Issuers) to release and reconvey to the Company and its applicable Subsidiaries
all of the Collateral, and shall deliver such Collateral in its possession to
the Company and its applicable Subsidiaries including, without limitation, the
execution and delivery of releases and satisfactions wherever required.
(b) DISPOSITIONS PERMITTED BY SECTION 4.17. In the event that all of
the Capital Stock of an issuer of Pledged Securities owned by the Company and
its Subsidiaries is sold or otherwise transferred by the Company and/or one or
more of its Sub-
87
sidiaries to a Person or Persons other than the Company or one of its
Subsidiaries pursuant to an Asset Sale that complies with Section 4.17, the
Company and its applicable Subsidiaries shall be entitled to obtain a release of
the Capital Stock of such issuer of Pledged Securities from Lien of the
applicable Security Documents upon delivery by the Issuers to the Trustee of (i)
an Officers' Certificate stating that (A) no Default or Event of Default has
occurred and is continuing and (B) the release of such Capital Stock complies
with the provisions of this Indenture and the TIA and (ii) all certificates,
opinions and other documentation required by the TIA. All of the Asset Sale
Proceeds from any such Asset Sale shall be deposited in a separate account with
the Trustee (a "COLLATERAL ACCOUNT"), which Collateral Account shall be subject
to the Lien of the applicable Security Documents. The Company and its applicable
Subsidiaries shall be entitled to obtain a release of cash and Cash Equivalents
in a Collateral Account upon delivery by the Issuers to the Trustee of (i) an
Officers' Certificate stating that (A) no Default or Event Default has occurred
and is continuing, (B) such cash and Cash Equivalents (x) will be applied within
five days of such release to either (1) repay Indebtedness in accordance with
Section 4.17, (2) invest in assets in accordance with Section 4.17 or (3)
repurchase Securities pursuant to an Excess Proceeds Offer or (y) are no longer
required to be applied to such uses pursuant to Section 4.17 and (C) the release
of such cash and Cash Equivalents complies with the provisions of this Indenture
and the TIA and (ii) all certificates, opinions and other documentation required
by the TIA.
SECTION 10.06. TERMINATION OF SECURITY INTEREST.
Upon the payment in full of all obligations of the Issuers under
this Indenture, the Security Documents and the Securities, the Trustee shall, at
the request of the Issuers together with an Officers' Certificate to such
effect, acknowledge as pledgee under the Security Documents that such
obligations have been paid in full or, if the Trustee is not the pledgee, send a
certificate executed by a Responsible Officer to such pledgee, stating that such
obligations have been paid in full.
88
ARTICLE ELEVEN
[INTENTIONALLY OMITTED]
ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of Section 318(c) of the TIA, the imposed
duties shall control.
SECTION 12.02. NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Issuers:
c/o ACME Television Holdings, LLC
000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with copies to:
Xxxxxxxxx Xxxxxxx Xxxxx & Xxxxxxxx LLP 0000 X Xxxxxx, X.X.
Washington, DC 20037
Attention: Xxxxxxx Xxxxx, Xx., Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
89
if to the Trustee:
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Each of the Issuers and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Issuers and the Trustee, shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 12.03. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA ss. 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar 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 Issuers to the Trustee to
take any action under this Indenture, the Issuers shall furnish to the Trustee
at the request of the Trustee:
90
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 12.05. Statements Required in Certificate or
OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.08, shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
HOWEVER, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 12.06. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee, Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 12.07. LEGAL HOLIDAYS.
If a payment date is not a Business Day, payment may be made on the
next succeeding day that is a Business Day.
91
SECTION 12.08. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Indenture.
SECTION 12.09. No Adverse Interpretation of Other
AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Issuers or any of their respective Subsidiaries.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, equity holder or incorporator, as
such, of either Issuer shall not have any liability for any obligations of the
Issuers under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
SECTION 12.11. SUCCESSORS.
All agreements of the Issuers in this Indenture and the Securities
shall bind their respective successors. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 12.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Securities shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions shall not in any way be
92
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
93
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and attested, all as of the date first written above.
THE ISSUERS:
ACME INTERMEDIATE HOLDINGS, LLC
By: ACME Television Holdings, LLC,
its majority member
By:/s/Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Attest: /s/Xxx Xxxxx
-----------------
ACME INTERMEDIATE FINANCE, INC.
