--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXHIBIT 4.1
CHEROKEE INTERNATIONAL, LLC
AND CHEROKEE INTERNATIONAL FINANCE, INC.
as Issuers
and
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
INDENTURE
Dated as of April 30, 1999
10 1/2% Senior Subordinated Notes due 2009
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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; 13.02
(c).....................................................................................N.A.
311 (a).....................................................................................7.11
(b).....................................................................................7.11
(c).....................................................................................N.A.
312 (a).....................................................................................2.05
(b)....................................................................................13.03
(c)....................................................................................13.03
313 (a).....................................................................................7.06
(b)(1)..................................................................................N.A.
(b)(2)..................................................................................7.06
(c)..............................................................................7.06; 13.02
(d).....................................................................................7.06
314 (a)........................................................................4.07; 4.08; 13.02
(b).....................................................................................N.A.
(c)(1).................................................................................13.04
(c)(2).................................................................................13.04
(c)(3)..................................................................................N.A.
(d).....................................................................................N.A.
(e)....................................................................................13.05
(f).....................................................................................N.A.
315 (a)..................................................................................7.01(b)
(b)..............................................................................7.05; 13.02
(c)..................................................................................7.01(a)
(d)..................................................................................7.01(c)
(e).....................................................................................6.11
316 (a)(last sentence)......................................................................2.09
-i-
TIA INDENTURE
SECTION SECTION
------- -------
(a)(1)(A)...............................................................................6.05
(a)(1)(B)...............................................................................6.04
(a)(2)..................................................................................N.A.
(b).....................................................................................6.07
(c).....................................................................................9.05
317 (a)(1)..................................................................................6.08
(a)(2)..................................................................................6.09
(b).....................................................................................2.04
318(a).................................................................................13.01
(c)....................................................................................13.01
N.A. means not applicable
-ii-
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions....................................................................1
Section 1.2 Incorporation by Reference of TIA.............................................30
Section 1.3 Rules of Construction.........................................................30
Section 1.4 One Class of Securities.......................................................31
ARTICLE II
THE NOTES
Section 2.1 Form and Dating...............................................................31
Section 2.2 Execution and Authentication; Aggregate Principal Amount......................32
Section 2.3 Registrar and Paying Agent....................................................33
Section 2.4 Paying Agent To Hold Assets in Trust..........................................33
Section 2.5 Noteholder Lists..............................................................34
Section 2.6 Replacement Notes.............................................................34
Section 2.7 Outstanding Notes.............................................................35
Section 2.8 Treasury Notes................................................................35
Section 2.9 Temporary Notes...............................................................35
Section 2.10 Cancellation..................................................................36
Section 2.11 Defaulted Interest............................................................36
Section 2.12 CUSIP Number..................................................................37
Section 2.13 Deposit of Moneys.............................................................37
Section 2.14 Issuance of Additional Notes..................................................37
ARTICLE III
REDEMPTION
Section 3.1 Notices to Trustee............................................................38
Section 3.2 Selection of Notes To Be Redeemed.............................................38
Section 3.3 Notice of Redemption..........................................................39
Section 3.4 Effect of Notice of Redemption................................................40
-iii-
PAGE
----
Section 3.5 Deposit of Redemption Price...................................................41
Section 3.6 Notes Redeemed in Part........................................................41
Section 3.7 Optional Redemption...........................................................41
ARTICLE IV
COVENANTS
Section 4.1 Payment of Notes..............................................................42
Section 4.2 Maintenance of Office or Agency...............................................42
Section 4.3 Limited Liability Company and Corporate
Existence.....................................................................43
Section 4.4 Payment of Taxes and Other Claims.............................................43
Section 4.5 Maintenance of Properties and Insurance.......................................43
Section 4.6 Compliance Certificate; Notice of Default.....................................44
Section 4.7 Compliance with Laws..........................................................44
Section 4.8 SEC Reports...................................................................45
Section 4.9 Waiver of Stay, Extension or Usury Laws.......................................45
Section 4.10 Limitation on Restricted Payments.............................................45
Section 4.11 Limitation on Restrictions on Distributions from
Restricted Subsidiaries.......................................................47
Section 4.12 Limitation on Transactions with Affiliates....................................49
Section 4.13 Limitation on Indebtedness....................................................50
Section 4.14 Change of Control.............................................................52
Section 4.15 Limitation on Sales of Assets and Subsidiary Stock............................54
Section 4.16 Future Guarantors.............................................................56
Section 4.17 Limitation on Business Activities.............................................56
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 Merger, Consolidation and Sale of Assets of the Issuers.......................56
Section 5.2 Successor Corporation Substituted for the Company.............................58
Section 5.3 Merger, Consolidation and Sale of Assets of Any
Guarantor.....................................................................58
Section 5.4 Successor Corporation Substituted for Guarantor...............................58
-iv-
PAGE
----
ARTICLE VI
DEFAULT AND REMEDIES
Section 6.1 Events of Default.............................................................59
Section 6.2 Acceleration..................................................................61
Section 6.3 Other Remedies................................................................62
Section 6.4 Waiver of Past Defaults.......................................................62
Section 6.5 Control by Majority...........................................................62
Section 6.6 Limitation on Suits...........................................................63
Section 6.7 Rights of Holders To Receive Payment..........................................63
Section 6.8 Collection Suit by Trustee....................................................63
Section 6.9 Trustee May File Proofs of Claim..............................................64
Section 6.10 Priorities....................................................................64
Section 6.11 Undertaking for Costs.........................................................65
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee.............................................................65
Section 7.2 Rights of Trustee.............................................................66
Section 7.3 Individual Rights of Trustee..................................................68
Section 7.4 Trustee's Disclaimer..........................................................68
Section 7.5 Notice of Default.............................................................68
Section 7.6 Reports by Trustee to Holders.................................................68
Section 7.7 Compensation and Indemnity....................................................69
Section 7.8 Replacement of Trustee........................................................70
Section 7.9 Successor Trustee by Merger, Etc..............................................71
Section 7.10 Eligibility; Disqualification.................................................72
Section 7.11 Preferential Collection of Claims Against Company.............................72
-v-
PAGE
----
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.1 Discharge of Liability on Notes; Defeasance...................................72
Section 8.2 Conditions to Defeasance......................................................74
Section 8.3 Application of Trust Money....................................................76
Section 8.4 Repayment to Issuers..........................................................76
Section 8.5 Indemnity for Government Obligations..........................................76
Section 8.6 Reinstatement.................................................................76
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Without Consent of Holders....................................................77
Section 9.2 With Consent of Holders.......................................................78
Section 9.3 Effect on Senior Indebtedness.................................................79
Section 9.4 Compliance with TIA...........................................................80
Section 9.5 Revocation and Effect of Consents.............................................80
Section 9.6 Notation on or Exchange of Notes..............................................81
Section 9.7 Trustee To Sign Amendments, Etc...............................................81
Section 9.8 Payment for Consent...........................................................81
ARTICLE X
SUBORDINATION
Section 10.1 Agreement to Subordinate.......................................................81
Section 10.2 Liquidation, Dissolution, Bankruptcy...........................................82
Section 10.3 Default on Senior Indebtedness.................................................82
Section 10.4 Acceleration of Payment of Notes...............................................83
Section 10.5 When Distribution Must be Paid Over............................................84
Section 10.6 Subrogation....................................................................84
Section 10.7 Relative Rights................................................................84
Section 10.8 Subrogation May Not Be Impaired By Issuers.....................................85
Section 10.9 Rights of Trustee and Paying Agent.............................................85
-vi-
PAGE
----
Section 10.10 Distribution of Notice to Representative.......................................85
Section 10.11 Article Ten Not To Prevent Events of Default or
Limit Right To Accelerate......................................................86
Section 10.12 Trust Moneys Not Subordinated..................................................86
Section 10.13 Trustee Entitled To Rely.......................................................86
Section 10.14 Trustee To Effectuate Subordination............................................87
Section 10.15 Trustee Not Fiduciary for Holdings of Senior
Indebtedness...................................................................87
Section 10.16 Reliance by Holders of Senior Indebtedness on
Subordination Provisions.......................................................87
ARTICLE XI
GUARANTEES
Section 11.1 Unconditional Guarantee........................................................87
Section 11.2 Subordination of Guarantee.....................................................89
Section 11.3 Severability...................................................................89
Section 11.4 Release of Guarantor from the Guarantee........................................89
Section 11.5 Limitation on Amount Guaranteed; Contribution by
Guarantors.....................................................................90
Section 11.6 Waiver of Subrogation..........................................................91
Section 11.7 Execution of Guarantee.........................................................92
Section 11.8 Waiver of Stay, Extension or Usury Laws........................................92
ARTICLE XII
SUBORDINATION OF GUARANTEE OBLIGATIONS
Section 12.1 Agreement To Subordinate.......................................................93
Section 12.2 Liquidation, Dissolution, Bankruptcy...........................................93
Section 12.3 Default on Senior Indebtedness.................................................94
Section 12.4 Acceleration of Payment of Notes...............................................95
Section 12.5 When Distribution Must Be Paid Over............................................95
Section 12.6 Subrogation....................................................................96
Section 12.7 Relative Rights................................................................96
-vii-
PAGE
----
Section 12.8 Subordination May Not Be Impaired by a Subsidiary
Guarantor.....................................................................96
Section 12.9 Rights of Trustee and Paying Agent............................................96
Section 12.10 Distribution or Notice to Representative......................................97
Section 12.11 Article Twelve Not to Prevent Events of Default or
Limit Right to Accelerate.....................................................97
Section 12.12 Trust Moneys Not Subordinated.................................................97
Section 12.13 Trustee Entitled To Rely......................................................98
Section 12.14 Trustee To Effectuate Subordination...........................................98
Section 12.15 Trustee Not Fiduciary for Holders of Senior
Indebtedness of Guarantors....................................................99
Section 12.16 Reliance by Holders of Senior Indebtedness of Guarantors on
Subordination Provisions......................................................99
ARTICLE XIII
MISCELLANEOUS
Section 13.1 TIA Controls..................................................................99
Section 13.2 Notices......................................................................100
Section 13.3 Communications by Holders with Other Holders.................................101
Section 13.4 Certificate and Opinion as to Conditions Precedent...........................101
Section 13.5 Statements Required in Certificate or Opinion................................101
Section 13.6 Rules by Trustee, Paying Agent, Registrar....................................102
Section 13.7 Legal Holidays...............................................................102
Section 13.8 Governing Law................................................................102
Section 13.9 No Adverse Interpretation of Other Agreements................................103
Section 13.10 No Recourse Against Others...................................................103
Section 13.11 Successors...................................................................103
Section 13.12 Multiple Originals...........................................................103
Section 13.13 Severability.................................................................103
Section 13.14 Table of Contents; Cross Reference Table and Heading.........................104
SIGNATURES
APPENDICES
-viii-
INDENTURE, dated as of April 30, 1999, between CHEROKEE
INTERNATIONAL, LLC, a California limited liability company (the "Company"),
CHEROKEE INTERNATIONAL FINANCE, INC., a Delaware corporation ("Finance" and,
together with the Company, the "Issuers") and FIRSTAR BANK OF MINNESOTA, N.A., a
national assocation, as Trustee (the "Trustee").
The Issuers have duly authorized the creation of an issue of
$100,000,000 10 1/2% Series A Senior Subordinated Notes due 2009 in the form of
Initial Notes (as defined below) and, if and when issued in connection with a
registered exchange for such Initial Notes, 10 1/2% Series B Senior Subordinated
Notes due 2009 in the form of Exchange Notes (as defined below) and, if and when
issued in connection with a private exchange for such Initial Notes, 10 1/2%
Senior Subordinated Private Exchange Notes due 2009 in the form of Private
Exchange Notes (as defined below), and such Additional Notes (as defined below)
in aggregate principal amount not to exceed $150,000,000 that the Issuers may
from time to time choose to issue pursuant to this Indenture, and, to provide
therefor, the Issuers have duly authorized the execution and delivery of this
Indenture.
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 Notes.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS. "Additional Assets" means: (i) any
property or assets (other than Indebtedness and Capital Stock) in a Related
Business; (ii) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or a Restricted Subsidiary; or (iii) Capital Stock constituting a minority
interest in any Person that at such time is a Restricted Subsidiary; provided,
however, that any such Restricted Subsidiary described in clause (ii) above or
this clause (iii) is primarily engaged in a Related Business.
"Additional Notes" means, subject to the Issuers' compliance with
Section 4.13, 10 1/2% Series A, Series B or any other series of Senior
Subordinated Notes due 2009 issued from time to time after April 30, 1999 under
the terms of this Indenture (other than issuances pursuant to Section 2.6, 2.9,
3.6, 4.14, 4.15 or 9.6 of this Indenture or Section 2.3 of the Appendix and
other than Exchange Notes or
1
Private Exchange Notes issued pursuant to an exchange offer for other Notes
outstanding under this Indenture).
"Adjusted Maximum Amount" has the meaning provided in
Section 11.5(b).
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Affiliate Transaction" has the meaning provided in Section 4.12.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Aggregate Payments" has the meaning provided in Section 11.5.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Issuers or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of (i) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying shares or
shares required by applicable law to be held by a Person other than the Company
or a Restricted Subsidiary), (ii) all or substantially all the assets of any
division or line of business of the Issuers or any Restricted Subsidiary or
(iii) any other assets of the Issuers or any Restricted Subsidiary outside of
the ordinary course of business of the Issuers or such Restricted Subsidiary
(other than, in the case of (i), (ii) and (iii) above, (u) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (v) for purposes of Section 4.15 only, a
disposition that constitutes a Restricted Payment permitted by Section 4.10 or a
disposition specifically excepted from the definition of Restricted Payment),
(w) a transaction or series of related transactions for which the Issuers or its
Restricted Subsidiaries receive aggregate consideration less than or equal to $1
million, (x) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of the Issuers as permitted under Section
5.1, (y) the disposition of Temporary Cash Investments or
2
(z) an exchange of assets by the Issuers or any Restricted Subsidiary for like
or similar assets held by any Person; provided, that (i) the assets received by
the Issuers or such Restricted Subsidiary in any such exchange in the good faith
reasonable judgment of the Board of Directors of the Company will immediately
constitute, be a part of, or be used in, a Related Business of the Issuers or
such Restricted Subsidiary, (ii) the Board of Directors of the Company has
determined that the terms of any exchange are fair and reasonable and (iii) any
such exchange shall be deemed to be an Asset Disposition to the extent of any
cash or cash equivalents received by the Issuers or any Restricted Subsidiary
that exceed $1 million.
"Authenticating Agent" has the meaning provided in Section 2.2.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of
all such payments.
"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
limited partnership, the board of directors of its corporate general partner or
any committee authorized to act therefor (or, if the general partner is itself a
limited partnership, the board of directors of such general partner's corporate
general partner or any committee authorized to act therefor); (ii) in the case
of a Person that is a corporation, the board of directors of such Person or any
committee authorized to act therefor, and (iii) in the case of any other Person,
the board of directors, 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 each day which is not a Legal Holiday.
3
"Capital Lease Obligations" means an obligation that is required
to be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated), equity of such Person including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following
events:
(i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), except that for purposes of this
paragraph (i) such person shall be deemed to have beneficial ownership
of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of
the then outstanding Voting Stock of the Company; provided, however,
that no Change of Control shall be deemed to have occurred under this
paragraph (i) if the Permitted Holders either (a) beneficially own (as
defined above), directly or indirectly, (x) in the aggregate more than
40% of the total voting power of the then outstanding Voting Stock of
the Company and (y) a greater percentage of the total voting power of
the then outstanding Voting Stock of the Company than any other person
or (b) have the right or ability by voting power, contract or otherwise
to elect or designate for election a majority of the Board of
Directors; after an initial Public Equity Offering, during any period
of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with
any new members of the Board of Directors whose election by such Board
of Directors or whose nomination for election by the equityholders of
the Company was approved by a
4
vote of the majority of the members of the Board of Directors of the
Company then still in office who were either members of the Board of
Directors at the beginning of such period or whose election or
nomination for election was previously so approved including new
members of the Board of Directors designated in or provided for in
an agreement regarding the merger, consolidation or sale, transfer
or other conveyance, of all or substantially all of our assets, if
such agreement was approved by a vote of such majority of members of
the Board of Directors) cease for any reason to constitute a
majority of the Board of Directors then in office;
(ii) the adoption by the holders of Capital Stock of
either Issuer of any plan or proposal for the liquidation or
dissolution of either Issuer (whether or not otherwise in compliance
with the Indenture) except in connection with converting the Company
into a corporation, by way of merger, consolidation or otherwise; or
(iii) the merger or consolidation of the Company with
or into another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the
Company and its Subsidiaries, taken as a whole, to another Person
(other than to a Restricted Subsidiary of the Company or to one or more
Permitted Holders or any entity controlled by one or more Permitted
Holders), in which, in the case of any such merger, consolidation or
sale, the securities of the Company that are outstanding immediately
prior to such transaction and which represent 100% of the aggregate
Voting Stock of the Company are changed into or exchanged for cash,
securities or property; provided, however, that no Change of Control
shall be deemed to have occurred under this paragraph (iv) if pursuant
to such transaction the securities of the Company are changed into or
exchanged for, in addition to any other consideration, securities of
the surviving Person that represent immediately after such
transaction, (a) at least 30% of the aggregate voting power of the
Voting Stock of the surviving Person and (b) a greater percentage of
the Voting Stock of the surviving Person than the percentage of such
Voting Stock beneficially owned by any other person (as defined in
paragraph (i) above).
5
"Change of Control Purchase Date" has the meaning provided in
Section 4.14.
"Change of Control Purchase Price" has the meaning specified in
Section 4.14.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and thereafter means such successor.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (x) the aggregate amount of Consolidated EBITDA for the
period of the most recent four consecutive fiscal quarters for which financial
information is available ending prior to the date of such determination to (y)
the aggregate amount of Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (i) if either Issuer or any Restricted
Subsidiary (x) has Incurred any Indebtedness since the beginning of such period
that remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or
both, Consolidated EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period (and, if such Indebtedness is revolving Indebtedness, the amount of
Indebtedness deemed to be outstanding for such period shall be the average
outstanding amount of such Indebtedness during such period) and the discharge of
any other Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had occurred on
the first day of such period or (y) has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of the period
(including, without limitation, Indebtedness that has been repaid, repurchased,
defeased or otherwise discharged in connection with an Asset Disposition) that
is no longer outstanding on such date of determination, or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio involves a
discharge of Indebtedness (other than Indebtedness Incurred for working capital
purposes unless such Indebtedness has been permanently repaid and has not been
replaced), Consolidated EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness, as if such discharge had
occurred on the first day of such period, (ii) if since the beginning of such
period the Issuers or any Restricted Subsidiary shall have made any Asset
Disposition, the Consolidated EBITDA for such period shall be reduced
6
by an amount equal to the Consolidated EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition
for such period, or increased by an amount equal to the Consolidated EBITDA
(if negative) directly attributable thereto for such period, (iii) if since
the beginning of such period the Issuers or any Restricted Subsidiary (by
merger or otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person which becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction requiring a calculation to be made hereunder,
which constitutes all or substantially all of an operating unit of a
business, Consolidated EBITDA for such period shall be calculated after
giving pro forma effect thereto as if such Investment or acquisition occurred
on the first day of such period, and (iv) if since the beginning of such
period any Person (that subsequently became a Restricted Subsidiary or was
merged with or into the Issuers or any Restricted Subsidiary since the
beginning of such period) shall have made any Asset Disposition, Investment
or acquisition of assets that would have required an adjustment pursuant to
clause (ii) or (iii) above if made by the Issuers or a Restricted Subsidiary
during such period, Consolidated EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto as if
such Asset Disposition, Investment or acquisition occurred on the first day
of such period. For purposes of this definition, whenever pro forma effect is
to be given to an acquisition of assets, the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated
with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be made in accordance with Article 11 of Regulation S-X
promulgated under the Securities Act. If any Indebtedness bears a floating
rate of interest and is being given pro forma effect, the interest on such
Indebtedness shall be calculated as if the average rate in effect during the
period had been the applicable rate for the entire period (taking into
account any fixed rate established by an Interest Rate Agreement applicable
to such Indebtedness if such Interest Rate Agreement has a remaining term in
excess of 12 months, in which case such fixed rate shall be used).
"Consolidated EBITDA" for any period means the sum of
Consolidated Net Income plus the following to the extent deducted in
calculating such Consolidated Net Income (i) Consolidated Interest Expense,
(ii) all income tax expense of the Company and its Restricted Subsidiaries,
(iii) depreciation expense of the Company and its Restricted Subsidiaries,
(iv) amortization expense of the Company and its Restricted Subsidiaries and
(v) all other non-cash items reducing such Consolidated Net Income (excluding
any non-cash item to the extent it represents an accrual of, or reserve for,
cash disbursement for any subsequent period) less
7
all non-cash items increasing such Consolidated Net Income (such amount
calculated pursuant to this clause (v) not to be less than zero), in each case
for such period. Notwithstanding the foregoing, the provision for taxes based on
the income or profits of, and the depreciation and amortization of, a Subsidiary
of the Company shall be added to Consolidated Net Income to compute Consolidated
EBITDA only to the extent (and in the same proportion) that the net income of
such Subsidiary was included in calculating Consolidated Net Income. For
purposes of this definition, Cherokee International Finance, Inc. shall be
deemed to be a Restricted Subsidiary of the Company.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Issuers and their consolidated Restricted Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Issuers or their Restricted Subsidiaries and attributable
to such period, without duplication, (i) interest expense attributable to
Capital Lease Obligations (which shall be deemed to accrue at an interest rate
reasonably determined in good faith by the Issuers to be the rate of interest
implicit in such Capital Lease Obligation in accordance with GAAP), (ii)
amortization of debt discount and debt issuance costs, (iii) capitalized
interest, (iv) non-cash interest expense, (v) commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) net costs associated with Hedging Obligations (including
amortization of fees), (vii) dividends paid or payable in respect of any
Disqualified Stock of the Company, (viii) cash dividends paid or payable by the
Issuers and all dividends paid or payable by Restricted Subsidiaries, in each
case in respect of all Preferred Stock of a Restricted Subsidiary held by
Persons other than the Company or a Wholly Owned Subsidiary, and (ix) interest
accruing on any Indebtedness of any other Person to the extent such Indebtedness
is guaranteed by the Issuers or any Restricted Subsidiary.
