Exhibit 4.2
EXECUTION COPY
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DANKA BUSINESS SYSTEMS PLC
and each of the Guarantors named herein
SERIES A AND SERIES B
11% SENIOR NOTES DUE 2010
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INDENTURE
Dated as of July 1, 2003
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HSBC Bank USA
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.10
(b)..................................................... 7.10
(c)..................................................... N.A.
311(a)..................................................... 7.11
(b)..................................................... 7.11
(c)..................................................... N.A.
312(a)..................................................... 2.05
(b)..................................................... 12.03
(c)..................................................... 12.03
313(a)..................................................... 7.06
(b)(1).................................................. N.A.
(b)(2).................................................. 7.06; 7.07
(c)..................................................... 7.06
(d)..................................................... 7.06
314(a)..................................................... 4.03; 12.02; 12.05
(b)..................................................... N.A.
(c)(1).................................................. 12.04
(c)(2).................................................. 12.04
(c)(3).................................................. N.A.
(d)..................................................... N.A.
(e)..................................................... 12.05
(f)..................................................... N.A.
315(a)..................................................... 7.01
(b)..................................................... 7.05; 12.02
(c)..................................................... 7.01
(d)..................................................... 7.01
(e)..................................................... 6.11
316(a)(last sentence)...................................... 2.09
(a)(1)(A)............................................... 6.05
(a)(1)(B)............................................... 6.04
(a)(2).................................................. N.A.
(b)..................................................... 6.07
(c)..................................................... 2.12
317(a)(1).................................................. 6.08
(a)(2).................................................. 6.09
(b)..................................................... 2.04
318(a)..................................................... 12.01
(b)..................................................... N.A.
(c)..................................................... 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.....................................................1
Section 1.02 Other Definitions..............................................26
Section 1.03 Incorporation by Reference of Trust Indenture Act..............27
Section 1.04 Rules of Construction..........................................28
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating................................................28
Section 2.02 Execution and Authentication...................................29
Section 2.03 Registrar and Paying Agent.....................................29
Section 2.04 Paying Agent to Hold Money in Trust............................30
Section 2.05 Holder Lists...................................................30
Section 2.06 Transfer and Exchange..........................................30
Section 2.07 Replacement Notes..............................................42
Section 2.08 Outstanding Notes..............................................42
Section 2.09 Treasury Notes.................................................42
Section 2.10 Temporary Notes................................................43
Section 2.11 Cancellation...................................................43
Section 2.12 Defaulted Interest.............................................43
Section 2.13 Additional Amounts and Other Taxes.............................43
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.............................................45
Section 3.02 Selection of Notes to Be Redeemed or Purchased.................46
Section 3.03 Notice of Redemption...........................................46
Section 3.04 Effect of Notice of Redemption.................................47
Section 3.05 Deposit of Redemption or Purchase Price........................47
Section 3.06 Notes Redeemed or Purchased in Part............................48
Section 3.07 Optional Redemption............................................48
Section 3.08 Mandatory Redemption...........................................48
Section 3.09 Offer to Purchase by Application of Excess Proceeds............49
Section 3.10 Redemption for Changes in Withholding Taxes....................50
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes...............................................51
Section 4.02 Maintenance of Office or Agency................................51
Section 4.03 Reports........................................................52
Section 4.04 Compliance Certificate.........................................53
Section 4.05 Taxes..........................................................53
Section 4.06 Stay, Extension and Usury Laws.................................53
Section 4.07 Restricted Payments............................................53
Section 4.08 Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries........................................57
i
Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified
and Preference Shares..........................................59
Section 4.10 Asset Sales....................................................62
Section 4.11 Transactions with Affiliates...................................64
Section 4.12 Liens..........................................................65
Section 4.13 Business Activities............................................65
Section 4.14 Corporate Existence............................................65
Section 4.15 Offer to Repurchase Upon Change of Control.....................66
Section 4.16 Limitation on Sale and Leaseback Transactions..................67
Section 4.17 Payments for Consent...........................................68
Section 4.18 Additional Subsidiary Guarantees...............................68
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries........68
Section 4.20 Listing........................................................68
Section 4.21 Excess Cash Flow...............................................69
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of Assets........................70
Section 5.02 Successor Corporation Substituted..............................72
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..............................................72
Section 6.02 Acceleration...................................................74
Section 6.03 Other Remedies.................................................75
Section 6.04 Waiver of Past Defaults........................................75
Section 6.05 Control by Majority............................................75
Section 6.06 Limitation on Suits............................................75
Section 6.07 Rights of Holders of Notes to Receive Payment..................76
Section 6.08 Collection Suit by Trustee.....................................76
Section 6.09 Trustee May File Proofs of Claim...............................76
Section 6.10 Priorities.....................................................77
Section 6.11 Undertaking for Costs..........................................77
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee..............................................77
Section 7.02 Rights of Trustee..............................................78
Section 7.03 Individual Rights of Trustee...................................79
Section 7.04 Trustee's Disclaimer...........................................79
Section 7.05 Notice of Defaults.............................................79
Section 7.06 Reports by Trustee to Holders of the Notes.....................79
Section 7.07 Compensation and Indemnity.....................................80
Section 7.08 Replacement of Trustee.........................................81
Section 7.09 Successor Trustee by Merger, etc...............................81
Section 7.10 Eligibility; Disqualification..................................82
Section 7.11 Preferential Collection of Claims Against Company..............82
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.......82
Section 8.02 Legal Defeasance and Discharge.................................82
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Section 8.03 Covenant Defeasance............................................83
Section 8.04 Conditions to Legal or Covenant Defeasance.....................83
Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions..........................85
Section 8.06 Repayment to Company...........................................85
Section 8.07 Reinstatement..................................................85
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes............................86
Section 9.02 With Consent of Holders of Notes...............................87
Section 9.03 Compliance with Trust Indenture Act............................88
Section 9.04 Revocation and Effect of Consents..............................88
Section 9.05 Notation on or Exchange of Notes...............................88
Section 9.06 Trustee to Sign Amendments, etc................................89
ARTICLE 10.
SUBSIDIARY GUARANTEES
Section 10.01 Guarantee......................................................89
Section 10.02 Limitation on Guarantor Liability..............................90
Section 10.03 Execution and Delivery of Subsidiary Guarantee.................90
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.............91
Section 10.05 Releases Following Sale of Assets..............................91
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.....................................92
Section 11.02 Application of Trust Money.....................................93
Section 11.03 Acknowledgment of Discharge....................................93
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls...................................93
Section 12.02 Notices........................................................94
Section 12.03 Communication by Holders of Notes with Other Holders
of Notes.......................................................95
Section 12.04 Certificate and Opinion as to Conditions Precedent.............95
Section 12.05 Statements Required in Certificate or Opinion..................95
Section 12.06 Rules by Trustee and Agents....................................96
Section 12.07 No Personal Liability of Directors, Officers, Employees
and Stockholders...............................................96
Section 12.08 Governing Law..................................................96
Section 12.09 Judgment Currency..............................................96
Section 12.10 No Adverse Interpretation of Other Agreements..................97
Section 12.11 Consent to Service.............................................97
Section 12.12 Successors.....................................................97
Section 12.13 Severability...................................................97
Section 12.14 Counterpart Originals..........................................97
Section 12.15 Table of Contents, Headings, etc...............................97
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTATION OF GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
iv
INDENTURE dated as of July 1, 2003 among Danka Business Systems PLC, a
public company incorporated with limited liability under the Companies Act of
1985 with registered number 1101386 and with its registered office at Masters
House, 000 Xxxxxxxxxxx Xxxx, Xxxxxx X00 0XX, Xxxxxxx (the "Company"), the
Guarantors (as defined) and HSBC Bank USA, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 11% Series A Senior Notes due 2010 (the "Series A Notes") and
the 11% Series B Senior Notes due 2010 (the "Series B Notes" and, together with
the Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is consolidated, amalgamated, combined or otherwise merged with or
into or becomes a Subsidiary of such specified Person, whether or not such
Indebtedness is incurred in connection with, or in contemplation of, such
other Person consolidating, amalgamating, combining or otherwise merging
with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person, to the extent of the Fair Market Value of such asset
where the Indebtedness so secured is not the Indebtedness of such Person.
"Additional Notes" means an unlimited amount of Notes (other than the
Initial Notes) issued under this Indenture in accordance with Sections 2.02 and
4.09 hereof, as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings. No Person (other than the Company or any of its Subsidiaries) in whom
a Receivables Subsidiary makes an Investment in connection with a Qualified
Receivables Transaction will be deemed to be an Affiliate of the Company or any
of its Subsidiaries solely by reason of such Investment.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Clearstream that apply to such transfer or exchange.
1
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights; provided that the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole will be governed by the provisions of Sections 4.15 and
5.01 hereof and not by the provisions of Section 4.10 hereof; and
(2) the issuance of Share Capital by any of the Company's Restricted
Subsidiaries or the sale of Share Capital in any of its Restricted
Subsidiaries, other than the issuance or sale of directors' qualifying
shares.
Notwithstanding the preceding, none of the following items will be
deemed to be an Asset Sale:
(1) in the case of either clause (1) or (2) above, any single
transaction or series of related transactions that involve:
(a) assets having a Fair Market Value of less than $2.5 million,
or, to the extent not denominated in U.S. dollars, the U.S. dollar
equivalent thereof, or
(b) Net Proceeds of less than $2.5 million, or, to the extent
not denominated in U.S. dollars, the U.S. dollar equivalent thereof;
(2) a transfer of assets or rights by the Company to a Restricted
Subsidiary of the Company or by a Restricted Subsidiary of the Company to
the Company or another Restricted Subsidiary of the Company;
(3) an issuance of Share Capital by a Restricted Subsidiary of the
Company to the Company or to another Restricted Subsidiary of the Company;
(4) the sale, lease or license of equipment, inventory, intellectual
property or accounts receivable in the ordinary course of business;
(5) the sale or other disposition of cash, Cash Equivalents or other
marketable securities;
(6) a Restricted Payment that is not prohibited by Section 4.07
hereof or is a Permitted Investment;
(7) sales, conveyances or other transfers of accounts receivable and
related assets of the type specified in the definition of "Qualified
Receivables Transaction" to a Receivables Subsidiary for the fair market
value thereof, including cash in an amount at least equal to 75% of the
book value thereof as determined in accordance with GAAP, it being
understood that, for the purposes of this clause (7), notes received in
exchange for the transfer of accounts receivable and related assets will be
deemed cash if the Receivables Subsidiary or other payor is required to
repay said notes as soon as practicable from available cash collections
less amounts required to be established as reserves pursuant to contractual
agreements with entities that are not Affiliates of the Company entered
into as part of a Qualified Receivables Transaction;
2
(8) transfers of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables Transaction," or a
fractional undivided interest therein, by a Receivables Subsidiary in a
Qualified Receivables Transaction;
(9) sales, conveyances or other transfers of accounts receivables and
related assets, or fractional undivided interests therein, by a
Non--Guarantor Subsidiary in connection with factoring or other receivables
financing transactions by such Non--Guarantor Subsidiary in conjunction
with an incurrence of Indebtedness under clause (14) of Section 4.09
hereof; provided that each such sale, conveyance or other transfer shall be
subject to clause (1) of Section 4.10(a) hereof;
(10) the sale, exchange or other disposition of assets, property or
equipment that has become obsolete, damaged, worn out or unsuitable for use
in connection with the business of the Company or any Restricted Subsidiary
of the Company;
(11) the surrender or waiver of contract rights or settlement, release
or surrender of a contract, tort or other litigation claim in the ordinary
course of business;
(12) the lease, assignment or sublease of any real or personal
property in the ordinary course of business; and
(13) the granting of Liens not prohibited by this Indenture.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person," (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a company or corporation, the board of directors
of the company or corporation;
(2) with respect to a partnership, the Board of Directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
3
"Borrowing Base" means, as of any date, an amount equal to:
(1) 75% of the face amount of all accounts receivable owned by the
Company and its Subsidiaries as of the end of the most recent fiscal
quarter preceding such date that were not more than 90 days past due;
provided, however, that any accounts receivable owned by a Receivables
Subsidiary, or which the Company or any of its Subsidiaries has agreed to
sell or transfer to a Receivables Subsidiary, shall be excluded for
purposes of determining such amount; plus
(2) 50% of the book value of all inventory, net of reserves, owned by
the Company and its Subsidiaries as of the end of the most recent fiscal
quarter preceding such date; minus
(3) the aggregate amount of trade payables of the Company and its
Subsidiaries outstanding as of the end of the most recent fiscal quarter
preceding such date, all calculated on a consolidated basis and in
accordance with GAAP.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligations" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Cash Equivalents" means:
(1) United States dollars and currency of any member state of the
European Union;
(2) securities, or certificates representing an interest in such
securities, issued or directly and fully guaranteed or insured by the
United States government, including any agency or instrumentality thereof,
or the government of a member state of the European Union, including any
agency or instrumentality thereof, as the case may be;
(3) time deposit accounts, certificates of deposit, money market
deposits and bankers' acceptances with maturities of 12 months or less from
the date of acquisition and overnight bank deposits, issued by, or
deposited with, a bank or trust company which is organized under the laws
of a member state of the European Union or of the United States or any
state thereof; provided that such bank or trust company has capital,
surplus and undivided profits aggregating in excess of $200.0 million, or
the foreign currency equivalent thereof as of the date of such investment,
and whose long-term debt is rated "A-3" or higher by Xxxxx'x Investors
Service, Inc. or "A-" or higher by Standard and Poor's Ratings Group or the
equivalent rating category or another internationally recognized rating
agency;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Xxxxx'x Investors Service, Inc. or Standard & Poor's Rating Services and,
in each case, maturing within one year after the date of acquisition;
4
(6) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (1) through (4) of this
definition; and
(7) in the case of any Non-Guarantor Subsidiary:
(a) direct obligations of the sovereign nation, or any agency
thereof, in which such Non-Guarantor Subsidiary is organized and is
conducting business or in obligations fully and unconditionally guaranteed
by such sovereign nation, or any agency thereof; or
(b) investments of the type and maturity described in clauses
(1) through (6) above of foreign obligors, which investments or obligors
have ratings described in such clauses or equivalent ratings from
comparable foreign rating agencies;
provided that the aggregate amount of any obligations and investments that
are at any time outstanding pursuant to this clause (7) shall not exceed
the U.S. dollar equivalent of $5.0 million.
"Change of Control" means the occurrence of any of the following:
(1) the sale, transfer, conveyance or other disposition, other than
by way of merger, amalgamation, combination or consolidation, in one or a
series of related transactions, of all or substantially all the assets of
the Company and its Restricted Subsidiaries taken as a whole to any
"person," as that term is used in Section 13(d)(3) of the Exchange Act,
other than a Principal or a Related Party of a Principal or other than to
effect a Change of Domicile;
(2) the shareholders of the Company shall have approved a plan
relating to the liquidation or dissolution of the Company, other than to
effect a Change of Domicile;
(3) the consummation of any transaction, including, without
limitation, any merger, amalgamation, combination or consolidation, the
result of which is that any "person," as defined above, other than a
Principal or a Related Party of a Principal, becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the Voting Stock of the
Company, measured by voting power rather than number of shares; provided,
however, that the creation of a holding company to own all of the Share
Capital of the Company will not be deemed to constitute a Change of Control
under this clause (3) if, immediately after consummation of such
transaction, the holders of the Share Capital of such holding company are
the same as the holders of the Share Capital of the Company immediately
before such transaction and the percentage holdings of such holders is
unaffected by the creation of such holding company;
(4) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or
(5) the Company consolidates, amalgamates, combines or merges with or
into, any Person, or any Person consolidates with, or merges with or into,
the Company, in any such event pursuant to a transaction in which any of
the outstanding Voting Stock of the Company or such other Person is
converted into or exchanged for cash, securities or other property, other
than any such transaction where the Voting Stock of the Company outstanding
immediately prior to such transaction is converted into or exchanged for
Voting Stock, other than Disqualified Shares, of the surviving or
transferee Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person, immediately after
giving effect to such issuance.
5
"Change of Domicile" means a transaction or series of related transactions,
including, without limitation (1) a merger, amalgamation, combination or
consolidation of the Company with or into another Person, (2) the acquisition of
all the Share Capital of the Company or (3) the sale, transfer, conveyance or
other disposition of all or substantially all the assets of the Company and its
Restricted Subsidiaries taken as a whole to another Person, the sole purpose of
which is to reincorporate the Company in a jurisdiction other than England and
Wales or organize a successor entity to the Company in a jurisdiction other than
England and Wales.
"Clearstream" means Clearstream Banking, S.A.
"Company" means Danka Business Systems PLC and any and all successors
thereto.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
(1) an amount equal to any extraordinary loss plus any net loss
realized by such Person or any of its Restricted Subsidiaries in connection
with an Asset Sale, to the extent such losses were deducted in computing
such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and
its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net Income;
plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized, including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations as included in interest
expense per GAAP, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings and receivables financings, and net payments, if any, pursuant
to Hedging Obligations, to the extent that any such expense was deducted in
computing such Consolidated Net Income; plus
(4) depreciation, amortization, including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period, and other non-cash items, excluding any
such non-cash item to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a prepaid
cash expense that was paid in a prior period, of such Person and its
Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash items were deducted in
computing such Consolidated Net Income; plus
(5) the Net Income of any Guarantor excluded from Consolidated Net
Income pursuant to clause (2) of the definition thereof; minus
(6) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business; minus
(7) the payment of dividends on the Company's existing 6.5%
convertible participating shares in the form of additional convertible
participating shares, to the extent that such convertible participating
shares have been reclassified as indebtedness and such dividends are
included in the consolidated interest expense of the Company,
6
in each case, on a consolidated basis and determined in accordance with
GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash items
of, a Restricted Subsidiary of the Company that is not a Guarantor will be added
to Consolidated Net Income to compute Consolidated Cash Flow of the Company only
to the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary that
is not a Guarantor without prior governmental approval, that has not been
obtained, and without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders.
"Consolidated Current Assets" means, at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of any Person and its Subsidiaries at such date.
"Consolidated Current Liabilities" means, at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of any Person
and its Subsidiaries at such date, but excluding the current portion of any
Indebtedness of any Person and its Subsidiaries.
"Consolidated Net Income" means with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income or loss of any Person, other than the Company,
that is not a Restricted Subsidiary or that is accounted for by the equity
method of accounting will be included only to the extent of the amount of
dividends or distributions paid in cash, or to the extent converted into
cash, to the specified Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval, that has not been obtained, or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, unless such
restrictions with respect to the payment of dividends or, similar
distributions have been legally waived;
(3) the cumulative effect of a change in accounting principles will
be excluded;
(4) any one-time non-cash charges resulting from the write-off of
unamortized debt issuance costs on the Existing Credit Facility will be
excluded;
(5) any non-cash currency gain or loss, together with any related
provision for taxes on such gain or loss, related to the sale, disposition
or liquidation of a Subsidiary of the Company will be excluded; and
(6) the Net Income or loss of any Unrestricted Subsidiary will be
excluded, whether or not distributed to the specified Person or one of its
Subsidiaries.
"Consolidated Working Capital" means, at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
7
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this
Indenture; or
(2) was nominated for election or elected to such Board of Directors
with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Loan and Security Agreement, dated as
of July 1, 2003, by and among the Company and/or one or more of its Subsidiaries
and Fleet Capital Corporation, as Administrative Agent, and various financial
institutions, as Lenders, providing for up to $50.0 million of revolving credit
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, restated, modified, renewed, refunded, replaced, extended or refinanced
from time to time.
