Exhibit 4.1
CELLSTAR CORPORATION, as Issuer
and
The Bank of New York, as Trustee
____________________
INDENTURE
Dated as of [_______ __, 2002]
____________________
$[_______________]
12% Senior Subordinated Notes
Due 2007
TABLE OF CONTENTS
Page No.
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE ................ 1
Section 1.01 Definitions ......................... ................ 1
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Section 1.02 Incorporation by Reference of TIA .................... 12
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Section 1.03 Rules of Construction ................................ 12
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ARTICLE II THE NOTES ................................................ 13
Section 2.01 Form and Dating ...................................... 13
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Section 2.02 Execution and Authentication ......................... 13
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Section 2.03 Registrar and Paying Agent ........................... 14
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Section 2.04 Paying Agent To Hold Assets in Trust ................. 15
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Section 2.05 Securityholder Lists ................................. 15
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Section 2.06 Transfer and Exchange ................................ 15
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Section 2.07 Replacement Notes .................................... 16
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Section 2.08 Outstanding Notes .................................... 16
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Section 2.09 Treasury Notes ....................................... 17
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Section 2.10 Temporary Notes ...................................... 17
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Section 2.11 Cancellation ......................................... 17
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Section 2.12 Defaulted Interest ................................... 18
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Section 2.13 Deposit of Monies .................................... 18
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Section 2.14 CUSIP Number ......................................... 18
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Section 2.15 Book Entry Provisions for Global Note ................ 18
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ARTICLE III REDEMPTION OF NOTES ..................................... 19
Section 3.01 Redemption Price ..................................... 19
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Section 3.02 Notice of Redemption; Selection of Notes ............. 19
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Section 3.03 Payment of Notes Called for Redemption ............... 20
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Section 3.04 Purchase of Notes Upon A Change of Control ........... 21
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ARTICLE IV COVENANTS ................................................ 22
Section 4.01 Payment of Notes ..................................... 22
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Section 4.02 Maintenance of Office or Agency ...................... 23
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Section 4.03 Corporate Existence .................................. 23
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Section 4.04 Payment of Taxes and Other Claims .................... 23
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Section 4.05 Maintenance of Properties and Insurance .............. 24
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Section 4.06 Compliance Certificates; Notice of Default ........... 24
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Section 4.07 Compliance with Laws ................................. 25
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Section 4.08 SEC Reports and Other Information .................... 25
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Section 4.09 Limitation on Additional Indebtedness ................ 26
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Section 4.10 Limitation on Investments, Loans and Advances ........ 27
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Section 4.11 Limitation on Restricted Payments .................... 27
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Section 4.12 Limitation on Liens .................................. 28
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Section 4.13 Limitation on Sale-Leaseback Transactions...................................................... 29
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Section 4.14 Limitation on Liquidations, Dissolutions, Mergers and Consolidation............................ 29
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Section 4.15 Disposition of Proceeds of Asset Sales......................................................... 30
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Section 4.16 Limitation on Transactions with Affiliates..................................................... 30
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ARTICLE V SUCCESSOR CORPORATION.................................................................................. 31
Section 5.01 Consolidation, Merger, Conveyance, Transfer or Lease........................................... 31
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Section 5.02 Successor Entity Substituted................................................................... 32
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ARTICLE VI DEFAULT AND REMEDIES.................................................................................. 32
Section 6.01 Events of Default.............................................................................. 32
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Section 6.02 Acceleration................................................................................... 33
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Section 6.03 Other Remedies................................................................................. 34
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Section 6.04 Waiver of Past Defaults........................................................................ 34
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Section 6.05 Control by Required Holders.................................................................... 34
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Section 6.06 Limitation on Suits............................................................................ 34
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Section 6.07 Rights of Holders To Receive Payment........................................................... 35
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Section 6.08 Collection Suit by Trustee..................................................................... 35
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Section 6.09 Trustee May File Proofs of Claim............................................................... 35
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Section 6.10 Priorities..................................................................................... 35
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Section 6.11 Undertaking for Costs.......................................................................... 36
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Section 6.12 Rights and Remedies Cumulative................................................................. 36
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Section 6.13 Delay or Omission Not Waiver................................................................... 36
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ARTICLE VII TRUSTEE.............................................................................................. 36
Section 7.01 Duties of Trustee.............................................................................. 36
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Section 7.02 Rights of Trustee.............................................................................. 37
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Section 7.03 Individual Rights of Trustee................................................................... 38
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Section 7.04 Trustee's Disclaimer........................................................................... 38
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Section 7.05 Notice of Default.............................................................................. 39
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Section 7.06 Reports by Trustee to Holders.................................................................. 39
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Section 7.07 Compensation and Indemnity..................................................................... 39
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Section 7.08 Replacement of Trustee......................................................................... 40
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Section 7.09 Successor Trustee by Merger, Etc............................................................... 41
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Section 7.10 Eligibility; Disqualification.................................................................. 41
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Section 7.11 Preferential Collection of Claims Against Company.............................................. 41
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ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE.................................................................. 41
Section 8.01 Discharge of Indenture......................................................................... 41
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Section 8.02 Legal Defeasance And Covenant Defeasance....................................................... 42
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Section 8.03 Application of Trust Money..................................................................... 45
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Section 8.04 Repayment to the Company....................................................................... 45
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Section 8.05 Reinstatement.................................................................................. 45
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Section 8.06 Acknowledgment of Discharge by Trustee......................................................... 46
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ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS................................................................... 46
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Section 9.01 Without Consent of Holders.................................................................. 46
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Section 9.02 With Consent of Holders..................................................................... 47
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Section 9.03 Compliance with TIA......................................................................... 48
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Section 9.04 Revocation and Effect of Consents........................................................... 48
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Section 9.05 Notation on or Exchange of Notes............................................................ 48
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Section 9.06 Trustee To Sign Amendments, Etc............................................................. 49
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ARTICLE X SUBORDINATION.......................................................................................... 49
Section 10.01 Notes Subordinated to Senior Indebtedness................................................... 49
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Section 10.02 Suspension of Payment on Notes in Certain Events............................................ 50
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Section 10.03 Notes Subordinated to Prior Payment of All Senior Indebtedness on Dissolution, Liquidation
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or Reorganization of Company.................................................................................. 51
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Section 10.04 Holders to be Subrogated to Rights of Holders of Senior Indebtedness........................ 52
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Section 10.05 Obligations of the Company Unconditional.................................................... 52
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Section 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice..................... 53
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Section 10.07 Application by Trustee of Assets Deposited with It.......................................... 53
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Section 10.08 No Waiver of Subordination Provisions....................................................... 54
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Section 10.09 Holders Authorize Trustee to Effectuate Subordination of Notes.............................. 54
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Section 10.10 Right of Trustee to Hold Senior Indebtedness................................................ 54
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Section 10.11 This Article X Not To Prevent Events of Default............................................. 55
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Section 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.............................. 55
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Section 10.13 Relationship to Senior Subordinated Notes................................................... 55
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ARTICLE XI MISCELLANEOUS......................................................................................... 55
Section 11.01 TIA Controls................................................................................ 55
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Section 11.02 Notices..................................................................................... 56
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Section 11.03 Communications by Holders with Other Holders................................................ 57
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Section 11.04 Certificate and Opinion as to Conditions Precedent.......................................... 57
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Section 11.05 Statements Required in Certificate or Opinion............................................... 57
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Section 11.06 Rules by Trustee, Paying Agent, Registrar................................................... 57
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Section 11.07 Legal Holidays.............................................................................. 58
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Section 11.08 Governing Law............................................................................... 58
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Section 11.09 No Adverse Interpretation of Other Agreements............................................... 58
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Section 11.10 No Recourse Against Others.................................................................. 58
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Section 11.11 Successors.................................................................................. 59
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Section 11.12 Counterparts................................................................................ 59
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Section 11.13 Severability................................................................................ 59
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Section 11.14 Table of Contents, Headings. Etc............................................................ 59
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CROSS REFERENCE TABLE
Reconciliation and tie between the Trust Indenture Act of 1939 and this
Indenture, dated [_________].
TIA Section Indenture Section
Section 310 (a)(1) .........................................................7.10
(a)(2) .........................................................7.10
(a)(3) ...............................................Not Applicable
(a)(4) ...............................................Not Applicable
(a)(5) .........................................................7.10
(b) ............................................................7.10
(c) ..................................................Not Applicable
Section 311 (a) ............................................................7.11
(b) ............................................................7.11
(c) ..................................................Not Applicable
Section 312 (a) ............................................................2.05
(b) ...........................................................11.03
(c) ...........................................................11.03
Section 313 (a) ............................................................7.06
(b) ............................................................7.06
(c) ............................................................7.06
(d) ............................................................7.06
Section 314 (a) ............................................................4.08
(c)(1) ..........................2.02, 5.01, 8.01, 8.02, 8.06, 11.04
(c)(2) ......................................5.01, 8.01, 8.02, 11.04
(c)(3) .........................................................8.02
(d) ..................................................Not Applicable
(e) ...........................................................11.05
(f) ..................................................Not Applicable
Section 315 (a) ............................................................7.01
(b) ............................................................7.05
(c) ............................................................7.01
(d) ............................................................7.01
(e) ............................................................6.11
Section 316 (a)(last sentence) .............................................2.09
(a)(1)(A) ......................................................6.05
(a)(1)(B) ......................................................6.04
(a)(2) ...............................................Not Applicable
(b) ............................................................9.04
Section 3.17(a)(1) .........................................................6.08
(a)(2) .........................................................6.09
(b) ............................................................2.04
Section 3.18(a) ...........................................................11.01
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
INDENTURE, dated as of _________ __, 2002, between CellStar Corporation,
a Delaware corporation (the "Company"), and The Bank of New York, a
__________, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders (as defined below) of the
Company's 12% Senior Subordinated Notes due 2007:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
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"Acquired Indebtedness" means with respect to any person, Indebtedness of
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another person existing at the time such other Person becomes a Subsidiary of
such person or is merged with or into such person or a Subsidiary of such
Person, and not incurred in connection with, or in anticipation of, such other
person becoming a Subsidiary of such Person or the merger with or into such
other Person.