"Consolidated Net Income" means, for any period, the net income
of the Company and its consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided, however, that there shall
not be included in such Consolidated Net Income to the extent included in
computing such net income (without duplication):
(i) any net income, if positive, of any Person if
such Person is not a Restricted Subsidiary, except that subject to the
exclusion contained in clause (iv) below, the Company's equity in the
8
net income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to a Restricted
Subsidiary, to the limitations contained in clause (iii) below);
provided for purposes of this clause (i), Cherokee International
Finance, Inc. will be deemed to be a Restricted Subsidiary of the
Company;
(ii) any net income (or loss) of any Person acquired
by the Company or a Subsidiary of the Company in a pooling of interests
transaction for any period prior to the date of such acquisition;
(iii) any net income, if positive, of any
Restricted Subsidiary to the extent that such Restricted Subsidiary
is subject to restrictions, directly or indirectly, prohibiting the
payment of dividends, the repayment of intercompany debt and the
making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that subject to the exclusion
contained in clause (iv) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount
of cash actually distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend
or other distribution paid to another Restricted Subsidiary, to the
limitation contained in this clause); provided, for purposes of this
clause (iii), Cherokee International Finance, Inc. will be deemed to
be a Restricted Subsidiary of the Company;
(iv) any gain or loss realized upon the sale or
other disposition of any assets of the Company or its consolidated
Subsidiaries (including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed of in the
ordinary course of business and any gain or loss realized upon the
sale or other disposition of any Capital Stock of any Person;
9
(v) extraordinary gains or losses;
(vi) the amount of any Permitted Tax Distributions
(to the extent such Permitted Tax Distributions are made); and
(vii) the cumulative effect of a change in accounting
principles.
"covenant defeasance option" has the meaning provided in
Section 8.1.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Default Notice" has the meaning provided in Section 10.2.
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Designated Senior Indebtedness" means (i) Indebtedness under or
in respect of the New Credit Agreement and (ii) any other Senior Indebtedness of
either Issuer which, at the date of determination, has an aggregate principal
amount outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $25 million and is specifically
designated by the Board of Directors of the applicable Issuer or in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock
10
or (iii) is redeemable or must be repurchased, in either case, at the option of
the holder thereof, in whole or in part in each case on or prior to the Stated
Maturity of the Notes; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to purchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
Stated Maturity of the Notes shall not constitute Disqualified Stock if the
"asset sale" or "change of control" provisions applicable to such Capital Stock
are not more favorable to the holders of such Capital Stock than the provisions
described under Sections 4.15 and 4.14 below.
"Event of Default" has the meaning provided in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" has the meaning provided in the Appendix.
"Fair Share" has the meaning provided in Section 11.5.
"Fair Share Shortfall" has the meaning provided in Section 11.5.
"Finance" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Fraudulent Transfer Laws" has the meaning provided in Section
11.5.
"Funding Guarantor" has the meaning provided in Section 11.5.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, including those set
forth in (i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession, and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro-forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pro-
11
nouncements in staff accounting bulletins and similar written statements from
the accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing in any manner any Indebtedness of any
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such Person (whether arising by virtue of
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee against
loss in respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantee Obligations" has the meaning provided in Section 12.1.
"Guarantor Senior Indebtedness," with respect to any Guarantor,
means the principal of, premium, if any, and interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of such
Guarantor, whether outstanding on the Issue Date or thereafter created, incurred
or assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Notes. Without limiting the generality of the foregoing,
"Guarantor Senior Indebtedness" shall include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing by the Guarantors in respect of, (x) all
monetary obligations of every nature of the Guarantors under the New Credit
Agreement, including, without limitation, obligations to pay principal and
interest, reimbursement obligations under letters of credit, fees, expenses and
indemnities, (y) all Interest Rate Agreements (including guarantees thereof) and
(z) all obligations under Currency Agreements (including guarantees thereof), in
each case whether outstanding on the Issue Date or thereafter incurred, except,
in the case of clauses (y) and (z), for obligations or agreements that provide
otherwise. Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall
not include (i) any Indebtedness of a Guaran-
12
tor to a Subsidiary of a Guarantor, (ii) Indebtedness to, or guaranteed on
behalf of, any director, officer or employee of a Guarantor or any Subsidiary of
the Guarantor (including, without limitation, amounts owed for compensation),
(iii) Indebtedness to trade creditors and other amounts incurred in connection
with obtaining goods, materials or services, (iv) Indebtedness represented by
Disqualified Stock, (v) any liability for Federal, state, local or other taxes
owed or owing by the Guarantors, (vi) that portion of any Indebtedness incurred
in violation of this Indenture provisions set forth under Section 4.13 below
(but, as to any such obligation, no such violation shall be deemed to exist for
purposes of this clause (vi) if the holder(s) of such obligation or their
representative and the Trustee shall have received an officers' certificate of
the Company to the effect that the incurrence of such Indebtedness does not (or,
in the case of revolving credit Indebtedness, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate such provisions of this Indenture), (vii)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without recourse to the
Guarantors, and (viii) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Guarantors.
"Guarantors" means each of the Issuers' Restricted Subsidiaries
that in the future executes a Guarantee pursuant to and in accordance with
Section 4.16 and Articles Eleven and Twelve of this Indenture in which such
Restricted Subsidiary unconditionally guarantees on a senior subordinated basis
the Issuer's obligations under the Notes and this Indenture; provided that any
Person constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the
terms of the Indenture.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun
13
shall have a correlative meaning. The accretion of principal of a non-interest
bearing or other discount security shall not be deemed the Incurrence of
Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of and premium (if any) in
respect of
(A) indebtedness of such Person for
money borrowed and
(B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such
Person;
(iii) all obligations of such Person issued or
assumed as the deferred purchase price of property (which purchase
price is due more than one year after taking title of such
property), all conditional sale obligations of such Person and all
obligations of such Person under any title retention agreement;
(iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations
with respect to letters of credit securing obligations (other than
obligations described in clauses (i) through (iii) above) entered
into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon, or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth
Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit);
(v) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary of such Person,
14
any Preferred Stock (but excluding, in each case, any accrued
dividends);
(vi) all obligations of the type referred to in
clauses (i) through (v) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any guarantee (but only to the extent
of the amount actually guaranteed);
(vii) all obligations of the type referred to in
clauses (i) through (vi) of other Persons secured by any Lien on any
property or asset of such Person (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to
be the lesser of the value of such property or assets or the amount of
the obligation so secured; and
(viii) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
For purposes of the preceding sentence, the maximum fixed
repurchase price of any Disqualified Stock that does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Stock as if such Disqualified Stock were repurchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture;
provided, however, that if such Disqualified Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Disqualified
Stock. Indebtedness shall not include (i) undrawn commitments under the New
Credit Agreement or other revolving credit facilities and (ii) trade accounts
payable arising in the ordinary course of business.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Initial Notes" has the meaning provided in the Appendix.
"Initial Purchaser" has the meaning provided in the Appendix.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Notes.
15
"Interest Rate Agreement" means in respect of a Person any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the Person making
the advance or loan) or other extensions of credit (including by way of
guarantee or similar arrangement) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition of
Capital Stock, Indebtedness or other similar instruments issued by such Person.
For purposes of the definition of "Unrestricted Subsidiary," the definition of
"Restricted Payment" and the covenant described under Section 4.10 below, (i)
"Investment" shall include the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value as determined in good
faith by the Board of Directors of the Company of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that if such designation is made in
connection with the acquisition of such Subsidiary or the assets owned by such
Subsidiary, the "Investment" in such Subsidiary shall be deemed to be the
consideration paid in connection with such acquisition and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value as determined in good faith by the Board of Directors of the
Company at the time of such transfer.
"issue" means issue, assume, Guarantee, Incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be issued by such
Subsidiary at the time it becomes a Subsidiary; and the term "issuance" has a
corresponding meaning.
"Issue Date" means the date on which the Notes are originally
issued.
"Issuers" means the parties named as such in this Indenture until
a successor replaces one or more of such parties and thereafter means such
successor and any remaining parties named as such in this Indenture.
16
"legal defeasance option" has the meaning provided in Section 8.1.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the State of New York are authorized or required by law
to close. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record shall not be affected.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement or lease in the nature thereof).
"Maturity Date" means May 1, 2009.
"Members" means the members of the Company.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Available Cash" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form) in each case net of (i) all legal, title and
recording tax expenses, brokerage commissions, underwriting discounts or
commissions or sales commissions and other reasonable fees and expenses
(including, without limitation, fees and expenses of counsel, accountants and
investment bankers) related to such Asset Disposition or converting to cash any
other proceeds received, and any relocation and severance expenses as a result
thereof, and all Federal, state, provincial, foreign and local taxes required to
be accrued or paid as a liability under GAAP, as a consequence of such Asset
Disposition, (ii) all payments made on any Indebtedness or other obligations
which is secured by any assets subject to such Asset Disposition or made in
order to obtain a necessary consent to such Asset Disposition or to comply with
applicable law, (iii) all distributions and other payments required to be made
to minority interest holders in Subsidiaries or joint ventures as a result of
such Asset Disposition and (iv) appropriate amounts provided by the seller as a
reserve, in accordance with
17
GAAP, against any liabilities associated with the property or other assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Disposition. Further, with respect to an
Asset Disposition by a Subsidiary which is not a Wholly Owned Subsidiary, Net
Available Cash shall be reduced pro rata for the portion of the equity of such
Subsidiary which is not owned by the Company. The amounts in clauses (i) through
(iv) above, to the extent estimates are necessary, shall be estimated reasonably
and in good faith by the Issuers.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
Incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"New Credit Agreement" means, collectively, the Term Loan Facility
and the Revolving Credit Facility and any other bank credit agreement or similar
facility entered into in the future by either Issuer or any Restricted
Subsidiary and all documents, instruments and agreements ancillary thereto,
including security agreements and financing statements, as any of the same, in
whole or in part, may be amended, renewed, extended, increased (but only so long
as such increase is permitted under the terms of this Indenture), substituted,
refinanced, restructured or replaced (including, without limitation, any
successive renewals, extensions, increases, substitutions, refinancings,
restructurings, replacements, supplements or other modifications of the
foregoing).
"Notes" means the Initial Notes, the Exchange Notes and the
Private Exchange Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means with respect to any Indebtedness all
obligations for principal, premium, interest (including, without limitation,
interest after the commencement of any bankruptcy, reorganization, insolvency
or similar proceeding against the Issuers or any of their Subsidiaries,
whether or not allowed in any such proceeding), penalties, fees,
indemnifications, reimbursements, and other amounts payable pursuant to the
documentation governing such Indebtedness.
18
"Offering Memorandum" means (i) with respect to the Initial Notes
issued on April 30, 1999, the Offering Circular dated April 27, 1999, pursuant
to which the $100. million of 10 1/2% Series A Senior Subordinated Notes due
2009 in the form of Initial Notes were offered, and any supplement thereto and
(ii) with respect to each issuance of Additional Notes, the offering circular,
prospectus or other similar offering document pursuant to which such Additional
Notes were or are to be offered, and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, the Treasurer, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either a Treasurer or
Assistant Treasurer or an Assistant Secretary of such Person and otherwise
complying with the requirements of Sections 13.4 and 13.5, to the extent they
relate to the making of an Officers' Certificate.
"Opinion of Counsel" means a written opinion from legal counsel,
who may be an employee or counsel for either or both of the Issuers, and who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.4 and 13.5, to the extent they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.3.
"Payment Blockage Period" has the meanings provided in
Sections 10.2 and 12.2.
"Permitted Distributions for Pre-Closing Tax Liabilities" means
distributions in accordance with the Cherokee Unit Purchase Agreement made by
the Company to certain of its Members to cover such Member's income tax
liability attributable to income of the Company for the period from January 1,
1999 through the Issue Date.
"Permitted Holders" means Cherokee Investor Partners, LLC, GFI
Energy Ventures LLC, OCM Principal Opportunities Fund, L.P., RIT Capital
Partners plc and their respective Affiliates.
19
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (v) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(vi) loans or advances to (x) employees made in the ordinary course of business
of the Company or such Restricted Subsidiary or (y) to executive officers of the
Company to purchase Capital Stock of the Company not to exceed in the aggregate
$3 million at any time outstanding; (vii) stock, obligations or securities
received in settlement of debts created in the ordinary course of business and
owing to the Company or any Restricted Subsidiary or in satisfaction of
judgments or pursuant to a plan of reorganization or similar arrangement upon
the bankruptcy or insolvency of trade debtors or customers of the Company or any
Restricted Subsidiary or upon the foreclosure, perfection or enforcement of a
Lien in favor of the Company or any Restricted Subsidiary that arose in the
ordinary course of business of the Company or such Restricted Subsidiary and
(viii) any Person to the extent such Investment represents the non-cash portion
of the consideration received for a disposition of Assets as permitted under
Section 4.15 below.
"Permitted Tax Distributions," means, for any calendar year (or
portion thereof), a pro rata cash distribution by the Company to the Members
equal to (i) the amount of taxable income allocated to the Member of the Company
(the "Reference Member") with the greatest share of the Company's taxable income
(taking into consideration any prior losses of the Company allocated to such
Member to the extent such losses have not been previously used to reduce such
Member's allocable share of taxable income of the Company for purposes of
determining a Permitted Tax Distribution) for such period multiplied by (ii) the
applicable income tax rate (as defined below) and, thereafter, (iii) divided by
the Reference Member's Percentage Interest (the "Tax Amount"), minus any
aggregate amounts previously
20
distributed to the Members under this definition for such period. Permitted Tax
Distributions for estimated taxes of the Members may be made on or about the
last day of March, May, August, and December of each year in an amount not to
exceed twenty-five percent (25%) of the Tax Amount for the calendar year as
estimated, from time to time, in writing by the Chief Financial Officer of the
Company or other person serving in a similar capacity. Notwithstanding the
foregoing, to the extent Permitted Tax Distributions for estimated taxes for any
calendar year (or portion thereof) exceed the Tax Amount for such period (an
"Excess Tax Distribution"), Permitted Tax Distributions (including Permitted Tax
Distributions for estimated taxes) shall be reduced until the Excess Tax
Distribution is recovered. For purposes of this definition, "applicable income
tax rate" shall mean the highest marginal individual Federal income tax rate
imposed on ordinary income plus the highest marginal individual California
income tax rate; provided, however, that the highest marginal individual
California income tax rate shall be appropriately reduced to reflect the
deductibility of such taxes from Federal taxable income.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"principal" of Note means the principal amount of the Note plus
the premium, if any, payable on the Note which is due or overdue or is to become
due at the relevant time.
"Private Exchange Notes" has the meaning provided in the Appendix.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms of this Indenture, a calculation in
accordance with Article 11 of Regulation S-X under the Securities Act, as
determined by the Board of Directors of the Company.
21
"Public Equity Offering" means an underwritten primary or
combined primary public offering of common stock of the Company (or a corporate
successor thereof created in accordance with the provision of Section 5.1 below)
pursuant to an effective registration statement under the Securities Act that
results in gross proceeds of at least $25 million to the Company (or such
corporate successor).
"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 assets (including in the case of a Capital
Lease Obligation, the lease) which is incurred concurrently with (or within 270
days following) such acquisition and is secured only by the assets so financed.
"Record Date" means each Record Date specified in the Notes,
whether or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Notes.
"Redemption Price," when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Notes.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Issuers or any Restricted Subsidiary, including Indebtedness
that Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) such Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being Refinanced and (iii) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any pre-
22
mium and defeasance costs) under the Indebtedness being Refinanced; provided,
further, however, that (x) Refinancing Indebtedness shall not include (1)
Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the
Issuers or (2) Indebtedness of the Issuers or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
"Registrar" has the meaning provided in Section 2.3.
"Registration Rights Agreement" has the meaning set forth in the
Appendix.
"Regulation S" means Regulation S under the Securities Act.
"Related Business" means any business, in the good faith judgment
of the Board of Directors of the Company, reasonably related, ancillary or
complementary to the businesses of the Company on the Issue Date.
"Representative" means any trustee or representative (if any) for
an issue of Designated Senior Indebtedness.
"Restricted Payment" with respect to any Person means
(i) the declaration or payment of any dividends or
any other distributions of any sort in respect of its Capital Stock
(including any payment in connection with any merger or consolidation
involving such Person), other than (w) dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock),
(x) Permitted Tax Distributions, (y) dividends or distributions payable
to the Company or a Restricted Subsidiary, and (z) pro rata dividends
or other distributions made by a Subsidiary that is not a Wholly Owned
Subsidiary to minority stockholders (or owners of an equivalent
interest in the case of a Subsidiary that is an entity other than a
corporation),
(ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of an Issuer held by any
Person or of any Capital Stock of a Restricted Subsidiary held by any
Affiliate of the Issuers (other than a Restricted Subsidiary),
including
23
the exercise of any option to exchange any Capital Stock (other than
into Capital Stock of the Company that is not Disqualified Stock),
(iii) other than with the proceeds from the
substantially concurrent sale of, or in exchange for, Refinancing
Indebtedness, the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment of
any Subordinated Obligations (other than the purchase, repurchase or
other acquisition or Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of
the date of acquisition) or
(iv) the making of any Investment in any Person
(other than a Permitted Investment), including by designating any
Subsidiary as an Unrestricted Subsidiary.
"Restricted Subsidiary" means any Subsidiary of the Issuers that
is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit portion of
the New Credit Agreement with initial aggregate commitments of $25 million.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
or a Guarantor secured by a Lien.
"Securities Act" means, the Securities Act of 1933, as amended, or
any successor statute or statutes thereto.
"Senior Indebtedness" means the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on any Indebtedness of either Issuer, whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the
24
instrument creating or evidencing the same or pursuant to which the same is out
standing expressly provides that such Indebtedness shall not be senior in right
of payment to the Notes. Without limiting the generality of the foregoing,
"Senior Indebtedness" shall include the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other amounts owing by the Issuers in respect of, (x) all monetary
obligations of every nature of either Issuer under the New Credit Agreement,
including, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, (y) all Interest Rate Agreements (including guarantees thereof) and
(z) all obligations under Currency Agreements (including guarantees thereof), in
each case whether outstanding on the Issue Date or thereafter incurred except,
in the case of clauses (y) and (z), for obligations or agreements that provide
otherwise. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include
(i) any Indebtedness of the Company to a Subsidiary
of the Company,
(ii) Indebtedness to, or guaranteed on behalf of, any
director, officer or employee of the Company or any Subsidiary of the
Company (including, without limitation, amounts owed for compensation),
(iii) Indebtedness to trade creditors and other
amounts incurred in connection with obtaining goods, materials or
services,
(iv) Indebtedness represented by Disqualified
Stock,
(v) any liability for federal, state, local or other
taxes owed or owing by the Company,
(vi) that portion of any Indebtedness incurred in
violation of the provisions set forth under Section 4.13 below (but, as
to any such obligation, no such violation shall be deemed to exist for
purposes of this clause (vi) if the holder(s) of such obligation or
their representative and the Trustee shall have received an officers'
certifi-
25
cate of the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit
Indebtedness, that the incurrence of the entire committed amount
thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture),
(vii) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Xxxxx 00, Xxxxxx
Xxxxxx Code, is without recourse to the Company, and
(viii) any Indebtedness which is, by its express
terms, subordinated in right of payment to any other Indebtedness of
the Issuers.
"Senior Subordinated Indebtedness" means the Notes and any other
Indebtedness of an Issuer or any Guarantor that specifically provides that such
Indebtedness is to rank pari passu with the Notes or the Guarantees, as the case
may be, in right of payment and is not subordinated by its terms in right of
payment to any Indebtedness or other obligation of an Issuer or the Guarantor,
as the case may be, which is not Senior Indebtedness or Guarantor Senior
Indebtedness.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Issuers or
a Guarantor (whether outstanding on the Issue Date or thereafter Incurred) which
is subordinate or junior in right of payment to the Notes, or the Guarantees,
respectively, pursuant to a written agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total
26
voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors (or similar persons),
managers, general partners or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person, (ii) such Person and one
or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person.
"Successor Company" shall have the meaning provided in Section
5.1.
"S&P" means Standard & Poor's Ratings Service.
"Temporary Cash Investments" means any of the following:
(i) any investment in direct obligations of the
United States of America or any agency thereof or obligations xxxxxx-
xxxx by the United States of America or any agency thereof,
(ii) investments in time deposit accounts,
certificates of deposit, and money market deposits maturing within
one year of the date of acquisition thereof, issued by a bank or
trust company which is organized under the laws of the United States
of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50,000,000
(or the foreign currency equivalent thereof) and has outstanding
debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or
any money-market fund sponsored by a registered broker dealer or
mutual fund distributor,
(iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described
in clause (ii) above,
(iv) investments in commercial paper, maturing not
more than one year after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in
exis-
27
tence under the laws of the United States of America or any foreign
country recognized by the United States of America with a rating at the
time as of which any investment therein is made of "P-2" (or higher)
according to Moody's or "A-2" (or higher) according to S&P,
(v) investments in securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America,
or by any political subdivision or taxing authority thereof, and having
one of the three highest ratings obtainable by either S&P or Moody's,
and
(vi) investments in money market funds substantially
all of whose assets comprise securities of the types described in
clauses (i) through (v) above.
"Term Loan Facility" means the term loan portion of the New Credit
Agreement equal to $50 million.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb), as in effect on the date of this Indenture.
"Trust Officer" means any authorized officer of the Trustee
assigned by the Trustee to administer this Indenture, or in the case of a
successor trustee, an authorized officer assigned to the department, division or
group performing the corporation trust work of such successor and assigned to
administer this Indenture.
"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.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted Subsidiary
by the Company's Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary unless at the time of designation
such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or holds
28
any Lien on any property of, the Company or any other Restricted Subsidiary of
the Company; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.10 below. The Company's Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
after giving effect to such designation (x) if such Unrestricted Subsidiary at
such time has Indebtedness, the Issuers could Incur $1.00 of additional
Indebtedness under paragraph (a) of Section 4.13 below and (y) no Default shall
have occurred and be continuing. Any such designation by the Company's Board of
Directors shall be evidenced by the Company to the Trustee by promptly filing
with the Trustee a copy of the board resolution giving effect to such
designation and an officers' certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of principal
of or interest on the U.S. Government Obligation evidenced by such depository
receipt.
"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.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including limited liability company or partnership interests)
of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors (or similar
persons), managers or trustees thereof and, in the case of the Company, includes
Class A membership units.
29
"Wholly Owned Subsidiary" means (1) Finance and (2) each
Restricted Subsidiary, in each case all the Capital Stock of which (other than
directors' qualifying shares and shares held by other Persons to the extent such
shares are required by applicable law to be held by a Person other than the
Company or a Restricted Subsidiary) is owned by the Company or one or more
Wholly Owned Subsidiaries.
SECTION 1.2 INCORPORATION BY REFERENCE OF TIA.
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 Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means either Issuer or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.3 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 as in effect from time
to time;
(3) "or" is not exclusive;
30
(4) words in the singular include the plural, and
words in the plural include the singular;
(5) "herein," "hereof" and otherwords of similar
import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(6) reference to Sections or Articles means
reference to such Section or Article in this Indenture, unless stated
otherwise.
SECTION 1.4 ONE CLASS OF SECURITIES.
The Initial Notes, the Private Exchange Notes, if any, and the
Exchange Notes shall vote and consent together on all matters as one class and
none of the Initial Notes, the Private Exchange Notes, if any, or the Exchange
Notes shall have the right to vote or consent as a separate class on any matter.
ARTICLE II
THE NOTES
SECTION 2.1 FORM AND DATING.