"Credit Facilities" means, one or more debt facilities, including, without
limitation, the Credit Agreement or commercial paper facilities, in each case
with banks, investment funds or other institutional lenders providing for
revolving credit loans, term loans, receivables financings including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables, or letters of credit or other
borrowings, in each case, as amended, restated, modified, renewed, refunded,
replaced, extended or refinanced in whole or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes in
global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, substantially
in the form of Exhibit A hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Shares" means any Share Capital that, by its terms, or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the security, or upon
the happening of any event, matures or is mandatory redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder,
in whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature. Notwithstanding the preceding sentence, any Share
Capital that would constitute Disqualified Shares solely because the holders of
the Share Capital have the right to require the Company to repurchase such Share
Capital upon the occurrence of a change of control or an asset sale will not
constitute Disqualified Shares if the terms of
8
such Share Capital provide that the Company may not repurchase or redeem any
such Share Capital pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof.
"Excess Cash Flow Amount" means, for any fiscal year, 50% of Excess Cash
Flow for such fiscal year.
"Excess Cash Flow" means for any fiscal year of the Company, the excess, if
any, of:
(1) the sum, without duplication, of (a) Consolidated Net Income for
such fiscal year, (b) the amount of all Non-Cash Charges (including
depreciation and amortization) deducted in arriving at such Consolidated
Net Income, (c) decreases in Consolidated Working Capital for such fiscal
year, other than as reflected in clause (2)(b) below and (d) the aggregate
net amount of non-cash losses on the sale, lease, sale and leaseback,
assignment, conveyance, transfer or other disposition of assets by the
Company and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income, over
(2) the sum, without duplication, of (a) the amount of all non-cash
items included in arriving at such Consolidated Net Income, (b) the
aggregate amount actually paid in cash by the Company and its Subsidiaries
or reflected as a payable on the Company's balance sheet during such fiscal
year on account of capital expenditures or acquisitions of, or capitalized
repairs to, fixed or capital assets that are used or useful in a Permitted
Business (excluding the principal amount of Indebtedness incurred to
finance such expenditures (but including repayments of any such
Indebtedness incurred during such period or any prior period and any such
expenditures financed with the proceeds of any Reinvestment Deferred
Amount)), (c) the aggregate amount of all prepayments of revolving and
swingline loans under a Credit Facility during such fiscal year to the
extent accompanying permanent optional reductions of the revolving
commitments are made thereunder and all prepayments of term loans under a
Credit Facility during such fiscal year, (d) the aggregate amount of all
principal payments of any Indebtedness of the Company and its Subsidiaries
made during such fiscal year (other than in respect of any revolving credit
facility to the extent there is not an equivalent permanent reduction in
commitments thereunder and other than in respect of any Indebtedness that
is subordinate in right of payment to the notes), (e) increases in
Consolidated Working Capital for such fiscal year, other than as reflected
in clause (2)(b) above and (f) the aggregate net amount of non-cash gain on
the sale, lease, sale and leaseback, assignment, conveyance, transfer or
other disposition of assets by the Company and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of
business), to the extent included in arriving at such Consolidated Net
Income.
"Equity Offering" means (1) an offering or sale of Share Capital, other
than Disqualified Shares, of the Company, or (2) the contribution of cash to the
Company as an equity capital contribution, other than Disqualified Shares.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
system.
"European Union" means the European Union, including the countries of
Austria, Belgium, Denmark, France, Finland, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom, but
not including any country which becomes a member of the European Union after the
date of this Indenture.
9
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant to
Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Credit Facility" means the credit facility governed by the Second
Amended and Restated Credit Agreement by and among the Company, DankaLux SARL &
Co. SCA and Danka Holding Company, as borrowers, and Bank of America, N.A., as
agent, and the lenders party thereto as of June 14, 2002, as the same was
amended through the date of this Indenture.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries, other than Indebtedness under the Credit Agreement, in
existence on the date of this Indenture.
"Fair Market Value" means the price that could be negotiated in an
arm's-length free market transaction for cash between a willing seller and a
willing and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction; provided that in the event such Fair Market Value is
in excess of $15.0 million, or, to the extent not denominated in U.S. dollars,
the U.S. dollar equivalent thereof, the Company has received a written opinion
as to the fairness to the Company of such transaction from a financial point of
view from an independent accounting, appraisal, financial advisory or investment
banking firm of national standing.
"Fixed Charges" means, with respect to any specified Person for any period,
the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations as included in interest expense per
GAAP, the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net
payments, if any, pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preference shares of such Person
or any of its Restricted Subsidiaries, other than dividends on Share
Capital payable solely in Share Capital of the Company, other than
Disqualified Shares, or to the Company or a Restricted Subsidiary of the
Company, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP; minus
10
(5) the payment of dividends on the Company's existing 6.5%
convertible participating shares in the form of additional convertible
participating shares, to the extent that such convertible participating
shares have been reclassified as indebtedness and such dividends are
included in the consolidated interest expense of the Company.
"Fixed Charge Coverage Ratio" means, with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person and
its Restricted Subsidiaries for such period. In the event that the specified
Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees,
repays, repurchases or redeems any Indebtedness, other than ordinary working
capital borrowings, or issues, repurchases or redeems preference shares
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made, the
"Calculation Date," then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preference shares, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage Ratio:
(1) acquisitions that have been made by the specified Person or any
of its Restricted Subsidiaries, including through consolidations,
amalgamations, combinations or mergers and including any related financing
transactions, during the four-quarter reference period or subsequent to
such reference period and on or prior to the Calculation Date will be given
pro forma effect as if they had occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period will be calculated on a pro forma basis in accordance with
Regulation S-X under the Securities Act, without giving effect to clause
(3) of the proviso set forth in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, will be excluded, but only to the extent
that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the Restricted
Global Notes and the Unrestricted Global Notes, substantially in the form of
Exhibit A hereto issued in accordance with Section 2.01 and 2.06 hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
11
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner (including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) Danka Holding Company, American Business Credit Corporation,
Danka Management II Company, Inc., Xxxxxx Enterprises, Inc. of South
Florida, D.I. Investment Management, Inc., Quality Business, Inc., Danka
Management Company, Inc., Corporate Consulting Group, Inc., Danka Imaging
Distribution, Inc., Danka Office Imaging Company, Danka Australasia Pty.
Limited, Danka Australia Pty. Limited, Danka Tower Pty. Ltd., Danka
Distributors Pty. Ltd., Danka Datakey Pty. Ltd., Datakey Alcatel Pty. Ltd.,
Danka Systems Pty. Limited, Danka Business Finance Ltd., Danka Canada Inc.,
Kalmara Inc., Danka S.a X.X, Danka UK plc and Danka Services International
Ltd.; and
(2) any other Subsidiary of the Company that executes a Subsidiary
Guarantee in accordance with the provisions of this Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the net
payment Obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements in the ordinary course of
business designed to protect such Person against fluctuations in currency
exchange rates or interest rates.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of and registered in the name of the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit, or reimbursement agreements in respect thereof;
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
12
(5) representing the balance deferred and unpaid of the purchase
price of any property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items, other than letters of credit
and Hedging Obligations, would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person, whether or not such Indebtedness is assumed by
the specified Person, provided that, where such Indebtedness is not assumed, the
amount of such Indebtedness will be the lesser of (a) the Fair Market Value of
such asset as of the date of determination and (b) the amount of such
Indebtedness, and, to the extent not otherwise included, the Guarantee by the
specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness that does not require the current payment of interest; and
(2) the principal amount of the Indebtedness, together with any
interest on the Indebtedness that is more than 30 days past due, in the
case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Notes" means the first $175,000,000.00 in aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"Initial Purchaser" means Bear, Xxxxxxx & Co. Inc.
"Insolvency Law" means (a) the U.K. Insolvency Xxx 0000, as amended from
time to time, including by the Xxxxxxxxxx Xxx, 0000, (x) Title 11, U.S.
Bankruptcy Code of 1978, as amended, or (c) any other law of the United Kingdom,
the United States or, in each case, any political subdivision thereof, or any
other jurisdiction relating to bankruptcy, insolvency, reorganisation,
administration, moratorium, receivership, winding up, liquidation,
reorganisation or relief of debtors, in each case, including any substitute or
replacement as may become law from time to time.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means with respect to any Person, all investments by such
Person in other Persons, including Affiliates, in the forms of loans, including
Guarantees of Indebtedness or other Obligations, advances or capital
contributions, excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business, purchases or other
acquisitions for consideration of Indebtedness, Share Capital or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Share Capital of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a direct or indirect Restricted Subsidiary of the Company, the Company
will be
13
deemed to have made an Investment on the date of any such sale or disposition
equal to the Fair Market Value of the Share Capital of the Company's Investments
in such Restricted Subsidiary that were not sold or disposed of in an amount
determined as provided in Section 4.07(d) hereof. The acquisition by the Company
or any Restricted Subsidiary of the Company of a Person that, after such
acquisition, becomes a Restricted Subsidiary of the Company and that holds an
Investment in a third Person, will be deemed to be an Investment by the Company
or such Subsidiary in such third Person in an amount equal to the Fair Market
Value of the Investments held by the acquired Person in such third Person in an
amount determined in Section 4.07(d) hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, fixed and/or floating, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in, except in connection with any Qualified
Receivables Transaction or any factoring or receivables financing by a
Non-Guarantor Subsidiary, and any filing of or agreement to give any financing
statement under the Uniform Commercial Code, or equivalent statutes, of any
jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any specified Person, the net income or
loss of such Person, determined in accordance with GAAP and before any reduction
in respect of preference share dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes
on such gain or loss, realized in connection with:
(a) any Asset Sale; or
(b) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any Indebtedness of
such Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Non-Cash Charges" shall have the meaning set forth in clause (4) under the
definition of "Consolidated Cash Flow."
"Net Proceeds" means the aggregate cash proceeds or Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale, including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset
14
Sale, net of all costs relating to such Asset Sale, including, without
limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result of the Asset Sale,
taxes paid or payable as a result of the Asset Sale, in each case, after taking
into account any available tax credits or deductions and any tax sharing
arrangements, payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either (a) is secured by a Lien
on the assets or Share Capital sold or (b) is required to be paid as a result of
such Asset Sale and any reserve for adjustment in respect of such Asset Sale
established in accordance with GAAP.
"Non-Guarantor Subsidiary" means any Subsidiary of the Company for so long
as:
(1) such Subsidiary is an Unrestricted Subsidiary of the Company; or
(2) such Subsidiary (a) was not formed under the laws of the United
Kingdom, the United States, Canada, Australia or Luxembourg or any of their
respective states or provinces, including, without limitation, England or
Wales, any state of the United States or the District of Columbia, (b) was
formed under the laws of the United States, any state of the United States
or the District of Columbia, but it, individually and in the aggregate with
all other Non-Guarantor Subsidiaries, other than Unrestricted Subsidiaries
of the Company, formed under the laws of the United States, any state of
the United States or the District of Columbia, has Total Assets, not
including intercompany receivables owing from, or investments in, the
Company or any of its Subsidiaries, of less than $2.5 million, or, to the
extent not denominated in U.S. dollars, the U.S. dollar equivalent thereof,
(c) was formed under the laws of the United Kingdom or any of its
provinces, including, without limitation, England or Wales, but it,
individually and in the aggregate with all other Non-Guarantor
Subsidiaries, other than Unrestricted Subsidiaries of the Company, formed
under the laws of the United Kingdom or any of its provinces, has Total
Assets, not including intercompany receivables owing from, or investments
in, the Company or any of its Subsidiaries, of less than $2.5 million, or,
to the extent not denominated in U.S. dollars, the U.S. dollar equivalent
thereof or (d) was formed under the laws of Luxembourg or any of its
provinces, but it, individually and in the aggregate with all other such
Non-Guarantor Subsidiaries, other than Unrestricted Subsidiaries of the
Company, formed under the laws of Luxembourg or any of its provinces, has
Total Assets, not including intercompany receivables owing from, or
investments in, the Company or any of its Subsidiaries, of less than $2.5
million, or, to the extent not denominated in U.S. dollars, the U.S. dollar
equivalent thereof.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind, including any
undertaking, agreement or instrument that would constitute Indebtedness,
(b) is directly or indirectly liable as a guarantor or otherwise or (c)
constitutes the lender;
(2) no default with respect to which, including any rights that the
Holders of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary, would permit upon notice, lapse of time or both
any Holder of any other Indebtedness, other than the Notes, of the Company
or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment of the Indebtedness to be accelerated or
payable prior to its stated maturity; and
15
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Notes" has the meaning assigned to it in the preamble to this Indenture.
The Initial Notes and the Additional Notes shall be treated as a single class
for all purposes under this Indenture, and unless the context otherwise
requires, all references to the Notes shall include the Initial Notes and any
Additional Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 12.05
hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Company or any Subsidiary of
the Company.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means any business conducted by the Company and its
Restricted Subsidiaries on the date of this Indenture and any business
reasonably related, ancillary or complimentary to, or reasonable extensions of,
the business of the Company or any of its Restricted Subsidiaries on the date of
this Indenture.
"Permitted Disqualified Shares" means any Disqualified Shares of the
Company issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace or refund other Disqualified Shares of the Company;
provided that:
(1) the face amount or liquidation preference, if applicable, of such
Permitted Disqualified Shares does not exceed the face amount or
liquidation preference, if applicable, of the Disqualified Shares being
extended, refinanced, renewed, replaced or refunded, plus all accrued
dividends and premiums, if any, on the Disqualified Shares and the amount
of all fees, expenses, penalties and premiums, if any, incurred in
connection therewith; and
(2) such Permitted Disqualified Shares have a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of,
the Disqualified Shares being extended, refinanced, renewed, replaced or
refunded.
"Permitted Investments" means
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
16
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company;
or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 of this Indenture;
(5) any Investment made in exchange for the issuance of Share
Capital, other than Disqualified Shares, of the Company;
(6) the acquisition by a Receivables Subsidiary in connection with a
Qualified Receivables Transaction of Share Capital of a trust or other
Person established by such Receivables Subsidiary to effect such Qualified
Receivables Transaction; and any other Investment by the Company or a
Subsidiary of the Company in a Receivables Subsidiary or any Investment by
a Receivables Subsidiary in any other Person in connection with a Qualified
Receivables Transaction, provided that such other Investment is in the form
of a note or other instrument that the Receivables Subsidiary or other
Person is required to repay as soon as practicable from available cash
collections less amounts required to be established as reserves pursuant to
contractual agreements with entities that are not Affiliates of the Company
entered into as part of a Qualified Receivables Transaction;
(7) the acquisition by a Non-Guarantor Subsidiary in connection with
a factoring or other receivables financing transaction of a trust or other
Person established by such Non-Guarantor Subsidiary to effect such
transaction; and any other Investment by a Non-Guarantor Subsidiary in any
other Person in connection with such transaction; provided that such other
Investment is in the form of a note or other instrument that the
Non-Guarantor Subsidiary or other Person is required to repay as soon as
practicable from available cash collections less amounts required to be
established as reserves pursuant to contractual agreements with entities
that are not Affiliates of the Company entered into as part of such
transaction;
(8) any Investment existing on the date of this Indenture and any
amendment, modification, restatement, supplement, extension, renewal,
refunding, replacement or refinancing, in whole or in part, thereof;
(9) any Investments received in satisfaction of judgments,
settlements of debt or compromises of obligations incurred in the ordinary
course of business, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade creditor
or customer;
(10) Hedging Obligations;
(11) 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 that such
trade terms may include such concessionary trade
17
terms as the Company or any such Restricted Subsidiary deems reasonable
under the circumstances;
(12) Investments in prepaid expenses and lease, utility and workers'
compensation performance and other similar deposits;
(13) commission, payroll, travel and similar advances to employees in
the ordinary course of business;
(14) Investments consisting of intercompany Indebtedness not
prohibited under this Indenture;
(15) Investments consisting of Guarantees of Indebtedness not
otherwise prohibited by this Indenture;
(16) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
(17) Investments consisting of purchases and acquisitions of
inventory, supplies, materials and equipment or purchases of contract
rights or licenses or leases of intellectual property, in each case in the
ordinary course of business; and
(18) other Investments in any Person having an aggregate Fair Market
Value, measured on the date each such Investment was made and without
giving effect to subsequent changes in value, when taken together with all
other Investments made pursuant to this clause (18) that are at the time
outstanding not to exceed the greater of (x) $20.0 million, or, to the
extent not denominated in U.S. dollars, the U.S. dollar equivalent thereof,
and (y) 2% of the Company's Total Assets.
"Permitted Liens" means
(1) Liens on assets, including, without limitation, the Share Capital
of a Subsidiary, of the Company or any of its Restricted Subsidiaries to
secure Indebtedness and other Obligations under Credit Facilities permitted
to be incurred pursuant to clauses (1) and (16) of Section 4.09(b) hereof
or otherwise;
(2) Liens in favor of the Company or any Restricted Subsidiary of the
Company;
(3) Liens on assets of a Person existing at the time such Person is
acquired by, or merged with or into or consolidated, combined or
amalgamated with the Company or any Subsidiary of the Company; provided
that such Liens were not put in place in contemplation of such acquisition,
merger, consolidation, combination or amalgamation and do not extend to any
assets other than those of the Person acquired by, or merged with or into
or consolidated, combined or amalgamated with the Company or any Subsidiary
of the Company;
(4) Liens on assets existing at the time of acquisition of the assets
by the Company or any Subsidiary of the Company, provided that such Liens
were not put in place in contemplation of such acquisition;
(5) Liens incurred or deposits made to secure the performance of
statutory or regulatory obligations, bankers' acceptances, surety or appeal
bonds, performance bonds, deposits
18
to secure the performance of tenders, bids, trade contracts, government
contracts, import duties, payment of rent, performance, letters of credit
and return-of-money bonds, leases or licenses or other obligations of a
like nature incurred in the ordinary course of business, including, without
limitation, landlord Liens on leased properties;
(6) Liens with respect to Permitted Debt incurred pursuant to clauses
(4), (7), (9), (11), (13), (14) or (16) of Section 4.09(b) hereof:
(7) Liens existing on the date of this Indenture;
(8) Liens for taxes, assessments or governmental charges or claims
that (i) are not yet delinquent, (ii) that are not yet subject to penalties
or interest for non-payment or (iii) that are being contested in good faith
by appropriate proceedings promptly instituted and diligently concluded,
provided that in the case of clause (iii), any reserve or other appropriate
provision as is required in conformity with GAAP has been made therefor;
(9) Liens incurred in the ordinary course of business of the Company
or any Subsidiary of the Company with respect to obligations that do not
exceed $5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
(11) Liens to secure any Permitted Refinancing Indebtedness incurred
to refinance any Indebtedness secured by any Lien referred to in the
foregoing clauses (1), (3), (4), (6) or (7), as the case may be, at the
time the original Lien became a Permitted Lien;
(12) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's, suppliers' or other like Liens arising in the ordinary course
of business and deposits made to obtain the release of such liens and with
respect of obligations not overdue for a period in excess of 60 days or
which are being contested in good faith by appropriate proceedings;
provided that any reserve or other appropriate provision as shall be
required to conform with GAAP shall have been made therefor;
(13) easements, rights-of-way, zoning ordinances and similar charges,
restrictions, exceptions or other irregularities, reservations of, or
rights of others for: licenses, sewers, electric lines, telegraph and
telephone lines, and other similar encumbrances or title defects incurred,
or leases or subleases granted to others, in the ordinary course of
business, which do not in any case materially detract from the value of the
property subject thereto or do not materially interfere with the ordinary
conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole;
(14) Liens in favor of customs and revenue authorities to secure
payment of customs duties in connection with the importation of goods in
the ordinary course of business and other similar Liens arising in the
ordinary course of business;
(15) leases or subleases granted to third Persons not materially
interfering with the ordinary course of business of the Company and its
Restricted Subsidiaries taken as a whole;
(16) Liens, other than any Lien imposed by ERISA or any rule or
regulation promulgated thereunder, incurred or pledges or deposits made in
the ordinary course of business
19
in connection with workers' compensation, unemployment insurance and other
types of social security;
(17) deposits made in the ordinary course of business to secure
liability to insurance carriers;
(18) any attachment or judgment Lien not constituting an Event of
Default under clause (6) of Section 6.01 hereof and Liens arising from the
rendering of a judgment that is not a final judgment or order against the
Company or any Restricted Subsidiary with respect to which the Company or
such Restricted Subsidiary is then proceeding with an appeal or other
proceeding for review or in connection with surety or appeal bonds in
connection with such attachment or judgment;
(19) any interest or title of a lessor or sublessor under any
operating lease or capital lease;
(20) Liens on assets of the Company or a Receivables Subsidiary
incurred in connection with a Qualified Receivables Transaction;
(21) Liens under licensing agreements for use of intellectual property
entered into in the ordinary course of business;
(22) Liens incurred or deposits made in connection with the purchase
of inventory; provided that any such purchase of inventory is incidental to
the conduct of the business of the Company or a Restricted Subsidiary of
the Company in accordance with its then current business practices, such
Liens are in the nature of a vendor's lien or a reservation of title and
the obligations secured by such Liens are trade payables incurred in the
ordinary course of business of the Company or such Restricted Subsidiary of
the Company;
(23) Liens incurred or deposits made in connection with account
netting and other similar treasury management functions;
(24) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business; and
(25) rights of set-off of banks and other Persons.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries,
other than intercompany Indebtedness; provided that:
(1) the principal amount, or accreted value, if applicable, of such
Permitted Refinancing Indebtedness does not exceed the principal amount, or
accreted value, if applicable, of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded, plus all accrued interest and
premiums on the Indebtedness and the amount of all fees, expenses,
penalties and premiums incurred in connection therewith;
(2) such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the
20
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company ,government or other entity.