By:/s/Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Attest: /s/Xxx Xxxxx
-----------------
THE TRUSTEE:
WILMINGTON TRUST COMPANY,
as Trustee
By:/s/Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
------------------------------------------------------------------------------
[FORM OF SERIES A SECURITY]
------------------------------------------------------------------------------
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITU-TIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D OF THE SECURITIES
ACT (AN "ACCREDITED INVESTOR")) OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUERS OR ANY SUBSIDIARY THEREOF, (B) INSIDE
THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF
BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE
IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND THE ISSUERS SUCH CERTIFICATES, LEGAL OPINIONS OR OTHER
INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
2
ACME INTERMEDIATE HOLDINGS, LLC
ACME INTERMEDIATE FINANCE, INC.
12% Senior Secured Discount Note
due September 30, 2005, Series A
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF
SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 OF PRINCIPAL
AMOUNT OF MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $497.67 AND THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT IS $502.33. THE ISSUE DATE OF THIS SECURITY IS
SEPTEMBER 30, 1997 AND THE YIELD TO MATURITY IS .
CUSIP No.:
No. [ ] $[ ]
Each of ACME INTERMEDIATE HOLDINGS, LLC, a Delaware limited
liability company (the "Company"), and ACME INTERMEDIATE FINANCE, INC., a
Delaware corporation ("Finance" and, together with the Company, the "Issuers"),
for value received promises to pay to [ ] or registered assigns, the principal
sum of $[ ], on September 30, 2005.
Interest Payment Dates: March 31 and September 30, commencing
March 31, 2003
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Issuers have caused this Security to be
signed manually or by facsimile by their respective duly authorized officers.
Dated:
ACME INTERMEDIATE HOLDINGS, LLC
By: ACME Television Holdings, LLC,
its majority member
By:________________________________________
Name:
Title:
3
By:________________________________________
Name:
Title:
ACME INTERMEDIATE FINANCE, INC.
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
4
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12% Senior Secured Discount Notes due 2005,
Series A, described in the within-mentioned Indenture.
Dated: WILMINGTON TRUST COMPANY,
as Trustee
By:_____________________________________
Authorized Signatory
5
(REVERSE OF SECURITY)
ACME INTERMEDIATE HOLDINGS, LLC
ACME INTERMEDIATE FINANCE, INC.
12% Senior Secured Discount Note
due September 30, 2005, Series A
1. INTEREST.
Each of ACME INTERMEDIATE HOLDINGS, LCC, a Delaware limited
liability company (the "Company"), and ACME INTERMEDIATE FINANCE, INC., a
Delaware corporation ("Finance" and, together with the Company, the "Issuers"),
promises to pay to the registered holder of this Security, until the principal
hereof is paid or duly provided for, interest on the principal amount set forth
on the face of this Security at a rate of 12% per annum commencing September 30,
2002. The Accreted Value of the Securities shall increase in the manner provided
in the Indenture. Interest on the Securities will accrue from and including the
most recent date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from and including September 30,
2002 through but excluding the date on which interest is paid or duly provided
for. Interest shall be payable in arrears on each March 31 and September 30 and
at stated maturity, commencing March 31, 2003. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The principal of this Security shall not bear or accrue interest
until September 30, 2002, except in the case of a default in payment of Accreted
Value or principal and/or premium, if any, upon acceleration, redemption or
purchase and, in such case, the overdue principal and any overdue premium shall
bear interest at the rate of 12% PER ANNUM (compounded semiannually on each
March 31 and September 30) (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or duly provided for. To the extent, but only to the extent, interest
on amounts in default constituting original issue discount prior to September
30, 2002 is not permitted by law, original issue discount shall continue to
accrete until paid or duly provided for. On or after September 30, 2002,
interest on overdue principal and premium, if any, and, to the extent permitted
by law, on overdue installments of interest will accrue, until the principal and
premium, if any, is paid or duly provided for, at the rate of 12% PER ANNUM.
Interest on any overdue Accreted Value or principal or premium shall be payable
on demand.
6
2. METHOD OF PAYMENT.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Issuers shall pay Accreted Value, 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 ("U.S. Legal Tender"). However,
the Issuers may pay principal and interest by wire transfer of Federal funds, or
interest by check payable in such U.S. Legal Tender. The Issuers may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, Wilmington Trust Company (the "Trustee") will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to the Holders.
4. INDENTURE.
The Issuers issued the Securities under an Indenture, dated as of
September 30, 1997 (the "Indenture"), between the Issuers and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities 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) (the "TIA"), as in effect
on the date of the Indenture until such time as the Indenture is qualified under
the TIA, and thereafter as in effect. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are general obligations of the Issuers limited in aggregate principal
amount at maturity to $71,634,000.