(a) Provisions relating to the Initial Notes, the
Private Exchange Notes and the Exchange Notes are set forth in the Rule
144A/Regulation S Appendix attached hereto (the "Appendix"), which is hereby
incorporated in and expressly made a part of this Indenture. The Initial Notes
and the corresponding Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Exchange Notes, the Private
Exchange Notes and the corresponding Trustee's certificate of authentication
shall be substantially in the form of Exhibit B hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Issuers are subject, if any, or depository rule or
usage. The Issuers shall approve the forms of the Notes and any notation,
legend or endorsement on them. Each Note shall be dated the date of its issuance
and shall show the date of its authentication. (b) The terms and provisions
contained in the Appendix and in the forms of the Notes, annexed hereto as
Exhibits A and B, shall constitute, and are hereby expressly made, a part of
this Indenture and,
31
to the extent applicable, the Issuers and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
SECTION 2.2 EXECUTION AND AUTHENTICATION; AGGREGATE PRINCIPAL
AMOUNT.
Two Officers, or an Officer and an Assistant Secretary, shall
sign, or one Officer 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) shall attest to, the Notes for each of the Issuers by manual
or facsimile signature. The seal of each of the Issuers shall also be reproduced
on the Notes.
If an Officer or Assistant Secretary whose signature is on a Note
was an Officer or Assistant Secretary at the time of such execution but no
longer holds that office or position at the time the Trustee authenticates the
Note, the Note shall nevertheless be valid.
On the Issue Date, the Trustee shall authenticate and deliver
$100.0 million of 10 1/2% Series A Senior Subordinated Notes due 2009 in the
form of Initial Notes. In addition, at any time, from time to time, the Trustee
shall authenticate and deliver Notes upon a written notice of each of the
Issuers, for original issuance in the aggregate principal amount specified in
such order for original issue in the aggregate principal amount, provided that
Exchange Notes and Private Exchange Notes shall be issuable only upon the valid
surrender for cancellation of such Initial Notes of a like aggregate principal
amount. Additional Notes shall be issued in an aggregate principal amount not to
exceed $150.0 million and in accordance with Section 2.14. Any such order shall
specify the amount of the Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated and, in the case of an issuance
of Additional Notes pursuant to Section 2.15 after the Issue Date shall certify
that such issuance will not be prohibited by Section 4.13.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee may appoint an authenticating agent (the
"Authenticating Agent") reasonably acceptable to the Issuers to authenticate
Notes. Unless
32
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Issuers and Affiliates of the Issuers.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Issuers shall maintain or designate an office or agency in
accordance with Section 4.2 (which shall be located in the Borough of Manhattan
in the City of New York, State of New York and which may be the office of the
Trustee) where Notes may be presented or surrendered for registration of
transfer or for exchange ("Registrar") and Notes may be presented or surrendered
for payment ("Paying Agent"). The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Issuers may have one or more
co-Registrars and one or more additional paying agents. The term "Paying Agent"
includes any additional Paying Agent. Either of the Issuers or any of their
Affiliates may act as Paying Agent or Registrar, except that for purposes of
Articles Three and Eight and Sections 4.14 and 4.15, neither the Issuers nor any
of their Subsidiaries or Affiliates shall act as Paying Agent. The Issuers may
change any Paying Agent or Registrar without notice to any Holder.
The Issuers shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Issuers shall notify the Trustee of the name and address of
any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent, or
fail to give the foregoing notice, the Trustee shall act as such.
The Issuers initially appoint the Trustee as Registrar and Paying
Agent, until such time as the Trustee has resigned or a successor has been
appointed. The Paying Agent or Registrar may resign upon 30 days notice to the
Issuers.
SECTION 2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.
33
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 the Holders or the Trustee all assets held by the Paying Agent for
the payment of principal of, or interest on, the Notes (whether such assets have
been distributed to it by the Issuers or any other obligor on the Notes), and
the Issuers and the Paying Agent shall notify the Trustee of any Default by the
Issuers (or any other obligor on the Notes) 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 to account for any assets disbursed. The Trustee may, and
upon direction of a majority of the Holders shall, 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 or any other obligor on the
Notes to the Paying Agent, the Paying Agent shall have no further liability for
such assets.
SECTION 2.5 NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Issuers shall furnish or cause the Registrar to
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 the Holders, which
list may be conclusively relied upon by the Trustee and the Issuers shall
otherwise comply with TIA Section 312(a).
SECTION 2.6 REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken,
subject to the terms of the next succeeding sentence, the Issuers shall issue
and the Trustee shall authenticate a replacement Note if the Trustee's
reasonable requirements for replacement Notes are met. If required by the
Trustee or the Issuers, such Holder must provide an affidavit of lost
certificate and an indemnity bond or other indemnity, sufficient in the
judgment of both the Issuers and the Trustee, to protect the Issuers, the
Trustee, any Agent or any Authenticating Agent from any loss which any of them
may suffer if a Note is replaced. The Issuers and the Trustee may charge such
Holder for their out-of-pocket expenses in replacing a Note, including reason-
34
able fees and expenses of counsel, and for any tax that may be imposed in
replacing such Notes. Every replacement Note shall constitute an additional
obligation of the Issuers and shall be entitled to all benefits of this
Indenture equally and proportionately with all other Notes duly issued
hereunder.
SECTION 2.7 OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.8, a Note does not cease to be outstanding
because an Issuer or any one of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.6 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.6.
Except as otherwise provided in Article 8 of this Indenture, if on
a Redemption Date or the Maturity Date the Paying Agent holds U.S. Legal Tender
or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.8 TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver, consent or notice,
Notes owned by an Issuer or any one of its Affiliates shall be considered as
though they are not outstanding, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver,
consent or notice, only Notes which a Trust Officer of the Trustee actually
knows are so owned shall be so considered.
SECTION 2.9 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Issuers may prepare and the
Trustee shall, upon receipt of a written order by the Issuers, authenticate
temporary Notes.
35
The Issuers' order to authenticate shall specify the amount of temporary Notes
to be authenticated and the date on which the temporary Notes are to be
authenticated. Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Issuers consider appropriate for
temporary Notes. Without unreasonable delay, the Issuers shall prepare and the
Trustee shall authenticate upon receipt of a written order of the Issuers
pursuant to Section 2.2 definitive Notes in exchange for, and upon surrender of,
temporary Notes. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as definitive Notes
authenticated and delivered hereunder.
SECTION 2.10 CANCELLATION.
The Issuers at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Issuers, shall dispose
of all Notes surrendered for transfer, exchange, payment or cancellation.
Subject to Section 2.6, the Issuers may not issue new Notes to replace Notes
that it has paid or delivered to the Trustee for cancellation. If the Issuers
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.10.
SECTION 2.11 DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the Notes
(without regard to any grace period therefor), it shall pay the defaulted
interest, plus (to the extent lawful) any interest payable on the defaulted
interest to the Persons who are Holders on a subsequent special record date,
which date shall be no less than 10 days preceding the date fixed by the Issuers
for the payment of defaulted interest or the next succeeding Business Day if
such date is not a Business Day. At least 15 days before the subsequent special
record date, the Issuers shall mail to each Holder, as of a recent date selected
by the Issuers, with a copy to the Trustee, a notice that states the subsequent
special record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
Alternatively, the Issuers may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the requirements of
any
36
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Issuers to the
Trustee and the Paying Agent of the proposed payment pursuant to this clause,
such manner shall be deemed practicable by the Trustee and the Paying Agent.
SECTION 2.12 CUSIP NUMBER.
The Issuers in issuing the Notes may use "CUSIP" numbers, and if
so, the Trustee shall use such CUSIP numbers in notices of redemption or
exchange as a convenience to Holders; provided that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of such CUSIP
numbers printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Issuers shall
promptly notify the Trustee of any change in a CUSIP number.
SECTION 2.13 DEPOSIT OF MONEYS.
Prior to 9:00 a.m. New York City time on each Interest Payment
Date and on the Maturity Date, the Issuers shall deposit with the Paying Agent
in immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date or Maturity Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date or Maturity Date, as the case may be.
SECTION 2.14 ISSUANCE OF ADDITIONAL NOTES.
The Issuers shall be entitled to issue Additional Notes in
aggregate principal amount not to exceed $150.0 million, under this Indenture
which shall have identical terms as the Notes issued on April 30, 1999, other
than with respect to the date of issuance, issue price, amount of interest
payable on the first payment date applicable thereto and, terms of optional
redemption, if any (and, if such Additional Notes shall be issued in the form of
Exchange Notes, other than with respect to transfer restrictions); provided that
such issuance is not prohibited by Section 4.13; and provided, further, that no
Additional Notes may be authenticated and delivered in an aggregate principal
amount of less than $25.0 million. The Initial Notes issued on April 30, 1999,
any Additional Notes and all Exchange Notes or Private Exchange Notes issued in
exchange therefor shall be treated as a single class for all purposes under this
Indenture.
37
With respect to any Additional Notes, each of the Issuers shall
set forth in a resolution of its respective Board of Directors and in an
Officers' Certificate, a copy of each of which shall be delivered to the
Trustee, the following information:
(1) the aggregate principal amount of such Additional
Notes to be authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date and the CUSIP
number of such Additional Notes and the amount of interest payable on
the first payment date applicable thereto; provided, however, that no
Additional Notes may be issued at a price that would cause such
Additional Notes to have "original issue discount" within the meaning
of Section 1273 of the Code; and
(3) whether such Additional Notes shall be transfer
restricted securities and issued in the form of Initial Notes or shall
be registered securities issued in the form of Exchange Notes, each as
set forth in the Appendix.
ARTICLE III
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE.
If the Issuers elect to redeem Notes pursuant to Section 3.7 of
this Indenture and Paragraph 6 of the Notes, they shall notify the Trustee and
the Paying Agent in writing of the Redemption Date and the principal amount of
the Notes to be redeemed.
The Issuers shall give each notice provided for in this Section
3.1 at least 45 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
38
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If fewer than all of the Notes are to be redeemed, selection of
the Notes to be redeemed will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not then listed on a national
securities exchange, on a pro rata basis, by lot or in such other fair and
reasonable manner chosen at the discretion of the Trustee; provided, however,
that if a partial redemption is made with the proceeds of a Public Equity
Offering, selection of the Notes or portion thereof for redemption shall be made
by the Trustee only on a pro rata basis, unless such method is otherwise
prohibited.
The Trustee shall make the selection from the Notes outstanding
and not previously called for redemption and shall promptly notify the Issuers
in writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date, the Issuers
shall mail or cause to be mailed a notice of redemption by first class mail,
postage prepaid, to each Holder whose Notes are to be redeemed at its registered
address, with a copy to the Trustee and any Paying Agent. At the Issuers'
written request no less than 35 days prior to the Redemption Date (or such
shorter period as may be acceptable to the Trustee), the Trustee shall give the
notice of redemption in the Issuers' name and at the Issuers' expense.
Each notice for redemption shall identify the Notes 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;
39
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes and/or Section of
this Indenture pursuant to which such redemption is being made;
(5) that Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price plus
accrued interest, if any;
(6) that, unless the Issuers default in making the
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the Redemption Date, and the only remaining right
of the Holders of such Notes is to receive payment of the Redemption
Price plus accrued interest, if any, upon surrender to the Paying Agent
of the Notes redeemed;
(7) if any Note is being redeemed in part, the
portion of the principal amount of such Note to be redeemed and that,
after the Redemption Date, and upon surrender of such Note, a new Note
or Notes in the aggregate principal amount equal to the unredeemed
portion thereof will be issued;
(8) if fewer than all the Notes are to be redeemed,
the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such
partial redemption and, if the redemption is not made pro rata, the
identification of the particular Notes (or portion thereof) to be re-
deemed; and
(9) that no representation is made as to the correct-
ness or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.3, Notes 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
40
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price plus accrued interest to the Redemption Date payable thereon,
if any, provided that if a Note is redeemed on or after a Record Date for an
interest payment but on or prior to the related Interest Payment Date, then any
accrued and unpaid interest shall be paid to the Holder of record at the close
of business on such Record Date. Failure to give notice or any defect in the
notice to any Holder shall not affect the validity of the notice to any other
Holder.
At any time prior to the mailing of a notice of redemption to the
Holders pursuant to Section 3.3, the Issuers may withdraw, revoke or rescind any
notice of redemption delivered to the Trustee without any continuing obligation
to redeem the Notes.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
On or before 9:00 a.m. New York City time on the Redemption Date,
the Issuers shall deposit with Trustee or Paying Agent U.S. Legal Tender
sufficient to pay the Redemption Price plus accrued interest, if any, of all
Notes to be redeemed on that date (other than Notes or portions of Notes called
for redemption which have been delivered by the Issuers to the Trustee for
cancellation). The Trustee or Paying Agent shall promptly return to the Issuers
any U.S. Legal Tender so deposited which is not required for that purpose,
except with respect to monies owed as obligations to the Trustee pursuant to
Article Seven.
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 Notes to be redeemed will cease to accrue on
and after the applicable Redemption Date, whether or not such Notes are
presented for payment. If a Note is redeemed on or after an interest payment
date, then any accrued and unpaid interest shall be paid to the person in whose
name such Note was registered at the close of business on the record date
immediately proceeding such interest payment date.
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part, the
Issuers shall execute and the Trustee shall authenticate for the Holder a new
Note or Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.7 OPTIONAL REDEMPTION.
41
The Notes shall not be redeemable at the Issuers' option except as
set forth in the optional redemption provisions set forth in Paragraph 6 of the
Notes.
ARTICLE IV
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Issuers shall pay or cause to be paid the principal of and
interest on the Notes on the dates and in the manner provided in the Notes and
in this Indenture. An installment of principal of or interest on the Notes shall
be considered paid on the date it is due if the Trustee or Paying Agent (other
than the Issuers or any Affiliates of the Issuers) holds on that date U.S. Legal
Tender designated for and sufficient to pay the installment in full and is not
prohibited from paying such money to the Holders pursuant to the terms of this
Indenture.
Notwithstanding anything to the contrary contained in this
Indenture, the Issuers may, to the extent they are required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States
of America from principal or interest payments hereunder.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Issuers shall maintain in the Borough of Manhattan, the City
of New York, an the office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Issuers in respect of the Notes 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 13.2.
The Issuers may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such additional
designations,
42
provided that no such designation or recission shall in any manner relieve the
Issuers of their obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York. The Issuers shall give prompt written notice to
the Trustee of any such designation or recission and of any change in the
location of any such other office or agency.
The Issuers hereby designate the corporate trust office of the
Trustee as one such office or agency of the Issuers in accordance with Section
2.3 hereof.
SECTION 4.3 LIMITED LIABILITY COMPANY AND CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, Section 4.14, each
of the Issuers shall do or shall cause to be done, at its own cost and expense,
all things necessary to preserve and keep in full force and effect its limited
liability company or corporate existence, as the case may be, and the corporate,
limited liability company or partnership or other existence of each Restricted
Subsidiary in accordance with the respective organizational documents of each of
them (as the same may be amended from time to time) and the material rights
(charter and statutory) and franchises of the Issuers and the Restricted
Subsidiaries; provided, however, that the Issuers or any Restricted Subsidiary
shall not be required to preserve any right or franchise, or the corporate,
limited liability company, partnership or other existence of either Issuer or
any Restricted Subsidiary, if the Board of Directors of the Company shall in its
sole discretion determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries, taken as a
whole.
SECTION 4.4 PAYMENT OF TAXES AND OTHER CLAIMS.
The Issuers shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon either of
them or any of their Restricted Subsidiaries or properties of it or any of
its Restricted Subsidiaries and (ii) all lawful claims for labor, materials
and supplies that, if unpaid, might by law become a Lien upon the property of
their or any of their Restricted Subsidiaries; provided, however, that the
Issuers 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
43
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which reserves, to the extent required
under and in accordance with GAAP, have been taken.
SECTION 4.5 MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Issuers shall, and shall cause each of
their Restricted Subsidiaries to, maintain their material properties in good
working order and condition (subject to ordinary wear and tear) and make all
necessary repairs, renewals, replacements, additions, betterments and
improvements thereto; provided, however, that nothing in this Section 4.5 shall
prevent any of the Issuers or any of their Restricted Subsidiaries from
discontinuing the operation and maintenance of any of their properties, if such
discontinuance is, in the reasonable good faith judgment of such Issuer or
Restricted Subsidiary, as the case may be, desirable in the conduct of the
business of such Issuer and its Restricted Subsidiaries, taken as a whole.
(b) The Issuers shall provide, or cause to be
provided, for themselves and each of their Restricted Subsidiaries, insurance
(including appropriate self-insurance) against loss or damage of the kinds
that, in the reasonable, good faith judgment of the Board of Directors of the
Issuers is adequate and appropriate for the conduct of the business of the
Issuers and such Restricted Subsidiaries.
SECTION 4.6 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Issuers shall deliver to the Trustees,
within 120 days after the end of each fiscal year, an Officers' Certificate
stating that a review of the activities of the Issuers and their Restricted
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Issuers have kept, observed, performed and fulfilled their obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Issuers are not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Issuers are taking or propose to take
with respect thereto).
SECTION 4.7 COMPLIANCE WITH LAWS.
44
The Issuers shall comply, and shall cause each of their Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, 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 are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Issuers and their Restricted Subsidiaries, taken
as a whole.
SECTION 4.8 SEC REPORTS.
Whether or not subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Issuers shall file with the SEC (unless the
SEC will not accept such a filing, in which case the Issuers shall provide such
documents to the Trustee) and provide within 15 days to the Trustee and
Noteholders such annual reports and such information, documents and other
reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. limited liability company or corporation subject to such
Sections, such information, documents and other reports to be so filed and
provided at the times specified for the filing of such information, documents
and reports under such Sections. In addition, for so long as any Notes remain
outstanding, the Issuers shall furnish to the Holders and to securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.9 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Issuers covenant (to the extent that they may lawfully do so)
that they shall 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 principal of or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the 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.
45
SECTION 4.10 LIMITATION ON RESTRICTED PAYMENTS.
(a) the Issuers shall not, and shall not permit
any Restricted Subsidiary to, directly or indirectly, make a Restricted Payment
if at the time the Issuers or such Restricted Subsidiary makes such Restricted
Payment (i) a Default shall have occurred and be continuing (or would result
therefrom); (ii) the Issuers are not able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of Section 4.13; or (iii) the aggregate
amount of such Restricted Payment and all other Restricted Payments since the
Issue Date would exceed the sum of (A) 50% of the Consolidated Net Income of the
Company accrued during the period (treated as one accounting period) beginning
on the first day of the fiscal quarter commencing immediately following the
Issue Date and ending on the last day of the most recent full fiscal quarter for
which financial statements are available prior to the date of such Restricted
Payment (or, in case such Consolidated Net Income shall be a deficit, minus 100%
of such deficit); (B) the aggregate Net Cash Proceeds received by the Company
from capital contributions or the issuance or sale of its Capital Stock (other
than Disqualified Stock) subsequent to the Issue Date or any options, warrants
or rights to purchase its Capital Stock (other than Disqualified Stock) together
with the aggregate cash received by the Company at the time of the exercise of
such options, warrants or rights (other than an issuance or sale to a Subsidiary
of the Company); (C) the amount by which Indebtedness of the Company is reduced
on the Company's balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of
the Company convertible into or exchangeable or exercisable for Capital Stock
(other than Disqualified Stock) of the Company (less the amount of any cash, or
the fair value of any other property, distributed by the Company upon such
conversion or exchange); and (D) an amount equal to the sum of (x) the net
amount of any Investments made after the Issue Date constituting a Restricted
Payment that is returned to either Issuer or any Restricted Subsidiary by way of
dividend, distribution, repayment of loans or advances or otherwise and (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of an Unrestricted Subsidiary (other
than Unrestricted Subsidiaries referred to in clause (1) of the definition
thereof, except to the extent of Investments made or deemed made in such
Unrestricted Subsidiaries on or after the Issue Date) at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed the aggregate amount of
Investments previously made (and treated as a Restricted Payment) by either
Issuer or any Restricted Subsidiary.
46
(b) The provisions of the foregoing paragraph
(a) shall not prohibit (i) any redemption, repurchase or other acquisition of
any Capital Stock of the Company made out of the proceeds of the substantially
concurrent sale of, or made by exchange for, Capital Stock of the Company (other
than (A) Disqualified Stock or, (B) Capital Stock issued or sold to a Subsidiary
of the Company) or out of the proceeds of a substantially concurrent capital
contribution to the Company; provided, however, that the Net Cash Proceeds from
such sale of Capital Stock or capital contribution shall be excluded from clause
(iii)(B) of paragraph (a) above; (ii) any purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value of Subordinated
Obligations made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of an Issuer which is permitted to be Incurred
pursuant to Section 4.13; (iii) dividends or distributions paid within 60 days
after the date of declaration thereof if at such date of declaration such
dividend or distributions would have complied with this covenant; (iv) the
declaration or payment of Permitted Tax Distributions or Permitted
Distributions for Pre-Closing Tax Liabilities; (v) any repurchase or other
acquisition of shares of, or options to purchase, Capital Stock of the Company
from directors (or similar persons), officers or employees of the Company
pursuant to the terms of an employee benefit plan or employment or other
agreement approved by the Board of Directors; provided, however, that the
aggregate amount of all such repurchases shall not exceed $1 million in any
fiscal year and $5 million in the aggregate; (vi) Investments in Unrestricted
Subsidiaries, or joint ventures in which the Company has at least a 25% economic
ownership interest in an aggregate amount not to exceed $7.5 million at any one
time outstanding; (vii) other Restricted Payments in an amount not to exceed $3
million at any time outstanding; and (viii) the $150 million distribution to be
made to the Members of the Company on the Issue Date.
In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (a)(iii) above, amounts
expended pursuant to clauses (iii), (vi) and (vii) (but not pursuant to clause
(i), (ii), (iv), (v) or (viii)) of the immediately preceding paragraph shall be
included in such calculation.
SECTION 4.11 LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM
RESTRICTED SUBSIDIARIES.
The Issuers shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay
47
dividends or make any other distributions on its Capital Stock to the Issuers or
a Restricted Subsidiary or pay any Indebtedness owed to the Issuers, (b) make
any loans or advances to the Issuers or (c) transfer any of its property or
assets to the Issuers, except (i) any encumbrance or restriction in respect of
any Restricted Subsidiary (x) pursuant to an agreement in effect at or entered
into on the Issue Date as in effect on the Issue Date (including the New Credit
Agreement) or (y) no more restrictive on such Restricted Subsidiary than under
clause (x); (ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by
such Restricted Subsidiary on or prior to the date on which such Restricted
Subsidiary was acquired by an Issuer (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related transaction
pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by an Issuer and outstanding on such date; (iii) any encumbrance or
restriction pursuant to an agreement effecting a Refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause (i) or (ii) of this
Section 4.11 or this clause (iii) or contained in any amendment to an agreement
referred to in clause (i) or (ii) of this Section 4.11 or this clause (iii);
provided, however, that the encumbrances and restrictions with respect to such
Restricted Subsidiary contained in any such refinancing agreement or amendment
are no less favorable to the Noteholders than encumbrances and restrictions with
respect to such Restricted Subsidiary contained in such predecessor agreements;
(iv) any such encumbrance or restriction (A) consisting of customary
non-assignment provisions in leases to the extent such provisions restrict the
subletting, assignment or transfer of the lease or the property leased
thereunder or in purchase money financings or (B) by virtue of any Indebtedness,
transfer, option or right with respect to, or any Lien on, any property or
assets of an Issuer or any Restricted Subsidiary not otherwise prohibited by the
Indenture; (v) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such restrictions restrict the transfer of the property
subject to such security agreements or mortgages; (vi) any restriction with
respect to a Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of all or substantially all the Capital Stock or
assets of such Restricted Subsidiary pending the closing of such sale or
disposition; (vii) encumbrances or restrictions imposed by operation of any
applicable law, rule, regulation or order; (viii) Capital Lease Obligations that
are otherwise permitted hereunder; provided, however, that such encumbrance or
restriction does not extend to any property other than that subject to the
underlying lease; (ix) any encumbrance or restriction under or relating to an
agreement relating to the acquisition of assets or property so long as such
48
encumbrances and restriction relate solely to the assets so acquired (and any
improvements thereon) and (x) restrictions imposed by the Notes or the Indenture
or by the Company's other indebtedness ranking senior or pari passu with the
Notes; provided, that such restrictions are no more restrictive taken as a whole
than those imposed by this Indenture and the Notes.