"Affiliate" means any specified Person or any other Person, directly or
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indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
"Affiliate Transaction" means the conduct of business or any transactions
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or series of transactions by the Company or any of its Subsidiaries with or for
the benefit of any of their respective Affiliates
"Agent" means any Registrar, Paying Agent or co-Registrar.
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"Agent Members" has the meaning provided in Section 2.15.
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"Asset Sale" means any direct or indirect disposition to a Person other
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than the Company or any of its Subsidiaries of any property or asset of the
Company or any of its Subsidiaries, other than inventory in the ordinary course
of business and other than such isolated transactions which do not exceed Five
Million Dollars ($5,000,000) individually. For the purposes of this definition,
the term "Asset Sale" shall not include sales of receivables not a part of a
sale of the business from which they arose or any disposition of properties and
assets of the Company or any of its Subsidiaries that is governed under and
complies with Section 4.14 or any sale of the Company's capital stock
"Attributable Debt" means leasehold and other obligations incurred in
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connection with Sale-Leaseback Transactions.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar federal,
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state or foreign law for the relief of debtors.
"Blockage Period" has the meaning provided in Section 10.02 hereof.
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"Board of Directors" means, with respect to any Person, the board of
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directors or other applicable governing body of such Person or any committee of
the board of directors or of such other governing body of such Person duly
authorized, with respect to any particular matter, to exercise the power of the
board of directors or other applicable governing body of such Person.
"Board Resolution" means, with respect to any Person, a copy of a
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resolution certified by the Secretary or an Assistant Secretary of such Person,
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Book-Entry Note" means a Note represented by a Global Note and registered
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in the name of the nominee of the Depository.
"Business Day" means any day that is not a Legal Holiday.
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"Capital Lease" means all leases which have been or should be capitalized
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in accordance with GAAP as in effect from time to time, including Statement No.
13 of the Financial Accounting Standards Board and any successor thereof.
"Capitalized Lease Obligation" means any obligation to pay rent or other
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amounts under a lease of (or other agreement conveying the right to use) any
property (whether real, personal or mixed) that is required to be classified and
accounted for as a Capital Lease and, for the purpose of this Indenture, the
amount of such obligation at any date shall be the capitalized amount thereof at
such date, determined in accordance with GAAP.
"Cash Equivalents" means at any time (a) any evidence of Indebtedness with
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a maturity of one year or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (b) certificates of deposit or acceptances with a
maturity of one year or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than Five Hundred Million Dollars ($500,000,000); (c)
commercial paper issued by a corporation (except an Affiliate of the Company)
organized under the laws of any state of the United States or the District of
Columbia and having one of the two highest ratings from Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc.; (d) repurchase agreements and
reverse repurchase agreements relating to marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; provided,
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however, that the terms of such agreements comply with the guidelines set forth
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in the Federal Financial Agreements of Depository Institutions with Securities
Dealers and Others, as adopted by the Comptroller of the Currency; (e) money
market funds investing principally in the types of securities described in
clauses (a), (b) or (c) above; (f) investments in eurodollars placed through
any financial institution having combined capital surplus and undivided profits
of not less than $100,000,000; and (g) "overnight investments" or similar
short-term obligations issued by any commercial bank located in the U.S. in
those areas where the Company or its Subsidiaries conduct their business whose
deposits are insured by the Federal Deposit Insurance Corporation.
"Change of Control" means an event or series of events in which (a) all or
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substantially all of the Company's assets are sold, leased, exchanged or
otherwise transferred to any Person or
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group of Persons acting in concert, other than any Affiliates of the Company or
a trustee or other fiduciary holding securities under any of the Company's
employee benefit plans and acting in such capacity, (b) the Company is merged or
consolidated with or into another corporation with the effect that the equity
holders of the Company immediately prior to such merger of consolidation hold
less than fifty percent (50%) of the combined voting power of the then
outstanding securities of the surviving corporation of such merger or the
corporation resulting from such consolidation ordinarily (and apart from rights
arising under special circumstances) having the right to vote in the election of
directors, (c) a majority of the Board of Directors shall be replaced, over a
two-year period, from the directors who constituted the Board of Directors at
the beginning of such period, and such replacement shall not have been approved
by a majority of the members of the Board of Directors as constituted at the
beginning of such period (including any new directors whose appointment,
nomination or election to the Board of Directors was approved by a majority of
the directors who were directors or whose appointment, nomination or election
was previously so approved and, (d) a Person or group of Persons acting in
concert, other than any Subsidiary of the Company or a trustee or other
fiduciary holding securities under any of the Company's employee benefit plans
and acting in such capacity, shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have become
the, directly or indirectly, beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of the Company's securities representing fifty percent
(50%) or more of the combined voting power of the Company's then outstanding
securities ordinarily (and apart from rights arising under special
circumstances) having the right to vote in the election of directors; provided,
that the conversion of any of the Company's Subordinated Convertible Note due
2002 shall not result in a Change of Control.
"Change of Control Offer" has the meaning provided in Section 3.04.
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"Change of Control Purchase Date" has the meaning provided in Section 3.04.
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"Change of Control Purchase Price" has the meaning provided for in Section
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3.04.
"Company" means the party named as such in this Indenture until a successor
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replaces it pursuant to the terms and conditions of this Indenture and
thereafter means such successor.
"Company Order" means a written order or request signed in the name of the
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Company by its President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Net Income" means, for any period, the aggregate of the
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Company's and its Subsidiaries net income or loss for such period, on a
consolidated basis, determined in accordance with GAAP consistently applied,
provided, that (a) the net income of any Person in which the Company or any of
its Subsidiaries have a joint interest with a third party (which interest does
not cause the net income of such Person to be consolidated into the net income
of the Company in accordance with GAAP) shall be included only to the extent of
the amount of dividends or distributions paid to the Company or such Subsidiary,
(b) the net income of any of the Company's Subsidiaries that is subject to any
restriction or limitation on the payment of dividends or the making of other
distributions shall be excluded to the extent of such restriction or limitation,
(c) any net non-cash gain (but not loss) resulting from an Asset Sale by the
Company or any of its Subsidiaries other than in the ordinary course of business
shall be excluded and (d) extraordinary gains and losses (and any related tax
effects) and any one-time increase or decrease to net income which is required
to be recorded because of the adoption of new accounting policies, practices or
standards required by GAAP shall be excluded.
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"Consolidated Net Worth" means, with respect to any Person at any date, the
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consolidated equity represented by the shares of such Person's capital stock
(other than Disqualified Stock) at such date, as determined on a consolidated
basis in accordance with GAAP.
"Credit Agreement" means the Loan and Security Agreement, dated as of
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September 28, 2001, entered into among the Company, certain of its subsidiaries
and Foothill, as agent, and the lenders party thereto, providing for working
capital and other financing, as the same may at any time be amended, amended and
restated, supplemented or otherwise modified, including any refinancing,
refunding, replacement or extension thereof which provides for working capital
and other financing, whether by the same or any other lender or group of
lenders.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
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or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or the passage of time
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or both would be, an Event of Default.
"Default Amount" shall have the meaning set forth in Section 6.02 hereof.
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"Default Notice" has the meaning provided in Section 10.02 hereof.
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"Depository" means, with respect to the Notes issuable or issued in one or
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more Book-Entry Notes, the Person specified in Section 2.02 as the Depository
with respect to the Notes until the successor shall have been appointed and
becomes such pursuant to the applicable provisions of this Indenture, and,
thereafter, "Depository" shall mean or include such successor.
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"Designated Senior Indebtedness" means Senior Indebtedness under or in
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respect of the Company's revolving credit facility as the same and related
documents have been or may be amended, modified, renewed, extended, supplemented
or restated from time to time, in whole or in part (and without limitation as to
amount, terms, conditions, covenants and other provisions) and any agreements
hereafter entered into in renewal, extension, supplement, restatement,
replacement or other modification thereof, whether the Company is a borrower or
guarantor thereunder and whether with any agent, lender or group of lenders.
"Disqualified Stock" means any of the Company's capital stock that is
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required to be redeemed in whole or in part or has a sinking fund payment due
or, at the option of the holder of such capital stock, is required to be
repurchased in whole or in part on or prior to the maturity of the Notes.