5. OPTIONAL REDEMPTION.
The Securities will be redeemable, at the Issuers' option, in whole
at any time or in part from time to time, on and after September 30, 2001 at the
following redemption prices (expressed as percentages of the Accreted Value
thereof on the applicable Redemption Date) if redeemed during the twelve-month
period commencing on September 30 of the years set forth below,
7
plus, in each case, accrued interest thereon to the date of redemption:
YEAR PERCENTAGE
2001.......................... 106.000%
2002.......................... 103.000%
2003 and thereafter........... 100.000%
6. OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERING.
At any time, or from time to time, on or prior to September 30,
2000, the Issuers may, at their option, use the Net Proceeds of one or more
Public Equity Offerings to redeem up to 35% aggregate principal amount at
maturity of Securities at a redemption price equal to 112% of the Accreted Value
thereof; provided that at least 65% of the principal amount at maturity of
Securities originally issued remains outstanding immediately after giving effect
to any such redemption. In order to effect the foregoing redemption with the Net
Proceeds of a Public Equity Offering, the Issuers shall make such redemption not
more than 90 days after the consummation of such Public Equity Offering.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 principal amount at maturity or less may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 principal amount at
maturity or any integral multiple thereof) of Securities that have denominations
larger than $1,000 principal amount at maturity.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount at maturity thereof to be redeemed. A new Security in a
principal amount at maturity equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the Redemption Date, Accreted Value will cease to accrete
or interest will cease to accrue, as the case may be, on Securities or portions
thereof called for redemption.
8
8. CHANGE OF CONTROL OFFER.
Upon the occurrence of a Change of Control, the Issuers will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the Accreted Value thereof (if on or prior to September
30, 2002) or 101% of the principal amount at maturity thereof (if after
September 30, 2002), plus accrued and unpaid interest, if any, as the case may
be, thereon to the date of repurchase.
9. LIMITATION ON DISPOSITION OF ASSETS.
The Issuers are, subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their Accreted Value (if on or prior to
September 30, 2002) or 100% of their principal amount at maturity (if after
September 30, 2002), plus accrued and unpaid interest, if any, thereon to the
date of repurchase, as the case may be, with certain net cash proceeds of
certain sales or other dispositions of assets in accordance with the Indenture.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount at maturity and integral multiples of
$1,000 principal amount at maturity. A Holder shall register the transfer of or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities or portions thereof
selected for redemption, except the unredeemed portion of any security being
redeemed in part.
11. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. UNCLAIMED FUNDS.
If funds for the payment of Accreted Value or principal or interest
remain unclaimed for one year, the Trustee and the Paying Agent will repay the
funds to the Issuers at their request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
9
13. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
The Issuers may be discharged from their obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securities, in each case upon satisfaction of certain
conditions specified in the Indenture.
15. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount at maturity of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount at maturity of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture and the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
15. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to issue preferred or other
capital stock of Subsidiaries, to sell assets, to consolidate, merge or sell all
or substantially all of its assets, to engage in transactions with affiliates or
to engage in certain businesses. The limitations are subject to a number of
important qualifications and exceptions. The Issuers must report quarterly to
the Trustee on compliance with such limitations.
16. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount at maturity of Securities
then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. Holders
of Secu-
10
rities may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount at
maturity of the Securities then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of
Securities notice of certain continuing Defaults or Events of Default if it
determines that withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH ISSUERS.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Issuers, their respective Subsidiaries or their respective Affiliates
as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No equity holder, director, officer, employee or incorporator, as
such, of the Issuers shall have any liability for any obligation of the Issuers
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
11
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. SECURITY DOCUMENTS.
In order to secure the due and punctual payment of the Accreted
Value of principal of and interest on the Securities and all other amounts
payable by the Issuers under the Indenture and the Securities when and as the
same shall be due and payable, whether at maturity, by acceleration or
otherwise, according to the terms of the Securities and the Indenture, the
Company and certain of its Subsidiaries have granted Liens on the Collateral to
the Trustee for the benefit of the Holders of Securities pursuant to the
Indenture and the Security Documents.
Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Security Documents, as the same may be amended from time to
time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture will
not be deemed for any purpose to be an impairment of the security under the
Indenture.