"Principals" means Cypress Associates II LLC and its Affiliates.
"Private Placement Legend" means the legend set forth in Section 2.06(g)(1)
to be placed on all Notes issued under this Indenture except where otherwise
permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Receivables Transaction" means any transaction or series of
transactions entered into by the Company or any of its Subsidiaries pursuant to
which the Company or any Restricted Subsidiary of the Company sells, conveys or
otherwise transfers to (1) a Receivables Subsidiary, in the case of a transfer
by the Company or any of its Subsidiaries, and (2) any other Person, in the case
of a transfer by a Receivables Subsidiary, or grants a security interest in, any
accounts receivable, whether now existing or arising in the future, of the
Company or any Restricted Subsidiary of the Company, and any assets related
thereto, including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Subsidiary of the Company which engages in
no activities other than in connection with the financing of accounts receivable
and which is designated by the Board of Directors of the Company, as provided
below, as a Receivables Subsidiary (a) no portion of the Indebtedness or any
other Obligations, contingent or otherwise, of which (i) is guaranteed by the
Company or any Restricted Subsidiary of the Company, excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and indemnities entered into
in the ordinary course of business in connection with a Qualified Receivables
Transaction, (ii) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to representations,
warranties, covenants and indemnities entered into in the ordinary course of
business in connection with a Qualified Receivables Transaction or (iii)
subjects any property or asset of the Company or any Restricted Subsidiary of
the Company, other than accounts receivable and related assets as provided in
the definition of "Qualified Receivables Transaction," directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
representations, warranties, covenants and indemnities entered into in the
ordinary course of business in connection with a Qualified Receivables
Transaction, (b) with which neither the Company nor any Restricted Subsidiary of
the Company has any material contract, agreement, arrangement or understanding
other than on terms no
21
less favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of the
Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable and (c) with which neither the
Company nor any Restricted Subsidiary of the Company has any obligation to
maintain or preserve such Subsidiary's financial condition or cause such
Subsidiary to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Company will be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Recovery Event" means any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Person.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of July 1, 2003, among the Company, the Guarantors and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements among the Company, the
Guarantors and the other parties thereto, as such agreement(s) may be amended,
modified or supplemented from time to time, relating to rights given by the
Company to the purchasers of Additional Notes to register such Additional Notes
under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Reinvestment Deferred Amount" means with respect to any Reinvestment
Event, the aggregate net cash proceeds received by a Person in connection
therewith that are not applied to prepay term loans under a Credit Facility or
any secured Indebtedness or reduce the revolving commitments thereunder as a
result of the delivery of a Reinvestment Notice.
"Reinvestment Event" means any sale, lease, conveyance or other disposition
of any assets or rights or Recovery Event in respect of which the Company has
delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by an officer stating
that no Event of Default has occurred and is continuing and that the Company
(directly or indirectly through a Subsidiary) intends and expects to use all or
a specified portion of the net cash proceeds of (a) a sale, lease, conveyance or
other disposition of any assets or rights or (b) a Recovery Event to make a
capital expenditure or acquire, or make capitalized repairs to, fixed or capital
assets that are used or useful in a Permitted Business.
"Related Party" means
(1) any controlling stockholder, partner, member, 80% or more owned
Subsidiary, or any spouse, descendant, including by adoption or and
stepchildren, or beneficiary of any Principal; or
(2) any trust, corporation, partnership, limited liability company or
other entity, the beneficiaries, stockholders, partners, members, owners or
Persons beneficially holding an 80% or
22
more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause
(1).
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(1) all Indebtedness of any specified Person or any of its Restricted
Subsidiaries outstanding under Credit Facilities and all Hedging
Obligations with respect thereto;
(2) any other Indebtedness of any specified Person or any of its
Restricted Subsidiaries permitted to be incurred under the terms of the
indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is subordinated in right of payment to the notes
or any Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in the preceding
clauses (1) and (2).
"Senior Debt to Cash Flow Ratio" means, as of any date of determination,
the ratio of (a) the Senior Debt of the Company and its Restricted Subsidiaries
as of such date to (b) the Consolidated Cash Flow of the Company and its
Restricted Subsidiaries for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred, determined
on a pro forma basis, including a pro forma application of the net proceeds
therefrom, as if such Indebtedness had been incurred at the beginning of such
four quarter period.
23
In addition, for purposes of calculating the Senior Debt to Cash Flow
Ratio:
(1) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through consolidations, amalgamations,
combinations or mergers and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference
period and on or prior to the date on which the event for the calculation
for the Senior Debt to Cash Flow Ratio is made will be given pro forma
effect as if they had occurred on the first day of the four-quarter
reference period and Consolidated Cash Flow for such reference period will
be calculated on a pro forma basis in accordance with Regulation S-X under
the Securities Act, without giving effect to clause (3) of the proviso set
forth in the definition of Consolidated Net Income; and
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the date on which the event for which the
calculation of the Senior Debt to Cash Flow Ratio is made, shall be
excluded.
"Share Capital" means
(1) in the case of a corporation, any and all shares, rights to
purchase, warrants, options, participations or other equivalents, however
designated and whether or not voting, of, or interests in, Share Capital or
capital stock, including preference shares;
(2) in the case of an association or business entity, any and all
shares, rights to purchase, warrants, options, participations or other
equivalents, however designated, of, or interests in, Share Capital or
capital stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests or rights to purchase, warrants,
options, participations or other equivalents of partnership or membership
interests, whether general or limited; and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person;
provided in no event shall "Share Capital" include any debt security convertible
or exchangeable into share capital, capital stock, partnership interests,
membership interests or any other equity interest until conversion or exchange,
as applicable.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the date of
this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
24
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Share Capital
entitled, without regard to the occurrence of any contingency, to vote in
the election of directors, managers or trustees of the corporation,
association, or other business entity is at the time owned or controlled,
directly or indirectly, by that Person, or one or more of the other
Subsidiaries of that Person, or a combination thereof; and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are that Person, or one or more
Subsidiaries of that Person, or any combination thereof.
"Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.
"Tax" means any tax, duty, levy, impost, assessment or other governmental
charge, including penalties and interest related thereto.
"Taxes" and "Taxation" shall be construed to have corresponding meanings to
"Tax."
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Total Assets" means the total assets of a Person and its Subsidiaries on a
consolidated basis determined in accordance with GAAP, as shown on the most
recently available consolidated balance sheet of such Person.
"Trustee" means the party named as such in the preamble to this Indenture
until a successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"Unrestricted Global Note" means a permanent global Note substantially in
the form of Exhibit A attached hereto that bears the Global Note Legend and that
has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"U.S. Person" means a U.S. Person as defined in Rule 902(k) under the
Securities Act.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a Board Resolution, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
25
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Share Capital or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the board resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 of this Indenture the Company will
be in default of such covenant. The Board of Directors of the Company may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted under Section 4.09 hereof
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"Voting Stock" of any Person as of any date means the Share Capital of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
or Disqualified Shares at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness or Disqualified Shares, by (b) the number of
years, calculated to the nearest one-twelfth, that will elapse between such
date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness or
Disqualified Shares.
Section 1.02 Other Definitions.
Defined in
Term Section
---------------------------------------------- ----------
"Additional Amounts" ......................... 2.13
"Affiliate Transaction"....................... 4.11
"Asset Sale Offer"............................ 3.09
"Authentication Order"........................ 2.02
"Change of Control Offer"..................... 4.15
26
Defined in
Term Section
---------------------------------------------- ----------
"Change of Control Payment"................... 4.15
"Change of Control Payment Date".............. 4.15
"Covenant Defeasance"......................... 8.03
"DTC"......................................... 2.03
"Event of Default"............................ 6.01
"Excess Proceeds"............................. 4.10
"Excess Cash Flow Offer" ..................... 4.21
"incur"....................................... 4.09
"Judgment Currency" .......................... 12.09
"Legal Defeasance"............................ 8.02
"Offer Amount"................................ 3.09
"Offer Period"................................ 3.09
"Offering Memorandum" ........................ 9.01
"Payer" ...................................... 2.13
"Paying Agent"................................ 2.03
"Payment Default" ............................ 6.01
"Permitted Debt".............................. 4.09
"Purchase Date"............................... 3.09
"Registrar"................................... 2.03
"Required Currency" .......................... 12.09
"Restricted Payments"......................... 4.07
"Tax Redemption Date" ........................ 3.10
"Taxing Jurisdiction" ........................ 2.13
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company and
the Guarantors, respectively, and any successor obligor upon the Notes and the
Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
27
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the
form of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form will be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note will represent such of the outstanding Notes as will be specified
therein and each shall provide that it represents the aggregate principal amount
of outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee (if the Custodian and the Trustee are not the same Person), in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
28
(c) Euroclear and Clearstream Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearsteam.
Section 2.02 Execution and Authentication.
At least one Officer must sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the
Trustee. The signature of the Trustee will be conclusive evidence that the Note
has been authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed by
two Officers (an "Authentication Order"), authenticate Notes for original issue
up to the aggregate principal amount stated in paragraph 4 of the Notes.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain a registrar with an office or agency in the
Borough of Manhattan, City of New York where Notes may be presented for
registration of transfer or for exchange ("Registrar") and one or more paying
agents for the Notes in each of (1) London, (2) the Borough of Manhattan, City
of New York and (3) for so long as the Notes are listed on the Luxembourg Stock
Exchange and its rules so require, Luxembourg, where Notes may be presented for
payment ("Paying Agent"). If the conclusions of the ECOFIN Council meetings of
November 26-27, 2000 and/or January 21, 2003 are implemented, the Company will
use its commercially reasonable efforts to maintain a Paying Agent in a member
state of the European Union that will not be obliged to withhold or deduct tax
pursuant to European Union Directive on the taxation of savings implementing
such conclusions or any law implementing or complying with, or introduced to
conform to, such directive. The Registrar will keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more
co-Registrars and one or more additional Paying Agents. The term "Registrar"
includes any co-Registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent, Registrar or Transfer
Agent without notice to any Holder. The Company will notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. For
so long as the Notes are listed on the Luxembourg Stock Exchange and its rules
so require, the Company will publish a notice of any change of Paying Agent,
Registrar or Transfer Agent in a newspaper having a general circulation in
Luxembourg, which is expected to be the Luxemburger Wort. Any notices regarding
the Notes to be published in Luxembourg will be published in this same manner.
If the Company fails to appoint or maintain another entity as Registrar or
Paying Agent, the Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
The initial Paying Agents will be HSBC Bank plc in London, located at
Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, the Trustee in New York, located
at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
29
10018 and Dexia Banque Internationale a Luxembourg societe anonyme in Luxembourg
located at 00, Xxxxx x' Xxxx X--0000 Xxxxxxxxxx. The Company initially appoints
The Depository Trust Company ("DTC") to act as Depositary with respect to the
Global Notes.
The Company initially appoints the Trustee to act as the Registrar and to
act as Custodian with respect to the Global Notes. The initial Transfer Agent
will be the Trustee in New York and Dexia Banque Internationale a Luxembourg
societe anonyme in Luxembourg. The Registrar and the Transfer Agent in New York
and the Transfer Agent in Luxembourg will maintain a register reflecting
ownership of certificated Notes outstanding from time to time and will make
payments on and facilitate transfer of certificated Notes on the behalf of the
Company.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium or Liquidated Damages, if any, or Additional Amounts, if any, or
interest on the Notes, and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) will have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it will segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable
the most recent list available to it of the names and addresses of all Holders
and shall otherwise comply with TIA Section 312(a). If the Trustee is not the
Registrar, the Company will furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) DTC (a) notifies the Company that it is unwilling or unable to
continue to as Depositary for the Global Notes or (b) has ceased to be a
clearing agency registered under the Exchange Act and, in either case, the
Company fails to appoint a successor Depositary;
(2) the Company, at its option, notifies the Trustee in writing that
it elects to cause the issuance of certificated Notes; or
(3) there has occurred and is continuing a Default or Event of
Default with respect to the Notes.
30
Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also will require compliance with
either subparagraph (1) or (2) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period, transfers of
beneficial interests in the Regulation S Global Note may not be made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser) Beneficial interests in any Unrestricted Global Note may
be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect
the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(1) above, the transferor
of such beneficial interest must deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause
to be credited a beneficial interest in another Global Note in an
amount equal to the beneficial interest to be transferred or
exchanged; and
(ii) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant
account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
31
(ii) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above Upon consummation of an
Exchange Offer by the Company in accordance with Section 2.06(f)
hereof, the requirements of this Section 2.06(b)(2) shall be
deemed to have been satisfied upon receipt by the Registrar of
the instructions contained in the Letter of Transmittal delivered
by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable
under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(h)
hereof (subject to limitations contained in such Section
2.06(h)).
(3) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(2) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in an Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
32
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
33
(D) if such beneficial interest is being transferred pursuant to
an exemption from the registration requirements of the Securities Act
in accordance with Rule 144, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such beneficial interest is being transferred pursuant to
an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the
Exchange Notes or (iii) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
34
(i) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(ii) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Definitive Note, then, upon satisfaction of the
conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause
the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company will
execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(3) will be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest requests through instructions to the
Registrar from or through the Depositary and the Participant or Indirect
Participant. The Trustee will deliver such Definitive Notes to the Persons
in whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(3) will
not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
35
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is being transferred to
the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note, increase or
cause to be increased the aggregate principal amount of, in the case
of clause (A) above, the appropriate Restricted Global Note, in the
case of clause (B) above, the 144A Global Note, in the case of clause
(C) above, the Regulation S Global Note, and in all other cases, the
IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from
36
such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(2), the Trustee will cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee will cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B), (2)(D) or
(3) above at a time when an Unrestricted Global Note has not yet been
issued, the Company will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate one
or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar will register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
37
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a broker-dealer, (ii) a Person participating in the
distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof; or
(ii) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably
acceptable to the Company to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the Securities
Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A
Holder of Unrestricted Definitive Notes may transfer such Notes to a Person
who takes delivery thereof in the form of an Unrestricted Definitive Note.
Upon receipt of a request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the instructions
from the Holder thereof.
38
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests in the
Restricted Global Notes tendered into the Exchange Offer by Persons that
certify in the applicable Letters of Transmittal that (A) they are not
Broker-Dealers, (B) they are not participating in a distribution of the
Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of
the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal amount
equal to the principal amount of the Restricted Definitive Notes accepted
for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO
A PERSON WHO 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, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (c) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501 (A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
(THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION
OF COUNSEL ACCEPTABLE TO DANKA BUSINESS
39
SYSTEMS PLC THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF DANKA BUSINESS SYSTEMS
PLC SO REQUESTS), (2) TO DANKA BUSINESS SYSTEMS PLC OR ONE OF ITS SUBSIDIARIES
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2),
(d)(3), (e)(2), (e)(3) or (f) of this Section 2.06 (and all Notes
issued in exchange therefor or substitution thereof) will not bear the
Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person
40
who will take delivery thereof in the form of a beneficial interest in another
Global Note or for Definitive Notes, the principal amount of Notes represented
by such Global Note will be reduced accordingly and an endorsement will be made
on such Global Note by the Trustee (or by the Depositary, at the direction of
the Trustee, if the Depositary and the Trustee are not the same Person) to
reflect such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note will be
increased accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company
will execute and the Trustee will authenticate Global Notes and Definitive
Notes upon receipt of an Authentication Order in accordance with Section
2.02 or at the Registrar's request.
(2) No service charge will be made to a Holder of a Global Note or to
a Holder of a Definitive Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10,
4.15, 4.21 and 9.05 hereof).
(3) The Registrar will not be required to register the transfer of or
exchange any Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
will be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such registration of transfer or
exchange.
(5) The Company will not be required:
(A) to issue, to register the transfer of or to exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on the day of
selection;
(B) to register the transfer of or to exchange any Note selected
for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part;
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date; or
(D) to register the transfer of or to exchange a Note tendered
and not withdrawn in connection with a Change of Control Offer or an
Asset Sale Offer.
(6) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of
41
and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the
contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and will
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as
not outstanding. Except as set forth in Section 2.09 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note; however, Notes held by the Company or a Subsidiary of the Company
shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes will
be deemed to be no longer outstanding and will cease to accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
42
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, will
authenticate temporary Notes. Temporary Notes will be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this
Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent will forward to the Trustee any Notes surrendered
to them for registration of transfer, exchange or payment. The Trustee and no
one else will cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and will destroy canceled Notes
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all canceled Notes will be delivered to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13 Additional Amounts and Other Taxes.