"EBITDA" means, for a period ending at the close of any fiscal quarter, the
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sum of (a) Consolidated Net Income for such period, plus (b) to the extent
deducted in determining Consolidated Net Income, the sum of all expenses of the
Company and its Subsidiaries, on a consolidated basis, in accordance with GAAP
for such period in respect of (i) depreciation, (ii) amortization, including,
without limitation, amortization of capitalized debt issuance costs, (iii)
consolidated interest expense, (iv) U.S. federal, state and foreign income taxes
and (v) any other non-cash charges (including inventory write-downs and losses
from disposals of business operations) to the extent deducted from Consolidated
Net Income except for any non-cash charges that represent accruals of, or
reserves for, cash disbursements to be made in any future accounting period.
Notwithstanding the foregoing, the provision for taxes based on the income and
profits of, and the depreciation, amortization and other non-cash charges of any
of the Company's Subsidiaries shall be added to Consolidated Net Income to
compute EBITDA only to the extent (and in the same proportion) that the net
income of such Subsidiary was included in calculating the Consolidated Net
Income and only if a corresponding amount could, at the date of determination,
be paid as a dividend by such Subsidiary to the Company.
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"EBITDA Coverage Ratio" means the ratio of (a) EBITDA for the four fiscal
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quarters immediately preceding the determination date, to (b) consolidated cash
interest expense calculated in accordance with GAAP (including interest with
respect to capitalized lease obligations but excluding interest with respect to
Indebtedness of any of the Company's Subsidiaries that is subject to any
restriction or limitation on the payment of dividends), capitalized interest and
cash dividends paid on Disqualified Stock calculated on a pro forma basis for
such four fiscal quarters.
"Event of Default" has the meaning provided in Section 6.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
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the rules and regulations promulgated by the SEC thereunder.
"Foothill" means Foothill Capital Corporation.
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"GAAP" means generally accepted accounting principles in the United States
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of America as in effect as of the date hereof and as such principles may be
amended from time to time, including those set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States, which are applicable as of the date of determination.
"Global Note" means a Note evidencing all or a part of the Notes to be
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issued as Book-Entry Notes, issued to the Depository in accordance with Section
2.02.
"Holder" means the person in whose name a Note is registered on the
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Registrar's books.
"Indebtedness" means, with respect to any person, without duplication, (a)
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any liability, contingent or otherwise, of such Person (i) for borrowed money
(whether or not the recourse of the lender is to the whole of the Property of
such Person or only to a portion thereof), (ii) evidenced by bonds, notes,
debentures or similar instruments or representing the deferred and unpaid
balance of any part of the purchase price of Property or other assets or for the
cost of Property or other assets constructed or of improvements thereto
(including any obligation under or in connection with any letter of credit
related thereto), (iii) under or in connection with any letter of credit issued
for the account of such Person, and all drafts drawn, reimbursement obligations
or demands for payment thereunder, or (d) for the payment of money relating to
any Capitalized Lease Obligations; (b) any liability of others of the kind
described in the preceding clause (a) which the Person has guaranteed or which
is otherwise its legal liability; (c) any liability, contingent or otherwise,
secured by any Lien in respect of Property of such Person, whether or not the
obligations secured thereby shall have been assumed by or shall otherwise be
such Person's legal liability, provided, that, solely in the case of any
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Indebtedness of the type described in this clause (c), recourse for the
payment of which is limited to such Property, the amount of such Indebtedness
shall be deemed to be the lesser of the fair market value of such Property or
the amount of the obligation so secured; and (iv) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any liability of the kind described in any of the preceding
clauses (a), (b) and (c). The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
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obligations as described above and the maximum liability of such Person in
respect of any such contingent obligations at such date.
"Indenture" means this Indenture, as amended or supplemented from time
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to time in accordance with the terms hereof.
"Interest Payment Date" means the stated maturity of an installment of
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interest on the Notes.
"Investment" means any cash contributions, advances or loans to or
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investments in or purchases of capital stock or other securities of any Person.
"Issue Date" means the date of first issuance of the Notes under this
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Indenture.
"Legal Holiday" means, with respect to a particular place of payment, a
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Saturday, a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are authorized or obligated by law, executive order
or governmental decree to be closed.
"Lien" means any mortgage, lien, pledge, charge, security interest,
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encumbrance, claim, hypothecation, assignment for security, deposit arrangement
or preference or other security agreement of any kind or nature whatsoever,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement and any lease
deemed to constitute a security interest). For purposes hereof, a Person shall
be deemed to own subject to a Lien any Property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement.
"Material Subsidiary" means, with respect to any person, any Subsidiary
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of such person which would be a "significant subsidiary" pursuant to Article
1-02 of Regulation S-X of the Exchange Act.
"Maturity Date" means _____________, 2007.
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"Net Asset Sale Proceeds" means, with respect to any Asset Sale, the
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proceeds thereof in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations when received in the form of cash or
cash equivalents (except to the extent that such obligations with respect to
Indebtedness are financed or sold with recourse to the Company or any of its
Subsidiaries) net of (a) brokerage commissions and other reasonable fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale; (b) provisions for all taxes payable as a result of such
Asset Sale; (c) payments made to retire Indebtedness secured by the assets
subject to such Asset Sale to the extent required pursuant to their terms of
such Indebtedness; and (d) appropriate amounts to be provided by the Company or
any of its Subsidiaries, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any of its Subsidiaries, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale.
-6-
"Net Proceeds" means (a) in the case of any sale of capital stock by
------------
the Company, the aggregate net proceeds received by the Company, after payment
of expenses, commissions and the like incurred in connection therewith, whether
such proceeds are in cash or in property (valued at the fair market value
thereof, as determined in good faith by the Board of Directors, at the time of
receipt) and (b) in the case of any exchange, exercise, conversion or surrender
of the Company's outstanding securities of any kind for or into shares of the
Company's capital stock which is not Disqualified Stock, the net book value of
such outstanding securities on the date of such exchange, exercise, conversion
or surrender (plus any additional amount required to be paid by the holder to
the Company upon such exchange, exercise, conversion or surrender, less any and
all payments made to the holders).
"Notes" means, the Company's 12% Senior Subordinated Notes due 2007, as
-----
amended or supplemented from time to time in accordance with the terms hereof,
that are issued pursuant to the terms and conditions of this Indenture.
"Officer" means, with respect to any Person, the Chairman of the Board,
-------
the Chief Executive Officer, the President, any Vice President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, the Controller,
the Secretary or the Assistant Secretary of such Person.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Officers (one of whom shall be the Chief Financial
Officer) or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of such Person and otherwise complying with the requirements of
Sections 11.04 and 11.05.
"Opinion of Counsel" means a written opinion from Xxxxxx and Xxxxx,
------------------
LLP, or in the event Xxxxxx and Xxxxx, LLP is no longer in existence, legal
counsel who is acceptable to the Trustee complying with the requirements of
Sections 11.04 and 11.05. Unless otherwise required by the TIA, the legal
counsel may be an employee of or counsel to the Company.
"Paying Agent" has the meaning provided in Section 2.03.
------------
"Permitted Liens" shall mean: (a) any lien existing as of and disclosed
---------------
on the Issue Date; (b) any lien on the Company's assets securing Indebtedness
under the Credit Agreement; (c) liens securing other Senior Indebtedness; (d)
any lien arising by reason of (i) any judgment, decree or order of any court, so
long as such lien is being contested in good faith and any appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired; (ii) taxes not
yet delinquent or which are being contested in good faith; (iii) security for
payment of
-7-
workers' compensation or other insurance; (iv) security for the performance of
tenders, contracts (other than contracts for the payment of money) or leases;
(v) deposits to secure public or statutory obligations, or in lieu of surety or
appeal bonds or to secure permitted contracts for the purchase or sale of any
currency entered into in the ordinary course of business; (vi) operation of law
in favor of carriers, warehousemen, landlords, mechanics, materialmen, laborers,
employees or suppliers, incurred in the ordinary course of business for sums
which are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the collection thereof;
and (vii) security for surety or appeal bonds; (e) easements, rights-of-way,
zoning and similar covenants and restrictions and other similar encumbrances or
title defects which, in the aggregate, are not substantial in amount, and which
do not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries; (f) leases and subleases of real property
which do not interfere with the ordinary conduct of the business of the Company
or any of its Subsidiaries, and which are made on customary and usual terms
applicable to similar properties; (g) liens with respect to any Acquired
Indebtedness, provided such liens do not extend to or cover any property or
assets of the Company or any of its Subsidiaries (other than the property or
assets so acquired); (h) liens securing Indebtedness which is incurred to
refinance Indebtedness which has been secured by a lien permitted under this
Indenture and is permitted to be refinanced under this Indenture, provided that
such liens do not extend to or cover any property or assets of the Company or
any of its Subsidiaries not securing the Indebtedness so refinanced; (i) liens
securing capitalized lease obligations, purchase money mortgages or pledges or
other purchase money liens upon any property acquired by the Company or any of
its Subsidiaries after the issuance of the Notes which are acquired or held by
such entity in the ordinary course of business and are securing solely the
purchase price or lease rental of such property or are Indebtedness incurred
solely for the purpose of financing the acquisition or lease of such property
(but only to the extent the Indebtedness secured by such liens shall otherwise
be permitted under the covenants set forth herein); (j) any interest or title of
a lessor or sublessor, or any lien in favor of a landlord, arising under any
real or personal property lease under which the Company or any of its
Subsidiaries are a lessee, sublessee or subtenant (other than any interest or
title and or any lien securing any capitalized lease obligation); and (xi) other
liens securing Indebtedness if the Indebtedness secured by the lien, plus all
other Indebtedness secured by liens (excluding Indebtedness secured by liens
permitted by (a) through (c) above) at the time of determination does not exceed
$20,000,000. Attributable Debt in connection with Sale-Leaseback Transactions
must be included in the determination and treated as Indebtedness secured by a
lien not otherwise permitted by clauses (a) through (h) above.