SECTION 4.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) The Issuers shall not, and shall not permit
any Restricted Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any Affiliate of the
Issuers (an "Affiliate Transaction") unless the terms thereof: (i) are no less
favorable to the Issuers or such Restricted Subsidiary than those that could be
obtained at the time of such transaction in a comparable transaction in
arm's-length dealings with a Person who is not such an Affiliate; (ii) if such
Affiliate Transaction involves an amount in excess of $2.5 million, have been
approved by a majority of the members of the Company's Board of Directors having
no material personal financial stake in such Affiliate Transaction; and (iii) if
such Affiliate Transaction involves an amount in excess of $10 million, have
been determined by a nationally recognized investment banking firm or nationally
recognized independent appraisal firm qualified to perform such task, to be
fair, from a financial standpoint, to the Company or such Restricted Subsidiary,
as the case may be.
(b) The provisions of the foregoing paragraph
(a) shall not prohibit: (i) any Permitted Investment or Restricted Payment
permitted to be made pursuant to Section 4.10 or any payment or transaction
specifically excepted from the definition of Restricted Payment; (ii)
transactions exclusively between or among an Issuer and one or more Restricted
Subsidiaries or exclusively between or among Restricted Subsidiaries; (iii)
customary directors' (or similar persons') fees, indemnification and similar
arrangements (and payments pursuant thereto), employee salaries, bonuses or
employment agreements, compensation or retirement or employee benefit
arrangements and incentive arrangements with any officer, director (or similar
person), employee or member of an Issuer or any Restricted Subsidiary entered
into in the ordinary course of business; (iv) agreements (and transactions
pursuant to agreements), in effect on the Issue Date, as such agreements are in
effect on such date or as thereafter amended in a manner not materially adverse
to holders of the Notes in the good faith judgment of the Company's Board of
Directors; (v) issuances of Capital Stock (other then Disqualified Stock) of the
Company; (vi) loans
49
and advances to officers, directors (and similar persons) and employees of an
Issuer or any Restricted Subsidiary for travel, entertainment, moving and other
relocation expenses, in each case made in the ordinary course of business; or
(vii) agreements (and transactions pursuant to agreements) making manufacturing
capacity of other Persons available to the Company or making the Company's
manufacturing capacity available to other Persons; provided, that, in the case
of this clause (vii), the Company complies with the requirements of clauses
(a)(i) and (ii) above in connection with any such agreement.
SECTION 4.13 LIMITATION ON INDEBTEDNESS.
(a) The Issuers shall not, and shall not permit
any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Issuers and their Restricted Subsidiaries may Incur
Indebtedness, if, on the date of such Incurrence and after giving effect
thereto, the Consolidated Coverage Ratio would be at least 2.0 to 1 if the date
of such Incurrence is on or before May 1, 2002 and 2.25 to 1 thereafter.
(b) Notwithstanding the foregoing paragraph
(a), the Issuers and any Restricted Subsidiary, as applicable, may Incur any or
all of the following Indebtedness (i) Indebtedness of the Issuers or any
Restricted Subsidiary Incurred pursuant to the New Credit Agreement; in an
aggregate principal amount outstanding at any time of up to (x) with respect to
the Term Loan Facility (or any replacement term loan facility, as the case may
be), $50 million and (y) with respect to the Revolving Loan Facility (or any
replacement revolving loan facility, as the case may be), the greater of (A) $25
million and (B) the sum of (I) 50% of the net book value of the inventory of the
Company and its Restricted Subsidiaries and (II) 85% of the net book value of
the accounts receivable of the Company and its Restricted Subsidiaries, in each
case less the aggregate amount of Net Available Cash from any Asset Disposition
applied to permanently reduce the outstanding amounts or the commitments with
respect to such Indebtedness pursuant to Section 4.15; provided, however, that
the maximum amount permitted to be outstanding under this clause (i) of this
paragraph (b) shall not be deemed to limit additional Indebtedness under the New
Credit Agreement to the extent such additional Indebtedness is permitted
pursuant to the Consolidated Coverage Ratio or otherwise under this covenant;
(ii) Indebtedness owed to and held by either Issuer or a Restricted Subsidiary;
provided, however, that (A) any subsequent issuance or transfer of any Capital
Stock which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of such Indebtedness (other than to
50
an Issuer or a Restricted Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by the obligor thereon and (B) if
either Issuer is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all obligations
with respect to the Notes and this Indenture and the New Credit Agreement; (iii)
the Notes and the Exchange Notes; (iv) Indebtedness outstanding on the Issue
Date (other than Indebtedness described in clause (i), (ii) or (iii) of this
Section 4.13); (v) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Restricted Subsidiary was
acquired by an Issuer (other than Indebtedness Incurred in connection with, or
to provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by an
Issuer); provided, however, that on the date of acquisition, and after giving
effect thereto, the Company would have been able to Incur at least $1.00 of
additional Indebtedness pursuant to clause (a); (vi) Refinancing Indebtedness in
respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause
(iii), (iv) or (v) of this clause (b); (vii) Indebtedness of an Issuer or a
Restricted Subsidiary in respect of bids, performance bonds, letters of credit
and surety or appeal bonds and obligations entered into by an Issuer or any
Restricted Subsidiary in the ordinary course of business; (viii) Indebtedness of
an Issuer or any Restricted Subsidiary which constitutes Hedging Obligations
consisting of either (A) Interest Rate Agreements directly related to
Indebtedness permitted to be Incurred by the Issuers or a Restricted Subsidiary
pursuant to the Indenture or (B) Currency Agreements for the purpose of limiting
exchange rate risks in connection with a Related Business; (ix) Indebtedness of
the Issuers or a Restricted Subsidiary which constitutes Capital Lease
Obligations or Purchase Money Indebtedness, and Refinancing Indebtedness
thereof, in an aggregate principal amount not exceeding $7.5 million at any one
time outstanding; (x) Indebtedness incurred by the Company constituting
reimbursement obligations with respect to letters of credit issued in the
ordinary course of business, including, without limitation, letters of credit in
respect of customs duties, equipment leases, workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement obligations
regarding workers' compensation claims; provided, however, that upon the drawing
of such letters of credit or the Incurrence of such Indebtedness, such
obligations are reimbursed or refinanced within 30 days following such drawing
or Incurrence and (xi) Indebtedness of an Issuer or any Restricted Subsidiary in
an aggregate principal amount which does not, together with all other
outstanding Indebtedness incurred pursuant to this clause (xi), exceed $25
million at any one time outstanding.
51
(c) Notwithstanding the foregoing, neither the
Issuers nor any Restricted Subsidiary shall Incur any Indebtedness pursuant to
the foregoing paragraph (b) if the proceeds thereof are used, directly or
indirectly, to Refinance any Subordinated Obligations unless such Indebtedness
shall be subordinated to the Notes or the Guarantees, as applicable, to at least
the same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with
paragraph (b), (i) in the event that an item of Indebtedness meets the criteria
of more than one of the types of Indebtedness described above, the Issuers, in
their sole discretion, will classify such item of Indebtedness and only be
required to include the amount and type of such Indebtedness in one of the above
clauses and (ii) an item of Indebtedness may be divided and classified in more
than one of the types of Indebtedness described above. A guarantee of
Indebtedness permitted by this Section 4.13 to be Incurred by the Issuers or a
Restricted Subsidiary other-wise permitted to be Incurred pursuant to this
Section 4.13 is not considered a separate Incurrence for purposes of this
Section 4.13.
(e) Notwithstanding paragraphs (a) and (b)
above, neither the Guarantors nor the Issuers shall Incur (i) any Indebtedness
if such Indebtedness is subordinate or junior in ranking in any respect to any
Guarantor Senior Indebtedness or Senior Indebtedness, respectively, unless such
Indebtedness is Senior Subordinated Indebtedness or is expressly subordinated
in right of payment to Senior Subordinated Indebtedness or (ii) any Secured
Indebtedness that is not Guarantor Senior Indebtedness or Senior Indebtedness,
respectively, unless contemporaneously therewith effective provision is made to
secure the Guarantees or the Notes, respectively, equally and ratably with such
Secured Indebtedness for so long as such Secured Indebtedness is secured by a
Lien.
(c) Notwithstanding the foregoing, neither the
Issuers nor any Restricted Subsidiary shall Incur any Indebtedness pursuant to
the foregoing paragraph (b) if the proceeds thereof are used, directly or
indirectly, to Refinance any Subordinated Obligations unless such Indebtedness
shall be subordinated to the Notes or the Guarantees, as applicable, to at least
the same extent as such Subordi nated Obligations.
(d) For purposes of determining compliance with para
graph (b), (i) in the event that an item of Indebtedness meets the criteria of
more than one of the types of Indebtedness described above, the Issuers, in
their sole discretion, will classify such item of Indebtedness and only be
required to include the amount and type of such Indebtedness in one of the above
clauses and (ii) an item of Indebt edness may be divided and classified in more
than one of the types of Indebtedness described above. A guarantee of
Indebtedness permitted by this Section 4.13 to be Incurred by the Issuers or a
Restricted Subsidiary other-wise permitted to be Incurred pursuant to this
Section 4.13 is not considered a separate Incurrence for purposes of this
Section 4.13.
(e) Notwithstanding paragraphs (a) and (b) above,
neither the Guarantors nor the Issuers shall Incur (i) any Indebtedness if such
Indebtedness is subordinate or junior in ranking in any respect to any Guarantor
Senior Indebtedness or Senior Indebtedness, respectively, unless such
Indebtedness is Senior Subordi nated Indebtedness or is expressly subordinated
in right of payment to Senior Subordinated Indebtedness or (ii) any Secured
Indebtedness that is not Guarantor Senior Indebtedness or Senior Indebtedness,
respectively, unless contemporaneously therewith effective provision is made to
secure the Guarantees or the Notes, respec tively, equally and ratably with such
Secured Indebtedness for so long as such Secured Indebtedness is secured by a
Lien.
SECTION 4.14 CHANGE OF CONTROL.
(a) Upon a Change of Control, each Holder shall have
the right to require that the Issuers repurchase all or any part of such
Holder's Notes at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, thereon to the date of
purchase (subject to the right of Holders of record on the relevant record date
to receive interest on the relevant interest due on the relevant interest
payment date), in accordance with the terms contemplated in Section 4.14(b).
52
Prior to the mailing of the notice referred to below, but
in any event within 30 days following the date on which a Change of Control
occurs, the Issuers covenant to (i) repay in full all Indebtedness under the New
Credit Agreement (and terminate all commitments thereunder) or offer to repay in
full all such Indebtedness (and terminate all such commitments) and to repay the
Indebtedness owed to (and terminate the commitments of) each lender which has
accepted such offer or (ii) obtain the requisite consents under the New Credit
Agreement to permit the repur chase of the Notes as provided below. The Issuers
will first comply with the cove nant in the preceding sentence before they will
be required to repurchase Notes pursuant to the provisions described below;
provided that the Issuers failure to comply with the covenant described in the
preceding sentence shall constitute an Event of Default described under clause
(v) under Section 6.1 and not under clause (ii) thereof.
(b) Within 30 days following any Change of Control,
unless notice of redemption of the Notes has been given pursuant to the
provisions of Section 3.7, the Issuers shall mail a notice to each Holder with a
copy to the Trustee (the "Change of Control Offer") stating:
(i) that a Change of Control has occurred and that
such Holder has the right to require the Issuers to purchase such
Holder's Notes at a purchase price in cash equal to 101% of the
principal amount (the "Change of Control Purchase Price") thereof plus
accrued and unpaid interest, if any, thereon to the date of pur chase
(subject to the right of holders of record on the relevant record date
to receive interest on the relevant interest payment date);
(ii) the circumstances and relevant facts regarding
such Change of Control;
(iii) the purchase date (the "Change of Control
Purchase Date") (which shall be no earlier than 30 days nor later than
60 days from the date such notice is mailed); and
(iv) the instructions determined by the Issuers,
consistent with the covenant described hereunder, that a Holder must
follow in order to have its Notes purchased.
53
The Issuers will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in the Indenture applicable to a Change of Control Offer
made by the Issuers and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
(c) On or before the Change of Control Purchase Date,
the Issuers shall, to the extent lawful, (i) accept for payment Notes or
portions thereof properly tendered and not validly withdrawn pursuant to the
Change of Control Offer (together with the appropriate form as provided for in
Exhibit A or B), (ii) deposit with the Trustee or Paying Agent an amount in cash
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest, if any), of all Notes so tendered and (iii) deliver or
cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate listing the Notes or portions thereof being purchased by
the Issuers. The Trustee or Paying Agent promptly will pay the Holders of Notes
so accepted an amount equal to the Change of Control Purchase Price (together
with accrued and unpaid interest, if any), and the Trustee promptly will
authenticate and deliver to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not so accepted will
be delivered promptly by the Issuers to the Holders thereof.
(d) On the purchase date, all Notes purchased by the
Issuers under this Section 4.14 shall be delivered to the Trustee for
cancellation, and the Issuers shall pay or cause to be paid the purchase price
plus accrued and unpaid interest, if any, to the Holders entitled thereto.
(e) At the time the Issuers deliver Notes to the
Trustee which are to be accepted for purchase, the Issuers shall also deliver an
Officers' Certificate stating that such Notes are to be accepted by the Issuers
pursuant to and in accordance with the terms of this Section 4.14. A Note shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.
(f) The Issuers shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of Notes
pursuant to this Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, the Issuers shall
comply with the applicable securities
54
laws and regulations and shall not be deemed to have breached its obligations
under this Section by virtue thereof.
SECTION 4.15 LIMITATION ON SALES OF ASSETS AND SUBSIDIARY
STOCK.
(a) The Issuers shall not, and shall not permit any
Re stricted Subsidiary to, directly or indirectly, consummate any Asset
Disposition unless (i) the Issuers or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including the value of all non-cash consideration), as determined
in good faith by the Company's Board of Directors, of the shares and assets
subject to such Asset Disposition; (ii) at least 75% of the consideration
thereof received by the Issuers or such Restricted Subsid iary in connection
with such Asset Disposition consists of cash, Temporary Cash Investments or
other cash equivalents; and (iii) an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by the Issuers (or such Restricted
Subsidiary, as the case may be) (A) to either (x) prepay, repay, redeem or
purchase (and permanently reduce the commitments under) Senior Indebtedness or
Indebtedness (other than any Disqualified Stock) of a Restricted Subsidiary (in
each case other than Indebtedness owed to the Issuers or an Affiliate of the
Issuers or Indebtedness, other than Senior Indebtedness, of the Company) or (y)
to the extent an Issuer elects, to acquire Additional Assets, in each case
within one year from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; or (B) to make an offer pursuant to
paragraph (b) below to the Holders to purchase Notes pursuant to and subject to
the conditions contained in this Indenture and to repurchase or redeem the
Issuers' other Indebtedness ranking on a parity with the Notes and with similar
provisions requiring the Issuers to repurchase or redeem such Indebtedness with
the proceeds from such Asset Disposition, pro rata in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) of the Notes and such other Indebtedness
then outstanding and (C) to the extent of the balance of such Net Available Cash
after application in accordance with clause (A) or (B), to any other application
or use not prohibited by this Indenture. Notwithstanding the foregoing
provisions of this paragraph (a), the Issuers and the Restricted Subsidiaries
shall not be required to apply any Net Available Cash in accordance with this
paragraph except to the extent that the aggregate Net Available Cash from all
Asset Dispositions which is not applied in accordance with this paragraph
exceeds $5 million (at which time, the entire unutilized Net Available Cash, and
not just the amount in excess of $5 million, shall be applied pursuant to this
paragraph).
55
For the purposes of this Section 4.15, the following are
deemed to be cash or cash equivalents: (x) the assumption of Indebtedness of the
Issuers or any Restricted Subsidiary and the release of the Issuers or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition and (y) securities received by the Issuers or any
Restricted Subsidiary from the transferee that are converted by the Issuers or
such Restricted Subsidiary into cash within 90 days of closing this transaction.
(b) In the event of an Asset Disposition that
requires the purchase of the Notes pursuant to clause (a)(iii)(B) above, the
Issuers will be required to purchase Notes tendered pursuant to an offer by the
Issuers for the Notes at a purchase price of 100% of their principal amount
(without premium) plus accrued but unpaid interest, if any, thereon in
accordance with the procedures (including prorating in the event of over
subscription) set forth in this Indenture.
(c) The Issuers shall comply, to the extent
applicable, with the requirements of Section 14(e) of the Exchange Act and any
other securities laws or regulations in connection with the repurchase of Notes
pursuant to this covenant. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this covenant, the Issuers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this clause by virtue thereof.
SECTION 4.16 FUTURE GUARANTORS.
The Issuers will not permit any Restricted Subsidiary that
is not a Guarantor to Guarantee any other Indebtedness of the Company or any
Guarantor unless such Restricted Subsidiary simultaneously executes a
supplemental indenture to this Indenture providing for the Guarantee of the
payment of the Notes by such Restricted Subsidiary and executes a Guarantee (as
provided for in Exhibit C) subject to and in accordance with Articles Eleven and
Twelve of this Indenture satisfactory to the Trustee.
SECTION 4.17 LIMITATION ON BUSINESS ACTIVITIES.
The Issuers shall not, and shall not permit any Restricted
Subsid iary to, engage in any business other than in businesses conducted by the
Issuers and their Restricted Subsidiaries on the Issue Date and businesses
which, in the good
56
faith determination of the Company's Board of Directors, are reasonably related,
ancillary or complementary thereto.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS OF THE
ISSUERS.
Neither of the Issuers shall consolidate with or merge with
or into, or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all its assets to, any Person, unless
(i) such Issuer shall be the surviving Person, or the resulting, surviving or
transferee Person (the "Successor Company") shall be a Person organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and the Successor Company (if not such Issuer) shall
expressly assume, by an indenture supplemental thereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all the obligations of such
Issuer under the Notes, this Indenture and the Registration Rights Agreement;
provided, that at any time such Issuer or its successor is a limited
partnership, there shall be a co-issuer of the Notes that is a corporation;
(ii) immediately after giving effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Company or any
Subsidiary as a result of such transaction as having been Incurred by such
Successor Company or such Subsidiary at the time of such transaction), no
Default shall have occurred and be continuing; and (iii) immediately after
giving effect to such transaction, the Succes sor Company would be able to Incur
an additional $1.00 of Indebtedness pursuant to paragraph (a) of Section 4.13.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of all or substantially all of the properties and
assets of one or more Subsidiaries, the Issuers' interest in which constitutes
all or substantially all of the properties and assets of the Issuers shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Issuers.
Notwithstanding the foregoing, (i) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company, (ii) the Company may merge with or
transfer all or substantially all of its assets to an Affiliate incorporated
(or, in the case of a limited liability company,
57
formed) for the purpose of reincorporating (or, in the case of a limited
liability company, reforming) the Company to realize tax or other benefits and
(iii) the Company may merge into, or transfer its assets substantially as an
entity to, a newly formed corporation that prior to such merger has no
liabilities and conducts no business for the purpose of reorganizing the Company
as or into a corporation; provided, in each case, the surviving entity will
assume all the obligations of such Person under the Notes and this Indenture.
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED FOR THE
COMPANY.
Upon any consolidation, combination or merger or any
transfer of all or substantially all of the assets of either of the Issuers in
accordance with Section 5.1, in which the Company is not the continuing
corporation, the Successor Com pany formed by such consolidation or into which
the Company is merged or to which such conveyance, lease or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture and the Notes with the same effect as if
such surviving entity had been named as such, and the predecessor company, in
the case of a conveyance, transfer or lease, shall be released from the
obligation to pay the principal of and interest on the Notes.
SECTION 5.3 MERGER, CONSOLIDATION AND SALE OF ASSETS OF ANY
GUARANTOR.
The Issuers will not permit any Guarantor to consolidate
with or merge with or into, or convey, transfer, lease, in one transaction or a
series of transactions, all or substantially all of its assets to, any Person
unless (i) the resulting, surviving or transferee Person shall be a Person
organized and existing under the laws of the jurisdiction under which the
Guarantor was organized or under the laws of the United States of America, any
State thereof or the District of Columbia, and such Person (if not the
Guarantor) shall expressly assume, by a Guaranty Agreement, executed and
delivered to the Trustee, in a form satisfactory to the Trustee, all the
obligations of the Guarantor, if any, under its Guarantee; and (ii) immediately
after giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transac tion as having been issued by such Person at the time of
such transaction), no Default shall have occurred and be continuing.
58
The provision of clauses (i) and (ii) of the immediately
preceding paragraph shall not apply to any transactions that constitute an Asset
Disposition if the Issuers complied with the applicable provisions of Section
4.15. The foregoing shall not prohibit any consolidation or merger of, or
transfer of all or part of the property and assets of, any Restricted Subsidiary
with or to the Company.
SECTION 5.4 SUCCESSOR CORPORATION SUBSTITUTED FOR
GUARANTOR.
Upon any consolidation, combination or merger or any
transfer of all or substantially all of the assets of any Guarantor in
accordance with Section 5.3, in which such Guarantor is not the continuing
corporation, the successor Person formed by such consolidation or into which
such Guarantor is merged or to which such conveyance, lease or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, such Guarantor under this Indenture with the same effect as if such
surviving entity had been named as such, and the predeces sor company, in the
case of a conveyance, transfer or lease, shall be released from the obligation
to pay the principal of and interest on the Notes.
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(i) a default in the payment of interest on the
Notes when due, continued for 30 days;
(ii) a default in the payment of principal of any
Note when due at its Stated Maturity, upon optional redemption, upon
required repurchase (except as provided in Section 4.14), upon accel
eration or otherwise;
(iii) the failure by either of the Issuers to comply
with its obligations under Section 5.1 or any Guarantor to comply with
its obligations under Sections 5.3 or 5.4;
59
(iv) the failure by either of the Issuers to comply
for 30 days after notice with any of its obligations in Section 4.14
(other than a failure to purchase Notes) or under Sections 4.10, 4.11,
4.12, 4.13 or 4.15;
(v) the failure by either of the Issuers to comply
for 60 days after notice with its other agreements contained in this
Inden ture;
(vi) Indebtedness of either Issuer or any Significant
Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default
and the total amount of such Indebtedness unpaid or accelerated exceeds
$5 million;
(vii) the Company or any Significant Subsidiary of
the Company (A) commences a voluntary case or proceeding under any
Bankruptcy Law with respect to itself, (B) consents to the entry of a
judgment, decree or order for relief against it in an involuntary case
or proceeding under any Bankruptcy Law, (C) consents to the ap
pointment of a Custodian of it or for substantially all of its
property, or (D) makes a general assignment for the benefit of its
creditors;
(viii) a court of competent jurisdiction enters a
judgment, decree or order for relief in respect of the Company or any
Significant Subsidiary of the Company in an involuntary case or
proceeding under any Bankruptcy Law, which shall (A) order reorga
nization, arrangement, adjustment or composition in respect of the
Company or any such Significant Subsidiary, (B) appoint a Custodian of
the Company or any such Significant Subsidiary or for substan tially
all of its property or (C) 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; provided, however, that
if the entry of such order or decree is appealed and dismissed on
appeal then the Event if Default hereunder by reason of the entry of
such order or decree shall be deemed to have been cured.