All payments made by the Company, or a successor thereof, under or with
respect to a Note, whether or not in the form of a certificated Note, or by a
Guarantor, or a successor thereof, each a "Payer," under or with respect to its
Subsidiary Guarantee will be made free of and without withholding or deduction
for, or on account of, any present or future Taxes imposed or levied by or on
behalf of (i) any jurisdiction in which such Payer is then incorporated or
otherwise organized, engaged in business or resident for tax purposes or any
political subdivision thereof or therein or (ii) any jurisdiction by or through
which payment is made or any political subdivision thereof or therein, each, a
"Taxing Jurisdiction," unless the withholding or deduction of such Taxes is then
required by law or the interpretation or administration thereof. If the Payer is
so required to withhold or deduct any amount, the Payer will pay such additional
amounts, the "Additional Amounts," as may be necessary in order that the net
amounts received in respect of such payments by each holder, including
Additional Amounts, after such withholding, deduction or imposition will equal
the respective amounts which would have been received in respect of such
payments in the absence of such withholding, deduction or imposition; provided,
however, that no Additional Amounts will be payable with respect to:
43
(1) any payments which would not have been imposed but for the Holder or
the Beneficial Owner of, or Person ultimately entitled to obtain an
interest in, such note being a citizen or resident or national of, or
being incorporated in or carrying on a business in or maintaining a
permanent establishment in, the relevant Taxing Jurisdiction other
than the mere receipt of such payment on, or the ownership or holding
of, or the execution, delivery, registration or enforcement of, such
Note;
(2) any Taxes that are imposed, deducted or withheld as a result of the
failure of the Holder of a Note or Beneficial Owner of a Note to
comply with any written request, made to that Holder or Beneficial
Owner at least 60 days before any such imposition, deduction or
withholding would be payable by a Payer to (a) make a declaration of
non-residence, or any other claim or filing for exemption, to which it
is entitled or (b) comply with any certification, identification,
information, documentation or other reporting requirement concerning
the nationality, residence, identity or connection with the relevant
Taxing Jurisdiction of such Holder or Beneficial Owner of such Note or
any payment on such Note;
(3) any Taxes that would not have been so imposed, deducted or withheld if
the registered Holder had presented the Note for payment within 30
days after the date on which such payment became due and payable or
the date on which the full amount of the monies had been made
available to the Paying Agent, whichever is later;
(4) any estate, inheritance, gift, sales, excise, transfer, personal
property or similar Tax;
(5) any Taxes withheld, deducted or imposed on a payment to an individual
and which are required to be made pursuant to any European Union
Directive on the taxation of savings income implementing the proposal
for a Directive published by the European Union on July 19, 2001 or
otherwise implementing the conclusions of the ECOFIN Council meetings
of November 26 and 27, 2000, December 13, 2001, January 21, 2003
and/or June 3, 2003 or any law implementing or complying with or
introduced in order to conform to, such Directive;
(6) any Note presented for payment by or on behalf of a Holder of Note who
would have been able to avoid such withholding or deduction by
presenting the relevant note to another Paying Agent in a member state
of the European Union;
(7) any Taxes payable otherwise than by deduction or withholding from
payments under or with respect to such Note or such Subsidiary
Guarantee; or
(8) any combination of items (1) through (7) above.
Such Additional Amounts will also not be payable where, had the Beneficial
Owner of the Note been the Holder of the Note, it would not have been entitled
to payment of Additional Amounts by reason of clauses (1) through (8) inclusive
above.
The Company or any Guarantor will pay any stamp, transfer, court or
documentary taxes, or any other excise or property taxes, charges or similar
levies which arise from the initial execution, delivery or registration of the
Notes or any Subsidiary Guarantee, the initial resale of the Notes by the
Initial Purchaser and the enforcement of the Notes or any Subsidiary Guarantee
following the occurrence of an Event of Default with respect to the Notes.
44
If the Company or any Guarantor, as the case may be, becomes aware that it
will be obligated to pay Additional Amounts with respect to any payment under or
with respect to the Notes or any Subsidiary Guarantee, the Company or the
relevant Guarantor, as the case may be, will deliver to the Trustee on a date
which is at least 30 days prior to the date of that payment, unless the
obligation to pay Additional Amounts arises after the 30th day prior to that
payment date, in which case the Company or the relevant Guarantor shall notify
the Trustee promptly thereafter, an Officers' Certificate stating the fact that
Additional Amounts will be payable and the amount estimated to be so payable.
The Officers' Certificate must also set forth any other information reasonably
necessary to enable the Paying Agents to pay Additional Amounts to Holders on
the relevant payment date. The Company or the relevant Guarantor will provide
the Trustee with documentation reasonably satisfactory to the Trustee evidencing
the payment of Additional Amounts.
The Company or the relevant Guarantor will make the required withholdings
and deductions and will remit the amount deducted or withheld to the relevant
Taxing Jurisdiction in accordance with applicable law. The Company or the
relevant Guarantor will use its reasonable efforts to obtain certified copies of
Tax receipts from each Taxing Jurisdiction evidencing the payment of any Taxes
so deducted or withheld. The Company or the relevant Guarantor will furnish to
the Holders, within 60 days after the date the payment of any Taxes so deducted
or withheld is made, certified copies of Tax receipts evidencing payment by the
Company or a Guarantor, as the case may be, or if, notwithstanding such entity's
efforts to obtain receipts, receipts are not obtained, other evidence of
payments by such entity.
In the event that either the Company or the relevant Guarantor has become,
or would be, obliged to pay on the next date on which any amount would be
payable under or with respect to the Notes, any Additional Amounts as a result
of certain changes affecting the laws relating to withholding or deduction of
Taxes, the Company may redeem all, but not less than all, the Notes in
accordance with Section 3.10 hereof.
Whenever in this Indenture there is mentioned, in any context, the payment
of amounts based upon the principal amount of the Notes or of principal,
interest or of any other amount payable under, or with respect to, any of the
Notes, such mention shall be deemed to include mention of the payment of
Additional Amounts to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it must furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption
shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
45
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any securities exchange, in compliance
with the requirements of the principal securities exchange on which the
Notes are listed; or
(2) if the Notes are not listed on any securities exchange, on a pro
rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate.
In the event of partial redemption or purchase by lot, the particular Notes
to be redeemed or purchased will be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption or purchase date
by the Trustee from the outstanding Notes not previously called for redemption
or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Sections 3.09, 4.15 and 4.21 hereof, at least
30 days but not more than 60 days before a redemption date, the Company will
mail or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address, except that
redemption notices may be mailed more than 60 days prior to a redemption date if
the notice is issued in connection with a defeasance of the Notes or a
satisfaction and discharge of this Indenture pursuant to Articles 8 or 11 of
this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion will be issued upon cancellation of the
original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
46
(6) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee will give the notice of redemption in
the Company's name and at its expense; provided, however, that the Company has
delivered to the Trustee, at least 45 days and not more than 90 days prior to
the redemption date, an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
For Notes which are represented by global certificates held on behalf of
DTC, Euroclear or Clearstream, notice of redemption may be given by delivery of
the relevant notices to DTC, Euroclear or Clearstream for communication to
entitled account holders in substitution for the aforesaid publication. So long
as any Notes are listed on the Luxembourg Stock Exchange and its rules so
require, any such notice to the Holders of the relevant Notes shall also be
published in a newspaper having a general circulation in Luxembourg, which is
expected to be the Luxemburger Wort, and, in connection with any redemption, the
Company will notify the Luxembourg Stock Exchange of any change in the principal
amount of Notes outstanding.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
At least one Business Day prior to the redemption or purchase price date,
the Company will deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption or purchase price of and accrued interest and
Liquidated Damages, if any, and Additional Amounts, if any, on all Notes to be
redeemed or purchased on that date. The Trustee or the Paying Agent will
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest and Liquidated Damages, if
any, and Additional Amounts, if any, on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption or purchase date, interest will cease to accrue on the
Notes or the portions of Notes called for redemption or purchase. If a Note is
redeemed or purchased on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof. In addition, immediately prior to any redemption or repayment of Notes,
or any repurchase of Notes pursuant to a Change of Control Offer, an Asset Sale
Offer or an Excess Cash Flow
47
Offer, the Company and the Guarantors will pay any accrued but unpaid Liquidated
Damages which have accrued to such date of redemption or date of repurchase as
the case may be.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Company
will issue and, upon receipt of an Authentication Order, the Trustee will
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to June 15 , 2006, the Company may, on any one or
more occasions, redeem, in whole or in part, up to 35% of the aggregate
principal amount of Notes, including Additional Notes, if any, issued under this
Indenture at a redemption price of 111 % of the principal amount of the Notes
redeemed, plus accrued and unpaid interest and Additional Amounts, if any, on
the Notes redeemed to the applicable redemption date, with the net cash proceeds
of one or more Equity Offerings; provided that;
(1) at least 65% of the aggregate principal amount of Notes,
including Additional Notes, if any, issued under this Indenture remains
outstanding immediately after the occurrence of such redemption, excluding
Notes held by the Company and its Subsidiaries; and
(2) the redemption occurs within 90 days of the date of the closing
of such Equity Offerings.
Except pursuant to the preceding paragraph and as set forth in Section
3.10 hereof, the Notes will not be redeemable at the Company's option prior to
June 15 , 2007.
(b) On or after June 15 , 2007, the Company may, at its option, redeem all
or a part of the Notes upon not less than 30 nor more than 60 days' notice, at
the redemption prices, expressed as percentages of principal amount, set forth
below plus accrued and unpaid interest and Additional Amounts, if any, on the
Notes redeemed, to the applicable redemption date, if redeemed during the
twelve-month period beginning on June 15 of the years indicated below
Year Percentage
------------------------------------------- ----------
2007 ...................................... 105.500%
2008 ...................................... 102.750%
2009 and thereafter ....................... 100.000%
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
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Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is required
to commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"),
it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales and assets. The Asset Sale Offer will remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "Offer Period"). No later than three Business Days after the
termination of the Offer Period (the "Purchase Date"), the Company will apply
all Excess Proceeds (the "Offer Amount") to the purchase of Notes and such other
pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased will be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease to
accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(6) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three Business Days before the Purchase
Date;
(7) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;
49
(8) that, if the aggregate principal amount of Notes and other pari
passu Indebtedness surrendered by Holders exceeds the Offer Amount, the
Trustee will select the Notes and the Company will select the other pari
passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the
Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five Business
Days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company will promptly issue a new Note, and
the Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
Section 3.10 Redemption for Changes in Withholding Taxes.
The Company may redeem the Notes, in whole but not in part, at its
discretion at any time upon giving not less than 30 nor more than 60 days'
notice, which notice will be irrevocable and given in accordance with Section
12.02 hereof, at a redemption price equal to the principal amount thereof,
together with accrued and unpaid interest to the date fixed by the Company for
redemption, a "Tax Redemption Date," and all Additional Amounts, if any, then
due and which will become due on the Tax Redemption Date as a result of the
redemption or otherwise, and in the case of certificated Notes, subject to the
right of Holders on the relevant record date to receive interest due on the
relevant interest payment date and Additional Amounts, if any, in respect
thereof, if, on the next date on which any amount would be payable in respect of
the Notes, the Company or any Subsidiary Guarantor has or would be required to
pay Additional Amounts, and the Company and the relevant Subsidiary Guarantor
cannot avoid any such payment obligation by taking reasonable measures
available, as a result of:
(1) any change in, or amendment to, the laws or treaties, or any
regulations or rulings promulgated thereunder, of the relevant Taxing
Jurisdiction affecting taxation which change or amendment has not been
publicly announced as formally proposed before, and which becomes effective
on or after, the date of this Indenture, or, if the relevant Taxing
Jurisdiction has changed since the date of this Indenture, the date on
which the then current Taxing Jurisdiction became the applicable Taxing
Jurisdiction under this Indenture; or
(2) any change in, or amendment to, the existing official position or
the introduction of an official position regarding the application,
administration or interpretation of such laws,
50
treaties, regulations or rulings, including a holding, judgment or order by
a court of competent jurisdiction or a change in published practice, which
change, amendment, application or interpretation has not been publicly
announced as formally proposed before, and becomes effective on or after,
the date of this Indenture, or, if the relevant Taxing Jurisdiction has
changed since the date of this Indenture, the date on which the then
current Taxing Jurisdiction became the applicable Taxing Jurisdiction under
this Indenture.
The Company will not give any such notice of redemption earlier than 90
days prior to the earliest date on which the Company would be obligated to make
such payment or withholding if a payment in respect of the Notes were then due.
Prior to the publication or, where relevant, mailing of any notice of redemption
of the Notes pursuant to the foregoing, the Company will deliver to the Trustee
an Opinion of Counsel, the choice of such counsel to be subject to the prior
written approval of the Trustee, such approval not to be unreasonably withheld,
to the effect that the Company or the relevant Subsidiary Guarantor cannot avoid
any obligation to pay Additional Amounts by taking reasonable measures available
and there has been such change or amendment which would entitle the Company to
redeem the Notes hereunder.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if any,
and interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest will be considered paid on the date due
if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as
of 10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Insolvency Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Insolvency Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such designation or rescission will in any manner relieve the Company of
its obligation to maintain an office or agency in the Borough of Manhattan, the
City of
51
New York for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency. The Company hereby designates the Corporate
Trust Office of the Trustee as one such office or agency of the Company in
accordance with Section 2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the SEC's rules and regulations, so long as
any Notes are outstanding, the Company will furnish to the registered Holders of
Notes, within the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual reports that would be required to be
filed with the SEC on Forms 10-Q and 10-K if the Company were required to
file such reports; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports.
All such reports will be prepared in all material respects in accordance
with all of the rules and regulations applicable to such reports. Each annual
report on Form 10-K shall include a report on the Company's consolidated
financial statements by the Company's certified independent accountants. In
addition, the Company shall file a copy of each of the reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time
periods specified in the rules and regulations applicable to such reports,
unless the SEC will not accept such a filing, and make such information
available to securities analysts and prospective investors upon request.
If, at any time, the Company is no longer subject to the periodic reporting
requirements of the Exchange Act for any reason, the Company shall nevertheless
continue filing the reports specified in the preceding paragraph with the SEC
within the time periods specified above unless the SEC will not accept such a
filing. The Company agrees that it shall not take any action for the purpose of
causing the SEC not accept any such filings. If, notwithstanding the foregoing,
the SEC will not accept the Company's filings for any reason, the Company shall
post the reports referred to in the preceding paragraph on its website within
the time periods that would apply if the Company were required to file those
reports with the SEC.
(b) In addition, the Company and the Guarantors agree that, for so long as
any Notes remain outstanding, at any time they are not required to file the
reports required by the preceding paragraphs with the SEC, they 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.
(c) If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries and such Unrestricted Subsidiaries collectively have assets in
excess of $1.0 million, or, to the extent not denominated in U.S. dollars, the
U.S. dollar equivalent thereof, then the quarterly and annual financial
information required by the preceding paragraphs shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in Management's Discussion and Analysis of Financial
Condition and Results of Operations or Operating and Financial Review and
Prospects, of the financial condition and results of operations of the Company
and its Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
(d) So long as the Notes are listed on the Luxembourg Stock Exchange, all
reports referred to in this section will be available at the offices of the
Paying Agent in Luxembourg.
52
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is
so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers and further
stating, as to each such Officer signing such certificate, that to his or her
knowledge, (1) the Company has fulfilled each and every covenant and obligation
contained in this Indenture, (2) no Default or Event of Default has occurred
(or, if a Default or Event of Default has occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and (3) no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will deliver
to the Trustee, within five Business Days after any Officer becoming aware of
any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay, prior
to delinquency, all material taxes, assessments, and governmental levies except
such as are contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the
Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (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, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, 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 has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
53
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Share Capital, including, without limitation, any payment in
connection with any consolidation, amalgamation, combination or merger
involving the Company or any of its Restricted Subsidiaries, or to the
direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Share Capital in their capacity as such, other than dividends
or distributions payable in Share Capital, other than Disqualified Shares,
or to the Company or a Restricted Subsidiary of the Company;
(2) purchase, redeem or otherwise acquire or retire for value,
including, without limitation, in connection with any consolidation,
amalgamation, combination or merger involving the Company, any Share
Capital of the Company or any direct or indirect parent of the Company;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of the
Company or a Restricted Subsidiary of the Company that is subordinated by
its terms in right of payment to the Notes or the Subsidiary Guarantees,
except (1) payments on or with respect to the Company's Zero Coupon Senior
Subordinated Notes due 2004 and (2) payments of interest or principal at
the Stated Maturity thereof; or
(4) make any Restricted Investment, all such payments and other
actions set forth in these clauses (1) through (4) above being collectively
referred to as "Restricted Payments,"
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment; and
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in Section 4.09(a) hereof;
and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture, excluding Restricted
Payments permitted by clauses (2), (3), (4) and (6) of Section 4.07(b)
hereof, is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the
period, taken as one accounting period, from the beginning of the
first fiscal quarter commencing after the date of this Indenture to
the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment, or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit, plus
(B) 100% of the aggregate net cash proceeds and the Fair Market
Value of assets other than cash received by the Company since the date
of this Indenture as a contribution to its Share Capital or from the
issue or sale of Share Capital of the Company, other than Disqualified
Shares, or from the issue or sale of convertible or exchangeable
Disqualified Shares or convertible or exchangeable debt securities of
the Company that have been converted into or exchanged for such Share
Capital, other than
54
Share Capital, Disqualified Shares or debt securities sold to a
Subsidiary of the Company, plus
(C) to the extent that any Restricted Investment that was made
after the date of this Indenture is sold or otherwise liquidated or
repaid, or the Person in whom such Restricted Investment was made
subsequently becomes a Restricted Subsidiary of the Company, the
lesser of (i) the cash plus the Fair Market Value of any assets other
than cash received upon the sale, liquidation or repayment of such
Restricted Investment, less the cost of disposition, if any, or the
cash plus the Fair Market Value of any assets other than cash held by
such Person on the date it becomes a Restricted Subsidiary of the
Company, as applicable, and (ii) the initial amount of such Restricted
Investment, plus
(D) to the extent that any Unrestricted Subsidiary of the
Company is redesignated as a Restricted Subsidiary after the date of
this Indenture, the lesser of (i) the Fair Market Value of the
Company's and its Restricted Subsidiaries' Investment in such
Subsidiary as of the date of such redesignation and (ii) such Fair
Market Value as of the date on which such Subsidiary was originally
designated as an Unrestricted Subsidiary, plus
(E) 50% of any dividends received by the Company or a Restricted
Subsidiary of the Company that is a Guarantor after the date of this
Indenture from an Unrestricted Subsidiary of the Company, to the
extent that such dividends were not otherwise included in the
Consolidated Net Income of the Company for such period.
(b) The provisions of Section 4.07(a) hereof will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
(2) the making of any Restricted Investment or the redemption,
repurchase, retirement, defeasance or other acquisition of any subordinated
Indebtedness of the Company or any Restricted Subsidiary of the Company or
of any Share Capital of the Company or any direct or indirect parent of the
Company in exchange for, or out of the net cash proceeds of (a) the
substantially concurrent sale, other than to a Restricted Subsidiary of the
Company, of Share Capital of the Company or, in the case of any redemption,
repurchase, retirement, defeasance or other acquisition of any Share
Capital of any direct or indirect parent of the Company, any direct or
indirect parent of the Company, in each case, other than Disqualified
Shares, or (b) contributions to the Company's Share Capital, other than by
a Restricted Subsidiary of the Company; provided that the amount of any
such net cash proceeds that are utilized for any such Restricted
Investment, redemption, repurchase, retirement, defeasance or other
acquisition shall be excluded from clause (3)(B) of Section 4.07(a) hereof;
(3) the payment, defeasance, redemption, repurchase, retirement or
other acquisition for value of (a) subordinated Indebtedness of the Company
or any Restricted Subsidiary of the Company with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness or Permitted
Disqualified Shares or (b) any Disqualified Shares of the Company in
exchange for, or out of the net cash proceeds of the substantially
concurrent sale of, Permitted Disqualified Shares or Permitted Refinancing
Indebtedness;
55
(4) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its Share Capital on a pro rata basis;
(5) the redemption, repurchase, retirement or other acquisition for
value of any Share Capital of the Company or any direct or indirect parent
of the Company held by (a) any current or former member of the Company's,
any direct or indirect parent of the Company's or any of the Company's
Restricted Subsidiaries' management pursuant to any management equity
subscription agreement or stock option agreement or (b) any employee,
former employee, director or former director of the Company, any direct or
indirect parent of the Company or any of the Company's Restricted
Subsidiaries; provided, however, that the aggregate price paid for all such
redeemed, repurchased, retired or acquired Share Capital in any calendar
year may not exceed the lesser of (i) the sum of (x) $2.0 million, or, to
the extent not denominated in U.S. dollars, the U.S. dollar equivalent
thereof, and (y) the aggregate amount of Restricted Payments permitted, but
not made, pursuant to this clause (5) in prior calendar years and (ii) $5.0
million, or, to the extent not denominated in U.S. dollars, the U.S. dollar
equivalent thereof;
(6) repurchases of Share Capital deemed to occur upon the exercise of
stock options if such Share Capital represents a portion of the exercise
price thereof;
(7) payments or distributions to dissenting shareholders pursuant to
applicable law or pursuant to or in connection with a consolidation,
combination, amalgamation, merger or transfer of assets that complies with
the provisions of this Indenture applicable to consolidations,
combinations, amalgamations, mergers and transfers of all or substantially
all assets, as the case may be;
(8) any purchase, redemption, retirement, defeasance or other
acquisition for value of Indebtedness that is subordinated in right of
payment to the Notes or the Subsidiary Guarantees pursuant to the
provisions of such Indebtedness upon a change of control or an asset sale;
provided that, prior to such purchase, redemption, retirement, defeasance
or acquisition, the Company shall have made the Change of Control Offer or
Asset Sale Offer, as the case may be, with respect to the Notes as required
by this Indenture, and the Company shall have repurchased all Notes validly
tendered for payment and not withdrawn in connection with such Change of
Control Offer or Asset Sale Offer; and
(9) any other Restricted Payments in an aggregate amount not to
exceed $15.0 million, or, to the extent not denominated in U.S. dollars,
the U.S. dollar equivalent thereof, since the date of this Indenture;
provided that with respect to clauses (5), (8) and (9) above, no Default or
Event of Default shall have occurred and be continuing or would be caused
thereby.