"Permitted Subsidiary Transaction" means a transaction between the
--------------------------------
Company and a Subsidiary of the Company or among Subsidiaries of the Company,
each such Subsidiary in either case not being encumbered or restricted as to its
ability to (a) pay dividends, in cash or otherwise, or make any other
distributions on its Capital Stock or any other interest or participation in, or
measured by, its profits owned by, or pay any Indebtedness owed to, the Company
or any of its Subsidiaries, (b) make loans or advances to the Company or any of
its Subsidiaries or (c) transfer any of its properties or assets to the Company
or any of its Subsidiaries.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or any
other entity or organization including a government or political subdivision or
any agency or instrumentality thereof.
"Physical Notes" has the meaning set forth in Section 2.02.
--------------
"Principal" of any Indebtedness (including the Notes) means the
---------
principal of such Indebtedness plus the premium, if any, on such Indebtedness.
"Property" or "property" means any assets or property of any kind or
-------- --------
nature whatsoever, real, personal or mixed (including fixtures), whether
tangible or intangible.
-8-
"Record Date" means the Record Dates specified in the Notes; provided
----------- --------
that if any such date is a Legal Holiday, the Record Date shall be the first day
immediately preceding such specified day that is not a Legal Holiday.
"Redemption Date" when used with respect to any Note to be redeemed,
---------------
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price" has the meaning provided in Section 3.01 hereof.
----------------
"Registrar" has the meaning provided in Section 2.03.
---------
"Representative" means the trustee, agent or representative in respect
--------------
of any Senior Indebtedness and shall mean (i) with respect to Indebtedness under
the Credit Agreement Foothill in such capacity, until such time as it is no
longer the representative pursuant to the terms of the Credit Agreement and (ii)
with respect to all other Senior Indebtedness, the representative for such
Senior Indebtedness; provided, however, that if, and for so long as, any Senior
-------- -------
Indebtedness lacks such a representative, then the Representative for such
Senior Indebtedness shall at all times constitute the holders of a majority in
outstanding principal amount of such Senior Indebtedness in respect of any
Senior Indebtedness.
"Required Filing Dates" has the meaning provided in Section 4.08
---------------------
hereof.
"Required Holders" means Holders holding at least a majority of the
----------------
aggregate principal amount of the outstanding Notes.
"Restricted Payment" means (a) the declaration or payment of any
------------------
dividend or any other distribution on the Company's capital stock or of any of
its Subsidiaries or any payment made to the direct or indirect holders (in their
capacities as such) of the Company's capital stock or of any of its Subsidiaries
(other than (i) dividends or distributions payable solely in capital stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase capital stock (other than Disqualified Stock), and (ii) in the case of
the Company's Subsidiaries, dividends or distributions payable to the Company or
to any of its Subsidiaries); (b) the purchase, redemption or other acquisition
or retirement for value of any of the Company's capital stock or of any of its
Subsidiaries, (c) the making of any principal payment on, or the purchase,
defeasance, repurchase, redemption or other acquisition or retirement for value,
prior to any scheduled maturity, scheduled repayment or scheduled sinking fund
payment, of any Indebtedness which is subordinated in right of payment to the
Notes (other than Indebtedness acquired in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition); and (d) the making of any
Investment other than an Investment permitted under clauses (a) through (f) of
Section 4.10.
"Sale-Leaseback Transaction" means any direct or indirect arrangement
--------------------------
with any person providing for the leasing to the Company or any of its
Subsidiaries of any real or tangible personal property (except for leases
between or among the Company and any of its Subsidiaries), which property or
similar property has been or is to be sold or transferred by the Company or such
Subsidiary to such person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
---
-9-
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC promulgated thereunder.
"Senior Debt Other Default" has the meaning provided in Section 10.02
-------------------------
hereof.
"Senior Debt Payment Default" has the meaning provided in Section 10.02
---------------------------
hereof.
"Senior Indebtedness" means, at any date, the Principal of and interest
-------------------
(including any interest accruing subsequent to the filing of a petition in
bankruptcy at a rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on all
Indebtness arising under the Credit Agreement and any other Indebtedness of the
Company, whether outstanding on the Issue Date or thereafter incurred, unless,
in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes. Notwithstanding the foregoing, Senior Indebtedness shall not include (a)
Indebtedness evidenced by the Notes, (b) any Indebtedness which is subordinated
or junior in right of payment to any other Indebtedness of the Company, (c) to
the extent it might constitute Indebtedness, any amount owing for goods,
materials or services purchased in the ordinary course of business or
constituting a trade payable, (d) any Indebtedness of the Company to a
Subsidiary of the Company or any other Affiliate of the Company or any of such
Affiliates' Subsidiaries, (e) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code or
other applicable bankruptcy law, is without recourse to the Company, (f)
Indebtedness that is represented by Disqualified Stock, (g) Indebtedness of or
amounts owed by the Company for compensation to employees or for services
rendered to the Company, (h) any liability for federal, state, local or other
taxes owed or owing by the Company, (i) that portion of any Indebtedness which
at the time of issuance is issued in violation of the Indenture, (j)
Indebtedness that is pari passu with the Notes and (k) Indebtedness evidenced by
the Company's 5% Subordinated Convertible Notes due 2002.
"Subsidiary" means with respect to any Person (a) a corporation a
----------
majority of whose capital stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by one or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person or (b) any other Person (other than a corporation)
in which such Person, one or more Subsidiaries of such Person or such Person and
one or more subsidiaries of such Person, directly or indirectly, individually or
with another Person, at the date of determination thereof, has (i) at least a
majority ownership interest or (ii) the power to elect or direct the election of
a majority of the directors or other governing body of such Person.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. SS
---
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Trust Officer" means any officer of the Trustee assigned by the
-------------
Trustee to administer its corporate trust matters.
-10-
"U.S. Government Obligations" means direct non-callable obligations of,
---------------------------
or non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of
-----------------
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"voting power" means, with respect to any Person, the power under
------------
ordinary circumstances, pursuant to the ownership of shares of any class or
classes of capital stock, to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not,
at the time, stock of any other class or classes shall have, or might have,
voting power by reason of the happening of any contingency).
Wholly-Owned Subsidiary" means with respect to any Person any
-----------------------
Subsidiary of such person, one hundred percent (100%) of the capital stock of
which (other than shares of capital stock representing any director's qualifying
shares or investments by foreign nationals mandated by applicable law) is owned
by such Person, by a Wholly-Owned Subsidiary of such Person or by such Person
and one or more Wholly-Owned Subsidiaries of such Person
Section 1.02 Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
----------
"indenture securities" means the Notes.
--------------------
"indenture security holder" means a Holder.
-------------------------
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"obligor" on the indenture securities means the Company or any other
-------
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.03 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
-11-
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words in the plural
include the singular;
(e) provisions apply to successive events and transactions;
(f) the words "include" and "including" shall be deemed to mean "include,
without limitation," and "including, without limitation";
(g) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision;
(h) references to Sections or Articles means references to such Section or
Article in this Indenture, unless stated otherwise;
and
(i) references to sections of or rules under the Securities Act and the
Exchange Act shall be deemed to include substitute, replacement or successor
sections or rules adopted by the SEC from time to time.
ARTICLE II
THE NOTES
Section 2.01 Form and Dating.
---------------
(a) The Notes and the Trustee's certificate of authentication with respect
thereto shall be substantially in the form of Exhibit A hereto. The Notes may
---------
have notations, legends or endorsements required by law, stock exchange rules,
usage or agreement to which the Company is subject, including the legends set
forth in Exhibit A hereto. The Company and the Trustee shall approve the form of
---------
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its authentication, shall bear interest from the Issue Date
and shall be payable on the Interest Payment Dates and the Maturity Date.
(b) The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and 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.
Section 2.02 Execution and Authentication.
----------------------------
(a) One Officer shall sign (who shall have been duly authorized by all
requisite corporate actions) the Notes for the Company by manual or facsimile
signature. If an Officer whose signature is on a Note was an Officer at the time
of such execution but no longer holds
-12-
that office at the time the Trustee authenticates the Note, the Note shall
nevertheless be valid. A Note shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
(b) The Trustee shall authenticate Notes for original issue up to an
aggregate principal amount of Sixty Million One Hundred Forty-Two Thousand
Dollars ($60,142,000) upon a written order of the Company in the form of an
Officers' Certificate to a Trust Officer directing the Trustee to authenticate
the Notes and certifying that all conditions precedent to the issuance of the
Notes contained herein have been complied with. Upon the written order of the
Company in the form of an Officers' Certificate, the Trustee shall authenticate
Notes in substitution of Notes issued on the Issue Date to reflect any name
change of the Company. The aggregate principal amount of Notes outstanding at
any time may not exceed Sixty Million One Hundred Forty-Two Thousand Dollars
($60,142,000) except as provided in Section 2.07 hereof.