23. REGISTRATION RIGHTS.
Pursuant to the Registration Rights Agreement, the Issuers will be
obligated upon the occurrence of certain events to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Series A Security for a Series B Security, which has been registered under
the Securities Act, in like principal amount at maturity and having terms
identical in all material respects as the Series A Securities. The Holders shall
be entitled to receive certain additional cash interest payments in the event
such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
12
The Issuers will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture and the Registration
Rights Agreement. Requests may be made to: c/o ACME Television Holdings,
LLC, Suite 850, 000 Xxxx Xxxxxx Xxxxx, Xxxxx Xxxx, XX 00000, Attn: President.
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Issuers.
The agent may substitute another to act for him.
Dated:__________________________ Signed:__________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ] Section 4.17 [ ]
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount: $_____________
Date:__________________________ Your Signature:_______________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:__________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
EXHIBIT B
[FORM OF SERIES B SECURITY]
ACME INTERMEDIATE HOLDINGS, LLC
ACME INTERMEDIATE FINANCE, INC.
12% Senior Secured Discount Note
due September 30, 2005, Series B
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF
SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 OF PRINCIPAL
AMOUNT OF MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $497.67 AND THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT IS $502.33. THE ISSUE DATE OF THIS SECURITY IS
SEPTEMBER 30, 1997 AND THE YIELD TO MATURITY IS 13.92.
CUSIP No.:
No. [ ] $[ ]
Each of ACME INTERMEDIATE HOLDINGS, LLC, a Delaware limited
liability company (the "Company"), and ACME INTERMEDIATE FINANCE, INC., a
Delaware corporation ("Finance" and, together with the Company, the "Issuers"),
for value received promises to pay to [ ] or registered assigns, the principal
sum of $[ ], on September 30, 2005.
Interest Payment Dates: March 31 and September 30, commencing
March 31, 2003.
Record Dates: March 15 and September 15.
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Issuers have caused this Security to be
signed manually or by facsimile by their respective duly authorized officers.
Dated:
ACME INTERMEDIATE HOLDINGS, LLC
By: ACME Television Holdings, LLC,
its majority member
By:________________________________________
Name:
Title:
2
By:________________________________________
Name:
Title:
ACME INTERMEDIATE FINANCE, INC.
By:________________________________________
Name:
Title:
By:________________________________________
Name:
Title:
3
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12% Senior Secured Discount Notes due 2005,
Series B, described in the within-mentioned Indenture.
Dated: WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________________
Authorized Signatory
4
(REVERSE OF SECURITY)
ACME INTERMEDIATE HOLDINGS, LLC
ACME INTERMEDIATE FINANCE, INC.
12% Senior Secured Discount Note
due September 30, 2005, Series B
1. INTEREST.
Each of ACME INTERMEDIATE HOLDINGS, LCC, a Delaware limited
liability company (the "Company"), and ACME INTERMEDIATE FINANCE, INC., a
Delaware corporation ("Finance" and, together with the Company, the "Issuers"),
promises to pay to the registered holder of this Security, until the principal
hereof is paid or duly provided for, interest on the principal amount set forth
on the face of this Security at a rate of 12% per annum commencing September 30,
2002. The Accreted Value of the Securities shall increase in the manner provided
in the Indenture. Interest on the Securities will accrue from and including the
most recent date to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for, from and including September 30,
2002 through but excluding the date on which interest is paid or duly provided
for. Interest shall be payable in arrears on each March 31 and September 30 and
at stated maturity, commencing March 31, 2003. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The principal of this Security shall not bear or accrue interest
until September 30, 2002, except in the case of a default in payment of Accreted
Value or principal and/or premium, if any, upon acceleration, redemption or
purchase and, in such case, the overdue principal and any overdue premium shall
bear interest at the rate of 12% PER ANNUM (compounded semiannually on each
March 31 and September 30) (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or duly provided for. To the extent, but only to the extent, interest
on amounts in default constituting original issue discount prior to September
30, 2002 is not permitted by law, original issue discount shall continue to
accrete until paid or duly provided for. On or after September 30, 2002,
interest on overdue principal and premium, if any, and, to the extent permitted
by law, on overdue installments of interest will accrue, until the principal and
premium, if any, is paid or duly provided for, at the rate of 12% PER ANNUM.
Interest on any overdue Accreted Value or principal or premium shall be payable
on demand.