(c) In determining whether any Restricted Payment is permitted by this
Section 4.07, the Company may allocate all or any portion of such Restricted
Payment among the categories described in clauses (1) through (9) of Section
4.07(b) hereof or among such categories and the types of Restricted Payments
described in Section 4.07(a) hereof; provided that at the time of such
allocation, all such Restricted Payments, or allocated portions thereof, would
be permitted under the various provisions of this Section 4.07.
(d) The amount of all Restricted Payments, other than cash, shall be the
Fair Market Value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The Fair
56
Market Value of any assets or securities that are required to be valued by this
Section 4.07 shall be determined by the Board of Directors of the Company, whose
resolution with respect thereto shall be delivered to the Trustee with respect
to any assets or securities that are required to be valued by this Section 4.07
that are determined to have a Fair Market Value greater than $5.0 million, or,
to the extent not denominated in U.S. dollars, the U.S. dollar equivalent
thereof. The Board of Directors' determination must be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
international standing if the Fair Market Value exceeds $15.0 million, or, to
the extent not denominated in U.S. dollars, the U.S. dollar equivalent thereof.
Not later than the date of making any Restricted Payment that exceeds $5.0
million, or, to the extent not denominated in U.S. dollars, the U.S. dollar
equivalent thereof, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Share
Capital to the Company or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to the Company or any of
its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof will not apply to
encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities
as in effect on the date of this Indenture and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings of those agreements, provided that the
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the date
of this Indenture;
(2) this Indenture, the Notes, the Exchange Notes, the Subsidiary
Guarantees and the Guarantees of the Exchange Notes;
(3) applicable law, rule, regulation or order;
(4) any instrument governing Indebtedness or Share Capital of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition, except to the extent such
Indebtedness was incurred, or such Share Capital was issued, in connection
with or in contemplation of such acquisition, which encumbrance or
restriction is not applicable to any Person, or the
57
properties or assets of any Person, other than the Person, or the property
or assets of the Person, so acquired, provided that, in the case of
Acquired Debt, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(5) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on that property of the nature
described in clause (3) of Section 4.08(a) hereof;
(7) any agreement for the sale or other disposition of all or
substantially all of the Share Capital or assets of a Restricted Subsidiary
that restricts distributions by that Restricted Subsidiary pending its sale
or other disposition;
(8) Permitted Refinancing Indebtedness or Permitted Disqualified
Shares, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness or Permitted Disqualified
Shares are not materially more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness or Disqualified
Shares being refinanced;
(9) Indebtedness of Restricted Subsidiaries permitted to be incurred
pursuant to clauses (4), (14) or (16) of Section 4.09(b) hereof;
(10) Liens securing Indebtedness otherwise permitted to be incurred
pursuant to Section 4.12 hereof that limit the right of the debtor to
dispose of the assets subject to such Liens;
(11) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
stock sale agreements and other similar agreements entered into in the
ordinary course of business;
(12) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business;
(13) other encumbrances and restrictions in effect on the date of this
Indenture;
(14) Indebtedness or other contractual requirements of a Receivables
Subsidiary in connection with a Qualified Receivables Transaction, provided
that such restrictions apply only to such Receivables Subsidiary;
(15) Indebtedness or other contractual requirements of a Non-Guarantor
Subsidiary in connection with factoring or other receivables financing
transactions; provided that such restrictions only apply to such
Non-Guarantor Subsidiary; and
(16) any encumbrance or restriction of the type referred to in clauses
(1) through (3) of Section 4.08(a) hereof imposed by any extension,
amendment, modification, restatement, renewal, increase, supplement,
refunding, replacement or refinancing of an agreement, contract, instrument
or obligation referred to in clauses (1) through (15) of Section 4.08(b)
hereof that is not materially more restrictive, taken as a whole, than the
encumbrance or restriction imposed by the applicable predecessor agreement,
contract, instrument or obligation.
58
Section 4.09 Incurrence of Indebtedness and Issuance of Disqualified and
Preference Shares.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to, collectively, "incur", any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Shares and will not
permit any of its Restricted Subsidiaries to issue any preference shares;
provided, however, that the Company may incur Indebtedness, including Acquired
Debt, or issue Disqualified Shares and the Guarantors may incur Indebtedness or
issue preference shares, if the Fixed Charge Coverage Ratio for the Company's
most recently ended four full fiscal quarters for which internal financial
statements are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Shares or preference shares are
issued would have been at least 2.0 to 1, determined on a pro forma basis,
including a pro forma application of the net proceeds therefrom, as if the
additional Indebtedness had been incurred or the Disqualified Shares or
preference shares had been issued, as the case may be, at the beginning of such
four-quarter period; provided that if such Indebtedness to be incurred
constitutes Senior Debt, the Senior Debt to Cash Flow Ratio shall be less than
3.0 to 1, determined on a pro forma basis, including a pro forma application of
the net proceeds therefrom, as if such Senior Debt had been incurred at the
beginning of such four-quarter period..
(b) The provisions of Section 4.09(a) will not prohibit the incurrence or
issuance of any of the following items, collectively, "Permitted Debt":
(1) the incurrence by the Company or any Guarantor of additional
Indebtedness and letters of credit under Credit Facilities in an aggregate
principal amount at any one time outstanding under this clause (1), with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of the Company and its Restricted Subsidiaries
thereunder, not to exceed the greater of:
(a) $75.0 million, or, to the extent not denominated in U.S.
dollars, the U.S. dollar equivalent thereof; provided that such amount
shall be reduced by the face amount of any accounts receivable sold,
conveyed or transferred to any Receivables Subsidiary or in connection
with any Qualified Receivables Transaction; provided further that such
amount shall further be reduced by the aggregate amount of all Net
Proceeds of Asset Sales applied by the Company or any of its
Restricted Subsidiaries since the date of this Indenture to repay any
term Indebtedness under a Credit Facility or to repay any revolving
credit Indebtedness under a Credit Facility and to effect a
corresponding commitment reduction thereunder pursuant to Section 4.10
hereof; and
(b) the amount of the Borrowing Base as of the date of such
incurrence;
(2) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of Indebtedness
represented by the Notes and the related Subsidiary Guarantees to be issued
on the date of this Indenture, the Exchange Notes and the related
Subsidiary Guarantees to be issued pursuant to the Registration Rights
Agreement and any Subsidiary Guarantee issued after the date of this
Indenture pursuant to the terms of this Indenture;
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money
59
obligations, in each case, incurred for the purpose of financing all or any
part of the purchase price, or cost of construction or improvement, of
property, plant or equipment used in the business of the Company or such
Restricted Subsidiary, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (4), not to exceed the
greater of (a) 1% of the Company's Total Assets and (b) $10.0 million, or,
to the extent not denominated in U.S. dollars, the U.S. dollar equivalent
thereof, at any time outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace
Indebtedness, other than intercompany Indebtedness, that was permitted by
this Indenture to be incurred under Section 4.09(a) hereof or clauses (2),
(3), (4), (5) or (16) of this Section 4.09(b);
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the
prior payment in full in cash of all Obligations with respect to the
Notes, in the case of the Company, or any Subsidiary Guarantee, in the
case of a Guarantor; and
(B) (i) any subsequent issuance or transfer of Share Capital
that results in any such Indebtedness being held by a Person other
than the Company or a Restricted Subsidiary of the Company and (ii)
any sale or other transfer of any such Indebtedness to a Person that
is not either the Company or a Restricted Subsidiary of the Company
shall be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred in the normal course
of business and not for speculative purposes;
(8) the guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of
the Company that is not prohibited to be incurred by another provision of
this Section 4.09(b);
(9) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in the ordinary course of business solely in
respect of performance, bid, surety, appeal and similar bonds, completion
or performance guarantees or standby letters of credit issued for the
purpose of supporting workers' compensation liabilities of the Company or
any of its Restricted Subsidiaries, to the extent that such incurrence does
not result in the incurrence of any obligation for the payment of borrowed
money to others;
(10) the incurrence of Indebtedness arising from agreements of the
Company or any of its Restricted Subsidiaries providing for
indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or Subsidiary;
60
(11) Indebtedness of the Company or a Restricted Subsidiary of the
Company owed to, including obligations in respect of letters of credit for
the benefit of, any Person in connection with workers' compensation,
health, disability or other employee benefits or property, casualty or
liability insurance provided by such Person to the Company or a Restricted
Subsidiary of the Company, pursuant to reimbursement or indemnification
obligations to such Person, in each case incurred in the ordinary course of
business;
(12) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business; provided that such
Indebtedness is extinguished within two Business Days of its incurrence;
(13) the incurrence by a Receivables Subsidiary of Indebtedness in a
Qualified Receivables Transaction that is without recourse to the Company
or to any Restricted Subsidiary of the Company or their assets, other than
such Receivables Subsidiary and its assets and, as to the Company or any
Subsidiary of the Company, other than pursuant to representations,
warranties, covenants and indemnities customary for such transactions, and
is not guaranteed by the Company or any other Restricted Subsidiary the
Company;
(14) the incurrence of Indebtedness by Non-Guarantor Subsidiaries in
connection with factoring or other receivables financing transactions in an
aggregate principal amount at any time outstanding under this clause (14)
not to exceed $25.0 million, or, to the extent not denominated in U.S.
dollars, the U.S. dollar equivalent thereof;
(15) the issuance of preference shares of a Restricted Subsidiary of
the Company issued to the Company or another Restricted Subsidiary of the
Company; provided that any subsequent issuance or transfer of Share Capital
that results in any such preference shares being held by a Person other
than the Company or a Restricted Subsidiary of the Company and any sale or
other transfer of any such preference shares to a Person that is not either
the Company or a Restricted Subsidiary of the Company shall be deemed to
constitute an issuance of such preference shares that was not permitted by
this clause (15); and
(16) the incurrence or issuance by the Company or any of its
Restricted Subsidiaries of additional Indebtedness, Disqualified Shares or
Preference Shares in an aggregate principal amount, accreted value, face
amount or liquidation preference, as applicable, at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(16), not to exceed the greater of (a) $25.0 million, or, to the extent not
denominated in U.S. dollars, the U.S. dollar equivalent thereof and (b)
2.5% of the Company's Total Assets.
The Company will not incur any Indebtedness, including Permitted Debt, that
is contractually subordinated by its terms in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also contractually
subordinated by its terms in right of payment to the Notes on substantially
identical terms; provided, however, that no Indebtedness of the Company shall be
deemed to be contractually subordinated in right of payment by its terms to any
other Indebtedness of the Company solely by virtue of being unsecured.
For purposes of determining compliance with this Section 4.09, in the event
that an item of proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (1) through (16) above or is
entitled to be incurred pursuant to Section 4.09(a), the Company, in its sole
discretion, will be permitted to classify such item of Indebtedness on the date
of its incurrence, or
61
later reclassify all or a portion of such item of Indebtedness, in any manner
that complies with this Section 4.09.
Indebtedness under Credit Facilities outstanding on the date on which Notes
are first issued and authenticated under this Indenture will be deemed to have
been incurred on such date in reliance on the exemption provided by clause (1)
of the definition of Permitted Debt.
The accrual of interest, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms and the payment of dividends on Disqualified
Shares or preference shares in the form of additional shares of the same class
of Disqualified Shares or preference shares shall not be deemed to be an
incurrence of Indebtedness or an issuance of Disqualified Shares or preference
shares for purposes of this Section 4.09. In addition, Indebtedness arising from
the reclassification, if any, of the Company's outstanding 6.5% convertible
participating shares as Indebtedness shall not be deemed to be Indebtedness for
purposes of this Section 4.09.
Section 4.10 Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company, or the Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the assets or Share Capital issued, sold or otherwise
disposed of;
(2) the Fair Market Value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee with respect to any
Asset Sale determined to have a Fair Market Value greater than $5.0
million, or, to the extent not denominated in U.S. dollars, the U.S. dollar
equivalent thereof; and
(3) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents. For purposes of this clause (3), each of the following shall
be deemed to be cash:
(A) any liabilities, as shown on the Company's most recent
consolidated balance sheet, of the Company or any Restricted
Subsidiary, other than contingent liabilities and liabilities that are
by their terms subordinated to the Notes or any Subsidiary Guarantee,
that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability;
(B) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that
are converted by the Company or such Restricted Subsidiary into cash
or Cash Equivalents within 90 days, to the extent of the cash received
in that conversion; and
(C) any stock or assets of the kind referred to in clause (2) or
(4) of the next paragraph of this Section 4.10.
62
(b) Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may, at its option and to the extent the Company elects, apply
those Net Proceeds:
(1) to repay Indebtedness and other Obligations under a Credit
Facility and, if the Indebtedness repaid is revolving credit Indebtedness,
to correspondingly reduce commitments with respect thereto; provided that
any such reduction shall not reduce the amount available for incurrence
under clause (1)(b), but shall reduce the amount available for incurrence
under clause (1)(a), in each case, of Section 4.09(b) hereof;
(2) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, another Person engaged in a Permitted
Business;
(3) to make a capital expenditure;
(4) to acquire other long-term assets that are used or useful in a
Permitted Business; or
(5) any combination of the foregoing;
provided that the Company shall be deemed to have complied with clause (2) or
(4) of this paragraph if, within 365 days of such Asset Sale, the Company shall
have entered into, and not abandoned or rejected, a binding agreement with
respect to an acquisition, expenditure or Investment, in compliance with clause
(2) or (4) of this paragraph, and that acquisition, expenditure or Investment is
thereafter completed within 455 days after the date of such Asset Sale.
(c) Pending the final application of any such Net Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture.
(d) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 4.10(b) hereof will constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $10.0 million, or, to the extent not
denominated in U.S. dollars, the U.S. dollar equivalent thereof, the Company
will make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets in accordance with Section 3.09 hereof to
purchase the maximum principal amount of Notes and such other pari passu
Indebtedness that may be purchased out of the Excess Proceeds. The offer price
in any Asset Sale Offer will be equal to 100% of principal amount plus accrued
and unpaid interest and Additional Amounts, if any on the Notes to be purchased
or redeemed, to the date of purchase, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee will select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero.
(e) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Sections 3.09 or 4.10 of this Indenture, the Company will comply with the
applicable securities laws and regulations and
63
will not be deemed to have breached its obligations under those provisions of
this Indenture by virtue of such conflict.
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate, each, an "Affiliate Transaction," unless:
(1) such Affiliate Transaction is on terms that are no less favorable
to the Company or the relevant Restricted Subsidiary than those that would
have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, or, to the extent not denominated in U.S.
dollars, the U.S. dollar equivalent thereof, a resolution of the Board
of Directors set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (1) of this Section
4.11(a) and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $15.0 million, or, to the extent not denominated in U.S.
dollars, the U.S. dollar equivalent thereof, an opinion as to the
fairness to the Company of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of international standing.
(b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a):
(1) any employment, service or termination agreement entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business;
(2) transactions between or among the Company and/or its Restricted
Subsidiaries;
(3) transactions with a Person that is an Affiliate of the Company
solely because the Company owns Share Capital in, or controls, such Person;
(4) sales or issuances of Share Capital, other than Disqualified
Shares, to Affiliates or employees of the Company or its Subsidiaries;
(5) Restricted Payments that are not prohibited by the provisions of
Section 4.07 hereof and Permitted Investments;
64
(6) reasonable and customary fees and compensation paid to, and
indemnity provided on behalf of, officers, directors and employees of the
Company or any Subsidiary of the Company, as determined by the Board of
Directors of the Company or of any such Subsidiary;
(7) advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business;
(8) transactions with customers, joint venture partners, clients and
suppliers, in each case in the ordinary course of business and otherwise in
compliance with the terms of this Indenture which are fair to the Company
or any of its Restricted Subsidiaries, in the reasonable determination of
the Board of Directors of the Company or such Restricted Subsidiary;
(9) transactions effected as part of a Qualified Receivables
Transaction or in connection with factoring or other receivables financing
transactions on the part of a Non-Guarantor Subsidiary; and
(10) transactions pursuant to any arrangement, contract or agreement
in existence on the date of this Indenture.
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Lien of any kind
on any asset now owned or hereafter acquired, except Permitted Liens.
Section 4.13 Business Activities.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Section 4.14 Corporate Existence.
The Company will do or cause to be done all things necessary to preserve
and keep in full force and effect:
(a) its corporate existence, and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary; and
(b) the material rights (charter and statutory), licenses and franchises
of the Company and its Restricted Subsidiaries;
provided, however, that the Company shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any of its Restricted Subsidiaries, if the preservation thereof is
no longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
materially adverse to the Holders of the Notes; provided further that this
Section 4.14 does not prohibit any transaction permitted by Section 4.10 or
Article 5 hereof.
65
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) If a Change of Control occurs, and the Company does not redeem the
Notes pursuant to Section 3.07 hereof within 90 days after the Change of
Control, each Holder of Notes shall have the right to require the Company to
repurchase all or any part, equal to $1,000 or an integral multiple of $1,000,
of that Holder's Notes pursuant to a Change of Control Offer on the terms set
forth in this Indenture.
(b) Upon the occurrence of a Change of Control, the Company will make an
offer (a "Change of Control Offer") to each Holder to repurchase all or any part
(equal to $1,000 or an integral multiple of $1,000) of each Holder's Notes at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Additional Amounts, if any, on the Notes
repurchased, to the applicable date of repurchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company will mail
a notice to each registered Holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase Notes on the
Change of Control Payment Date specified in the notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which will be no later
than 30 from the date such notice is mailed (the "Change of Control Payment
Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Section 4.15 of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control provisions of under Section
4.15 of
66
this Indenture by virtue of such conflict. If, and for so long as, the Notes are
listed on the Luxembourg Stock Exchange and the rules of that exchange so
require, the Company shall publish notices relating to the Change of Control
Offer in a leading newspaper of general circulation in Luxembourg, which is
expected to be the Luxemburger Wort.
(c) On the Change of Control Payment Date, the Company will, to the extent
lawful:
(1) accept for payment all Notes or portions of Notes properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agents an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Company.
The Paying Agents will promptly mail to each registered Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail, or cause to be transferred by book entry, to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note shall be in a
principal amount of $1,000 or an integral multiple of $1,000. Any Note so
accepted for payment shall cease to accrue interest on and after the Change of
Control Payment Date.