(c) The Principal and interest on Book-Entry Notes shall be payable to the
Depository or its nominee, as the case may be, as the sole registered owner and
the sole holder of the Book-Entry Notes represented thereby. The Principal of
and interest on Notes in certificated form ("Physical Notes") shall be payable
--------------
at the office of the Paying Agent.
(d) The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Notes. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Company and Affiliates of the Company.
(e) The Notes shall be issuable only in registered form without coupons in
denominations of One Thousand Dollars ($1,000) and any integral multiples
thereof.
(f) If the Notes are to be issued in the form of one or more Global Notes,
then the Company shall execute and the Trustee shall authenticate and deliver
one or more Global Notes that (i) shall represent and shall be in minimum
denominations of One Thousand Dollars ($1,000), (ii) shall be registered in the
name of the Depository for such Global Note or Notes or the nominee of such
Depository and (iii) shall be delivered to the Trustee as custodian for such
Depository or pursuant to such Depository's instructions.
(g) The Company initially appoints The Depository Trust Company to act as
Depository with respect to the Book-Entry Notes.
Section 2.03 Registrar and Paying Agent
--------------------------
(a) The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (i) Notes may be presented or surrendered
for registration of transfer or for exchange (the "Registrar"), (ii) Notes may
---------
be presented or surrendered for payment (the "Paying Agent"), and (iii) notices
------------
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered
-13-
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
-------- -------
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of New York, for such purposes. Neither
the Company nor any Affiliate of the Company shall act as Paying Agent. The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company, upon notice to the Trustee, may appoint one or more co-Registrars
and one or more additional paying agents reasonably acceptable to the Trustee.
The term "Paying Agent" includes any additional paying agent. The Company
------------
initially appoints the Trustee as Registrar, Paying Agent and agent for service
of notices or demands in connection with the Notes and this Indenture until such
time as the Trustee has resigned or a successor has been appointed. Notes,
notices and demands may be delivered to the Trustee at The Bank of New York.
(b) The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall promptly notify the
Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation in accordance with Section 7.07 hereof.
Section 2.04 Paying Agent To Hold Assets in Trust
------------------------------------
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all assets held by the Paying Agent for the payment of
Principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and shall
notify the Trustee of any Default by the Company (or any other obligor on the
Notes) in making any such payment. The Trustee may at any time during the
continuance of any Default by the Company in making any such payment, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
Section 2.05 Security Holder Lists.
---------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders and shall otherwise comply with TIA (S)312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee five (5) days before
each Record Date and at such other times as the Trustee may request in writing a
list as of such date and in such form as the Trustee may reasonably require of
the names and addresses of the Holders, which list may be conclusively relied
upon by the Trustee, and the Company shall otherwise comply with TIA (S)312(a).
-14-
Section 2.06 Transfer and Exchange.
---------------------
(a) When Notes in certificated form are presented to the Registrar or a
co-Registrar with a request from the Holder thereof to register the transfer of
such Notes or to exchange such Notes for an equal principal amount of Notes of
other authorized denominations, the Registrar or co-Registrar, as the case may
be, shall register the transfer or make the exchange as requested if its
requirements for such transaction are met; provided, however, that the Notes
-------- -------
surrendered for registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar, or co-Registrar, as the case may be, duly executed by
the Holder thereof or such Holder's attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute by
manual or facsimile signature and issue, and the Trustee shall authenticate new
Notes evidencing such transfer or exchange at the Registrar's or co-Registrar's
request, as the case may be. No service charge shall be made 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 exchanges or transfers pursuant to Section
2.02, 2.07, 2.10, 3.02, 3.04, 4.16 or 9.05). The Registrar or co-Registrar shall
not be required to register the transfer of or exchange of any Note (i) during a
period beginning at the opening of business fifteen (15) days before the mailing
of a notice of redemption of Notes and ending at the close of business on the
day of such mailing and (ii) selected for redemption in whole or in part
pursuant to Article III, except the unredeemed portion of any Note being
redeemed in part.
(b) Notwithstanding any other provision of this Section 2.06, a Global Note
representing a Book-Entry Note may not be transferred in whole except by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor depository or a nominee of such successor
depository.
(c) Notwithstanding the foregoing, no Global Note shall be registered for
transfer or exchange, or authenticated and delivered, whether pursuant to this
Section 2.06, Section 2.07, 2.10 or 3.02 or otherwise, in the name of a person
other than the Depository for such Global Note or its nominee until (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for such Global Note or if at any time the Depository ceases to be a
clearing agency registered under the Exchange Act, and a successor depository is
not appointed by the Company within thirty (30) days, (ii) the Company executes
and delivers to the Trustee a Company Order that all such Global Notes shall be
exchangeable or (iii) there shall have occurred and be continuing an Event of
Default.
(d) Except as provided above, any Note authenticated and delivered upon
registration of transfer or, or in exchange for, or in lieu of, any Global Note,
whether pursuant to this Section 2.06, Section 2.07, 2.10 or 3.02 or otherwise,
shall also be a Global Note.
Section 2.07 Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or the Registrar or if
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the
-15-
Company shall issue and the Trustee, upon receipt of a Company Order, shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Note is replaced. The Company and the Trustee may
charge such Holder for their respective reasonable, out-of-pocket expenses in
replacing a Note, including reasonable fees and expenses of counsel. Every
replacement Note shall constitute an additional obligation of the Company and
shall be entitled to all benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
-----------------
(a) Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those canceled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Except
as set forth in Section 2.09, a Note does not cease to be outstanding because
the Company or any of its Affiliates holds the Note.
(b) If a Note is replaced pursuant to Section 2.07 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07.
(c) 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.
(d) If on the Redemption Date or the Maturity Date the Paying Agent
holds U.S. Legal Tender sufficient to pay all of the Principal and interest due
on the Notes payable on that date and is not prohibited from paying such
Principal and interest due on such date, then on and after such date such Notes
cease to be outstanding and interest on them ceases to accrue.
Section 2.09 Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any declaration of acceleration or notice of default or
direction, waiver or consent or any amendment, modification or other change to
this Indenture, the Notes owned by the Company or an Affiliate of the Company
shall be disregarded as though they were not outstanding, except that, for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be disregarded.
Section 2.10 Temporary Notes.
---------------
Until definitive Notes are prepared and ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes upon
receipt of a written order of the Company in the form of an Officers'
Certificate. The Officers' Certificate shall specify the amount of temporary
Notes to be authenticated and the date on which the temporary Notes are to be
authenticated. Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes. Without
-16-
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate, upon receipt of a written order of the Company pursuant to Section
2.02, definitive Notes in exchange for temporary Notes. Until such exchange,
Holders of temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes.
Section 2.11 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Company or a Subsidiary), and no one else, shall cancel and,
pursuant to a Company Order, shall dispose of all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
certification of their destruction (subject to the record retention requirements
of the Exchange Act) shall be delivered to the Company unless, by a Company
order, the Company shall direct that canceled Notes be returned to it. Subject
to Section 2.07, the Company may not issue new Notes to replace Notes that it
has paid or delivered to the Trustee for cancellation. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation pursuant to this Section
2.11.
Section 2.12 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Notes, it shall,
unless the Trustee fixes another record date pursuant to Section 6.10, pay the
defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest to the persons who are Holders on a subsequent special record
date, which date shall be a Business Day at least five (5) Business Days prior
to the payment date, in each case at the rate provided in the Notes and in
Section 4.01 hereof. The Company shall fix or cause to be fixed such special
record date and payment date in a manner reasonably satisfactory to the Trustee.
At least fifteen (15) days before the subsequent special record date, the
Company shall mail or cause to be mailed to each Holder, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid. The Company may also pay defaulted
interest in any other lawful manner.
Section 2.13 Deposit of Monies.
-----------------
On or before 10:00 a.m. on each Interest Payment Date and the Maturity
Date, as the case may be, the Company shall deposit or cause to be deposited
with the Paying Agent, in immediately available funds, U.S. Legal Tender
sufficient to make cash payments, if any, due on such Interest Payment Date or
the Maturity Date, as the case may be, in a timely manner that permits the
Trustee to remit payment to the Holders on such Interest Payment Date or the
Maturity Date, as the case may be.
Section 2.14 CUSIP Number.
------------
The Company in issuing the Notes may use one or more CUSIP numbers, and if
so, the Trustee shall use the CUSIP numbers in notices of redemption or exchange
as a convenience to
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Holders; provided, that any such notice may state that no representation is made
--------
as to the correctness or accuracy of the CUSIP number printed in the notice or
on the Notes, and that reliance may be placed only on the other identification
numbers printed on the Notes.
Section 2.15 Book Entry Provisions for Global Note.
-------------------------------------
(a) Members of, or participants in, the Depository ("Agent Members") shall
-------------
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Notes, and the Depository may be treated by the Company, the Trustee and
any Agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any Agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers in whole, but
not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in a Global Note may be transferred or exchanged
for Physical Notes in accordance with the rules and procedures of the
Depository. In addition, Physical Notes shall be transferred to all beneficial
owners in exchange for their beneficial interests in a Global Note if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Global Notes and a successor depositary is not appointed by
the Company within ninety (90) days of such notice or (ii) an Event of Default
has occurred and is continuing and the Registrar has received a written request
from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Note to beneficial owners pursuant to paragraph
(b) of this Section 2.15, the Registrar shall (if one or more Physical Notes are
to be issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Notes in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
(d) In connection with the transfer of an entire Global Note to beneficial
owners pursuant to paragraph (b) of this Section 2.15, such Global Note shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Note, an equal aggregate principal amount of Physical Note of authorized
denominations.