(ix) any judgment or decree for the payment of money
(except to the extent that a solvent insurance carrier has
60
admitted in writing that such judgment or decree is covered by its
applicable policy) in excess of $5 million is entered against either
Issuer or any Significant Subsidiary, remains outstanding for a
period of 60 days following entry of such judgment and is not
discharged, bonded, waived or stayed within 30 days after notice; or
(x) a Guarantee ceases to be in full force and effect
or is declared to be null and void and unenforceable or the Guarantee
is found to be invalid or a Guarantor denies its liability under its
Guarantee (other than by reason of release of the Guarantor in accor
dance with the terms of the Indenture).
However, a default under clause (iv), (v), (vi) or (ix)
will not constitute an Event of Default until the Trustee or the Holders of 25%
in principal amount of the outstanding Notes notify the Issuers of the default
and the Issuers do not cure such default within the time specified after receipt
of such notice.
The Issuers shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice of any Event of Default under
clause (vi) or (x) and any event which with the giving of notice or the lapse of
time would become an Event of Default under clause (iv), (v) or (ix), its status
and what action the Issuers are taking or propose to take with respect thereto.
SECTION 6.2 ACCELERATION.
(a) If an Event of Default (other than an Event of
Default specified in Section 6.1(vii) or (viii) with respect to either of the
Issuers) occurs and is continuing, and has not been waived pursuant to Section
6.4, then the Trustee, by written notice to the Issuers, or the Holders of at
least 25% in principal amount of outstanding Notes, by notice in writing to the
Issuers and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Notes to be due and payable. All such notices shall specify
the respective Event of Default and that it is a "notice of acceleration". Upon
any such declaration, such amount shall be immedi ately due and payable.
(b) If an Event of Default specified in Section
6.1(vii) or (viii) relating to either of the Issuers occurs and is continuing
with respect to the either of the Issuers, the principal of and interest on all
the Notes will ipso facto
61
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders.
(c) The Holders of a majority in principal amount of
the Notes may, on behalf of the Holders of all of the Notes, rescind and cancel
an acceleration and its consequences (i) if the rescission would not conflict
with any judgment or decree, (ii) if all existing Events of Default have been
cured or waived except nonpayment of principal or interest that has become due
solely because of the acceleration, (iii) if the Issuers have paid the Trustee
its reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (iv) in the event of the cure or waiver of an
Event of Default of the type described in Section 6.1(vii) or (viii), 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 6.3 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 Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.4 WAIVER OF PAST DEFAULTS.
Subject to Sections 2.8, 6.7 and 9.2, the Holders of a
majority in principal amount of the then outstanding Notes by notice to the
Trustee may, on behalf of the Holders of all of the Notes, waive an existing
Default or Event of Default and its consequences, except a Default in the
payment of principal of or interest on any Note as specified in clauses (i) and
(ii) of Section 6.1. When a Default or Event of Default is waived, it is cured
and ceases to exist for every purpose of this Indenture.
62
SECTION 6.5 CONTROL BY MAJORITY.
Subject to Section 2.9, the Holders of a majority in
principal amount of the then outstanding Notes 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, including, without limitation,
any remedies provided for in Section 6.3. Subject to Section 7.1, however, the
Trustee may refuse to follow any direction that conflicts with any law or this
Indenture, that the Trustee deter mines is unduly prejudicial to the rights of
another Holder, or that may involve the Trustee in personal liability and the
Trustee may take any other action it deems proper that is not inconsistent with
any such direction received from Holders of the Notes.
SECTION 6.6 LIMITATION ON SUITS.
Subject to Article Seven, if an Event of Default occurs and
is continuing, the Trustee will be under no obligation to exercise any of the
rights or powers under this Indenture at the request or direction of any of the
Holders unless such Holders have offered to the Trustee reasonable indemnity or
security against any loss, liability or expense. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no Holder
of a Note may pursue any remedy with respect to this Indenture or the Notes
unless (i) such Holder has previously given the Trustee notice that an Event of
Default is continuing, (ii) Holders of at least 25% in principal amount of the
outstanding Notes have requested the Trustee to pursue the remedy, (iii) such
Holders have offered the Trustee reason able security or indemnity against any
loss, liability or expense, (iv) the Trustee has not complied with such request
within 60 days after the receipt thereof and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding Notes
have not given the Trustee a direction inconsistent with such request within
such 60-day period.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and interest on a Note,
on or after the respective due dates expressed in such Note, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
63
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest
specified in clause (i) or (ii) of Section 6.1 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 Notes for the whole amount of
principal and accrued interest remaining unpaid, together with interest on
overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest at the rate set forth in Section
4.1 and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents, consultants and counsel.
SECTION 6.9 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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Issuer or any other
obligor upon the Notes, any of their respective creditors or any of their
respective 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 Holder to make such payments to the Trustee and, if
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agents, consultants and counsel, and any other amounts due the Trustee under
Section 7.7. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money or property pursuant to
this Article Six, it shall pay out the money in the following order:
64
First: to the Trustee for amounts due under Section 7.7;
Second: to holders of Senior Indebtedness of the Issuers to
the extent required by Article X;
Third: to Holders for amounts due and unpaid on the Notes
for principal and interest, ratably, without
preference or priority of any kind, according to
the amounts due and payable on the Notes for
principal and interest, respec tively; and
Fourth: the balance, if any, to the Issuers or any other
obligor on the Notes.
The Trustee, upon prior notice to the Issuers, may fix a
record date and payment date for any payment to Holders 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 6.7, or a suit by a Holder or Holders of more than
10% in principal amount of the outstanding Notes.
ARTICLE VII
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing and is known to the Trustee, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture and use the same degree of care
and skill in its exercise thereof as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.
65
(b) Except during the continuance of an Event of
Default:
(1) The Trustee need perform only those
duties as are specifically set forth in this Indenture and
no covenants or obligations shall be implied in this In
denture against the Trustee.
(2) In the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this In
denture. However, the Trustee shall examine the certifi
xxxxx and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein
contained, 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:
(i) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1.
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.2, 6.4 or 6.5 hereof.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it.
(e) Whether or not herein expressly provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c) and (d) of this Section 7.1.
66
(f) The Trustee shall not be liable for interest on
any money or assets received by it except as the Trustee may agree in writing
with the Issuers or any Guarantor. Assets held in trust by the Trustee need not
be segregated from other assets except to the extent required by law.
(g) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
SECTION 7.2 RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instru ment, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting,
it may consult with counsel and may require an Officers' Certificate, an Opinion
of Counsel or both, which shall conform to Sections 13.4 and 13.5. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents or attorneys
and shall not be responsible for the misconduct or negligence of any agent or
attorney appointed with due care.
(d) The Trustee shall not be liable for any action
that it takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers; provided, however that the Trustee's
conduct does not constitute wilful misconduct, negligence or bad faith.
(e) The Trustee shall not be bound to make any
investiga tion into the facts or matters stated in any resolution, certificate,
statement, instru ment, opinion, notice, request, direction, consent, order,
bond, debenture, or other
67
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon reasonable notice to the Issuers, to examine the books,
records, and premises of the Issuers, personally or by agent or attorney.
(f) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee security
or indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request, order
or direction.
(g) The Trustee shall not be required to give any
bond or surety in respect of the performance of its powers and duties hereunder.
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Notes and may otherwise deal with either of the
Issuers, or any Guarantor, or their respective Affiliates with the same rights
it would have if it were not Trustee. However, if the Trustee acquires any
conflicting interest within the meaning of Section 3.10(b) of the TIA, it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Offering Memorandum and the recitals contained herein
and in the Notes shall be taken as statements of the Issuers and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representation as to the validity or adequacy of this Indenture, the Notes or
any Guarantee, and it shall not be accountable for the Issuers' use of the
proceeds from the Notes, and it shall not be responsible for any statement of
either of the Issuers or any Guarantor in this Indenture, the Notes or any
Guarantee other than the Trustee's certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULT.
68
If a Default occurs and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Holder notice of the Default within
90 days after such Default occurs. Except in the case of a Default in payment of
principal of, or interest on, any Note, the Trustee may withhold notice if and
so long as a commit tee of its Trust Officers determines that withholding notice
is not opposed to the interest of the Holders.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15, beginning with the May 15
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Holder a brief report dated as of
such date that complies with TIA section 313(a). The Trustee also shall comply
with TIA section 313(b) and (c).
The Issuers shall promptly notify the Trustee if the Notes
become listed on, or delisted from, any exchange and the Trustee shall comply
with TIA section 313(d).
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Issuers and any Guarantors shall pay to the Trustee
from time to time reasonable compensation for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuers and any Guarantors shall reimburse the Trustee upon
request for all reason able fees and expenses, including out-of-pocket expenses
incurred or made by it in connection with the performance of its duties under
this Indenture. Such expenses shall include the reasonable fees and expenses of
the Trustee's agents, consultants, experts and counsel, except such
disbursements, advances and expenses as may be attributable to its negligence,
bad faith or wilfull misconduct.
The Issuers and any Guarantors shall, jointly and
severally, indemnify the Trustee and its agents, employees, stockholders and
directors and officers for, and hold them harmless against, any loss, liability
or expense incurred by them, arising out of or in connection with the
administration of this trust including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of their rights, powers
69
or duties hereunder. The Issuers and any Guarantors need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own willful misconduct, negligence or bad faith.
The Trustee shall notify the Issuers and any Guarantors promptly of any claim
asserted against the Trustee for which it may seek indemnity. At the Trustee's
sole discretion, the Issuers and such Guarantors shall defend the claim and the
Trustee shall cooperate and may participate in the defense; provided that any
settlement of a claim shall be approved in writing by the Trustee, such approval
not to be unreasonably withheld. Alterna tively, the Trustee may at its option
have separate counsel of its own choosing and the Issuers and the Guarantors
shall pay the reasonable fees and expenses of such counsel; provided that the
Issuers and such Guarantors will not be required to pay such fees and expenses
if it assumes the Trustee's defense and there is no conflict of interest between
the Issuers and such Guarantors, on the one hand, and the Trustee, on the other,
in connection with such defense as reasonably determined by the Trustee. The
Issuers and such Guarantors need not pay for any settlement made without their
written consent. The Issuers and such Guarantors need not reimburse any expense
or indemnify against any loss or liability to the extent incurred by the Trustee
through its negligence, bad faith or willful misconduct.
To secure the Issuers' and the Guarantors' payment
obligations in this Section 7.7, the Trustee shall have a lien prior to the
Notes on all assets or money held or collected by the Trustee, in its capacity
as Trustee, except assets or money held in trust to pay principal of or interest
on particular Notes. Such lien shall survive the satisfaction and discharge of
the Indenture.
When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.1(vii) or (viii) occurs, such
expenses and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Law; provided, however, that
this shall not affect the Trustee's rights as set forth in the preceding
paragraph or Section 6.10.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the
Issuers and the Guarantors in writing at least 30 days prior to the date of the
proposed resigna tion. The Holders of a majority in principal amount of the
outstanding Notes may remove the Trustee by so notifying the Issuers and the
Trustee and may appoint a successor Trustee. The Issuers may remove the Trustee
if:
70
(A) the Trustee fails to comply with
Section 7.10;
(B) the Trustee is adjudged bankrupt or
insolvent or an order for relief is entered with respect to the Trustee
under any Bankruptcy Law;
(C) a Custodian or other public officer
takes charge of the Trustee or its property; or
(D) the Trustee becomes incapable of acting.
A resignation or removal of the Trustee and appointment of
a successor Trustee shall become effective only upon the successor Trustee's
accep tance of appointment as provided in this Section 7.8.
If the Trustee resigns or is removed as Trustee 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 of the Notes 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 all property held by it as Trustee to
the successor Trustee, subject to the lien provided in Section 7.7, 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 Holder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuers or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
71
If the Trustee fails to comply with Section 7.10, any
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Issuers' obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9 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 be the successor Trustee.
If at the time such successor or successors by merger,
conversion, consolidation or transfer of assets to the Trustee shall succeed to
the trust created by this Indenture any of the Notes shall have been
authenticated but not delivered, any successor to the Trustee may adopt a
certificate of authentication of any predecessor Trustee, and deliver such Notes
so authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenti cate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certifi cate
of the Trustee shall have.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies
the requirements of TIA sections 310(a)(1), (2) and (5). The Trustee (or, in the
case of a Trustee included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition. In
addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA section 310(a)(2). The Trustee shall comply with TIA
section 310(b); provided, however, that there shall be excluded from the
operation of TIA section 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
72
such exclusion set forth in TIA section 310(b)(1) are met. The provisions of TIA
section 310 shall apply to the Issuers, as obligor of the Notes.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY.
The Trustee shall comply with TIA section 311(a), excluding
any creditor relationship listed in TIA section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA section 311(a) to the extent
indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1 DISCHARGE OF LIABILITY ON NOTES; DEFEASANCE.
(a) The Indenture will cease to be of further
effect (except as to surviving rights of registration of transfer or exchange
of the Notes, as expressly provided for in this Indenture) as to all
outstanding Notes when
(i) either (A) all the Notes theretofore
authenticated and delivered (except lost, stolen or destroyed Notes
which have been replaced or paid) have been delivered to the Trustee
for cancellation or (B) all Notes not theretofore delivered to the
Trustee for cancellation have become due and payable or shall become
due and payable within one year and the Issuers have irrevocably
deposited or caused to be deposited with the Trustee an amount in
U.S. dollars sufficient to pay and discharge the entire indebtedness
on the Notes not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and interest to
the date of deposit,
(ii) the Issuers have paid or caused to be paid all
other sums payable under the Indenture by the Issuers; and
(iii) the Issuers have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel.
(b) Subject to Sections 8.1(c) and 8.2, the Issuers
and the Guarantors, if any, at any time may terminate (i) all their obligations
under the Notes,
73
the Guarantees, if any, and this Indenture ("legal defeasance option") or (ii)
their obligations under Sections 4.4, 4.5, 4.8 and 4.10 through 4.17 and the
operation of Section 6.1(iii), (iv), (v), (vi), (vii) and (viii) (with respect
only to Significant Subsidiaries), (ix) and (x) and the limitations contained in
Sections 5.1 and 5.3 ("covenant defeasance option"). The Issuers may exercise
its legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If the Issuers exercise their legal defeasance option,
payment of the Notes may not be accelerated because of an Event of Default. If
the Issuers exercise their covenant defeasance option, payment of the Notes may
not be accelerated because of an Event of Default specified in Section 6.1(iii),
(iv), (v), (vi), (vii) and (viii) (with respect only to Significant
Subsidiaries), (ix) and (x), or because of the failure of the Issuers to comply
with Sections 5.1 and 5.3. If the Issuers exercise their legal defeasance option
or their covenant defeasance option, each Guarantor, if any, shall be released
from all its obligations under its Guarantee.
Upon satisfaction of the conditions set forth herein and
upon request of the Issuers, the Trustee shall acknowledge in writing the
discharge of those obligations that the Issuers and the Guarantors, if any,
terminate.
(c) Notwithstanding clauses (a) and (b) above, the
obligations of the Issuers and the Guarantors, if any, in Sections 2.3, 2.4,
2.5, 2.6, 2.7, 7.7, 7.8, 8.5, 8.6 and the Appendix shall survive until the Notes
have been paid in full. Thereafter, the obligations of the Issuers and the
Guarantors, if any, in Sections 7.7, 8.5 and 8.6 shall survive.
SECTION 8.2 CONDITIONS TO DEFEASANCE.
The following shall be the conditions to the application of
Section 8.1 hereof to the outstanding Notes:
(1) the Issuers irrevocably deposit in trust with the
Trustee money or U.S. Government Obligations, or a combination thereof,
for the payment of principal of, interest and premium, if any, on the
outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
74
(2) the Issuers deliver to the Trustee a
certificate from a nationally recognized firm of independent public
accountants or a nationally recognized investment banking firm
expressing their opinion that the payments of principal and interest
when due on the deposited U.S. Government Obligations plus any
deposited money will provide cash at such times and in such amounts
as will be sufficient to pay principal, premium, if any, and
interest when due on all outstanding Notes to maturity or
redemption, as the case may be;
(3) no Default or Event of Default with respect to
the Notes shall have occurred and be continuing on the date of such
deposit (other than a Default or Event of Default resulting from the
borrowing of funds to be applied to such deposit) or insofar as Events
of Default from bankruptcy or insolvency events are concerned, at any
time in the period ending on the 91st day after the date of deposit;
(4) the Issuers delivers to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with
the intent of preferring the Holders over any other creditors of the
Issuers or with the intent of defeating, hindering, delaying or defraud
ing any other creditors of the Issuers and the deposit is not
prohibited under any Designated Senior Indebtedness;
(5) neither the deposit nor the defeasance shall
result in a default or event of default under any other material
agreement to which the Issuers are a party or by which the Issuers
are bound and neither the deposit nor the defeasance shall be
prohibited by Article 10;
(6) the Issuers deliver to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit does
not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940;
(7) in the case of the legal defeasance option, the
Issuers shall have delivered to the Trustee an Opinion of Counsel
stating that (i) the Issuers have received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the
date of this Indenture there has been a change in the applicable
75
Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Noteholders
will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such defeasance had
not occurred;
(8) in the case of the covenant defeasance option,
the Issuers shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Noteholders will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred; and
(9) the Issuers deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Notes as contem plated
by this Article 8 have been complied with.
SECTION 8.3 APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to this Article Eight. It shall apply
the deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
of and interest on the Notes. Money and securities so held in trust are not
subject to Article 10.
SECTION 8.4 REPAYMENT TO ISSUERS.
The Trustee and the Paying Agent shall promptly turn over
to the Issuers (or the appropriate Guarantors), upon delivery of an Officers'
Certificate stating that such payment does not violate the terms of this
Indenture, any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the
Trustee and the Paying Agent shall pay to the Issuers and the Guarantors, if
any, upon this written request any money held by them for the payment of
principal or interest that remains unclaimed for two years, and, thereafter,
Noteholders entitled to the money
76
must look to the Issuers and the Guarantors, if any, for payment as general
creditors and all liability of the Trustee or Paying Agent with respect to such
money shall thereupon cease.
SECTION 8.5 INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Issuers and the Guarantors shall pay and shall
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations.
SECTION 8.6 REINSTATEMENT.
If the funds deposited with the Trustee to effect covenant
defeasance are insufficient to pay the principal of, premium, if any, and
interest on the Notes when due, then the obligations of the Issuers and the
Guarantors, if any, under this Indenture will be revived and no such defeasance
will be deemed to have occurred.
If the Trustee or Paying Agent is unable to apply any U.S.
Legal Tender or U.S. Government Obligations in accordance with this Article
Eight by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the obligations of the Issuers and the
Guarantors, if any, under this Indenture, the Notes and the Guarantees, if any,
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Eight until such time as the Trustee or Paying Agent is permitted
to apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Issuers or the Guarantors
have made any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Issuers or the Guarantors, as the case may
be, shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the U.S. Legal Tender or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.
77
The Issuers and the Guarantors, if any, when authorized by
a Board Resolution of each of them, and the Trustee, together, may amend or
supplement this Indenture or the Notes without notice to or consent of any
Holder:
(i) to cure any ambiguity, omission, defect or
inconsistency;
(ii) to comply with Article Five;
(iii) to provide for uncertificated Notes in addition
to or in place of certificated Notes (provided that the uncertificated
Notes are issued in registered form for purposes of Section 163(f) of
the Code, or in a manner such that the uncertificated Notes are de
scribed in Section 163(f)(2)(B) of the Code);
(iv) to comply with any requirements of the SEC in
order to effect or maintain the qualification of this Indenture under
the TIA;
(v) to add to the covenants of the Issuers for the
benefit of the Holders or to surrender a right or power conferred upon
the Issuers;
(vi) to add Guarantees with respect to the Notes;
(vii) to secure the Notes; or
(viii) to make any other change that does not ad
versely affect in any material respect the rights of any Holders
hereunder;
provided that the Issuers have delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.1.
After an amendment, supplement or waiver under this Section
9.1 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
78
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amendment, supplement or waiver.
SECTION 9.2 WITH CONSENT OF HOLDERS.
Subject to Section 6.7, the Issuers, the Guarantors, if
any, when authorized by a Board Resolution of each of them, and the Trustee,
together, with the written consent of the Holder or Holders of at least a
majority in aggregate principal amount of the then outstanding Notes (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, the Notes), may amend or supplement this
Indenture or the Notes, without notice to any other Holders. The Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes may waive compliance by the Issuers or the Guarantors, if any,
with any provision of this Indenture or the Notes without notice to any other
Holder. Notwithstanding the above, no amendment, supplement or waiver, including
a waiver pursuant to Section 6.4, shall, without the consent of each Holder of
each Note affected thereby:
(i) reduce the amount of Notes whose Holders must
consent to an amendment or waiver;
(ii) reduce the rate of or extend the time for
payment of interest on any Note;
(iii) reduce the principal of or extend the Stated
Maturity of any Note;
(iv) reduce the amount payable upon the redemption
of any Note or change the time at which any Note may be re deemed in
accordance with Article 3;
(v) make any Note payable in money other than that
stated in the Note;
(vi) make any change in Section 6.4 or Section 6.7 or
the third sentence of this Section;
(vii) amend, modify, change or waive any provision of
this Section 9.2; or
79
(viii) modify Articles Ten or Twelve or the
definitions used in Articles Ten or Twelve to adversely affect the
Holders of the Notes.
It shall not be necessary for the consent of the Holders
under this Section 9.2 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
9.2 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 amendment, supplement or
waiver.
SECTION 9.3 EFFECT ON SENIOR INDEBTEDNESS.
No amendment of this Indenture shall adversely affect the
rights of any holder of Senior Indebtedness of the Issuers or any Restricted
Subsidiary under Article Ten or Twelve of this Indenture, without the consent of
such holder (or its Representative).
SECTION 9.4 COMPLIANCE WITH TIA.
If at the time of an amendment to this Indenture or the
Notes, this Indenture shall be qualified under the TIA, every amendment, waiver
or supplement of this Indenture or the Notes shall comply with the TIA as then
in effect.
SECTION 9.5 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 Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Issuers received before the date the amendment,
supplement or waiver becomes effective.
80
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, which record date shall be (i) the later of
30 days prior to the first solicitation of such consent or the date of the most
recent list of Holders furnished to the Trustee prior to such solicitation
pursuant to Section 2.5 above or (ii) such other date as the Issuers may
designate. If a record date is fixed, then notwith standing 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 180 days after such record date.