The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
(d) The provisions of this Section 4.15 will be applicable whether or not
any other provisions of this Indenture are applicable. Notwithstanding anything
to the contrary in this Section 4.15, the Company will not be required to make a
Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Section 4.15 hereof and purchases all
Notes validly tendered and not withdrawn under the Change of Control Offer.
Section 4.16 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(1) the Company or that Restricted Subsidiary, as applicable, could
have (a) incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction pursuant to Section 4.09
hereof and (b) incurred a Lien to secure such Indebtedness pursuant to
Section 4.12 hereof; and
(2) the transfer of assets in that sale and leaseback transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Sections 3.09 and 4.10 hereof.
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Section 4.17 Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, pay or cause to be paid any consideration to or for the benefit
of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
Section 4.18 Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or creates
another Subsidiary, other than a Receivables Subsidiary or a Non-Guarantor
Subsidiary, after the date of this Indenture, then that newly acquired or
created Subsidiary will become a Guarantor and execute a Subsidiary Guarantee
pursuant to a supplemental indenture and deliver an Opinion of Counsel
reasonably satisfactory to the Trustee within 20 Business Days of the date on
which it was acquired or created; provided, that any Subsidiary that has
properly been designated as an Unrestricted Subsidiary in accordance with this
Indenture shall not be required to become a Guarantor so long as it continues to
constitute an Unrestricted Subsidiary.
Furthermore, if any Subsidiary of the Company, other than a Receivables
Subsidiary, ceases to be a Non-Guarantor Subsidiary at any time, such Subsidiary
will become a Guarantor and execute a Subsidiary Guarantee pursuant to a
supplemental indenture and deliver an Opinion of Counsel reasonably satisfactory
to the Trustee within 20 Business Days of the date on which it ceases to be a
Non-Guarantor Subsidiary. The form of such Subsidiary Guarantee is attached as
Exhibit E hereto.
Section 4.19 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary properly
designated shall be deemed to be an Investment made as of the time of the
designation and shall reduce the amount available for Restricted Payments
pursuant to Section 4.07 hereof or Permitted Investments, as determined by the
Company. That designation shall only be permitted if the Investment would be
permitted at that time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors may redesignate
any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation
would not cause a Default.
Section 4.20 Listing.
The Company will use its best efforts to maintain the listing of the Notes
on the Luxembourg Stock Exchange for so long as such Notes are outstanding;
provided that if at any time the Company determines that it can no longer
reasonably comply with the requirements for listing the Notes on the Luxembourg
Stock Exchange or if maintenance of such listing becomes unduly onerous, it will
obtain prior to the delisting of the Notes on the Luxembourg Stock Exchange, and
thereafter use its best efforts to maintain, a listing of such Notes on such
other "recognised stock exchange" as defined in Section 841 of the Income and
Corporation Taxes Xxx 0000 of the United Kingdom. As long as the Notes are
listed on the Luxembourg Stock Exchange, and for so long as the Notes so
require, an agent for making payments on, and transfers of, Notes will be
maintained in Luxembourg. The Company has initially
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designated Dexia Banque Internationale a Luxembourg societe anonyme as its agent
for those purposes. The address of Dexia Banque Internationale a is 00, Xxxxx
x'Xxxx X-0000 Xxxxxxxxxx.
Section 4.21 Excess Cash Flow
If, for any fiscal year of the Company commencing with the fiscal year
ending March 31, 2004, there is Excess Cash Flow in an amount in excess of $5.0
million, the Company will make an offer in cash to Holders of the Notes to
purchase the maximum principal amount of the Notes (an "Excess Cash Flow Offer")
that may be repurchased with the Excess Cash Flow Amount. The offer price in any
Excess Cash Flow Offer will be equal to 101% of the aggregate principal amount
of the Notes to be repurchased plus accrued and unpaid interest and Additional
Amounts, if any, on the Notes to be repurchased, to the applicable date of
repurchase. If any Excess Cash Flow remains after consummation of the repurchase
of Notes contemplated by an Excess Cash Flow Offer, the Company may use such
Excess Cash Flow for any purpose not otherwise prohibited by this Indenture. If
the aggregate principal amount of Notes tendered by Holders of the Notes in
connection with such Excess Cash Flow Offer exceeds the applicable Excess Cash
Flow Amount, the Trustee will select the Notes to be purchased on a pro rata
basis. Within 30 days of the earlier to occur of (a) the day on which the
Company's fiscal year end financial statements are publicly filed or (b) 90 days
after the end of the Company's fiscal year, to the extent an Excess Cash Flow
Offer is required to be made by the Company, the Company will send, by first
class mail, a notice to the Trustee and each of the registered Holders, offering
to repurchase Notes pursuant to any Excess Cash Flow Offer for such fiscal year
and the date of repurchase will be no earlier than 30 days and no later than 45
days from the date such notice is mailed (the "Excess Cash Flow Offer Period").
The notice will contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Excess Cash Flow Offer. The notice,
which will govern the terms of the Excess Cash Flow Offer, will state:
(1) that the Excess Cash Flow Offer is being made pursuant to this
Section 4.21 and the length of time the Excess Cash Flow Offer will remain
open;
(2) the Excess Cash Flow Amount, the purchase price and the
applicable date of repurchase;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Excess Cash Flow Offer will cease
to accrue interest after the applicable date of repurchase;
(5) that Holders electing to have a Note purchased pursuant to an
Excess Cash Flow Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(6) that Holders electing to have a Note purchased pursuant to any
Excess Cash Flow Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three Business Days before the applicable
date of repurchase;
(7) that Holders will be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Excess Cash Flow Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
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name of the Holder, the principal amount of the Note the Holder delivered
for purchase and a statement that such Holder is withdrawing his election
to have such Note purchased;
(8) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Excess Cash Flow Amount, the Trustee will select the
Notes to be purchased on a pro rata basis based on the principal amount of
Notes surrendered (with such adjustments as may be deemed appropriate by
the Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the applicable date of repurchase, the Company will, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Excess Cash Flow Amount of Notes or portions thereof tendered pursuant to
the Excess Cash Flow Offer, or if less than the Excess Cash Flow Amount has been
tendered, all Notes tendered, and will deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 4.21. The
Company, the Depositary or the Paying Agent, as the case may be, will promptly
(but in any case not later than five Business Days after the applicable date of
repurchase) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company will promptly issue a new Note, and the Trustee,
upon written request from the Company will authenticate and mail or deliver such
new Note to such Holder, in a principal amount equal to any unpurchased portion
of the Note surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Excess Cash Flow Offer on the applicable date of
repurchase.
Prior to the date of repurchase with respect to any Excess Cash Flow Offer,
the Company may temporarily reduce revolving credit borrowings or otherwise
invest such Excess Cash Flow Amount in any manner that is not prohibited by this
Indenture.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Excess Cash Flow Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.21, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section 4.21 by virtue of such conflict.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of Assets.
The Company may not, directly or indirectly: (1) consolidate, amalgamate,
combine or merge with or into another Person whether or not the Company is the
surviving corporation; or (2) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, unless:
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(1) either:
(A) the Company is the surviving corporation; or
(B) the Person formed by or surviving any such consolidation,
amalgamation, combination or merger, if other than the Company, or to
which such sale, assignment, transfer, conveyance or other disposition
has been made is organized and validly existing under the laws of
England and Wales, Luxembourg, the United States, any state of the
United States or the District of Columbia;
(2) the Person formed by or surviving any such consolidation,
amalgamation, combination or merger, if other than the Company, or the
Person to which such sale, assignment, transfer, conveyance or other
disposition has been made assumes all the obligations of the Company under
the Notes, the Indenture and the Registration Rights Agreement, and causes
the Guarantors to reaffirm their respective obligations under the
Subsidiary Guarantees, in each case pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction, no Default or Event of
Default exists;
(4) the Company or the Person formed by or surviving any such
consolidation, amalgamation, combination or merger, if other than the
Company, or to which such sale, assignment, transfer, conveyance or other
disposition has been made will, on the date of such transaction after
giving pro forma effect thereto and any related financing transactions as
if the same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a) hereof; provided, however, that this clause (4) does not apply if,
in the good faith determination of the Board of Directors of the Company,
whose determination shall be evidenced by a board resolution, the principal
purpose of such transaction is to change the place of organization of the
Company and any such transaction shall not have as one of its purposes the
evasion of the foregoing limitation; and
(5) such transactions will not result in the Company or the Person
formed by or surviving any such transactions, if other than the Company, or
to which such sale, assignment, transfer, conveyance or other disposition
has been made, being required to make any deduction or withholding on
account of Taxes pursuant to Sections 2.13 and 3.10 hereof from any payment
under or in respect of the Notes that the Company would not have been
required to make had such transactions not occurred.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of the assets of the Company and its Restricted Subsidiaries,
taken as a whole, in one or more related transactions, to any other Person.
Clause (4) of this Section 5.01 will not apply to a sale, assignment, lease,
transfer, conveyance or other disposition of assets between or among the Company
and any of its Restricted Subsidiaries.
In the case of any such consolidation, amalgamation, combination or merger
or sale, assignment, transfer, conveyance or other disposition of all or
substantially all of the Company's assets, a notice will be published in
Luxembourg pursuant to Section 12.02 hereof.
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Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets in a transaction that is subject to, and that complies with
the provisions of, Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default
Each of the following is an "Event of Default":
(1) the Company defaults for 30 consecutive days in the payment when
due of interest on, or Liquidated Damages or Additional Amounts with
respect to, the Notes;
(2) the Company defaults in the payment when due of the principal of,
or premium, if any, on the Notes;
(3) the Company or any of its Subsidiaries fails to comply with the
provisions of Section 5.01 hereof;
(4) the Company or any of its Restricted Subsidiaries fails to
observe or perform any other covenant, representation, warranty or other
agreement in this Indenture or the Notes for 60 days after notice to the
Company by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class;
(5) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries, or the payment of which is Guaranteed by the
Company or any of its Restricted Subsidiaries, whether such Indebtedness or
Guarantee now exists, or is created after the date of this Indenture, if
that default:
(A) is caused by a failure to pay principal of, or interest or
premium, if any, on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such
default, a "Payment Default"; or
(B) results in the acceleration of such Indebtedness prior to
its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment
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Default or the maturity of which has been so accelerated, aggregates
$25.0 million, or, to the extent not denominated in U.S. dollars, the
U.S. dollar equivalent thereof, or more;
(6) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company
or any of its Restricted Subsidiaries, which judgment or judgments are not
paid, discharged or stayed for a period of 60 days; provided that the
aggregate of all such undischarged judgments exceeds $25.0 million, or, to
the extent not denominated in U.S. dollars, the U.S. dollar equivalent
thereof, excluding amounts covered by insurance;
(7) the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of the Company's Restricted
Subsidiaries that, when taken together, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Insolvency Law:
(A) passes any resolution or initiates any legal proceedings for
the suspension of payments generally or any process giving protection
against creditors or for the dissolution, liquidation or
administration of the Company, or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of the Company's
Restricted Subsidiaries that, when taken together, would constitute a
Significant Subsidiary the Guarantor or any Significant Subsidiary;
(B) consents to any person taking any legal proceeding of the
type referred to in clause (A) above;
(C) consents to the entry of an order for relief against it in
an involuntary legal proceeding of the type referred to in clause (A)
above;
(D) requests or consents to the appointment of a custodian or
receiver of it or for any substantial part of its property;
(E) enters into any kind of composition, scheme of arrangement
or compromise with or with respect to, or makes a general assignment
for the benefit of, its or their respective creditors (including a
proposal to its creditors under Section 1 of the Insolvency Xxx 0000,
as amended, for a voluntary arrangement or for a scheme of arrangement
under Section 425 of the Companies Xxx 0000 save in each case for the
purposes of a solvent reorganisation approved in advance by the
Trustee); or
(F) ceases or suspends generally payments of its debt or admits
in writing an intention to do so or is (or is deemed to be for the
purposes of any Insolvency Law applicable to it to be) unable to pay
its debts as they fall due or otherwise becomes insolvent; including
but not limited to where the assets of the Company or such Restricted
Subsidiary or group of Restricted Subsidiaries become worth less than
the liabilities (including contingent or prospective liabilities) of
the Company or such Restricted Subsidiary or group of Restricted
Subsidiaries, as the case may be;
(8) a court of competent jurisdiction enters an order or decree under
any Insolvency Law that:
(A) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary in an involuntary insolvency
proceeding;
73
(B) appoints a custodian or official receiver of the Company or
any of its Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary or for all
or substantially all of its respective property; or
(C) orders the dissolution, liquidation, winding up or
administration of the Company or any of its Significant Subsidiaries
or any group of Subsidiaries that, taken as a whole, would constitute
a Significant Subsidiary and the order or decree remains unstayed and
in effect for 60 consecutive days;
(9) any person other than the Company, or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of the Company's
Restricted Subsidiaries that, when taken together, would constitute a
Significant Subsidiary presents any petition for the winding up of the
Company, or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of the Company's Restricted Subsidiaries that, when
taken together, would constitute a Significant Subsidiary (and such
petition is not discharged within 60 days of its presentation);
(10) any Lien holder (which shall include any holder of fixed or
floating charges over the Company's or such Subsidiary's assets) takes
possession of, or a receiver or administrator or similar officer is
appointed over or in respect of all or substantially all of the business or
assets of the Company, or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of the Company's Restricted
Subsidiaries that, when taken together, would constitute a Significant
Subsidiary and is not discharged within 60 days; an attachment, distress,
execution or sequestration is levied or enforced upon or sued out against
all or substantially all of the business or assets of the Company, the
Guarantor or any of the Company's Restricted Subsidiaries that is a
Significant Subsidiary or any group of the Company's Restricted
Subsidiaries that, when taken together, would constitute a Significant
Subsidiary and such is not discharged within, and remains in effect for, 60
days; or a petition is presented or application made for the purpose of
appointing an administrator or receiver or other similar officer of, or for
the making of an administration order in respect of, the Company, or any of
its Restricted Subsidiaries that is a Significant Subsidiary or any group
of the Company's Restricted Subsidiaries that, when taken together, would
constitute a Significant Subsidiary and such petition or application is not
discharged within, and remains in effect for, 60 days;
(11) except as permitted by this Indenture, any Subsidiary Guarantee
is held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (7), (8), (9) or
(10) of Section 6.01 hereof, with respect to the Company, any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of the Company's
Restricted Subsidiaries that, when taken together, would constitute a
Significant Subsidiary, all outstanding Notes shall become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Upon any such declaration, the Notes shall become
due and payable immediately.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its
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consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest,
premium, Liquidated Damages or Additional Amounts that has become due solely
because of the acceleration) have been cured or waived.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with this Indenture. Within five Business Days of the
occurrence of any Default or Event of Default, the Company will deliver to the
Trustee a statement specifying such Default or Event of Default.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, and 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 of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All remedies are cumulative to the extent
permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the interest, Liquidated Damages, if any, or Additional Amounts, if
any, on, or principal of, the Notes (including in connection with an offer to
purchase); provided, however, that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of other Holders of Notes or that may involve the Trustee in
personal liability, provided that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(1) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
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(2) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note. This Section 6.06 does not apply to a suit instituted by a
Holder of a Note for enforcement of payment of the principal of, and premiums,
on such Note or after the respective due dates expressed in such Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, or Additional Amounts, if any, and interest on the Note, on or
after the respective due dates expressed in the Note (including in connection
with an offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) hereof occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or
76
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and Liquidated
Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require 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 of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this
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Indenture and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee will examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) the Trustee will not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or
risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee will not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon. The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order or other paper or
document.
(c) The Trustee may act through its attorneys and agents and will not be
responsible for the misconduct or negligence of any agent appointed with due
care.
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(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company will be sufficient if signed by an
Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities that might be incurred
by it in compliance with such request or direction.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
Trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default relating to the payment of principal of,
premium, if any, or Liquidated Damages, if any, or Additional Amounts, if any,
or interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA Section 313(a) (but if no event described
in TIA Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also will, in
compliance with TIA Section 313(b)(2), transmit to the Holders a brief report
with respect to the character and amount of any advances made by it as such
since the date of the last report transmitted pursuant to the first sentence of
this Section 7.06(a) (or if no such report has yet been so transmitted, since
the date of execution of this Indenture), for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Notes, on the trust
estate or on property or funds held or collected by it as Trustee, and which it
has not previously reported, if such advances remaining
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unpaid at any time aggregate more than 10% of the principal amount of Notes
outstanding at such time, within 90 days after such time. The Trustee will also
transmit, as required by TIA Section 313(c), by mail all reports, (i) to all
Holders, as the names and addresses of such Holders appear upon Company's
registration books on the Notes; (ii) to such Holders as have, within the two
(2) years preceding such report, filed their names and addresses with the
Trustee for that purpose; and (iii) except in the case of reports pursuant to
TIA Section 313(b)(2), to all Holders whose names and addresses have been
furnished to or received by the Trustee pursuant to TIA Section 312.
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA Section 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange or any delisting thereof.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture (including its services as Registrar and Paying Agent), including the
costs and expenses of enforcing this Indenture against the Company and the
Guarantors (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company, the Guarantors or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence, bad faith or willfull misconduct.
The Trustee will notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company will not relieve the
Company or any of the Guarantors of their obligations hereunder. The Company or
such Guarantor will defend the claim and the Trustee will cooperate in the
defense. The Trustee may have separate counsel and the Company will pay the
reasonable fees and expenses of such counsel. Neither the Company nor any
Guarantor need pay for any settlement made without its consent, which consent
will not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this Section
7.07 will survive the resignation or removal of the Trustee, the termination of
the Company's obligations hereunder and the satisfaction and discharge of this
Indenture.
(d) To secure the Company's payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien will survive the resignation or removal
of the Trustee and the satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) shall be preferred over the status of the Holders in a proceeding under
any Insolvency Law and are intended to constitute expenses of administration
under any Insolvency Law.
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(f) The Trustee will comply with the provisions of TIA Section 313(b)(2)
to the extent applicable, as set forth in Section 7.06(a).
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor
Trustee will become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee at
least 30 days prior to the date of proposed removal, by so notifying the Trustee
and the Company in writing. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Insolvency Law;
(3) a custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act will be the successor Trustee.