(e) The Holder of a Global Note may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interest through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
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ARTICLE III
REDEMPTION OF NOTES
Section 3.01 Redemption Price.
----------------
At any time, the Notes may be redeemed at the Company's option, upon notice
as set forth in Section 3.02, in whole at any time or in part from time to time,
at a redemption price in an amount equal to 100% of the principal amount of such
Notes, plus accrued and unpaid interest thereon to the Redemption Date.
Section 3.02 Notice of Redemption; Selection of Notes.
----------------------------------------
(a) In case the Company shall desire to exercise the right to redeem all
or, as the case may be, any part of the Notes pursuant to Section 3.01, it shall
fix a date for redemption and, in the case of any redemption pursuant to Section
3.01, it or, at its request accompanied by the proposed form of notice of
redemption (which must be received by the Trustee at least ten days prior to the
date the Trustee is requested to give notice as described below, unless a
shorter period is agreed to by the Trustee), the Trustee in the name of and at
the expense of the Company, shall publish a notice in THE WALL STREET JOURNAL
and mail or cause to be mailed a notice of such redemption at least 30 and not
more than 60 days prior to the date fixed for redemption to the holders of Notes
so to be redeemed as a whole or in part at their last addresses as the same
appear on the Note register, provided that if the Company shall give such
notice, it shall also give such notice, and notice of the Notes to be redeemed,
to the Trustee. Such mailing shall be by first class mail. The notice, if mailed
in the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice. In any case, failure to
give such notice by mail or any defect in the notice to the holder of any Note
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Note.
(b) Each such notice of redemption shall identify the Notes to be redeemed
(including CUSIP numbers), specify the aggregate principal amount of Notes to be
redeemed, the date fixed for redemption, the redemption price at which Notes are
to be redeemed, the place or places of payment, that payment shall be made upon
presentation and surrender of such Notes, that interest accrued to the date
fixed for redemption shall be paid as specified in said notice and that on and
after said date, interest thereon or on the portion thereof to be redeemed shall
cease to accrue. If fewer than all the Notes are to be redeemed, the notice of
redemption shall identify the Notes to be redeemed. In case any Note is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof shall be issued.
(c) On or prior to the Business Day prior to the Redemption Date specified
in the notice of redemption given as provided in this Section 3.02, the Company
shall deposit with the Trustee or with one or more paying agents an amount of
money sufficient to redeem on the Redemption Date all the Notes so called for
redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. If any Note called for redemption is converted
pursuant hereto, any money deposited with the Trustee or any paying agent or so
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segregated and held in trust for the redemption of such Note shall be paid to
the Company upon its request or, if then held by the Company, shall be
discharged from such trust. If fewer than all the Notes are to be redeemed, the
Company shall give the Trustee written notice in the form of an Officers'
Certificate not fewer than forty-five (45) (or such shorter period of time as
may be acceptable to the Trustee) prior to the Redemption Date as to the
aggregate principal amount of Notes to be redeemed.
(d) If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes or portions thereof to be redeemed (in principal amounts of
one thousand dollars ($1,000) or integral multiples thereof), by lot or, in its
discretion, on a pro rata basis. The Notes (or portions thereof) so selected
shall be deemed duly selected for redemption for all purposes hereof.
Section 3.03 Payment of Notes Called for Redemption.
--------------------------------------
(a) If notice of redemption has been given as above provided, the Notes or
portion of Notes with respect to which such notice has been given shall become
due and payable on the date and at the place or places stated in such notice at
the applicable redemption price, together with interest thereon accrued to the
date fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Notes at the redemption price, together with
interest thereon accrued to said date), interest on the Notes or portion of
Notes so called for redemption shall cease to accrue and, except as provided in
Sections 7.01 and 8.01, to be entitled to any benefit under this Indenture, and
the holders thereof shall have no right in respect of such Notes except the
right to receive the redemption price thereof and unpaid interest thereon to the
date fixed for redemption. On presentation and surrender of such Notes at a
place of payment in said notice specified, the said Notes or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that any semi-annual payment of interest becoming due on
the date fixed for redemption shall be payable to the holders of such Notes
registered as such on the relevant record date subject to the terms and
provisions of Section 2.01 hereof.
(b) Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
(c) If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
borne by the Note.
Section 3.04 Purchase of Notes Upon A Change of Control.
------------------------------------------
(a) If a Change of Control shall occur at any time, then each holder of
Notes shall have the right to require that the Company repurchase such holder's
Notes in whole or in part in integral multiples of one thousand dollars ($1,000)
at a purchase price (the "Change of Control Purchase Price") in cash in an
amount equal to one hundred one percent (101%) of the principal amount of such
Notes, plus accrued and unpaid interest thereon, if any, to the purchase date
(the "Change of Control Purchase Date") pursuant to
-20-
the offer described below (the "Change of Control Offer") and in accordance
with the other procedures set forth in this Indenture.
(b) Within thirty (30) days following any Change of Control, unless
the Company has given the Holders notice of its intention to redeem the Notes
pursuant to Section 3.01, the Company shall notify the Trustee and give written
notice of such Change of Control to each Holder of Notes, by first-class mail,
postage prepaid, at the Holder's address appearing in the Note register,
stating, among other things, (i) that a Change of Control has occurred, (ii) the
Change of Control Purchase Price, (iii) the Change of Control Purchase Date
(which shall be a Business Day no earlier than thirty days (30) nor later than
sixty days (60) from the date such notice is mailed, or such later date as is
necessary to comply with requirements under the Exchange Act), (iv) that any
Note not tendered shall continue to accrue interest and to have all of the
benefits of this Indenture, (v) that, unless the Company defaults in the payment
of the Change of Control Purchase Price, any Notes accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest after the Change
of Control Purchase Date, (vi) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer shall 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 Company at the address specified in the notice prior
to the close of business on the third Business Day preceding the Change of
Control Purchase Date, (vii) that Holders shall be entitled to withdraw their
election if the Company receives, not later than the close of business on the
second Business Day preceding the Change of Control Purchase 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 such Notes purchased, and (viii) that
Holders whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to one thousand Dollars ($1,000) in
principal amount or an integral multiple thereof. Prior to being required to
purchase any Notes pursuant to this Section 3.04 and prior to the mailing of the
notice of the Change of Control to the Holders, but in any event within 30 days
following any Change of Control, the Company shall either (i) repay in full all
of the Designated Senior Indebtedness and terminate all commitments thereunder
or offer to do so and repay the Designated Senior Indebtedness and terminate all
commitments of each lender thereunder who accepted such offer or (ii) obtain the
requisite consent under the Designated Senior Indebtedness to permit the
repurchase of the Notes pursuant to this Section 3.04. The Company shall comply
with the requirements of Rule 13e-4 and 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes in
connection with a Change of Control.
(c) On the Change of Control Purchase Date, the Company shall, to
the extent lawful, (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Trustee an amount
equal to the Change of Control Purchase Price in respect of all Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof tendered to the Company. The Trustee shall promptly
mail to each Holder of Notes so accepted payment in an amount equal to the
purchase price of such Notes, and the Trustee shall promptly authenticate and
mail to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that each such new Note shall
be
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in a principal amount of $1,000 or an integral multiple thereof. The Company
shall publicly announce the results of the Change of Control Offer on or as soon
as practicable after the Change of Control Purchase Date.
ARTICLE IV
COVENANTS
Section 4.01 Payment of Notes.
----------------
(a) The Company shall pay the Principal of and interest on the Notes
on the dates and in the manner provided in the Notes and this Indenture. An
installment of Principal on the Notes shall be considered paid on the date it is
due if the Trustee or Paying Agent holds on that date U.S. Legal Tender
designated for and sufficient to pay the installment then due and is not
prohibited from paying such installment on such date. An installment of interest
on the Notes shall be considered paid on the date it is due if the Trustee or
Paying Agent holds on that date U.S. Legal Tender designated for and sufficient
to pay the interest then due and it is not prohibited from paying such interest
on such date.
(b) The Company shall pay interest on (i) overdue Principal at the
rate set forth in the Notes for such overdue Principal, and (ii) overdue
installments of interest at the same rate, to the extent lawful. Interest shall
be paid in U.S. Legal Tender.
Section 4.02 Maintenance of Office or Agency.
-------------------------------
(a) The Company shall maintain in the Borough of Manhattan, The City
of New York, the office or agency required under Section 2.03. The Company shall
give prior notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
described in such Section 2.03 may be made or served at the address of the
Trustee set forth in Section 2.03.
(b) 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 shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby initially designates the corporate trust office of the Trustee
set forth in Section 2.03 as such office.
-22-
Section 4.03 Corporate Existence.
-------------------
Except as permitted by Article V, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence and the existence of each of its Subsidiaries, in accordance with the
respective organizational documents of each of them and the rights (charter and
statutory) and franchises of the Company and its Subsidiaries; provided,
however, that the Company shall not be required to preserve, with respect to
itself, any right or franchise, and with respect to any of its Subsidiaries, any
such existence, right or franchise, if (a) the Board of Directors of the Company
shall determine reasonably and in good faith that the preservation thereof is no
longer desirable in the conduct of the business of the Company and (b) the loss
thereof is not adverse in any material respect to the Holders.