After an amendment, supplement or waiver becomes effective,
it shall bind every Holder, unless it makes a change described in any of clauses
(i) through (vii) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that, without the consent of a Holder,
any such waiver shall not impair or affect the right of such Holder to receive
payment of principal of and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates.
SECTION 9.6 NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of
a Note, the Trustee may require the Holder of such Note to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Note 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 Note shall issue, the
Guarantors, if any, shall endorse and the Trustee shall authenticate a new Note
that reflects the changed terms. Any such notation or exchange shall be made at
the sole cost and expense of the Issuers. Failure to make the appropriate
notation or to issue a new Note shall not affect the validity of such amendment,
supplement or waiver.
SECTION 9.7 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
81
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. Such Opinion
of Counsel shall not be an expense of the Trustee.
SECTION 9.8 PAYMENT FOR CONSENT.
In connection with any amendment, supplement or waiver
under this Article 9, the Issuers may, but shall not be obligated to, offer to
any Holder who consents to such amendment, supplement or waiver, or to all
Holders, consideration for such Holder's consent to such amendment, supplement
or waiver.
ARTICLE X
SUBORDINATION
SECTION 10.1 AGREEMENT TO SUBORDINATE.
The Issuers agree, and each Holder of the Notes by
accepting a Note agrees, that the Indebtedness evidenced by the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article Ten, to the prior payment of all Senior Indebtedness of the Issuers
and that the subordination is for the benefit of and enforceable by the holders
of such Senior Indebtedness. The Notes shall in all respects rank pari passu
with all other Senior Subordinated Indebtedness of the Issuers and only
Indebtedness which is Senior Indebtedness shall rank senior to the Notes in
accordance with the provisions set forth herein. All provisions of this Article
Ten shall be subject to Section 10.12.
SECTION 10.2 LIQUIDATION, DISSOLUTION, BANKRUPTCY.
Upon any payment or distribution of the assets of the
Issuers to creditors upon a total or partial liquidation or a total or partial
dissolution of the Issuers or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Issuers or their property:
(i) holders of Senior Indebtedness of the Issuers
shall be entitled to receive payment in full of such Senior
82
Indebtedness of the Issuers before Holders shall be entitled to
receive any payment of principal of or interest on the Notes; and
(ii) until such Senior Indebtedness of the Issuers is
paid in full, any payment or distribution to which Holders would be
entitled but for this Article Ten shall be made to holders of such
Senior Indebtedness as their interests may appear.
SECTION 10.3 DEFAULT ON SENIOR INDEBTEDNESS.
The Issuers may not pay the principal of, premium (if
any) or interest on the Notes or make any deposit pursuant to Section 8.1 and
may not repurchase, redeem or otherwise retire any Notes (collectively, "pay
the Notes") if (i) any Designated Senior Indebtedness of the Issuers is not
paid when due or (ii) any other default on Designated Senior Indebtedness of
the Issuers occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the
default has been cured or waived and any such acceleration has been rescinded
or (y) such Designated Senior Indebtedness has been paid in full; provided,
however, that the Issuers may pay the Notes without regard to the foregoing
if the Issuers and the Trustee receive written notice approving such payment
from the Representative of such Designated Senior Indebtedness. During the
continuance of any default (other than a default described in clause (i) or
(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness of the Issuers pursuant to which the maturity thereof may be
accelerated either immediately without further notice (except such notice as
may be required to effect such acceleration) or after the expiration of any
applicable grace periods, the Issuers may not pay the Notes for a period (a
"Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to the Issuers) of written notice (a "Blockage Notice") of such default
from the Representative of the holders of such Designated Senior Indebtedness
of the Issuers specifying an election to effect a Payment Blockage Period and
ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (i) by written notice to the Trustee and the Issuers from the
Person or Persons who gave such Blockage Notice, (ii) because the default
giving rise to such Blockage Notice is cured, waived or no longer continuing
or (iii) because such Designated Senior Indebtedness has been discharged or
paid in full). Notwithstand ing the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section 10.3), unless the holders of such Designated Senior
Indebtedness of the Issuers or the Representative of such holders have
accelerated the maturity of such Designated Senior Indebtedness of the
83
Issuers, the Issuers may resume payments on the Notes after the end of such
Payment Blockage Period, including any missed payments. The Notes shall not
be subject to more than one Payment Blockage Period in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness of the Issuers during such period. No default
or event of default which existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Indebtedness of the Issuers initiating such Payment Blockage Period
shall be, or be made, the basis of the commencement of a subsequent Payment
Blockage Period by the Representative of such Designated Senior Indebtedness
of the Issuers, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived in
writing for a period of not less than 90 consecutive days.
SECTION 10.4 ACCELERATION OF PAYMENT OF NOTES.
If payment of the Notes is accelerated because of an Event
of Default, the Issuers or the Trustee shall promptly notify the holders of the
Designated Senior Indebtedness of the Issuers (or their Representatives) of the
acceleration. The Trustee shall give notice of such acceleration, of which it
has actual knowledge, to all holders of Designated Senior Indebtedness of the
Issuers. Prior to the Trustee's giving such notice, the Issuers shall notify the
Trustee of the name and address of any such holder of Designated Senior
Indebtedness of the Issuers.
SECTION 10.5 WHEN DISTRIBUTION MUST BE PAID OVER.
If a distribution is made to Holders of the Notes that
because of this Article Ten should not have been made to them, such Holders who
receive the distribution shall hold it in trust for holders of Senior
Indebtedness of the Issuers and pay it over to them as their interests may
appear and the Trustee shall not be liable to any holders of Senior Indebtedness
of the Issuers with respect thereto. With respect to the holders of Senior
Indebtedness of the Issuers, the Trustee undertakes to perform or to observe
only such of its covenants or obligations as are specifically set forth in this
Article Ten and no implied covenants or obligations with respect to holders of
Senior Indebtedness of the Issuers shall be read into this Indenture against the
Trustee.
SECTION 10.6 SUBROGATION.
84
After all Senior Indebtedness of the Issuers is paid in
full and until the Notes are paid in full, Holders of the Notes shall be
subrogated to the rights of holders of such Senior Indebtedness to receive
distributions applicable to such Senior Indebtedness. A distribution made under
this Article Ten to holders of such Senior Indebtedness of the Issuers which
otherwise would have been made to Holders of the Notes is not, as between the
Issuers and Holders of the Notes, a payment by the Issuers on such Senior
Indebtedness of the Issuers.
SECTION 10.7 RELATIVE RIGHTS.
This Article Ten defines the relative rights of Holders of
the Notes and holders of Senior Indebtedness of the Issuers. Nothing in this
Indenture shall:
(i) impair, as between the Issuers and Holders of
the Notes, the obligation of the Issuers, which is absolute and
unconditional, to pay principal of and interest on the Notes in
accordance with their terms; or
(ii) prevent the Trustee or any Holder of the Notes
from exercising its available remedies upon a Default, subject to the
rights of holders of Senior Indebtedness of the Issuers to receive
distributions otherwise payable to Holders.
SECTION 10.8 SUBROGATION MAY NOT BE IMPAIRED BY ISSUERS.
No right of any holder of Senior Indebtedness of the
Issuers to enforce the subordination of the Indebtedness evidenced by the Notes
shall be impaired by any act or failure to act by the Issuers or by their
failure to comply with this Indenture.
SECTION 10.9 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 10.3, the Trustee or Paying Agent
may continue to make payments on the Notes and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article Ten. The Issuers, the Registrar or
co-registrar, the Paying Agent, a
85
Representative or a holder of Senior Indebtedness of the Issuers may give the
notice; provided, however, that, if an issue of Senior Indebtedness of the
Issuers has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may
hold Senior Indebtedness of the Issuers with the same rights it would have if it
were not Trustee. The Registrar and co-registrar and the Paying Agent may do the
same with like rights. The Trustee shall be entitled to all the rights set forth
in this Article Ten with respect to any Senior Indebtedness of the Issuers which
may at any time be held by it, to the same extent as any other holder of such
Senior Indebtedness; and nothing in Article Seven shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article Ten shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.7.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness of the Issuers, the distribution may be made and
the notice given to their Representative (if any).
SECTION 10.11 ARTICLE TEN NOT TO PREVENT EVENTS OF DEFAULT
OR LIMIT RIGHT TO ACCELERATE.
The failure to make a payment pursuant to the Notes by
reason of any provision in this Article Ten shall not be construed as preventing
the occurrence of a Default. Nothing in this Article Ten shall have any effect
on the right of the Holders or the Trustee to accelerate the maturity of the
Notes.
SECTION 10.12 TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary,
payments from money or the proceeds of U.S. Government Obligations held in trust
under Article Eight by the Trustee for the payment of principal of and interest
on the Notes shall not be subordinated to the prior payment of any Senior
Indebtedness of the Issuers or subject to the restrictions set forth in this
Article Ten, and none of the Holders of the Notes shall be obligated to pay over
any such amount to the Issuers or any holder of Senior Indebtedness of the
Issuers or any other creditor of the Issuers.
SECTION 10.13 TRUSTEE ENTITLED TO RELY.
86
Upon any payment or distribution pursuant to this Article
Ten, the Trustee and the Holders shall be entitled to rely (i) upon any order or
decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 10.2 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Holders or (iii) upon the Representatives for the
holders of Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness and other Indebtedness of the Issuers, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article Ten. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of the Issuers to participate
in any payment or distribution pursuant to this Article Ten, the Trustee may
request such Person to furnish evidence to the satisfaction of the Trustee as to
the amount of such Senior Indebtedness of the Issuers held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article Ten, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.1 and 7.2 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article Ten.
SECTION 10.14 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder by accepting a Note authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders and the holders
of Senior Indebtedness of the Issuers as provided in this Article Ten and
appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15 TRUSTEE NOT FIDUCIARY FOR HOLDINGS OF SENIOR
INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness of the Issuers and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to Holders or the
Issuers or any other Person, money or assets to which any holders of Senior
Indebtedness of the Issuers shall be entitled by virtue of this Article Ten or
otherwise.
87
SECTION 10.16 RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS.
Each Holder by accepting a Note acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Indebtedness of
the Issuers whether such Senior Indebtedness was created or acquired before
or after the issuance of the Notes, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
ARTICLE XI
GUARANTEES
SECTION 11.1 UNCONDITIONAL GUARANTEE.
Each Guarantor, by execution of a Guarantee, will
unconditionally jointly and severally Guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (i) the principal of and interest on the Notes
will be promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration or otherwise and interest on the
overdue principal, if any, and interest on any interest, to the extent
lawful, of the Notes and all other obligations of the Issuers to the Holders
or the Trustee under the Indenture or the Notes will be promptly paid in full
or performed, all in accordance with the terms hereof and thereof and (ii) in
case of any extension of time of payment or renewal of any Notes or of any
such other obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject
to any applicable grace period, whether at stated maturity, by acceleration
or otherwise.
Each Guarantor, by execution of a Guarantee, will agree
that, as between such Guarantor on the one hand, and the Holders and the Trustee
on the other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of the Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and
88
payable) shall forthwith become due and payable by such Guarantor for the
purposes of the Guarantee.
Each Guarantor, by execution of a Guarantee, will agree
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Issuers, any action to enforce the same
or any other circumstance which might otherwise consti tute a legal or
equitable discharge or defense of a guarantor. Each Guarantor, by execution
of a Guarantee, will waive diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the
Issuers, any right to require a proceeding first against the Issuers,
protest, notice and all demands whatsoever and covenants that the Guarantee
will not be discharged except by complete performance of the obligations
contained in the Notes, this Indenture and in the Guarantee. If any
Noteholder or the Trustee is required by any court or otherwise to return to
the Issuers, any Guarantor, or any Custodian acting in relation to the
Issuers or any Guarantor, any amount paid by the Issuers or such Guarantor to
the Trustee or such Noteholder, the Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor, by
execution of a Guarantee, will agree that, in the event of default in the
payment of principal (or premium, if any) or interest on such Notes, whether
at their Stated Maturity, by acceleration, upon redemption, purchase or
otherwise, legal proceedings may be instituted by the Trustee on behalf of,
or by, the Holder of such Notes, subject to the terms and conditions set
forth in this Indenture, directly against each of the Guarantors to enforce
the Guarantee without first proceeding against the Issuers. Each Guarantor,
by execution of a Guarantee, will agree that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any Holders are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce any other right or remedy with respect to the Notes, the Guarantors
will agree, by execution of a Guarantee, to pay to the Trustee for the
account of the Holders, upon demand therefor, the amount that would otherwise
have been due and payable had such rights and remedies been permitted to be
exercised by the Trustee or any of the Holders.
SECTION 11.2 SUBORDINATION OF GUARANTEE.
The obligations of each Guarantor to the Holders of the
Notes and to the Trustee pursuant to the Guarantee and this Indenture are
expressly subordinate
89
and subject in right of payment to the prior payment in full of all Senior
Indebtedness of such Guarantor, to the extent and in the manner provided in
Article Twelve.
SECTION 11.3 SEVERABILITY.
In case any provision of the Guarantee shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.4 RELEASE OF GUARANTOR FROM THE GUARANTEE.
Upon the sale or disposition (whether by merger, stock
purchase, asset sale or otherwise) of a Guarantor (or all or substantially all
of its assets) to an entity which is not an Issuer or a Subsidiary or Affiliate
of the Issuers and which sale or disposition is otherwise in compliance with the
terms of this Indenture or pursuant to a foreclosure on the capital stock of
such Guarantor in accordance with the New Credit Agreement, such Guarantor shall
be deemed released from all obligations under this Article Eleven without any
further action required on the part of the Trustee or any Holder.
The Trustee shall deliver an appropriate instrument
evidencing such release upon receipt of a request by the Issuers accompanied by
an Officers' Certificate certifying as to the compliance with this Section 11.4.
SECTION 11.5 LIMITATION ON AMOUNT GUARANTEED; CONTRIBUTION
BY GUARANTORS.
(a) Anything contained in this Indenture or the
Guarantee to the contrary notwithstanding, if any Fraudulent Transfer Law (as
hereinafter defined) is determined by a court of competent jurisdiction to be
applicable to the obligations of any Guarantor under the Guarantee, such
obligations of such Guarantor under the Guarantee shall be limited to a
maximum aggregate amount equal to the largest amount that would not render
its obligations under the Guarantee subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States
Code or any applicable provisions of comparable state law (collec tively, the
"Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such Guarantor, contingent or otherwise, that are relevant
under the Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of such Guarantor (x) in respect of intercompany Indebtedness to
Issuers or other Affiliates
90
of Issuers to the extent that such Indebtedness would be discharged in an amount
equal to the amount paid by such Guarantor under the Guarantee and (y) under any
Guarantee of Subordinated Indebtedness which Guarantee contains a limitation as
to maximum amount similar to that set forth in this subsection 11.5(a), pursuant
to which the liability of such Guarantor under the Guarantee is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including without
limitation any such right of contribution under subsection 11.5(b)).
(b) The Guarantors together may desire to allocate
among themselves in a fair and equitable manner, their obligations arising
under the Guarantee. Accordingly, if any payment or distribution is made on
any date by any Guarantor under the Guarantee (a "Funding Guarantor") that
exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor will be entitled to a contribution from each of the other
Guarantors in the amount of such other Guarantor's Fair Share Shortfall (as
defined below) as of such date, with the result that all such contributions
will cause each Guarantor's Aggregate Payments (as defined below) to equal
its Fair Share as of such date. "Fair Share" means, with respect to a
Guarantor as of any date of determination, an amount equal to (i) the ratio
of (x) the Adjusted Maximum Amount (as defined below) with respect to such
Guarantor to (y) the aggregate of the Adjusted Maximum Amounts with respect
to all Guarantors, multiplied by (ii) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under the
Guarantee in respect of the obligations guarantied. "Fair Share Shortfall"
means, with respect to a Guarantor as of any date of determination, the
excess, if any, of the Fair Share of such Guarantor over the Aggregate
Payments of such Guarantor. "Adjusted Maximum Amount" means, with respect to
a Guarantor as of any date of determination, the maximum aggregate amount of
the obligations of such Guarantor under the Guarantee, determined as of such
date in accordance with subsection 11.5(a); provided that, solely for
purposes of calculating the Adjusted Maximum Amount with respect to any
Guarantor for purposes of this subsection 11.5(b), any assets or liabilities
of such Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obliga tions of
contribution hereunder shall not be considered as assets or liabilities of
such Guarantor. "Aggregate Payments" means, with respect to a Guarantor as of
any date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Guarantor in
respect of the
91
Guarantee (including, without limitation, in respect of this subsection 11.5(b)
minus (ii) the aggregate amount of all payments received on or before such date
by such Guarantor from the other Guarantors as contributions under this
subsection 11.5(b)). The amounts payable as contributions hereunder shall be
determined as of the date on which the related payment or distribution is made
by the applicable Funding Guarantor. The allocation among Guarantors of their
obligations as set forth in this subsection 11.5(b) shall not be construed in
any way to limit the liability of any Guarantor under this Indenture or under
the Subsidiary Guarantee.
SECTION 11.6 WAIVER OF SUBROGATION.
Until payment in full is made of the Notes and all other
obligations of the Issuers to the Holders or the Trustee hereunder and under
the Notes, each Guarantor, by its execution of the Guarantee, will
irrevocably waive any claim or other rights will acquire against the Issuers
that arise from the existence, payment, performance or enforcement of such
Guarantor's obligations under the Guarantee and this Indenture, including
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Issuers, whether or not such claim, remedy or
right arises in equity, or under contract, statute or common law, including,
without limitation, the right to take or receive from the Issuers, directly
or indirectly, in cash or other property or by set-off or any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to any Guarantor in violation of the preceding sentence and the
Notes shall not have been paid in full, such amount shall have been deemed to
have been paid to such Guarantor for the benefit of, and held in trust for
the benefit of, the Holders of the Notes, and shall forthwith be paid to the
Trustee for the benefit of such Holders to be credited and applied upon the
Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor, by its execution of the Guarantee, will
acknowledge that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 11.6 is knowingly made in contemplation of such
benefits.
SECTION 11.7 EXECUTION OF GUARANTEE.
To evidence its guarantee to the Noteholders set forth in
this Article Eleven, each Guarantor will execute the Guarantee in substantially
the form attached to this Indenture as Exhibit C, which shall be endorsed on
each Note ordered to be authenticated and delivered by the Trustee in accordance
with Section
92
4.16. Each Guarantor will agree that the Guarantee set forth in this Article
Eleven shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of the Guarantee. The Guarantee shall be signed
on behalf of each Guarantor by one Officer of such Guarantor (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions), and the delivery of such Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee on behalf of
such Guarantor. Such signatures upon the Guarantee may be by manual or facsimile
signature of such officers and may be imprinted or otherwise reproduced on the
Guarantee, and in case any such Officer who shall have signed the Guarantee
shall cease to be such officer before the Note on which the Guarantee is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Issuers, such Note nevertheless may be authenticated and delivered or
disposed of as though the person who signed the Guarantee had not ceased to be
such Officer of such Guarantor.
SECTION 11.8 WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Guarantor, by its execution of a Guarantee, will
covenant (to the extent that it may lawfully do so) that it 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 such Guarantor from performing the Guarantee as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) each Guarantor, by its execution of a Guarantee,
will expressly waive all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE XII
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.1 AGREEMENT TO SUBORDINATE.
Each Guarantor by execution of a Guarantee jointly and
uncondi tionally will agree, and each Holder by accepting a Note will agree,
that any payment of obligations by each Guarantor in respect of the Guarantee
(its "Guarantee Obligations") is subordinated in right of payment, to the
extent and in the manner provided
93
in this Article Twelve, to the prior payment of all Senior Indebtedness of such
Guarantor and that the subordination is for the benefit of and enforceable by
the holders of such Guarantor's Senior Indebtedness. The Guarantee Obligations
shall in all respects rank pari passu with all other Senior Subordinated
Indebtedness of such Guarantors and only Indebtedness which is Senior
Indebtedness of such Guarantors shall rank senior to the Guarantee Obligations
in accordance with the provisions set forth herein.
SECTION 12.2 LIQUIDATION, DISSOLUTION, BANKRUPTCY.
Upon any payment or distribution of the assets of any
Guarantor to creditors upon a total or partial liquidation or a total or partial
dissolution of such Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to such Guarantor or its property:
(1) holders of such Guarantor's Senior Indebted ness
shall be entitled to receive payment in full of such Senior Indebt
edness before Holders shall be entitled to receive any payment with
respect to the Guarantee; and
(2) until such Guarantor's Senior Indebtedness is
paid in full, any payment with respect to the Guarantee to which
Holders would be entitled but for this Article Twelve shall be made to
holders of such Senior Indebtedness as their interests may appear.
SECTION 12.3 DEFAULT ON SENIOR INDEBTEDNESS.
A Guarantor may not make any payment with respect to its
Guarantee Obligations or make any deposit pursuant to Section 8.1 (collectively,
"pay the Guarantee") if (i) any of such Guarantor's or the Issuer's Designated
Senior Indebtedness is not paid when due or (ii) any other default on such
Guarantor's or the Issuer's Designated Senior Indebtedness occurs and the
maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms unless, in either case, (x) the default has been cured or waived
and any such acceleration has been re scinded or (y) such Designated Senior
Indebtedness has been paid in full; provided, however, that the Guarantor may
pay the Guarantee without regard to the foregoing if the Trustee receives
written notice approving such payment from the Representa tive of such
Designated Senior Indebtedness guaranteed by such Guarantor. During the
continuance of any default (other than a default described in clause (i) or (ii)
of
94
the preceding sentence) with respect to any Guarantor's or Issuer's
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated either immediately without further notice (except such notice as
may be required to effect such acceleration) or after the expiration of any
applicable grace periods, the Guarantor may not pay the Guarantee for a
period (a "Payment Blockage Period") commencing upon the receipt by the
Trustee (with a copy to such Guarantor) of written notice (a "Blockage
Notice") of such default from the Representative of such Designated Senior
Indebtedness of such Guarantor or the Issuers guaranteed by such Guarantor
specifying an election to effect a Payment Blockage Period and ending 179
days thereafter (or earlier if such Payment Blockage Period is terminated (i)
by written notice to the Trustee and such Guarantor from the Person or
Persons who gave such Blockage Notice, (ii) because the default giving rise
to such Blockage Notice is cured, waived or otherwise no longer continuing or
(iii) because such Designated Senior Indebtedness of such Guarantor and the
related Designated Senior Indebtedness of the Issuers has been discharged or
paid in full). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section 12.3), unless the holders of such Guarantor's or the
Issuer's Designated Senior Indebtedness or the Representative of such holders
shall have accelerated the maturity of such Guarantor's or the Issuer's
Designated Senior Indebtedness, the Guarantor may resume payments on the
Guarantee after termination of such Payment Blockage Period, including any
missed payments. The Guarantee will not be subject to more than one Payment
Blockage Period in any consecutive 360-day period, irrespective of the number
of defaults with respect to such Designated Senior Indebtedness during such
period. No default or event of default which existed or was continuing on the
date of the commencement of any Payment Blockage Period with respect to the
Guarantor's or the Issuers' Designated Senior Indebtedness initiating such
Payment Blockage Period shall be, or be made, the basis of the commencement
of a subsequent Payment Blockage Period by the Representative of such
Guarantor's or the Issuers' Designated Senior Indebted ness, whether or not
within a period of 360 consecutive days, unless such default or event of
default shall have been cured or waived for a period of not less than 90
consecutive days.