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Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of
TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section
310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at its option and at any time, elect to have either
Section 8.02 or 8.03 hereof be applied to all outstanding Notes (including the
Subsidiary Guarantees) upon compliance with the conditions set forth below in
this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guarantees), which will thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in clauses (1) and (2) below,
and to have satisfied all their other obligations under such Notes, the
Subsidiary Guarantees and this Indenture (and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which will survive until otherwise
terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, or interest or premium, Liquidated Damages, if
any, and Additional Amounts, if any, on, such Notes when such payments are
due from the trust referred to below;
(2) the Company's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Guarantors' obligations in connection
therewith; and
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(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 3.09,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and
4.21 hereof and clause (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
hereof are satisfied (hereinafter, "Covenant Defeasance"), and the Notes will
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and
Subsidiary Guarantees, the Company and the Guarantors may omit to comply with
and will have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply will not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(5)
hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under
either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S.
dollars and non-callable Government Securities, in amounts as will be
sufficient, in the opinion of an internationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay the principal of, or interest and premium,
Liquidated Damages, if any, and Additional Amounts, if any, on, the
outstanding Notes on the stated maturity or on the applicable redemption
date, as the case may be, and Danka must specify whether the Notes are
being defeased to maturity or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the Company
has delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (a) the Company has
received from, or there has been published by, the U.S. Internal Revenue
Service a ruling; or (b) since the date of this Indenture there has been a
change in the applicable U.S. federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Notes will not recognize income gain or loss
for U.S. federal income tax purposes as a result of such Legal Defeasance
and will be subject to U.S. federal income tax on the same amounts, in the
same
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manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(3) in the case of an election under Section 8.02 hereof, the Company
has delivered to the Trustee an Opinion of Counsel in the United Kingdom
reasonably acceptable to the Trustee or a ruling from the Inland Revenue of
the United Kingdom confirming that (a) the Holders of the outstanding Notes
will not recognize income, gain or loss for UK income tax or other UK tax
purposes as a result of such deposit and Legal Defeasance and will be
subject to UK income tax and other UK tax on the same amounts, in the
same manner and at the same times as would have been the case if such
deposit and Legal Defeasance had not occurred, and, for the purposes of
such opinion, such counsel shall assume that the Holders of the Notes
include Holders who are not resident in the United Kingdom; and (b)
payments from the defeasance trust will be free and exempt from any and all
withholdings and deductions of whatever nature imposed or levied by or on
behalf of the United Kingdom or any political subdivision of, or any
authority in or of, the United Kingdom having the power to tax;
(4) in the case of an election under Section 8.03 hereof, the Company
must deliver to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss U.S. federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(5) in the case of an election under Section 8.03 hereof, the Company
must deliver to the Trustee an Opinion of Counsel in the United Kingdom
reasonably acceptable to the Trustee or a ruling from the Inland Revenue of
the United Kingdom confirming that (a) the Holders of the outstanding Notes
will not recognize income, gain or loss for UK income tax or other UK tax
purposes as a result of such deposit and Covenant Defeasance and will be
subject to UK income tax and other United Kingdom tax on the same amounts,
in the same manner and at the same times as would have been the case if
such deposit and Covenant Defeasance had not occurred, and, for the
purposes of such opinion, such counsel shall assume that the Holders of the
Notes include Holders who are not resident in the United Kingdom; and (b)
payments from the defeasance trust will be free and exempt from any and all
withholdings and deductions of whatever nature imposed or levied by or on
behalf of the United Kingdom or any political subdivision of, or any
authority in or of, the United Kingdom having the power to tax;
(6) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit);
(7) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(8) the Company must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others; and
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(9) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium or Liquidated
Damages, if any, or interest on any Note and remaining unclaimed for two years
after such principal, premium or Liquidated Damages, if any, or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) will be discharged from such trust; and the Holder of such
Note will thereafter be permitted to look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantor's obligations under this
Indenture and the Notes and the Subsidiary Guarantees will be revived and
reinstated as though no deposit had
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occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium [or Liquidated Damages], if any, or
interest on any Note following the reinstatement of its obligations, the Company
will be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture, the Subsidiary
Guarantees or the Notes without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(3) to provide for the assumption of the Company's or a Guarantor's
obligations to the Holders of the Notes by a successor to the Company or a
Guarantor pursuant to Article 5 or Article 10 hereof;
(4) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note;
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) to conform the text of this Indenture, the Subsidiary Guarantees
or the Notes to any provision of the "Description of Notes" section of the
final offering memorandum, dated June 24, 2003, including any amendments or
supplements thereto and any exhibits thereto and the documents incorporated
by reference therein, (the "Offering Memorandum") to the extent that such
provision in the "Description of Notes" section of the Offering Memorandum
was intended to be a verbatim recitation of a provision of this Indenture,
the Subsidiary Guarantees or the Notes;
(7) to evidence and provide for the acceptance of appointment of a
successor Trustee;
(8) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture; or
(9) to allow any Guarantor to execute a supplemental indenture and/or
a Subsidiary Guarantee with respect to the Notes.
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Upon the written request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture (including, without
limitation, Sections 3.09, 4.10, 4.15 and 4.21 hereof), the Subsidiary
Guarantees and the Notes with the consent of the Holders of at least a majority
in principal amount of the Notes (including, without limitation, Additional
Notes, if any) then outstanding voting as a single class, including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, the Notes, and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, premium, Liquidated Damages, or
Additional Amounts, if any, or interest on the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture, the Subsidiary Guarantees or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes voting as a single class, including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, the Notes. Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental Indenture
directly affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
will not be obligated to, enter into such amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it is sufficient if such consent approves the substance thereof.
For so long as the Notes are listed on the Luxembourg Stock Exchange and
its rules so require, notice of any such amendment, supplement or waiver will be
published in Luxembourg.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company will mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver under this Section 9.02 may not,
with respect to any Notes held by a non-consenting Holder:
(1) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
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(2) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes, except
as provided above with respect to Section 3.09, 4.10, 4.15 or 4.21 hereof;
(3) reduce the rate of or change the time for payment of interest on
any Note;
(4 waive a Default or Event of Default in the payment of principal
of or premium, or Liquidated Damages, if any, or Additional Amounts, if
any, or interest on the Notes, except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal amount
of the then outstanding Notes and a waiver of the payment default that
resulted from such acceleration;
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of, or interest or premium or Liquidated Damages, if
any, or Additional Amounts, if any, on the Notes;
(7) waive a redemption payment with respect to any Note, other than a
payment required by Section 3.09, 4.10, 4.15 or 4.21 hereof;
(8) release any Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, except in accordance with the terms
of this Indenture; or
(9) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver it to the Trustee. The
Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall, upon receipt of an Authentication Order,
authenticate new Notes that reflect the amendment, supplement or waiver.
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Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled to receive and (subject to Section 7.01 hereof) will be fully
protected in relying upon, in addition to the documents required by Section
12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental Indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBSIDIARY GUARANTEES
Section 10.01 Guarantee.
(a) Subject to this Article 10, each of the Guarantors hereby, jointly and
severally, fully and unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium, if any, and Liquidated Damages, if
any, Additional Amounts, if any, and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
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 Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
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(c) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated
in full force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) subject to this Article 10,
the maturity of the obligations of the Company guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of this Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (2) in
the event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) will
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee. The Guarantors will have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Subsidiary Guarantee.
Section 10.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Insolvency Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will be limited in amount to the maximum
amount that will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such
laws, and after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 10, result
in the obligations of such Guarantor under its Subsidiary Guarantee not being
voidable under corporate law or applicable law relating to fraudulent transfer
or conveyance, fraudulent transfer or similar laws affecting the rights of
creditors generally or otherwise being void, voidable or unenforceable under any
bankruptcy, reorganization, insolvency, liquidation or other similar legislation
or legal principles.
Section 10.03 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit E hereto will be endorsed by an
Officer of such Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of such Guarantor by
one of its Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 10.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
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The delivery of any Note by the Trustee, after the authentication thereof
hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in
this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Subsidiary after the
date of this Indenture, if required by Section 4.24 hereof, the Company will
cause such Subsidiary to comply with the provisions of Section 4.24 hereof and
this Article 10, to the extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell
or otherwise dispose of, in one or more related transactions, all or
substantially all of its assets to, or consolidate, amalgamate or combine with
or merge with or into, whether or not such Guarantor is the surviving Person,
another Person, other than the Company or another Guarantor, unless:
(1) immediately after giving effect to such transaction, no Default
or Event of Default has occurred and is continuing; and
(2) either:
(a) subject to Section 10.05 hereof, such Guarantor is the
surviving Person or the Person acquiring the property in any such sale or
disposition, or the Person formed by or surviving any such consolidation,
amalgamation, combination or merger, assumes all the obligations of that
Guarantor under this Indenture, its Subsidiary Guarantee and the
Registration Rights Agreement pursuant to a supplemental indenture
reasonably satisfactory to the Trustee; or
(b) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation, Section 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Article 5 hereof, and notwithstanding clauses (a)
and (b) above or Section 10.05, nothing contained in this Indenture or in any of
the Notes will prevent any consolidation or merger of a Guarantor with or into
the Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 10.05 Releases Following Sale of Assets.
In the event of any sale or other disposition of, in one or more related
transactions, all or substantially all of the assets of any Guarantor, including
by way of merger, amalgamation, combination,
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consolidation or otherwise, or a sale or other disposition of all the Share
Capital of any Guarantor, in each case, to a Person that is not, either before
or after giving effect to such transactions, a Subsidiary of the Company, or the
Company designates any Restricted Subsidiary that is a Guarantor as an
Unrestricted Subsidiary pursuant to Section 4.19 hereof, then such Guarantor (in
the event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the Share Capital of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Subsidiary Guarantee; provided that such sale or
other disposition complies with the applicable provisions of this Indenture,
including, without limitation, Section 4.10 hereof. Upon delivery by the Company
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Company in accordance
with the provisions of this Indenture, including without limitation Section 4.10
hereof, the Trustee will execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Subsidiary
Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as
to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated (except lost, stolen
or destroyed Notes that have been replaced or paid and Notes for whose
payment money has theretofore been deposited in trust and thereafter repaid
to the Company) have been delivered to the Trustee for cancellation; or
(b) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable within one
year and the Company or any Guarantor has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and discharge
the entire indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium, Liquidated Damages, if any, and
Additional Amounts, if any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of such deposit or will occur as a result of such deposit and such
deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which the Company or any Guarantor
is a party or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and
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(4) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money
has been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the provisions of Section 11.02 and Section 8.06 will survive. In
addition, nothing in this Section 11.01 will be deemed to discharge those
provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money deposited with the
Trustee pursuant to Section 11.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or Government
Securities in accordance with Section 11.01 by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and any Guarantor's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
11.01; provided that if the Company has made any payment of principal of,
premium, if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
Section 11.03 Acknowledgment of Discharge
After the conditions to discharge contained in this Article 11 have been
satisfied, and the Company has paid or caused to be paid all other sums payable
hereunder by the Company, and delivered to the Trustee an Officers' Certificate
and Opinion of Counsel, each stating that all conditions precedent relating to
the satisfaction and discharge of this Indenture have been satisfied, the
Trustee upon written request shall acknowledge in writing the discharge of the
obligations of the Company and the Guarantors under this Indenture (except for
those surviving obligations specified in Section 11.01 hereof.
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision that is required or deemed to be included in this Indenture by
the TIA, the provision so required or deemed shall control, and if any provision
of this Indenture limits, qualifies or conflicts with the duties imposed by TIA
Section 318(c), the imposed duties will control.
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Section 12.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company and/or any Guarantor:
00000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxx
If to the Trustee:
HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Issuer Services
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication will also be so mailed to any Person
described in TIA Section 313(c), to the extent required by the TIA, as described
in Section 7.06(a) hereof. Failure to mail a notice or communication to a Holder
or any defect in it will not affect its sufficiency with respect to other
Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance on such waiver.
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In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
All notices to the Holders will be valid if published in a leading English
language daily newspaper published in London and a leading English language
daily newspaper published in New York City or such other English language daily
newspaper with general circulation in Europe or the United States, as the case
may be, as the Trustee may approve and, so long as the Notes are listed on the
Luxembourg Stock Exchange, in one daily newspaper published in Luxembourg
approved by the Trustee. Any notice will be deemed to have been given on the
date of publication or, if so published more than once on different dates, on
the date of first publication. It is expected that publication will normally be
made in the Financial Times, The Wall Street Journal and, so long as the Notes
are listed on the Luxembourg Stock Exchange and its rules so require, the
Luxemburger Wort. If publication as provided above is not practicable, notice
will be given in such other manner, and shall be deemed to have been given on
such date, as the Trustee may approve.
If the Company mails a notice or communication to Holders, it will mail a
copy to the Trustee and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of TIA
Section 312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
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(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
shareholder of the Company or any Guarantor, as such, will have any liability
for any obligations of the Company or the Guarantors under the Notes, the
Exchange Notes, this Indenture, the Subsidiary Guarantees or the Guarantees of
the Exchange Notes or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each Holder of Notes or Exchange Notes by
accepting a Note or Exchange Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes. The
waiver may not be effective to waive liabilities under the U.S. federal
securities laws
Section 12.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09 Judgment Currency.
Any payment on account of an amount that is payable in dollars, the
"Required Currency," which is made to or for the account of any Holder or the
Trustee in lawful currency of any other jurisdiction, the "Judgment Currency,"
whether as a result of any judgment or order or the enforcement thereof or the
liquidation of the Company or any Guarantor, shall constitute a discharge of the
Company or the Guarantor's obligation under this Indenture and the Notes, as the
case may be, only to the extent of the amount of the Required Currency with such
Holder or the Trustee, as the case may be, could purchase in the New York
foreign exchange markets with the amount of the Judgment Currency in accordance
with normal banking procedures at the rate of exchange prevailing on the first
business day following receipt of the payment in the Judgment Currency. If the
amount of the Required Currency that could be so purchased is less than the
amount of the Required Currency originally due to such Holder or the Trustee, as
the case may be, the Company shall indemnify and hold harmless the Holder or the
Trustee, as the case may be, from and against all loss or damage arising out of,
or as a result of, such deficiency. This indemnity shall constitute an
obligation separate and independent from the other obligations contained in this
Indenture or the Notes, shall give rise to a separate and independent cause of
action, shall apply irrespective of any indulgence granted by any Holder or the
Trustee from time to time and shall continue
96
in full force and effect notwithstanding any judgment or order for a liquidated
sum in respect of an amount due hereunder or under any judgment or order.
Section 12.10 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 12.11 Consent to Service.
The Company and the Non-U.S. Guarantors will irrevocably appoint Danka
Office Imaging Company as agent for service of process in any suit, action or
proceeding arising out of or relating to this Indenture, the Registration Rights
Agreement, the Notes, the Subsidiary Guarantees, the Exchange Notes or the
Guarantees of the Exchange Notes for actions brought under U.S. federal or state
securities laws in any U.S. federal or state court located in The City of New
York and submit to such jurisdiction.
Section 12.12 Successors.
All agreements of the Company in this Indenture and the Notes will bind its
successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 10.05 hereof.
Section 12.13 Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 12.14 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy will be an original, but all of them together represent the same agreement.
Section 12.15 Table of Contents, Headings, etc.
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 will in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
97
SIGNATURES
Dated as of July 1, 2003
DANKA BUSINESS SYSTEMS PLC
By: /s/ X. Xxxx Xxxxxx, III
-------------------------------------
Name: X. Xxxx Xxxxxx, III
Title: Chief Executive Officer and
Chairman
98
DANKA HOLDING COMPANY
AMERICAN BUSINESS CREDIT CORPORATION
DANKA MANAGEMENT II COMPANY, INC.
XXXXXX ENTERPRISES, INC. OF SOUTH FLORIDA
D.I. INVESTMENT MANAGEMENT, INC.
QUALITY BUSINESS, INC.
DANKA MANAGEMENT COMPANY, INC.
CORPORATE CONSULTING GROUP, INC.
DANKA IMAGING DISTRIBUTION, INC.
DANKA OFFICE IMAGING COMPANY
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
99
DANKALUX S.A X.X.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: Manager
100
DANKA UK PLC
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
101
DANKA SERVICES INTERNATIONAL LTD.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
102
DANKA BUSINESS FINANCE LTD.
DANKA CANADA INC.
KALMARA INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
103
DANKA AUSTRALASIA PTY LIMITED
DANKA AUSTRALIA PTY LIMITED
DANKA TOWER PTY LTD
DANKA DISTRIBUTORS PTY LTD
DANKA DATAKEY PTY LTD
DATAKEY ALCATEL PTY. LTD.
DANKA SYSTEMS PTY LIMITED
By: *
--------------------------------------
Name: Xxxxxxx Xxxxxx Xxxxxxx
Title: Director
* By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Pursuant to Power of Attorney
104
HSBC BANK USA,
as Trustee
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Authorized Signatory
105
Schedule I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of the
date of the Indenture:
DANKA AUSTRALASIA PTY LIMITED
DANKA AUSTRALIA PTY LIMITED
DANKA TOWER PTY LTD
DANKA DISTRIBUTORS PTY LTD
DANKA DATAKEY PTY LTD
DATAKEY ALCATEL PTY. LTD.
DANKA SYSTEMS PTY LIMITED
DANKA BUSINESS FINANCE LTD.
DANKA CANADA INC.
KALMARA INC.
DANKALUX S.A X.X.
XXXXX UK PLC
DANKA SERVICES INTERNATIONAL LTD.
DANKA HOLDING COMPANY
AMERICAN BUSINESS CREDIT CORPORATION
DANKA MANAGEMENT II COMPANY, INC.
XXXXXX ENTERPRISES, INC. OF SOUTH FLORIDA
D.I. INVESTMENT MANAGEMENT, INC.
QUALITY BUSINESS, INC.
DANKA MANAGEMENT COMPANY, INC.
CORPORATE CONSULTING GROUP, INC.
DANKA IMAGING DISTRIBUTION, INC.
DANKA OFFICE IMAGING COMPANY
I-1
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT UNDER SECTIONS 1272, 1273,
AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND IS SUBJECT TO THE
RULES FOR DEBT INSTRUMENTS WITH CONTINGENT PAYMENTS UNDER TREASURY REGULATION
Section 1.1275-4(b). FOR INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE, THE YIELD TO MATURITY, THE COMPARABLE
YIELD AND PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY, YOU SHOULD submit a
written request for it to the Company at THE FOLLOWING ADDRESS: 00000 XXXXX
XXXXXX XXXXX, XX. XXXXXXXXXX, XXXXXXX ATTENTION: XXXX XXXXXX.
CUSIP/CINS
------------
11% [Series A] [Series B] Senior Notes due 2010
No. ___ $
------------
DANKA BUSINESS SYSTEMS PLC
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of
-----------------------------------------------------------
Dollars on June 15, 2010.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: July 1, 2003
DANKA BUSINESS SYSTEMS PLC
By: /s/
--------------------------------------
Name:
Title:
This is one of the Notes referred
to in the within-mentioned Indenture:
HSBC BANK USA
as Trustee
By: /s/
------------------------------------
Authorized Signatory
--------------------------------------------------------------------------------
A-1
[Back of Note]
11% Senior Notes due 2010
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) Interest. Danka Business Systems PLC, a public company
incorporated with limited liability under the Companies Act of 1985 with
registered number 1101386 and with its registered office at Masters House,
000 Xxxxxxxxxxx Xxxx, Xxxxxx X00 0XX, Xxxxxxx (the "Company"), promises to
pay interest on the principal amount of this Note at 11% per annum from
July 1, 2003 until maturity and shall pay the Additional Amounts, if any,
and the Liquidated Damages, if any, payable pursuant to Section 5 of the
Registration Rights Agreement referred to below. The Company will pay
interest, Liquidated Damages, if any, and Additional Amounts, if any,
semi-annually in arrears on June 15 and December 15 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each,
an "Interest Payment Date"). Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; provided that if there is no existing
Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be December 15, 2003. The Company will pay
interest (including post-petition interest in any proceeding under any
Insolvency Law) on overdue principal and premium, if any, from time to time
on demand at the rate then in effect; it will pay interest (including
post-petition interest in any proceeding under any Insolvency Law) on
overdue installments of interest, Liquidated Damages, if any, and
Additional Amounts, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
(2) Method Of Payment. The Company will pay interest on the Notes
(except defaulted interest), Liquidated Damages, if any, and Additional
Amounts, if any, to the Persons who are registered Holders of Notes at the
close of business on the June 1 or December 1 immediately preceding the
Interest Payment Date, even if such Notes are canceled after such record
date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium, Liquidated Damages, if any, and
Additional Amounts, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City and State of
New York, or, at the option of the Company, payment of interest and
Liquidated Damages, if any, and Additional Amounts, if any, may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders; provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium
and Liquidated Damages and Additional Amounts, if any, on, all Global Notes
and all other Notes the Holders of which will have provided the Company
with instructions for wire transfer to a U.S. dollar account maintained by
the Holder with a bank located in The City of New York. Such payment will
be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
A-2
(3) Paying Agent And Registrar. Initially, HSBC Bank plc in London,
HSBC Bank USA, the Trustee under the Indenture, in New York, and Dexia
Banque Internationale a Luxembourg societe anonyme in Luxembourg will act
as Paying Agents. Initially, HSBC Bank USA, the Trustee in New York will
act as Registrar. The Company may change any Paying Agent or the Registrar
without notice to any Holder. The Company or any of its Subsidiaries may
act in any such capacity. For so long as the Notes are listed on the
Luxembourg Stock Exchange and its rules so require, the Company will
publish a notice of any change of Paying Agent, Registrar or Transfer Agent
in a newspaper having a general circulation in Luxembourg, which is
expected to be the Luxemburger Wort.