Section 4.04 Payment of Taxes and Other Claims.
---------------------------------
The Company shall and shall cause each of its Subsidiaries to, pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied or
imposed upon it or any of its Subsidiaries or properties of it or any of its
Subsidiaries, and (ii) all lawful claims for labor, materials and supplies that,
if unpaid, might by law become a Lien upon the property of it or any of its
Subsidiaries; provided, however, that the Company shall not be required to pay
-------- -------
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim if either (a) the amount, applicability or validity thereof is being
contested in good faith by appropriate proceedings and an adequate reserve has
been established therefor to the extent required by GAAP, or (b) the failure to
make such payment or effect such discharge (together with all other such
failures) would not have a material adverse effect on the financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole.
Section 4.05 Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall cause all Properties used or useful in the
conduct of its business or the business of any of its Subsidiaries to be
maintained and kept in satisfactory condition, repair and working order and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
its judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times unless the
failure to so maintain such properties (together with all other such failures)
would not have a material adverse effect on the financial condition or results
of operations of the Company and its Subsidiaries taken as a whole; provided,
--------
however, that nothing in this Section 4.05 shall prevent the Company or any of
-------
its Subsidiaries from discontinuing the operation or maintenance of any of such
properties or disposing of any of them if such discontinuance or disposal is (i)
in the ordinary course of business, (ii) in the good faith judgment of the Board
of Directors of the Company or the Subsidiary concerned, or of the senior
officers of the Company or such Subsidiary, as the case may be, desirable in the
conduct of the business of the Company or such Subsidiary, as the case may be,
or (iii) otherwise permitted by this Indenture.
-23-
(b) The Company shall provide or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the reasonable, good faith opinion
of the Company are adequate and appropriate for the conduct of the business of
the Company and such Subsidiaries in a prudent manner, with reputable insurers
or with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable, good faith opinion of the
Company, for companies similarly situated in the industry, unless the failure to
provide such insurance (together with all other such failures) would not have a
material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole.
(c) The Company shall and shall cause each of its Subsidiaries to
keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of the Company
and each Subsidiary in accordance with GAAP consistently applied to the Company
and its Subsidiaries, taken as a whole.
Section 4.06 Compliance Certificates; Notice of Default.
------------------------------------------
(a) The Company shall deliver to the Trustee, within sixty (60) days
after the end of each of the Company's first three (3) fiscal quarters and
within one hundred twenty (120) days after the end of the Company's fiscal year,
an Officers' Certificate stating that a review of the Company's activities and
the activities of its Subsidiaries during the preceding fiscal period has been
made under the supervision of the signing Officers with a view to determining
whether it has kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of his knowledge, the Company during such
preceding fiscal period has kept, observed, performed and fulfilled each and
every such covenant and no Default or Event of Default occurred during such
period and at the date of such certificate there is no Default or Event of
Default that has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe the Default or Event
of Default and its status with particularity and what action the Company has
taken or proposes to take with respect thereto. The Officers' Certificate shall
also include all calculations necessary to show covenant compliance, if any. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) So long as (and to the extent) not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
Company shall deliver to the Trustee within one hundred twenty (120) days after
the end of each fiscal year a written statement by a nationally recognized firm
of independent public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, and (ii) whether, in connection with their audit
examination, any Default or Event of Default has come to their attention and if
such a Default or Event of Default has come to their attention, specifying the
nature and period of existence thereof provided, however, that such accounting
firm shall not be liable to the Holders for failure to obtain knowledge of any
Default or Event of Default.
(c) The Company will deliver to the Trustee promptly, and in any
event within ten (10) days after the Company becomes aware of the occurrence of
any Default or Event of Default, an Officers' Certificate describing such
Default
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or Event of Default and its status with particularity and what action the
Company is taking or proposes to take with respect thereto.
Section 4.07 Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with the respective organizational documents of each of them and all
applicable statutes, rules, regulations, orders and restrictions of the United
States of America, all states, provinces and municipalities thereof, and of any
governmental department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
such noncompliance with which would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Company and
its Subsidiaries, taken as a whole.
Section 4.08 SEC Reports and Other Information.
---------------------------------
To the extent permitted by applicable law or regulation, whether or not
the Company is subject to Section 13(a) or 15(d) of the Exchange Act, the
Company shall file with the SEC the annual reports, quarterly reports and other
documents which the Company would have been required to file with the SEC
pursuant to such Sections 13(a) and 15(d) if the Company were so subject, such
documents to be filed with the SEC on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required so to
---------------------
file such documents if the Company were so subject. In addition, the Company
shall comply with its reporting and filing obligations under the applicable
federal securities laws. The Company shall also in any event (a) within fifteen
(15) days after each Required Filing Date (i) transmit by mail to all Holders,
as their names and addresses appear in the register of Notes maintained by the
Registrar, without cost to such Holders and (ii) file with the Trustee, copies
of the annual reports, quarterly reports and other documents which the Company
would have been required to file with the SEC pursuant to Sections 13(a) and
15(d) of the Exchange Act if the Company were subject to such Sections and (b)
if filing such documents by the Company with the SEC is not permitted under the
Exchange Act, promptly upon written request, supply copies of such documents to
any prospective Holder. In any event, such annual reports will contain
consolidated financial statements and notes thereto, together with an opinion
thereon expressed by an independent public accounting firm with an established
national reputation and management's discussion and analysis of financial
condition and results of operations, and such quarterly reports will contain
unaudited consolidated financial statements for the first three (3) quarters of
each fiscal year. Upon qualification of this Indenture under the TIA, the
Company shall also comply with the provisions of TIA (S)314(a).
Section 4.09 Limitation on Additional Indebtedness.
-------------------------------------
(a) The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume, issue, guarantee
or in any manner become liable for or with respect to the payment of, any
Indebtedness, except that the Company and its Subsidiaries may incur (each of
which shall be given independent effect):
-25-
(i) Indebtedness of the Company and its Subsidiaries arising
under the Credit Agreement not to exceed $90 million outstanding at any
time;
(ii) Indebtedness of the Company or any of its Subsidiaries
outstanding and disclosed on the Issue Date or under any revolving
credit facility outstanding and disclosed on the Issue Date;
(iii) Indebtedness of the Company evidenced by the Notes or
otherwise arising under this Indenture;
(iv) Indebtedness of the Company or any of its subsidiaries if,
at the time of incurrence and after giving pro forma effect to the
incurrence of such Indebtedness, the EBITDA Coverage Ratio of the
Company for the prior four completed fiscal quarters, taken as a whole
and assuming such Indebtedness had been incurred on the first day of
such four quarter period, would have been at least 1.00 to 1.00;
(v) purchase-money Indebtedness and capitalized lease
obligations of the Company or any of its Subsidiaries not to exceed an
aggregate outstanding amount at any time of Ten Million Dollars
($10,000,000);
(vi any replacements, renewals, refinancings and extensions of
the Indebtedness incurred under clauses (ii), (iv) and (v) above,
provided that any such replacement, renewal, refinancing and extension
(A) shall not provide for any mandatory redemption, amortization or
sinking fund requirement in an amount greater than or at a time prior
to the amounts and times specified in the Indebtedness being replaced,
renewed, refinanced or extended and (B) shall not exceed the principal
amount (plus accrued interest and prepayment premium, if any) of the
Indebtedness being replaced, renewed, refinanced or extended;
(vii) any Permitted Subsidiary Transactions; and
(viii) Indebtedness of the Company or any of its Subsidiaries in
an aggregate principal amount not to exceed Fifty Million Dollars
($50,000,000) at any one time outstanding.
(b) Indebtedness shall be deemed to have been incurred by the survivor
of a merger at the time of such merger and, with respect to an acquisition of a
Subsidiary by the Company, at the time of such acquisition.
Section 4.10 Limitation on Investments, Loans and Advances.
---------------------------------------------
The Company shall not make, and shall not permit any of its
Subsidiaries to make, any Investment, except:
(a) Investments by the Company or any of its Subsidiaries in any
Wholly-Owned Subsidiary of the Company (including any such Investment pursuant
to which a Person becomes a Wholly-Owned Subsidiary of the Company) or in the
Company by any of its Subsidiaries;
(b) Investments represented by receivables created or acquired in the
ordinary course of business or the settlement of such receivables in the
ordinary course of business;
(c) Investments represented by advances to employees, officers and
directors of the Company or its Subsidiaries made in the ordinary course of
business and consistent with reasonable and customary business practices;
-26-
(d) Investments under or pursuant to interest rate protection
agreements;
(e) Investments, not exceeding Twenty-Five Million Dollars
($25,000,000) in the aggregate, in joint ventures, partnerships or Persons that
are not a Wholly-Owned Subsidiary of the Company, provided that such Investments
are made solely for the purpose of acquiring businesses or property related to
the business of the Company; and
(f) Investments made pursuant to Section 4.11.
(g) Investments which are Permitted Subsidiary Transactions.