SECTION 12.4 ACCELERATION OF PAYMENT OF NOTES.
If payment of a Guarantee is accelerated because of an
Event of Default, such Guarantor or the Trustee shall promptly notify the
holders of such Guarantor's or the Issuers' Designated Senior Indebtedness (or
their Representatives) of the acceleration. The Trustee shall give notice of
such acceleration, of which it
95
has actual knowledge, to all holders of such Guarantor's or the Issuers'
Designated Senior Indebtedness. Prior to the Trustee's giving such notice, the
Issuers shall notify the Trustee of the name and address of any such holder of
such Designated Senior Indebtedness.
SECTION 12.5 WHEN DISTRIBUTION MUST BE PAID OVER.
If a distribution is made to holders that because of this
Article Twelve should not have been made to them, the Holders who receive the
distribution shall hold it in trust for holders of such Guarantor's Senior
Indebtedness and pay it over to them as their interests may appear, and the
Trustee shall not be liable to any holders of such Guarantor's Senior
Indebtedness. With respect to the holders of such Guarantor's Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article Twelve
and no implied covenants or obligations with respect to holders of such
Guarantor's Senior Indebtedness shall be read into this Indenture against the
Trustee.
SECTION 12.6 SUBROGATION.
After a Guarantor's Senior Indebtedness is paid in full and
until the Subsidiary Guarantees are paid in full, Holders shall be subrogated to
the rights of holders of such Senior Indebtedness to receive distributions
applicable to such Guarantor's Senior Indebtedness. A distribution made under
this Article Twelve to holders of such Guarantor's Senior Indebtedness which
otherwise would have been made to Holders is not, as between such Guarantor and
Holders, a payment by such Guarantor on such Senior Indebtedness.
SECTION 12.7 RELATIVE RIGHTS.
This Article Twelve defines the relative rights of Holders
and holders of a Guarantor's Senior Indebtedness. Nothing in this Indenture
shall:
(i) impair, as between such Guarantor and Holders,
the obligation of such Guarantor, which is absolute and
unconditional, to pay the Guarantee Obligations in accordance with
their terms; or
(ii) prevent the Trustee or any Holder from
exercising its available remedies upon a Default, subject to the
rights of
96
holders of a Guarantor's Senior Indebtedness to receive distributions
otherwise payable to Holders.
SECTION 12.8 SUBORDINATION MAY NOT BE IMPAIRED BY A
SUBSIDIARY GUARANTOR.
No right of any holder of a Guarantor's Senior Indebtedness
to enforce the subordination of the Indebtedness evidenced by the Guarantees
shall be impaired by any act or failure to act by such Guarantor or by its
failure to comply with this Indenture.
SECTION 12.9 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 12.3, the Trustee or Paying Agent
may continue to make payments in respect of a Guarantee and shall not be charged
with knowledge of the existence of facts that would prohibit the making of any
such payments unless, not less than two Business Days prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article Twelve. Such Guarantor, the
Registrar or co-registrar, the Paying Agent, a Representative or a holder of
such Guarantor's Senior Indebtedness may give the notice; provided, however,
that, if an issue of a Guarantor's Senior Indebtedness has a Representative,
only the Representative may give the notice.
The Trustee in its individual or any other capacity may
hold a Guarantor's Senior Indebtedness with the same rights it would have if
it were not Trustee. The Registrar and co-registrar, the Paying Agent and any
agent of any Guarantor may do the same with like rights. The Trustee shall be
entitled to all the rights set forth in this Article Twelve with respect to
any Guarantor's Senior Indebtedness which may at any time be held by it, to
the same extent as any other holder of such Guarantor's Senior Indebtedness;
and nothing in Article Seven shall deprive the Trustee of any of its rights
as such holder. Nothing in this Article Twelve shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
SECTION 12.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of a Guarantor's Senior Indebtedness, the distribution may be made and
the notice given to their Representative (if any).
97
SECTION 12.11 ARTICLE TWELVE NOT TO PREVENT EVENTS OF
DEFAULT OR LIMIT RIGHT TO ACCELERATE.
The failure to make a payment relating to the Guarantee
Obligations by reason of any provision in this Article Twelve shall not be
construed as preventing the occurrence of a Default. Nothing in this Article
Twelve shall have any effect on the right of the Holders or the Trustee to
accelerate the maturity of the Notes.
SECTION 12.12 TRUST MONEYS NOT SUBORDINATED.
Notwithstanding anything contained herein to the contrary,
payments from money or the proceeds of U.S. Government Obligations held in trust
under Article Eight by the Trustee for the payment of principal of and interest
on the Notes shall not be subordinated to the prior payment of any Guarantor's
Senior Indebtedness or subject to the restrictions set forth in this Article
Twelve, and none of the Holders shall be obligated to pay over any such amount
to such Guarantor or any holder of such Guarantor's Senior Indebtedness or any
other creditor of such Guarantor.
SECTION 12.13 TRUSTEE ENTITLED TO RELY.
Upon any payment or distribution pursuant to this Article
Twelve, the Trustee and the Holders shall be entitled to rely (i) upon any order
or decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 12.2 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or distribution
to the Trustee or to the Holders or (iii) upon the Representatives for the
holders of each Guarantor's Senior Indebtedness for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the holders
of such Guarantor Senior Indebtedness and other Indebted ness of any
Guarantor's, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
Twelve. In the event that the Trustee determines, in good faith, that evidence
is required with respect to the right of any Person as a holder of a Guarantor's
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to furnish evidence to
the satisfaction of the Trustee as to the amount of such Guarantor's Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article
98
Twelve, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment. The provisions of Sections 7.1 and 7.2 shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article Twelve.
SECTION 12.14 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder by accepting a Note authorizes and directs
the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the
Holders and the holders of any Guarantor's Senior Indebtedness as provided in
this Article Twelve and appoints the Trustee as attorney-in-fact for any and
all such purposes.
SECTION 12.15 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS OF GUARANTORS.
The Trustee shall not be deemed to owe any fiduciary duty
to the holders of any Guarantor's Senior Indebtedness and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to Holders or any
Guarantor or any other Person, money or assets to which any holders of such
Guarantor's Senior Indebtedness shall be entitled by virtue of this Article
Twelve or otherwise.
SECTION 12.16 RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS OF
GUARANTORS ON SUBORDINATION PROVISIONS.
Each Holder by accepting a Note acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Guarantor's Senior
Indebtedness whether such Senior Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Senior Indebtedness and such holder of such Senior Indebtedness
shall be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continu ing to hold, such Senior
Indebtedness.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 TIA CONTROLS.
99
This Indenture is subject to the provisions of the TIA that
are required to be a part of this Indenture, and shall, to the extent
applicable, be governed by such provisions. If any provision of this Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Indenture as so modified. If any provision of this
Indenture excludes any TIA provisions that may be so excluded, such TIA
provision shall be excluded from this Indenture.
The provision of TIA xx.xx. 310 through 317 that imposes
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are part of and govern this
Indenture, whether or not physically contained therein.
SECTION 13.2 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 commercial courier service, by telex, by telecopier or registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to the Issuers or any Guarantor:
Cherokee International, LLC
0000 Xxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.:
Telephone: (000) 000-0000
Attn: Chief Executive Officerwith a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Telephone: (000) 000-0000
Attn: Xxxxxxx X. Xxxxx
if to the Trustee:
Firstar Bank of Minnesota, N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Facsimile No.: (000) 000-0000
100
Telephone No.: (000) 000-0000
Attn: Corporate Trust Department
Each of the Issuers, any Guarantors 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, any Guarantors and the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered; when
receipt is confirmed if delivered by commercial courier service; when receipt
is acknowledged, if faxed; and five (5) calendar days after mailing if sent
by registered or certified mail, postage prepaid.
Any notice or communication mailed to a Holder 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 Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. If a notice or communication is
mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.
SECTION 13.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to the TIA section 312(b)
with other Holders with respect to their rights under this Indenture or the
Notes. The Issuers, the Guarantors, the Trustee, the Registrar and any other
Person shall have the protection of the TIA section 312(c).
SECTION 13.4 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
Upon any request or application by the Issuers or any
Guarantor to the Trustee to take or refrain from taking any action under this
Indenture, the Issuers or such Guarantor shall furnish to the Trustee:
(i) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion of the
signers, all conditions precedent to be performed by the Issuers, if
any,
101
provided for in this Indenture relating to the proposed action have
been complied with; and
(ii) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent to be
performed by the Issuers, if any, provided for in this Indenture
relating to the proposed action have been complied with.
SECTION 13.5 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 4.6, shall include:
(i) a statement that the Person making such
certificate or opinion has read such covenant or condition and the
definitions relating thereto;
(ii) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such
Person, he has made such examination or investigation as is reasonably
necessary to enable him to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion
of each such Person, such condition or covenant has been complied with;
PROVIDED, that with respect to matters of fact, an Opinion of Counsel may rely
on an Officers' Certificate or a certificate of an appropriate public official.
SECTION 13.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
102
The Trustee may make reasonable rules in accordance with
the Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for their respective
functions.
SECTION 13.7 LEGAL HOLIDAYS.
If a payment date is a Legal Holiday, payment may be made
at such place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 13.8 GOVERNING LAW.
THIS INDENTURE AND THE NOTES (AND ANY GUARANTEES
RELATING THERETO) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS. 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 13.9 NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Issuers, any Guarantor or any of their
Subsidiaries or of any other Person. Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.
SECTION 13.10 NO RECOURSE AGAINST OTHERS.
No past, present or future member of the Board of
Directors, officer, employee, equityholder or incorporator, as such, of the
Issuers, any Guarantor or of the Trustee shall have any liability for any
obligations of the Issuers or any Guarantor under the Notes, any Guarantee or
this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
103
SECTION 13.11 SUCCESSORS.
All agreements of the Issuers and the Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successors.
SECTION 13.12 MULTIPLE ORIGINALS.
All parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together shall
represent the same agreement.
SECTION 13.13 SEVERABILITY.
In case any one or more of the provisions in this Indenture
or in the Notes 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
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14 TABLE OF CONTENTS; CROSS REFERENCE TABLE AND
HEADING.
The Table of Contents, Cross-Reference Table and Headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part of this Indenture
and shall in no way modify or restrict any of the terms of provisions hereof.
104
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
Issuers:
CHEROKEE INTERNATIONAL, LLC
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
CHEROKEE INTERNATIONAL FINANCE, INC.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
Trustee:
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
By: /s/ XXXXX XXXXXX
------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
105
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL
BUYERS PURSUANT TO RULE 144A AND TO
CERTAIN PERSONS IN OFFSHORE
TRANSACTIONS IN RELIANCE
ON REGULATION S
PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES,
AND EXCHANGE NOTES
1. Definitions.
1.1 Certain Definitions.
For the purposes of this Appendix the following terms shall
have the meanings indicated below, provided that all capitalized terms used but
not defined shall have the meanings given such terms in the Indenture:
"Depositary" means The Depository Trust Company, its nominees
and their respective successors and assigns.
"Exchange Notes" means (i) the 10-1/2% Series B Senior
Subordinated Notes due 2009 to be issued pursuant to this Indenture in
connection with a Registered Exchange Offer pursuant to a Registration Rights
Agreement and (ii) Additional Notes, if any, issued in the form of 10-1/2%
Series B or other series of Senior Subordinated Notes due 2009 pursuant to a
registration statement filed with the SEC under the Securities Act.
"Initial Purchaser" means Credit Suisse First Boston
Corporation.
"Initial Notes" means (i) $100,000,000 principal amount of
10-1/2% Series A Senior Subordinated Notes due 2009, issued on April 30, 1999
and (ii) Additional Notes, if any, issued in the form of 10-1/2% Series A or
other series of Senior Subordinated Notes due 2009 in a transaction exempt from
the registration requirements of the Securities Act.
"Private Exchange" means the offer by the Issuers, pursuant to
a Registration Rights Agreement, to the Initial Purchaser to issue and deliver
to the
106
Initial Purchaser, in exchange for the Initial Notes held by the Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
of Private Exchange Notes.
"Private Exchange Notes" means the 10-1/2% Senior Subordinated
Private Exchange Notes due 2009, if any, to be issued pursuant to this Indenture
to the Initial Purchaser in a Private Exchange.
"Purchase Agreement" means (i) with respect to the Initial
Notes issued on April 30, 1999, the Purchase Agreement dated April 27, 1999,
among the Issuers and the Initial Purchaser and (ii) with respect to each
issuance of Additional Notes, the purchase agreement or underwriting agreement
among the Issuers, the Guarantors, if any, and the persons purchasing Additional
Notes.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Issuers,
pursuant to a Registration Rights Agreement, to certain Holders of Initial
Notes, to issue and deliver to such Holders, in exchange for such Initial Notes,
a like aggregate principal amount of Exchange Notes registered under the
Securities Act.
"Registration Rights Agreement" means (i) with respect to the
Initial Notes issued on April 30, 1999, the Registration Rights Agreement dated
April 30, 1999 among the Issuers and the initial purchaser named therein, and
(ii) with respect to each issuance of Additional Notes issued in a transaction
exempt from the registration requirements of the Securities Act, the
registration rights agreement, if any, among the Issuers, the guarantors
thereunder, if any, and the Persons purchasing such Additional Notes under the
related Purchase Agreement.
"Securities" means the Initial Notes, the Exchange Notes and
the Private Exchange Notes, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depositary), or any successor person
thereto and shall initially be the Trustee.
107
"Shelf Registration Statement" means the shelf registration
statement issued by the Issuers, in connection with the offer and sale of
Initial Notes, Exchange Notes or Private Exchange Notes, pursuant to a
Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions.
Term Defined in Section:
"Agent Members" 2.1(b)
"Global Security" 2.1(a)
"Regulation S" 2.1(a)
"Rule 144A" 2.1(a)
2. The Securities.
2.1 Form and Dating.
On the Issue Date, $100,000,000 of the Initial Notes are being
offered and sold by the Issuers pursuant to the Purchase Agreement.
(a) Global Securities. Initial Notes offered and sold to a QIB
in reliance on Rule 144A under the Securities Act ("Rule 144A") or in reliance
on Regulation S under the Securities Act ("Regulation S"), in each case as
provided in the Purchase Agreement, and Additional Notes, if any, issued in the
form of Exchange Notes, shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and in the case of Initial
Notes restricted securities legend set forth in Exhibit 1 hereto (each, a
"Global Security"), which shall be deposited on behalf of the purchasers of the
Initial Notes or Additional Notes, as applicable, represented thereby with the
Trustee as custodian for the Depositary (or with such other custodian as the
Depositary may direct), and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Issuers and authenticated by the
108
Trustee as hereinafter provided. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depositary. The
Issuers shall execute and the Trustee shall, in accordance with this Section
2.1(b), authenticate and deliver initially one or more Global Securities that
(a) shall be registered in the name of the Depositary for such Global Security
or Global Securities or the nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or by the Trustee as the
custodian of the Depositary or under such Global Security, and the Depositary
may be treated by the Issuers, the Trustee and any agent of the Issuers or the
Trustee as the absolute owner of such 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 Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of such Depositary governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this
Section 2.1 or Section 2.3 or 2.4 of this Appendix, owners of beneficial
interests in Global Securities will not be entitled to receive physical
delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) On
the Issue Date, $100.0 million 10-1/2% Series A Senior Subordinated Notes due
2009, (2) any Additional Notes for original issue in an aggregate principal
amount specified in the written order of the Issuers pursuant to Section 2.2 of
the Indenture and (3) Exchange Notes or Private Exchange Notes for issue in a
Registered Exchange Offer or a Private Exchange, respectively, in exchange for
a like principal amount of Initial Notes, in each case upon a written order of
the Issuers. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Notes is to be
authenticated and whether the Securities are to be Initial Notes, Exchange
Notes, Private Exchange Notes or Additional Notes.
109
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities.
(i)The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depositary,
in accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Depositary
therefor. A transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in accordance with
the Depositary's procedures containing information regarding the
participant account of the Depositary to be credited with a beneficial
interest in the Global Security. The Registrar shall, in accordance
with such instructions instruct the Depositary to credit to the account
of the Person specified in such instructions a beneficial interest in
the Global Security and to debit the account of the Person making the
transfer the beneficial interest in the Global Security being
transferred.
(ii)Notwithstanding any other provisions of this
Appendix (other than the provisions set forth in Section 2.4 of this
Appendix), a Global Security may not be transferred as a whole except
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or
by the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
(iii) In the event that a Global Security is exchanged
for Securities in definitive registered form pursuant to Section 2.4
of this Appendix or Section 2.9 of the Indenture, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Notes intended to ensure that such transfers comply with
Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Issuers.
(b) Legend.
110
(i)Except as permitted by the following paragraphs
(ii), (iii) and (iv), each Security certificate evidencing Initial
Notes and Private Exchange Notes (and all Securities issued in
exchange therefor or in substitution thereof, other than Exchange
Notes) shall bear a legend in substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS
HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.THE HOLDER OF THIS NOTE AGREES FOR THE
BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERED ONLY (i) INSIDE THE UNITED STATES TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED STATES
IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES; AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii)Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted Security
represented by a Global Security)
111
pursuant to Rule 144 under the Securities Act, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted Security
for a certificated Security that does not bear the legend set forth
above and rescind any restriction on the transfer of such Transfer
Restricted Security, if the Holder certifies in writing to the
Registrar that its request for such exchange was made in reliance on
Rule 144 (such certification to be in the form set forth on the reverse
of the Security).
(iii) After a transfer of any Initial Notes or Private
Exchange Notes pursuant to, and during the period of the effectiveness
of, a Shelf Registration Statement with respect to such Initial Notes
or Private Exchange Notes, as the case may be, all requirements
pertaining to legends on such Initial Notes or such Private Exchange
Notes will cease to apply, but the requirements requiring such Initial
Notes or such Private Exchange Notes issued to certain Holders be
issued in global form will continue to apply, and Initial Notes or
Private Exchange Notes in global form without legends will be available
to the transferee of the Holder of such Initial Notes or Private
Exchange Notes upon exchange of such transferring Holder's Initial
Notes or Private Exchange Notes or directions to transfer such Holder's
interest in the Global Security, as applicable.
(iv)Upon the consummation of a Registered Exchange
Offer with respect to the Initial Notes pursuant to which Holders of
such Initial Notes are offered Exchange Notes in exchange for their
Initial Notes, all requirements pertaining to such Initial Notes that
Initial Notes issued to certain Holders be issued in global form will
continue to apply and Initial Notes in global form with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Notes that do not exchange their Initial
Notes, and Exchange Notes in global form without the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Notes in such Registered Exchange
Offer.
(v)Upon the consummation of a Private Exchange with
respect to the Initial Notes pursuant to which Holders of such Initial
Notes are offered Private Exchange Notes in exchange for their Initial
Notes, all requirements pertaining to such Initial Notes that Initial
Notes issued to certain Holders be issued in global form will still
apply, and Private Exchange Notes in global form with the restricted
securities legend set forth in
112
Exhibit 1 hereto will be available to Holders that exchange such
Initial Notes in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for certificated Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to the Depositary for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
Securities.
(i)To permit registrations of transfers and exchanges,
the Issuers shall execute and the Trustee shall authenticate
certificated Securities and Global Securities at the Registrar's or any
co-registrar's request.
(ii)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, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.9, 3.6, 4.14,
4.15 and Section 9.6 of the Indenture).
(iii) The Registrar or any co-registrar shall not be
required to register the transfer of or exchange of (a) any
certificated Security selected for redemption in whole or in part
pursuant to Article III of the Indenture, except the unredeemed portion
of any certificated Security being redeemed in part, or (b) any
Security for a period beginning 15 Business Days before the mailing of
a notice of an offer to repurchase or redeem Securities or 15 Business
Days before an Interest Payment Date.
(iv) Prior to the due presentation for registration
of transfer of any Security, the Issuers, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the person
in whose name a Security is
113
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for
all other purposes whatsoever, whether or not such Security is
overdue, and none of the Issuers, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) All Securities issued upon any transfer or
exchange pursuant to the terms of the Indenture shall evidence the
same debt and shall be entitled to the same benefits under the
Indenture as the Securities surrendered upon such transfer or exchange.
(e) No Obligation of the Trustee.
(i)The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Security, a member of,
or a participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest
in the Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the Depositary) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depositary or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to
its members, participants and any beneficial owners.
(ii)The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under the Indenture or under applicable law with
respect to any transfer of any interest in any Security (including any
transfers between or among Depositary participants, members or
beneficial owners in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as
are expressly required by, and to do so if and when expressly required
by, the terms of the Indenture and the Securities, and to
114
examine the same to determine substantial compliance as to form with
the express requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depositary or with
the Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Issuers
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed
by the Issuers within 90 days of such notice, (ii) the Issuers, in their sole
discretion, notify the Trustee in writing that they elect to cause the issuance
of certificated Securities under the Indenture or (iii) upon request of the
Trustee or Holders of a majority of the aggregate principal amount of
outstanding Securities if there shall have occurred and be continuing a Default
or Event of Default with respect to the Securities.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depositary
to the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount of certificated Securities of authorized denominations. Any portion of a
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Note delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(b), bear the
restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under the
Indenture or the Securities.
115
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a) above, the Issuers will promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
116
EXHIBIT 1
TO RULE 144A/REGULATION S
APPENDIX
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE ISSUERS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS 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, TRANSFERS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR
TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS NOTE
AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
117
MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) INSIDE THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH
(iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
118
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
Date of
Exchange
Signature of
authorized
officer
of Trustee or
Securities
Custodian
Amount of
Decrease in
Principal
Amount of
this Global
Security
Amount of
Increase in
Principal
Amount of
this Global
Security
Principal
Amount of
this Global
Security
following
119
such decrease
or increase
120
EXHIBIT A
FORM OF INITIAL NOTE
CUSIP No.:
CHEROKEE INTERNATIONAL, LLC
CHEROKEE INTERNATIONAL FINANCE, INC.
10-1/2% SERIES A SENIOR SUBORDINATED NOTE DUE 2009
No.
$
CHEROKEE INTERNATIONAL, LLC, a California limited liability company (the
"Company") and CHEROKEE INTERNATIONAL FINANCE, INC., a Delaware corporation
("Finance", and together with the Company, the "Issuers", which terms include
any successor entity), jointly and severally for value received, promise to pay
to Cede & Co. or registered assigns, the principal sum of ONE HUNDRED MILLION
DOLLARS, on May 1, 2009. Interest Payment Dates: May 1 and November 1 Record
Dates: April 15 and October 15 Reference is made to the further provisions of
this Note contained herein, which will for all purposes have the same effect as
if set forth at this place.
121
IN WITNESS WHEREOF, the Issuers have caused this Note to be signed manually or
by facsimile by its duly authorized officer.
CHEROKEE INTERNATIONAL, LLC
[SEAL]
By:
Name:
Title:
By:
Name:
Title:
CHEROKEE INTERNATIONAL FINANCE, INC.