(4) Indenture. The Company issued the Notes under an Indenture dated
as of July 1, 2003 (the "Indenture") among the Company, the Guarantors and
the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are
subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions
of the Indenture shall govern and be controlling. The Notes are unsecured
obligations of the Company.
(5) Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company will not have the option to redeem the Notes prior to June 15, 2007.
Thereafter, the Company will have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices, expressed as percentages of principal amount, set forth below plus
accrued and unpaid interest and Additional Amounts, if any, on the Notes
redeemed, to the applicable redemption date, if redeemed during the twelve-month
period beginning on June 15 of the years indicated below :
Year Percentage
--------------------------------------- ----------
2007................................... 105.500%
2008................................... 102.750%
2009 and thereafter.................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, at any time prior to June 15, 2006, the Company may, on any one or more
occasions, redeem, in whole or in part, up to 35% of the aggregate principal
amount of Notes, including Additional Notes, if any, issued under the Indenture
at a redemption price of 111% of the principal amount of the Notes redeemed,
plus accrued and unpaid interest and Additional Amounts, if any, on the Notes
redeemed to the applicable redemption date, with the net cash proceeds of one or
more Equity Offerings; provided that at least 65% of the aggregate principal
amount of Notes, including Additional Notes, if any, issued under the Indenture
remains outstanding immediately after the occurrence of such redemption,
excluding Notes held by the Company and its Subsidiaries, and that such
redemption occurs within 90 days of the date of the closing of any such Equity
Offering.
(6) Mandatory Redemption. The Company will not be required to make
mandatory redemption or sinking fund payments with respect to the Notes.
A-3
(7) Repurchase At Option Of Holder.
(a) If there is a Change of Control, and the Company does not
redeem the Notes as described in Paragraph 5 within 90 days after the
Change of Control, the Company will be required to make an offer (a "Change
of Control Offer") to repurchase all or any part, equal to $1,000 or an
integral multiple thereof, on the Notes repurchased, of each Holder's Notes
at a purchase price equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest and Additional Amounts, if any, on the
Notes repurchased, to the date of repurchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company will
mail a notice to each Holder setting forth the procedures governing the
Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, for which the aggregate amount of Excess Proceeds exceeds
$10.0 million, or, to the extent not denominated in U.S. dollars, the U.S.
dollar equivalent thereof, the Company will commence an offer to all
Holders of Notes and all holders of other Indebtedness that is pari passu
with the Notes containing provisions similar to those set forth in the
Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets (an "Asset Sale Offer") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Notes, including any
Additional Notes, and other pari passu Indebtedness that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to
100% of the principal amount thereof plus accrued and unpaid interest and
Additional Amounts, if any, to the date fixed for the closing of such
offer, in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes, including any Additional Notes,
and other pari passu Indebtedness tendered pursuant to an Asset Sale Offer
is less than the Excess Proceeds, the Company may use such deficiency for
any purpose not otherwise prohibited by the Indenture. If the aggregate
principal amount of Notes and other pari passu Indebtedness surrendered by
holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and the Company shall select the other pari passu
Indebtedness to be purchased on a pro rata basis. Holders of Notes that are
the subject of an offer to purchase will receive an Asset Sale Offer from
the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
(c) If, for any fiscal year of the Company, commencing with the
fiscal year ending March 31, 2004, there is Excess Cash Flow in an amount
in excess of $5.0 million, the Company will make an offer in cash to
Holders of the Notes to purchase the maximum principal amount of the Notes
(an "Excess Cash Flow Offer") that may be repurchased with the Excess Cash
Flow Amount. The offer price in any Excess Cash Flow Offer will be equal to
101% of the aggregate principal amount of the Notes to be repurchased plus
accrued and unpaid interest and Additional Amounts, if any, on the Notes to
be repurchased, to the applicable date of repurchase. If any Excess Cash
Flow remains after consummation of the repurchase of Notes contemplated by
an Excess Cash Flow Offer, the Company may use such Excess Cash Flow for
any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes tendered by Holders of the Notes in connection
with such Excess Cash Flow Offer exceeds the applicable Excess Cash Flow
Amount, the Trustee will select the Notes to be purchased on a pro rata
basis. Within 30 days of the earlier to occur of (a) the day on which the
Company's fiscal year end financial statements are publicly filed or (b) 90
days after the end of the Company's fiscal year, to the extent an Excess
Cash Flow Offer is required to be made by the Company, the Company will
send, by first class mail, a notice to the Trustee and each of the
registered Holders, offering to repurchase Notes pursuant to any Excess
Cash Flow Offer for such fiscal year, and the date of repurchase will be no
earlier than 30 days and no later than 45 days from the date such notice is
A-4
mailed. The notice will contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Excess Cash Flow Offer.
Any Excess Cash Flow Offer will be made pursuant to the procedures set
forth in Section 4.21 of the Indenture.
(8) 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
registered Holder whose Notes are to be redeemed at its registered address
except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of
the notes or a satisfaction and discharge of the indenture. Notices of
redemption may not be conditional. Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000,
unless all of the Notes held by a Holder are to be redeemed. On and after
the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
(9) Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged
as provided in the Indenture. The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Holder will be required to pay all taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note selected
for redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes
to be redeemed or during the period between a record date and the
corresponding Interest Payment Date or Notes tendered and not withdrawn in
connection with a Change of Control Offer or an Asset Sale Offer.
(10) Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
(11) Amendment, Supplement And Waiver. Subject to certain exceptions,
the Indenture, the Subsidiary Guarantees or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes and Additional Notes, if
any, voting as a single class, and any existing default or compliance with
any provision of the Indenture, the Subsidiary Guarantees or the Notes may
be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes and Additional Notes, if any, voting as a
single class. Without the consent of any Holder of a Note, the Indenture,
the Subsidiary Guarantees or the Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of the Notes in the case
of a consolidation, amalgamation, combination or merger or sale of all or
substantially all of the Company's assets, to make any change that would
provide any additional rights or benefits to the Holders of the Notes or
that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect
or maintain the qualification of the Indenture under the Trust Indenture
Act of 1939, as amended, to conform the text of the Indenture, the
Subsidiary Guarantees or the Notes to any provision of the "Description of
Notes" section of the Offering Memorandum to the extent that such provision
in the "Description of Notes" section of the Offering Memorandum was
intended to be a verbatim recitation of a provision of the Indenture, the
Subsidiary Guarantees or the Notes, to evidence and provide for the
acceptance of appointment of a successor Trustee, to provide for the
Issuance of Additional Notes in accordance with the Indenture, or to allow
any
A-5
Guarantor to execute a supplemental indenture to the Indenture and/or a
Subsidiary Guarantee with respect to the Notes.
(12) Defaults And Remedies. Events of Default include: (i) default for
30 consecutive days in the payment when due of interest on, or Liquidated
Damages or Additional Amounts with respect to, the Notes; (ii) default in
payment when due of principal of or premium, if any, on the Notes; (iii)
failure by the Company to comply with Section 5.01 of the Indenture; (iv)
failure by the Company or any of its Restricted Subsidiaries for 60 days
after notice to the Company by the Trustee or the Holders of at least 25%
in principal amount of the Notes then outstanding voting as a single class
to comply with certain other agreements in the Indenture or the Notes; (v)
default under certain other agreements relating to Indebtedness of the
Company or any of its Restricted Subsidiaries if that default is caused by
a failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default, or which default results in the
acceleration of such Indebtedness prior to its express maturity, and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness or the maturity of which
has been so accelerated, aggregates $25.0 million, or, to the extent not
denominated in U.S. dollars, the U.S. dollar equivalent thereof, or more;
(vi) final judgments for the payment of money is entered by a court or
courts of competent jurisdiction against the Company or any of the
Company's Restricted Subsidiaries that remain undischarged for a period of
60 days; provided that the aggregate of all such undischarged judgments
exceeds $25.0 million, or, to the extent not denominated in U.S. dollars,
the U.S. dollar equivalent thereof, or more; (vii) certain events of
bankruptcy, administration, administrative receivership, composition,
insolvency or liquidation with respect to the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group of
the Company's Restricted Subsidiaries that, when taken together, would
constitute a Significant Subsidiary; (viii) certain orders or decrees
entered by a court of competent jurisdiction under any Insolvency Law; and
(ix) except as permitted by the Indenture, any Subsidiary Guarantee shall
be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Guarantor or any
Person acting on its behalf shall deny or disaffirm its obligations under
such Guarantor's Subsidiary Guarantee. If any Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be due
and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy, administration,
administrative receivership, composition, insolvency or liquidation, all
outstanding Notes will become due and payable immediately without further
action or notice. Holders may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal, interest, Liquidated Damages or Additional Amounts) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Notes
waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the
payment of Liquidated Damages, Additional Amounts or interest on, or the
principal of, the Notes. The Company is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default,
to deliver to the Trustee a statement specifying such Default or Event of
Default.
A-6
(13) Trustee Dealings With Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
(14) No Recourse Against Others. A director, officer, employee,
incorporator or shareholder, of the Company or any of the Guarantors, as
such, will not have any liability for any obligations of the Company or
such Guarantor under the Notes, the Exchange Notes, the Subsidiary
Guarantees, the Guarantees of the Exchange 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 Notes or Exchange Notes by accepting a Note
or Exchange Notes waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes. The
waiver may not be effective to waive liabilities under the U.S. federal
securities laws.
(15) Authentication. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(16) Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
(17) Additional Rights Of Holders Of Restricted Global Notes And
Restricted Definitive Notes. In addition to the rights provided to Holders
of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes will have all the rights set forth in the
Registration Rights Agreement dated as of July 1, 2003, among the Company,
the Guarantors and the other parties named on the signature pages thereof
or, in the case of Additional Notes, Holders of Restricted Global Notes and
Restricted Definitive Notes will have the rights set forth in one or more
registration rights agreements, if any, among the Company, the Guarantors
and the other parties thereto, relating to rights given by the Company and
the Guarantors to the purchasers of any Additional Notes collectively, the
"Registration Rights Agreement").
(18) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed
on the Notes or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
DANKA BUSINESS SYSTEMS PLC
00000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
A-7
Assignment Form
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
-----------------------------------
(Insert assignee's legal name)
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: --------------
Your Signature:
--------------------------
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
Option Of Holder To Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10, 4.15 or 4.21 of the Indenture, check the appropriate box below:
[ ]Section 4.10 [ ]Section 4.15 [ ]Section 4.21
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10, Section 4.15 or Section 4.21 of the Indenture, state
the amount you elect to have purchased:
$
------------
Date:
--------------
Your Signature:
--------------------------
(Sign exactly as your name appears
on the face of this Note)
Tax Identification No.:
------------------
Signature Guarantee*:
----------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ------------------- --------------------- ------------------- ------------------
* This schedule should be included only if the Note is issued in global form.
A-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Danka Business Systems PLC
00000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: 11% Senior Notes due 2010
-------------------------
Reference is hereby made to the Indenture, dated as of July 1, 2003 (the
"Indenture"), among Danka Business Systems PLC, as issuer (the "Company"), the
Guarantors named on the signature pages thereto and HSBC Bank USA, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial interest in
the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor
hereby further certifies that the beneficial interest or Definitive Note is
being transferred to a Person that the Transferor reasonably believed and
believes is purchasing the beneficial interest or Definitive Note for its own
account, or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [ ] Check if Transferee will take delivery of a beneficial interest in
the Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a Person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act and (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act. Upon
consummation of the proposed transfer in accordance with the
B-1
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note, and/or the Definitive
Note and in the Indenture and the Securities Act.
3. [ ] Check and complete if Transferee will take delivery of a beneficial
interest in the IAI Global Note or a Definitive Note pursuant to any provision
of the Securities Act other than Rule 144A or Regulation S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted Definitive Notes
and pursuant to and in accordance with the Securities Act and any applicable
blue sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule
904, and the Transferor hereby further certifies that it has not engaged in
any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or
Restricted Definitive Notes and the requirements of the exemption claimed,
which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached
to this certification), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the IAI Global Note
and/or the Definitive Notes and in the Indenture and the Securities Act.
4. [ ] Check if Transferee will take delivery of a beneficial interest in
an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [ ] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or
B-2
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) [ ] Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-----------------------------------------
[Insert Name of Transferor]
By: /s/
-------------------------------------
Name:
Title:
Dated: ----------------
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ]Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
DANKA BUSINESS SYSTEMS PLC
00000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: 11% Senior Notes due 2010
-------------------------
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of July 1, 2003 (the
"Indenture"), among Danka Business Systems PLC, as issuer (the "Company"), the
Guarantors named on the signature pages thereto and HSBC Bank USA, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
__________________________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
C-1
(c) [ ] Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
144A Global Note, Regulation S Global Note, IAI Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-----------------------------------------
[Insert Name of Transferor]
C-2
By: /s/
--------------------------------------
Name:
Title:
Dated: -------------
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Danka Business Systems PLC
00000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
[Registrar address block]
Re: 11% Senior Notes due 2010
Reference is hereby made to the Indenture, dated as of July 1, 2003 (the
"Indenture"), among Danka Business Systems PLC, as issuer (the "Company"), the
guarantors named on the signature pages thereto and HSBC Bank USA, as Trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and , if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-----------------------------------------
[Insert Name of Accredited Investor]
By: /s/
--------------------------------------
Name:
Title:
Dated:_______________________
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of July 1, 2003 (the "Indenture") among
Danka Business Systems PLC (the "Company"), the Guarantors listed on Schedule I
thereto and HSBC Bank USA, as trustee (the "Trustee"), (a) the due and punctual
payment of the principal of, premium and Liquidated Damages, if any, and
Additional Amounts, if any, and interest on the Notes (as defined in the
Indenture), whether at maturity, by acceleration, redemption or otherwise, the
due and punctual payment of interest on overdue principal of and interest on the
Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) 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, by acceleration or otherwise.
The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article 10 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same agrees to and shall be bound by such provisions.
[Name Of Guarantor(s)]
By: /s/
--------------------------------------
Name:
Title:
E-1
EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
Supplemental Indenture (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of ____________________ (or its permitted successor),
a [_______] [corporation] (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and HSBC Bank USA, as trustee under
the indenture referred to below (the "Trustee").
WITNESSETH
WHEREAS, the Company has heretofore executed and delivered to the Trustee
an indenture (the "Indenture"), dated as of July 1, 2003 providing for the
issuance of an aggregate principal amount of $175,000,000 of 11% Senior Notes
due 2010 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. Agreement To Guarantee. The Guaranteeing Subsidiary hereby agrees as
follows:
(a) Along with all Guarantors named in the Indenture, to 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, the Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of, and premium, Liquidated Damages, if any,
and Additional Amounts, if any, and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and
interest on the Notes, if any, if lawful, and all other obligations of
the Company to the Holders or the Trustee hereunder or thereunder 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 any of such other obligations, that same will be promptly
paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so
F-1
guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the
Notes or the 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
Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor.
(c) The following is hereby waived: diligence, presentment,
demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever.
(d) This Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture, and the Guaranteeing Subsidiary accepts all obligations of
a Guarantor under the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors, or any custodian,
trustee, liquidator or other similar official acting in relation to
either the Company or the Guarantors, any amount paid by either to the
Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
(g) As between the Guarantors, 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 6 of the Indenture for the purposes of this Subsidiary
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 declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such
obligations (whether or not due and payable) shall forthwith become
due and payable by the Guarantors for the purpose of this Subsidiary
Guarantee.
(h) The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Subsidiary
Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving
effect to any maximum amount and all other contingent and fixed
liabilities that are relevant under any applicable Insolvency or
fraudulent conveyance laws, and after giving effect to any collections
from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such
other Guarantor under Article 10 of the Indenture, this new Subsidiary
Guarantee shall be limited to the maximum amount permissible such that
the obligations of such Guarantor under this Subsidiary Guarantee will
not constitute a fraudulent transfer or conveyance.
F-2
3. Execution And Delivery. Each Guaranteeing Subsidiary agrees that the
Subsidiary Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
4. Guaranteeing Subsidiary May Consolidate, Etc. On Certain s.
(a) The Guaranteeing Subsidiary may not sell or otherwise
dispose of all substantially all of its assets to, or consolidate,
amalgamate or combine with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person, other than the
Company or another Guarantor unless:
(i) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(ii) either (A) subject to Section 10.05 of the Indenture, the
Person acquiring the property in any such sale or disposition or the
Person formed by or surviving any such consolidation, amalgamation,
combination or merger unconditionally assumes all the obligations of
that Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture and the Subsidiary Guarantee on the terms set forth herein
or therein; or (B) the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of the
Indenture, including without limitation, Section 4.10 thereof.
(b) In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by
supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of
the covenants and conditions of the Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted
for the Guarantor with the same effect as if it had been named herein
as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable under the Indenture which theretofore shall not have
been signed by the Company and delivered to the Trustee. All the
Subsidiary Guarantees so issued shall in all respects have the same
legal rank and benefit under the Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the
terms of the Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.
(c) Except as set forth in Articles 4 and 5 and Section 10.04 of
Article 10 of the Indenture, and notwithstanding clauses (a) and (b)
above, nothing contained in the Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
5. RELEASES.
(a) In the event of any sale or other disposition of all or
substantially all of the assets of any Guarantor, including by way of
merger, amalgamation, combination, consolidation or otherwise, or a
sale or other disposition of all of the capital stock of any
Guarantor, in each case, to a Person that is not (either before or
after giving effect to such
F-3
transaction) a Subsidiary of the Company, or the Company designates
any Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary pursuant to Section 4.20 of the Indenture, then such
Guarantor (in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the capital stock of
such Guarantor) or the corporation acquiring the property (in the
event of a sale or other disposition of all or substantially all of
the assets of such Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; provided that the sale or
other disposition complies with the applicable provisions of the
Indenture, including, without limitation, Section 4.10 of the
Indenture. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation Section 4.10
of the Indenture, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee.
(b) Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations
of any Guarantor under the Indenture as provided in Article 10 of the
Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
F-4
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[Guaranteeing Subsidiary]
By:
--------------------------------------
Name:
Title:
DANKA BUSINESS SYSTEMS PLC
By:
--------------------------------------
Name:
Title:
DANKA AUSTRALASIA PTY LIMITED
DANKA AUSTRALIA PTY LIMITED
DANKA TOWER PTY LTD
DANKA DISTRIBUTORS PTY LTD
DANKA DATAKEY PTY LTD
DATAKEY ALCATEL PTY. LTD.
DANKA SYSTEMS PTY LIMITED
DANKA BUSINESS FINANCE LTD.
DANKA CANADA INC.
KALMARA INC.
DANKALUX S.A X.X.
XXXXX UK PLC
DANKA SERVICES INTERNATIONAL LTD.
DANKA HOLDING COMPANY
AMERICAN BUSINESS CREDIT CORPORATION
DANKA MANAGEMENT II COMPANY, INC.
XXXXXX ENTERPRISES, INC. OF SOUTH FLORIDA
D.I. INVESTMENT MANAGEMENT, INC.
QUALITY BUSINESS, INC.
DANKA MANAGEMENT COMPANY, INC.
CORPORATE CONSULTING GROUP, INC.
DANKA IMAGING DISTRIBUTION, INC.
DANKA OFFICE IMAGING COMPANY
By:
--------------------------------------
Name:
Title:
HSBC BANK USA,
as Trustee
By:
--------------------------------------
Authorized Signatory
F-5