5
2. METHOD OF PAYMENT.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Issuers shall pay Accreted Value, 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 ("U.S. Legal Tender"). However,
the Issuers may pay principal and interest by wire transfer of Federal funds, or
interest by check payable in such U.S. Legal Tender. The Issuers may deliver any
such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, Wilmington Trust Company (the "Trustee") will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent or Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar or co-Registrar.
4. INDENTURE.
The Issuers issued the Securities under an Indenture, dated as of
September 30, 1997 (the "Indenture"), between the Issuers and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities 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) (the "TIA"), as in effect
on the date of the Indenture until such time as the Indenture is qualified under
the TIA, and thereafter as in effect. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are general obligations of the Issuers limited in aggregate principal
amount at maturity to $71,634,000.
5. OPTIONAL REDEMPTION.
The Securities will be redeemable, at the Issuers' option, in whole
at any time or in part from time to time, on and after September 30, 2001 at the
following redemption prices (expressed as percentages of the Accreted Value
thereof) on the applicable Redemption Date if redeemed during the twelve-month
period commencing on September 30 of the years set forth below,
6
plus, in each case, accrued interest thereon to the date of redemption:
YEAR PERCENTAGE
2001.......................... 106.000%
2002.......................... 103.000%
2003 and thereafter........... 100.000%
6. OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERING.
At any time, or from time to time, on or prior to September 30,
2000, the Issuers may, at their option, use the Net Proceeds of one or more
Public Equity Offerings to redeem up to 35% aggregate principal amount at
maturity of Securities at a redemption price equal to 112% of the Accreted Value
thereof; provided that at least 65% of the principal amount at maturity of
Securities originally issued remains outstanding immediately after giving effect
to any such redemption. In order to effect the foregoing redemption with the Net
Proceeds of a Public Equity Offering, the Issuers shall make such redemption not
more than 90 days after the consummation of such Public Equity Offering.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 principal amount at maturity or less may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 principal amount at
maturity or any integral multiple thereof) of Securities that have denominations
larger than $1,000 principal amount at maturity.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount at maturity thereof to be redeemed. A new Security in a
principal amount at maturity equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the Redemption Date, Accreted Value will cease to accrete
or interest will cease to accrue, as the case may be, on Securities or portions
thereof called for redemption.
8. CHANGE OF CONTROL OFFER.
Upon the occurrence of a Change of Control, the Issuers will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the Accreted Value
7
thereof (if on or prior to September 30, 2002) or 101% of the principal amount
at maturity thereof (if on or prior to September 30, 2002), plus accrued and
unpaid interest, if any, as the case may be, thereon to the date of repurchase.
9. LIMITATION ON DISPOSITION OF ASSETS.
The Issuers are, subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their Accreted Value (if on or prior to
September 30, 2002) or 100% of their principal amount at maturity (if after
September 30, 2002), plus accrued and unpaid interest, if any, thereon to the
date of repurchase, as the case may be, with certain net cash proceeds of
certain sales or other dispositions of assets in accordance with the Indenture.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 principal amount at maturity and integral multiples of
$1,000 principal amount at maturity. A Holder shall register the transfer of or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities or portions thereof
selected for redemption, except the unredeemed portion of any security being
redeemed in part.
11. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. UNCLAIMED FUNDS.
If funds for the payment of Accreted Value or principal or interest
remain unclaimed for one year, the Trustee and the Paying Agent will repay the
funds to the Issuers at their request. After that, all liability of the Trustee
and such Paying Agent with respect to such funds shall cease.
13. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
The Issuers may be discharged from their obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from obligations to comply with certain covenants contained in the
Indenture and the Securi-
8
ties, in each case upon satisfaction of certain conditions specified in the
Indenture.
14. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture and the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount at maturity of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount at maturity of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture and the Securities to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
15. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and its Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to issue preferred or other
capital stock of Subsidiaries, to sell assets, to consolidate, merge or sell all
or substantially all of its assets, to engage in transactions with affiliates or
to engage in certain businesses. The limitations are subject to a number of
important qualifications and exceptions. The Issuers must report quarterly to
the Trustee on compliance with such limitations.
16. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount at maturity of Securities
then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. Holders
of Securities may not enforce the Indenture, the Securities or the Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount at
maturity of the Securities then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold
9
from Holders of Securities notice of certain continuing Defaults or Events of
Default if it determines that withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH ISSUERS.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Issuers, their respective Subsidiaries or their respective Affiliates
as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No equity holder, director, officer, employee or incorporator, as
such, of the Issuers shall have any liability for any obligation of the Issuers
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
10
22. SECURITY DOCUMENTS.
In order to secure the due and punctual payment of the Accreted
Value of principal of and interest on the Securities and all other amounts
payable by the Issuers under the Indenture and the Securities when and as the
same shall be due and payable, whether at maturity, by acceleration or
otherwise, according to the terms of the Securities and the Indenture, the
Company and certain of its Subsidiaries have granted Liens on the Collateral to
the Trustee for the benefit of the Holders of Securities pursuant to the
Indenture and the Security Documents.
Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Security Documents, as the same may be amended from time to
time pursuant to the respective provisions thereof and the Indenture.
The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture will
not be deemed for any purpose to be an impairment of the security under the
Indenture.
The Issuers will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
ACME Intermediate Holdings, LLC, c/o ACME Television Holdings, LLC, Suite 850,
000 Xxxx Xxxxxx Xxxxx, Xxxxx Xxxx, XX 00000, Attn: President.
ASSIGNMENT FORM
I or we assign and transfer this Security to
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ______________________________________________________
agent to transfer this Security on the books of the Issuers.
The agent may substitute another to act for him.
Dated:__________________________ Signed:_________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:__________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 [ ] Section 4.17 [ ]
If you want to elect to have only part of this Security purchased by
the Issuers pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount: $_____________
Date: ________________________ Your Signature:________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:____________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
C-1
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 12% Senior Secured Discount Notes due 2005, Series A and 12% Senior
Secured Discount Notes due 2005, Series B (the "Securities"), of
ACME INTERMEDIATE HOLDINGS, LLC and ACME FINANCE INC.
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or* _______
Physical Securities by ______ (the "Transferor").
The Transferor:*
|_| has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
|_| has requested that the Registrar by written order to exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of this Securities does not require registration under the
Securities Act of 1933, as amended (the "Act") because*:
|_| Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16(a)(II)(A) or Section
2.16(d)(i)(A) of the Indenture).
|_| Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
2
|_| Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act.
|_| Such Security is being transferred in reliance on Regulation S
under the Act
|_| Such Security is being transferred in reliance on Rule 144 under the
Act.
|_| Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 or Regulation S under the Act to a person other than an
institutional "accredited investor."
___________________________________________
[INSERT NAME OF TRANSFEROR]
By:_______________________________________
[Authorized Signatory]
Date:______________________________
*Check applicable box.
EXHIBIT E
Form of Certificate To Be
Delivered in Connection with
TRANSFERS TO INSTITUTIONAL ACCREDITED INVESTORS
---------------, ----
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 19890
Attention: Corporate Trust Administration
Re: ACME Intermediate Holdings, LLC and ACME Finance Inc.
(the "Issuers") Indenture (the "Indenture") relating
to 12% Senior Secured Discount Notes due 2005, Series
A, or 12% Senior Secured Discount Notes due 2005,
Series B (THE "SECURITIES")
Ladies and Gentlemen:
In connection with our proposed purchase of Securities of the
Issuers, we confirm that:
1. We have received such information as we deem necessary in
order to make our investment decision.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Securities, we will do so only (A) to the
Issuers or any subsidiary thereof, (B) inside the United States in accordance
with Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such
2
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
the Trustee a signed letter substantially in the form hereof, (D) outside the
United States in accordance with Regulations S under the Securities Act, (E)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing Securities from us a notice advising such purchaser that
resales of the Securities are restricted as stated herein.
4. We understand that, on any proposed resale of Securities, we will
be required to furnish to the Trustee and the Issuers, such certification, legal
opinions and other information as the Trustee and the Issuers may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
3
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:_____________________________________
[Authorized Signatory]
3
EXHIBIT F
Form of Certificate To Be
Delivered in Connection
WITH REGULATION S TRANSFERS
---------------, ----
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 19890
Attention: Corporate Trust Administration
Re: ACME Intermediate Holdings, LLC and ACME Finance
Inc. (the "Issuers") 12% Senior Secured Discount
Notes due 2005, Series A, and 12% Senior Secured
Discount Notes due 2005, SERIES B (THE "SECURITIES")
Dear Sirs:
In connection with our proposed sale of $____________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a
person in the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
2
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
You and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:______________________________________
[Authorized Signature]
Exhibit G - Securities Pledge Agreement has been intentionally omitted by
the Registrants.
A copy of this omitted Exhibit will be provided to the Securities and
Exchange Commission upon request.