[SEAL]
By:
Name:
Title:
By:
Name:
Title:
Dated: [ ], [ ]
Certificate of Authentication
This is one of the 10-1/2% Series A Senior Subordinated Notes due 2009 referred
to in the within-mentioned Indenture.
FIRSTAR BANK OF MINNESOTA, N.A.,
as Trustee
Dated: [ ], [ ] By:
Authorized Signatory
122
(REVERSE OF SECURITY)
10-1/2% SERIES A SENIOR SUBORDINATED NOTE DUE 2009
1. Interest. CHEROKEE INTERNATIONAL, LLC, a California limited liability company
(the "Company") and CHEROKEE INTERNATIONAL FINANCE, INC., a Delaware
corporation ("Finance", and together with the Company, the "Issuers"), jointly
and severally promise to pay interest on the principal amount of this Note at
the rate per annum shown above; provided, however, that if a Registration
Default (as defined in the Registration Rights Agreement) occurs, additional
interest will accrue on this Note at a rate of 0.50% per annum, from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured,
calculated on the principal amount of this Note as of the date on which such
interest is payable. Such interest is payable in addition to any other interest
payable from time to time with respect to this Note. The Trustee will not be
deemed to have notice of a Registration Default until it shall have received
actual notice of such Registration Default. Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from April 30, 1999. The Issuers will pay interest semi-annually in
arrears on each Interest Payment Date, commencing November 1, 1999. Interest
will be computed on the basis of a 360-day year of twelve 30-day months. The
Issuers shall pay interest on overdue principal at the rate borne by the Notes
plus 1% per annum and on overdue installments of interest (without regard to any
applicable grace periods) at such higher rate to the extent lawful.
2. Method of Payment. The Issuers shall pay interest on the Notes (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 Notes are cancelled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Issuers shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuers
may pay principal and interest by its 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, Firstar Bank of Minnesota, N.A., a
national association (the "Trustee"), will act as Paying Agent and Registrar.
The Issuers may change any Paying Agent, Registrar or co-Registrar without
notice to the Holders.
4. Indenture and Guarantee. The Issuers issued the Notes under an Indenture,
dated as of April 30, 1999 (the "Indenture"), among the Issuers and the Trustee.
This
123
Note is one of a duly authorized issue of Initial Notes of the Issuers
designated as their 10-1/2% Series A Senior Subordinated Notes due 2009. The
Issuers shall be entitled to issue Additional Notes pursuant to Section 2.14 of
the Indenture. The Initial Notes, any Additional Notes, and any Private Exchange
Notes and Exchange Notes issued pursuant to the Indenture are treated as a
single class of securities under the Indenture. Capitalized terms herein are
used as defined in the Indenture unless otherwise defined herein. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code "
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and the TIA for a
statement of them. The Notes are general unsecured obligations of the Issuers.
To the extent of any conflict between the terms of the Notes and the Indenture,
the applicable terms of the Indenture shall govern. The Notes will be entitled
to the benefits of certain Guarantees by future Guarantors made for the benefit
of the Holders. References is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and obligations thereunder
of the Trustee, the Holders and any Guarantors.
5. Subordination. The Notes are subordinated in right of payment, in the manner
and to the extent set forth in the Indenture, to the prior payment in full in
cash of all Senior Indebtedness of the Issuers, whether outstanding on the date
of the Indenture or thereafter created, incurred, assumed or guaranteed. Each
Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such
action as may be necessary or appropriate to effectuate the subordination
provided for in the Indenture and appoints the Trustee his attorney-in-fact for
such purposes.
6. Redemption. (a) Optional Redemption. Except as set forth in the following
paragraph, the Notes will not be redeemable at the option of the Issuers prior
to May 1, 2004. Thereafter, the Notes will be redeemable, at the Issuers'
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on May 1 of the years set forth below:
124
Period
Redemption
Price
2004
105.250%
2005
103.500%
2006
101.750%
2007 and thereafter
100.000%
(b) Optional Redemption Upon Public Equity Offerings. In addition, at any time
and from time to time prior to May 1, 2002, the Issuers may redeem in the
aggregate up to 35% of the original principal amount of the Notes (including the
original principal amount of any Additional Notes) with the proceeds of one or
more Public Equity Offerings, at a redemption price (expressed as a percentage
of principal amount) of 110.500% plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the aggregate principal amount of the
Notes originally outstanding (including the original principal amount of any
Additional Notes) must remain outstanding after each such redemption.
In order to effect the foregoing redemption with the proceeds of any Public
Equity Offering, the Issuers shall make such redemption not more than 120 days
after the consummation of any 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 Notes to
be redeemed at such Holder's registered address. Notes in denominations of
$1,000 may be redeemed only in whole. Notes in denominations larger than $1,000
may be
125
redeemed in part but only in multiples of $1,000.Except as set forth in the
Indenture, if monies for the redemption of the Notes called for redemption shall
have been deposited with the Paying Agent for redemption on such Redemption
Date, then, unless the Issuers default in the payment of such Redemption Price
plus accrued and unpaid interest, if any, the Notes called for redemption will
cease to bear interest from and after such Redemption Date and the only right of
the Holders of such Notes will be to receive payment of the Redemption Price
plus accrued and unpaid interest, if any.
8. Offers to Purchase. Sections 4.14 and 4.15 of the Indenture provide that, in
the event of certain Asset Dispositions (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
to further limitations contained therein, the Issuers will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Registration Rights. Pursuant to the terms, and subject to the provisions of
the Registration Rights Agreement (as defined in the Indenture), the Issuers
will be obligated to consummate an exchange offer pursuant to which the Holder
of this Note shall have the right to exchange this Note for the Issuers' 10-1/2%
Series B Senior Subordinated Notes due 2009 in the form of Exchange Notes, which
shall have been registered under the Securities Act, or the Issuers' 10-1/2%
Senior Subordinated Private Exchange Notes due 2009 (the "Private Exchange
Notes"), in each case in like principal amount and having terms identical in all
material respects to the Initial Notes. The Holders of the Initial Notes shall
be entitled to receive certain additional interest payments if 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. The Issuers
shall notify the Trustee of the amount of any such payments.
10. Denominations; Transfer; Exchange. The Notes are in registered form, without
coupons, in denominations of $1,000 and integral multiples of $1,000. A Holder
shall register the transfer of or exchange of Notes in accordance with the
terms, and subject to the provisions of 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 of any Notes or portions thereof
selected for redemption (except, in the case of Notes to be redeemed in part,
the portion of such Notes not to be redeemed) or any Note for a period beginning
15 Business Days before the mailing of a notice of an offer to repurchase or a
notice of redemption or 15 Business Days before any Interest Payment Date.
126
11. Persons Deemed Owners. The registered Holder of a Note shall be treated as
the owner of it for all purposes.
12. Unclaimed Money. If money for the payment
of principal or interest remains unclaimed for two years, the Trustee and the
Paying Agent will pay the money back to the Issuers (subject to any applicable
abandoned property law). After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
13. Discharge Prior to
Redemption or Maturity. If the Issuers at any time deposit with the Trustee U.S.
Legal Tender or U.S. Government Obligations sufficient to pay the principal of
and interest on the Notes to redemption or maturity and complies with the other
provisions of the Indenture relating thereto, the Issuers will be discharged
from certain provisions of the Indenture and the Notes (including certain
covenants, but excluding its obligation to pay the principal of and interest on
the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, omission,
defect or inconsistency, provide for uncertificated Notes in addition to or in
place of certificated Notes, or comply with Article Five of the Indenture or
make any other change that does not adversely affect in any material respect the
rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations on the
ability of the Issuers and their Restricted Subsidiaries to, among other things,
incur additional Indebtedness, make payments in respect of its Capital Stock or
certain Indebtedness, enter into transactions with Affiliates, create dividend
or other payment restrictions affecting Subsidiaries, merge or consolidate with
any other Person, sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and exceptions.
The Issuers must annually report to the Trustee on compliance with such
limitations.
16. Successors. When a successor assumes, in accordance with the Indenture, all
the obligations of its predecessor under the Notes and the Indenture, the
predecessor will be released from those obligations.
17. 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 of Notes
then
127
outstanding may declare all the Notes to be due and payable in the manner, at
the time and with the effect provided in the Indenture. Certain events of
bankruptcy and insolvency are Events of Default which will result in the Notes
being due and payable immediately upon the occurrence of such Events of Default.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.
18. Trustee Dealings with Issuers. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Issuers, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No past, present or future equityholder, member
of the Board of Directors, officer, employee or incorporator, as such, of either
Issuer or the Guarantors, if any, shall have any liability for any obligation of
the Issuers or the Guarantors, if any, under the Notes or the Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
20. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. The Laws of the State of New York shall govern this Note and
the Indenture (and the Subsidiary Guarantees relating thereto), without regard
to principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary abbreviations may be used in the
name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers has caused CUSIP numbers
to be printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
128
24. Indenture. Each Holder, by accepting a Note, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time.
25. Holders' Compliance with Registration Rights Agreement. Each Holder of a
Note, by acceptance hereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, including, without limitation, the obligations of
the Holders with respect to a registration and the indemnification of the
Issuers to the extent provided therein.
The Issuers will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture. Requests may be made to: CHEROKEE
INTERNATIONAL, LLC, 0000 Xxx Xxxxxx, Xxxxxx, XX 00000, Attn: Secretary.
129
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to:
(Print or type name, address and zip code
and social security or tax ID number of assignee)
and irrevocably appoint _______________________________, agent to transfer this
Note on the books of the Issuers. The agent may substitute another to act for
him.
Date:_______________ Signed:___________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:_______________________
(Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended).
In connection with any transfer of this Note occurring prior to the date which
is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) two years from date of original issuance, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Note is being
transferred:
130
[Check One]
(1)__ to the Issuers or a subsidiary thereof; or
(2)__ pursuant to and in compliance with Rule 144A under the Securities Act; or
(3)__ outside the United States to a "foreign person" in compliance with Rule
904 of Regulation S under the Securities Act; or
(4)__ pursuant to the exemption from registration provided by Rule 144 under the
Securities Act; or
(5)__ pursuant to an effective registration statement under the Securities Act;
or
(6)__ pursuant to another available exemption from the registration requirements
of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided that if box (3), (4) or (6) is
checked, the Issuers or the Trustee may require, prior to registering any
such transfer of the Notes, in its sole discretion, such legal opinions,
certifications and other information as the Trustee or the Issuers has
reasonably requested 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. If none of the foregoing boxes is
checked, the Trustee or Registrar shall not be obligated to register this
Note in the name of any person other than the Holder hereof unless and until
the conditions to any such transfer of registration set forth herein and in
the Appendix to the Indenture shall have been satisfied.
Date:_______________Signed:___________________________________
(Sign exactly as your name appears on the other side of this Security) Signature
Guarantee:
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for its
own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Issuers as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Date:_______________ Signed:___________________________________
NOTICE: To be executed by
an executive officer
131
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
Section 4.14 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the Issuers
pursuant to Section 4.14 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$______________________
Dated: _______________
NOTICE: The signature on this assignment must correspond with the name as it
appears upon the face of the within Note in every particular without alteration
or enlargement or any change whatsoever and be guaranteed by the endorser's bank
or broker.
Signature Guarantee:__________________________
(Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended).
132
EXHIBIT B
FORM OF EXCHANGE NOTE AND PRIVATE EXCHANGE NOTE
CUSIP No.:
CHEROKEE INTERNATIONAL, LLC
CHEROKEE INTERNATIONAL FINANCE, INC.
10-1/2% SERIES B SENIOR SUBORDINATED
[PRIVATE EXCHANGE] NOTE DUE 2009
No.
$
CHEROKEE INTERNATIONAL, LLC, a California limited liability company and CHEROKEE
INTERNATIONAL FINANCE, INC., a Delaware corporation ("Finance" and, together
with the Company, the "Issuers", which terms include any successor entity),
jointly and severally for value received, promise to pay to Cede & Co. or to
registered assigns, the principal sum of ONE HUNDRED MILLION DOLLARS, on May 1,
2009.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note contained herein, which
will for all purposes have the same effect as if set forth at this place.
133
IN WITNESS WHEREOF, the Issuers have caused this Note to be signed manually or
by facsimile by its duly authorized officer.
[SEAL] CHEROKEE INTERNATIONAL, LLC
By:
Name:
Title:
By:
Name:
Title:
[SEAL] CHEROKEE INTERNATIONAL FINANCE, INC.
By:
Name:
Title:
By:
Name:
Title:
Dated: [ ], [ ]
Certificate of Authentication
This is one of the 10-1/2% Series B Senior Subordinated Notes due 2009 referred
to in the within-mentioned Indenture.
FIRSTAR BANK OF MINNESOTA, N.A., as Trustee
Dated: [ ], [ ] By:______
Authorized Signatory
134
(REVERSE OF SECURITY)
10-1/2% SERIES B SENIOR SUBORDINATED NOTE DUE 2009
1. Interest. CHEROKEE INTERNATIONAL, LLC, a California limited liability company
(the "Company") and CHEROKEE INTERNATIONAL FINANCE, INC., a Delaware
corporation ("Finance", and together with the Company, the "Issuers"), jointly
and severally promise to pay interest on the principal amount of this Note at
the rate per annum shown above. Interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from April 30, 1999. The Issuers will pay interest semi-annually in arrears on
each Interest Payment Date, commencing November 1, 1999. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Issuers
shall pay interest on overdue principal at the rate borne by the Notes plus 1%
per annum and on overdue installments of interest (without regard to any
applicable grace periods) at such higher rate to the extent lawful.
2. Method of Payment. The Issuers shall pay interest on the Notes (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 Notes are cancelled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Issuers shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuers
may pay principal and interest by its 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, Firstar Bank of Minnesota, N.A., a
national association (the "Trustee"), will act as Paying Agent. The Issuers may
change any Paying Agent, Registrar or co-Registrar without notice to the
Holders.
4. Indenture and Guarantee. The Issuers issued the Notes under an Indenture,
dated as of April 30, 1999 (the "Indenture"), among the Issuers and the Trustee.
This Note is one of a duly authorized issue of Initial Notes of the Issuers
designated as their 10-1/2% Series B Senior Subordinated Notes due 2009. The
Issuers shall be entitled to issue Additional Notes pursuant to Section 2.14 of
the Indenture, and any Additional Notes are treated as a single class of
securities under the Indenture. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code " 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture. Notwithstanding anything to the contrary
herein, the Notes are subject to all such
135
terms, and Holders of Notes are referred to the Indenture and the TIA for a
statement of them. The Notes are general unsecured obligations of the Issuers.
To the extent of any conflict between the terms of the Notes and the Indenture,
the applicable terms of the Indenture shall govern. The Notes will be entitled
to the benefits of certain Guarantees by future Guarantors made for the benefit
of the Holders. Reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and obligations thereunder of
the Trustees, the Holders and any Guarantors.
5. Subordination. The Notes are subordinated in right of payment, in the manner
and to the extent set forth in the Indenture, to the prior payment in full in
cash of all Senior Indebtedness of the Issuers, whether outstanding on the date
of the Indenture or thereafter created, incurred, assumed or guaranteed. Each
Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such
action as may be necessary or appropriate to effectuate the subordination
provided for in the Indenture and appoints the Trustee his attorney-in-fact for
such purposes.
6. Redemption.
(a) Optional Redemption. Except as set forth in the following paragraph, the
Notes will not be redeemable at the option of the Issuers prior to May 1, 2004.
Thereafter, the Notes will be redeemable, at the Issuers' option, in whole or in
part, at any time or from time to time, upon not less than 30 nor more than 60
days' prior notice mailed by first-class mail to each Holder's registered
address, at the following redemption prices (expressed in percentages of
principal amount), plus accrued and unpaid interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on May 1 of the years set forth below:
Period
Redemption
Price
2004
105.250%
2005
136
103.500%
2006
101.750%
2007 and thereafter
100.000%
(b) Optional Redemption Upon Public Equity Offerings. In addition, at any time
and from time to time prior to May 1, 2002, the Issuers may redeem in the
aggregate up to 35% of the original principal amount of the Notes (including the
original principal amount of any Additional Notes) with the proceeds of one or
more Public Equity Offerings, at a redemption price (expressed as a percentage
of principal amount) of 110.500% plus accrued and unpaid interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the aggregate principal amount of the
Notes originally outstanding (including the original principal amount of any
Additional Notes) must remain outstanding after each such redemption.
In order to effect the foregoing redemption with the proceeds of any Public
Equity Offering, the Issuers shall make such redemption not more than 120 days
after the consummation of any 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 Notes to
be redeemed at such Holder's registered address. Notes in denominations of
$1,000 may be redeemed only in whole. Notes in denominations larger than $1,000
may be redeemed in part but only in multiples of $1,000. Except as set forth in
the Indenture, if monies for the redemption of the Notes called for redemption
shall have been deposited with the Paying Agent for redemption on such
Redemption Date, then, unless the Issuers default in the payment of such
Redemption Price plus accrued and unpaid interest, if any, the Notes called for
redemption will cease to bear interest from and after such Redemption Date and
the only right of the Holders of such Notes will be to receive payment of the
Redemption Price plus accrued and unpaid interest, if any.
8. Offers to Purchase. Sections 4.14 and 4.15 of the Indenture provide that, in
the event of certain Asset Dispositions (as defined in the Indenture) and upon
the
137
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Issuers will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange of
Notes in accordance with the terms, and subject to the provisions of 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 of any Notes or portions thereof selected for redemption (except, in
the case of Notes to be redeemed in part, the portion of such Notes not to be
redeemed) or any Note for a period beginning 15 Business Days before the mailing
of a notice of an offer to repurchase or a notice of redemption or 15 Business
Days before any Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note shall be treated as
the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agent will pay the money
back to the Issuers (subject to any applicable abandoned property law). After
that, all liability of the Trustee and such Paying Agent with respect to such
money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Issuers at any time
deposit with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Issuers will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture or the Notes to, among other things, cure any ambiguity, omission,
defect or inconsistency, provide for uncertificated Notes in addition to or in
place of certificated Notes,
138
or comply with Article Five of the Indenture or make any other change that does
not adversely affect in any material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain limitations on the
ability of the Issuers and their Restricted Subsidiaries to, among other things,
incur additional Indebtedness, make payments in respect of its Capital Stock or
certain Indebtedness, enter into transactions with Affiliates, create dividend
or other payment restrictions affecting Subsidiaries, merge or consolidate with
any other Person, sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and exceptions.
The Issuers must annually report to the Trustee on compliance with such
limitations.
15. Successors. When a successor assumes, in accordance with the Indenture, all
the obligations of its predecessor under the Notes and the Indenture, the
predecessor will be released from those obligations.
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 of Notes
then outstanding may declare all the Notes to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Certain events of
bankruptcy and insolvency are Events of Default which will result in the Notes
being due and payable immediately upon the occurrence of such Events of Default.
Holders of Notes may not enforce the Indenture or the Notes except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest) 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 Notes and
may otherwise deal with the Issuers, their Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No past, present or future equityholder, member
of the Board of Directors, officer, employee or incorporator, as such, of the
Issuers or the Guarantors, if any, shall have any liability for any obligation
of the Issuers or the Guarantors, if any, under the Notes or the Indenture or
for any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
139
19. Authentication. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The Laws of the State of New York shall govern this Note and
the Indenture (and the Subsidiary Guarantees relating thereto), without regard
to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations may be used in the
name of a Holder of a Note or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Issuers has caused CUSIP numbers
to be printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound by all of
the terms and provisions of the Indenture, as the same may be amended from time
to time.
The Issuers will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture. Requests may be made to: CHEROKEE
INTERNATIONAL, LLC, 0000 Xxx Xxxxxx, Xxxxxx, XX 00000, Attn: Secretary.
140
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to:
(Print or type name, address and zip code
and social security or tax ID number of assignee)
and irrevocably appoint _______________________________, agent to transfer this
Note on the books of the Issuers. The agent may substitute another to act for
him.
Date:_______________ Signed:___________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:_______________________
(Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended). In connection with any
transfer of this Note occurring prior to the date which is the earlier of (i)
the date of the declaration by the SEC of the effectiveness of a registration
statement under the Securities Act of 1933, as amended (the "Securities Act")
covering resales of this Note (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) two years from
date of original issuance, the undersigned confirms that it has not utilized
any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
141
[Check One]
(1)__ to the Issuers or a subsidiary thereof; or
(2)__ pursuant to and in compliance with Rule 144A under the Securities Act; or
(3)__ outside the United States to a "foreign person" in compliance with Rule
904 of Regulation S under the Securities Act; or
(4)__ pursuant to the exemption from registration provided by Rule 144 under the
Securities Act; or
(5)__ pursuant to an effective registration statement under the Securities Act;
or
(6)__ pursuant to another available exemption from the registration requirements
of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided that if box (3), (4) or (6) is
checked, the Issuers or the Trustee may require, prior to registering any
such transfer of the Notes, in its sole discretion, such legal opinions,
certifications and other information as the Trustee or the Issuers has
reasonably requested 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.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in the Appendix to the Indenture shall have been satisfied.
Date:_______________Signed:___________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents
and warrants that it is purchasing this Note for its own account or an account
with respect to which it exercises sole investment discretion and that it and
any such account is a "qualified institutional buyer" within the meaning of Rule
144A under the Securities Act and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Issuers as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Date:_______________ Signed:___________________________________
NOTICE: To be executed by
an executive officer
142
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Issuers pursuant to
Section 4.14 or Section 4.15 of the Indenture, check the appropriate box:
Section 4.14 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the Issuers
pursuant to Section 4.14 or Section 4.15 of the Indenture, state the amount you
elect to have purchased:
$______________________
Dated: _______________
NOTICE: The signature on this assignment must correspond with the name as it
appears upon the face of the within Note in every particular without alteration
or enlargement or any change whatsoever and be guaranteed by the endorser's bank
or broker.
Signature Guarantee:__________________________
(Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended).
143
[EXHIBIT C]
[FORM OF GUARANTEE]
GUARANTEE
Each of the undersigned (the "Guarantors"), have jointly and severally
unconditionally guaranteed on a senior subordinated basis (such guarantee by
each Guarantor being referred to herein as the "Guarantee") (i) the due and
punctual payment of the principal of and interest on the Notes, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise, the
due and punctual payment of interest on the overdue principal and interest, if
any, on the Notes, to the extent lawful, and the due and punctual performance of
all other obligations of the Issuers to the Holders or the Trustee all in
accordance with the terms set forth in Article Eleven of the Indenture and (ii)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, subject to any applicable grace period, by acceleration or
otherwise. The obligations of each Guarantor to the Holders of Notes and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth and
are senior subordinated obligations of each Guarantor, to the extent and in the
manner provided, in Articles Eleven and Twelve of the Indenture, and reference
is hereby made to such Indenture for the precise terms of the Guarantee therein
made. No stockholder, officer, director, employee or incorporator, as such,
past, present or future, of each Guarantor shall have any liability under the
Guarantee by reason of his or its status as such stockholder, officer, director,
employee or incorporator.
144
The Guarantee shall not be valid or obligatory for any purpose until this
certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
[GUARANTOR]
By:
Name:
Title:
145