Section 4.11 Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, make any Restricted Payment, unless at the time of
and after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or occur as a consequence thereof;
(ii) the Company could incur at least One Dollar ($1.00) of
Indebtedness pursuant to clause (a) of Section 4.09 hereof; and
(iii) the aggregate of all Restricted Payments declared or made
after the Issue Date through and including the date of such Restricted
Payment does not exceed the sum of (A) seventy-five percent (75%) of
the Company's Consolidated Net Income (or in the event such
Consolidated Net Income shall be a deficit, minus seventy-five percent
(75%) of such deficit) from and including the Issue Date, and (B) one
hundred percent (100%) of the aggregate Net Proceeds and the fair
market value of marketable securities and property received by the
Company from the issue or sale, after the issuance of the Notes, of
Capital Stock (other than Disqualified Stock) or any Indebtedness or
other of the Company's securities convertible into or exercisable or
exchangeable for its Capital Stock (other than Disqualified Stock)
which has been so converted, exercised or exchanged, as the case may
be. For purposes of determining the amount expended for Restricted
Payments in accordance with clause (ii), cash distributed shall be
valued at the face amount thereof and property other than cash shall
be valued at its fair market value. In determining the amount of
Restricted Payments permitted under this clause (iii), amounts expended
pursuant to clauses (i) and (ii) above of this Section 4.11(a) shall be
included as Restricted Payments.
(b) The provisions of this Section 4.11 shall not prohibit (i) the
payment of any dividend within sixty (60) days after the date of declaration
thereof, if such payment would comply with the provisions of this Indenture at
the date of the declaration of such payment, (ii) the retirement of any shares
of Capital Stock of the Company or Indebtedness of the Company which is
subordinated in right of payment to the Notes by conversion into, or by an
exchange for, shares of Capital Stock of the Company that are not Disqualified
Stock or out of the Net Proceeds of the substantially concurrent sale (other
than to a Subsidiary of the Company) of other shares of Capital Stock (other
than Disqualified Stock) of the Company, and (iii) the redemption or retirement
of Indebtedness of the Company which is subordinated in right of payment to the
Notes in exchange for, by conversion into, or out of the Net Proceeds of, a
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substantially concurrent sale of subordinated Indebtedness of the Company (other
than to a Subsidiary of the Company) that is contractually subordinated in right
of payment to the Notes and permitted to be incurred in accordance with Section
4.09.
Section 4.12 Limitation on Liens.
-------------------
Other than Permitted Liens, the Company shall not, and the Company shall
not permit, cause or suffer any of its Subsidiaries to, create, incur, assume or
suffer to exist any Lien, charge or other encumbrance of any kind with respect
to any property or assets now owned or hereafter acquired by it, which secures
Indebtedness of the Company subordinated in right of payment to the Notes,
unless the Notes are secured by a Lien on such Property that is equal and
ratable with such Lien.
Section 4.13 Limitation on Sale-Leaseback Transactions.
-----------------------------------------
The Company will not, and will not permit any of its Subsidiaries to, enter
into any Sale-Leaseback Transaction unless at least one of the following
conditions is satisfied: (a) the lease is between the Company and any of its
Wholly-Owned Subsidiaries or between any of the Company's Wholly-Owned
Subsidiaries; (b) the lease is a Permitted Lien and the Company or any of its
Subsidiaries could create a lien on the property to secure Indebtedness at least
equal in amount to the Attributable Debt in connection with the Sale-Leaseback
Transaction; or (c) the Company or any of its Subsidiaries within ninety (90)
days of the effective date of the Sale-Leaseback Transaction makes an optional
prepayment in cash of any of its long-term Senior Indebtedness (which may
include the Notes) at least equal in amount to the Attributable Debt in
connection with the Sale-leaseback Transaction; provided, however, that the
Indebtedness prepaid is not owned by the Company or any of its Subsidiaries or
any Affiliates of the Company; provided further, however, that in connection
with any such prepayment, the Company will cause the related loan commitment (if
any) to be permanently reduced in an amount equal to the principal amount so
prepaid.
Section 4.14
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Limitation on Liquidations, Dissolutions, Mergers and
-----------------------------------------------------
Consolidation.
--------------
The Company shall not, directly or indirectly, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets (other than isolated transactions which do not exceed Five Million
Dollars ($5,000,000) individually), or make any material change in its present
method of conducting business, except transactions permitted by Section 5.01
hereof.
Section 4.15 Disposition of Proceeds of Asset Sales.
--------------------------------------
(a) The Company will not, and will not permit any of its Subsidiaries
to, make any Asset Sale unless (i) the Company or the applicable 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 sold or otherwise disposed of
(which shall be as determined by the Board of Directors) and (ii) at least fifty
percent (50%) of the Net Proceeds received by the Company or such Subsidiary, as
the case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents (with Indebtedness of the Company or its Subsidiaries assumed by the
purchaser being counted as cash for such purposes if the Company and its
Subsidiaries are permanently released from all liability therefor).
(b) The Company shall or shall cause its Subsidiaries to:
(i) apply such Net Asset Sale Proceeds to permanently prepay
Senior Indebtedness;
(ii) within two hundred seventy (270) days of such Asset Sale
commit to invest or invest the Net Asset Sale Proceeds and, within
three hundred sixty (360) days of such Asset Sale, apply the Net Asset
Sale Proceeds to acquire or construct similar properties and asset of
the Company or any of its Subsidiaries in lines of business related to
the Company's or its Subsidiaries' businesses as in existence on the
Issue Date; or
(iii) use the remaining Net Asset Sale Proceeds to offer to
purchase ratably the maximum principal amount of the Notes that may be
purchased out of such proceeds, at an offer price in cash in an amount
equal to one hundred percent (100%) of the principal amount thereof
plus accrued interest to the date of payment. The Company may defer the
offer to purchase Notes until the aggregate Net Asset Sale Proceeds
required to be
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applied to make such offer is at least Ten Million Dollars
($10,000,000) at which time the entire amount of the Net Asset Sale
Proceeds shall be used to make the offer.
Section 4.16 Limitation on Transactions with Affiliates.
------------------------------------------
The Company will not, and will not permit, cause or suffer, any of its
Subsidiaries to, participate in, conduct any business or enter into any
transaction with or for the benefit of an Affiliate (each an "Affiliate
Transaction") other than a Permitted Subsidiary Transaction, except in good
faith and on terms that are no less favorable to the Company or such Subsidiary,
as the case may be, than those that could have been obtained in a comparable
transaction on an arm's length basis from a person not an Affiliate of the
Company or such Subsidiary. With respect to any Affiliate Transaction (and each
series of related Affiliate Transactions which are similar or part of a common
plan) involving aggregate payments or other market value in excess of Ten
Million Dollars ($10,000,000), be approved by a majority of the Board of
Directors of the Company as a whole, evidenced by a resolution stating that the
Board of Directors has, in good faith, determined that such transaction complies
with the foregoing provisions. Notwithstanding the foregoing, the restrictions
set forth in this Section 4.16 shall not apply to (i) any employment agreement,
consulting agreement and indemnification obligations entered into by the Company
or any of its Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Subsidiary, and (ii) the payment
of reasonable and customary fees to directors of the Company who are not
employees of the Company.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.01 Consolidation, Merger, Conveyance, Transfer or Lease.
----------------------------------------------------
The Company shall not consolidate with or merge with or into or sell,
assign, convey, lease, transfer or otherwise dispose of all or substantially all
of its properties and assets (determined on a consolidated basis for the Company
and its Subsidiaries, taken as a whole) to another Person or Persons, in a
single transaction or through a series of related transactions, or cause or
permit any of its Subsidiaries to do any of the foregoing, unless:
(a) the Company is the continuing Person, or the Person formed by or
surviving such consolidation or merger or the Person to which such sale,
assignment, conveyance, lease, transfer or other disposition is made (the
"surviving entity") is a corporation organized and validly existing under the
----------------
laws of the United States, any State thereof or the District of Columbia;
(b) the surviving entity shall expressly assume, by a supplemental
indenture executed and delivered to the Trustee, in form and substance
reasonably satisfactory to the Trustee, all of the obligations of the Company
under the Notes and this Indenture;
(c) immediately before and immediately after giving effect to such
transaction, or series of transactions (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions), no Default or Event of
Default shall have occurred and be continuing;
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(d) immediately after giving effect to such transaction or series of
transactions, the Company or the surviving entity (in the case of a merger or
consolidation involving the Company or any sale, assignment, conveyance, lease,
transfer or other disposition of all or substantially all of the Company's
assets) could incur One Dollar ($1.00) of Indebtedness pursuant to clause
(a)(iv) of Section 4.09 hereof and the surviving entity shall have a
Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Company immediately prior to such transaction; and
(e) the Company or the surviving entity shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
(i) such consolidation, merger, sale, assignment, conveyance, lease, transfer or
other disposition complies with this Section 5.01, (ii) if a supplemental
indenture is required in connection with such transaction or series of
transactions, such supplemental indenture complies with this Section 5.01, and
(iii) all conditions precedent in this Indenture relating to the transaction or
series of transactions have been satisfied.
Section 5.02 Successor Entity Substituted.
----------------------------
Upon any consolidation, merger or any transfer of all or substantially all
of the assets of the Company in accordance with Section 5.01, the surviving
entity formed by such consolidation or into or with which the Company is merged
or to which such transfer is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture with the
same effect as if such surviving entity had been named as the Company herein and
the Company shall be discharged from all obligations and covenants under the
Indenture and the Notes.
ARTICLE VI
DEFAULT AND REMEDIES
Section 6.01 Events of Default.
-----------------
An "Event of Default" occurs if:
----------------
(a) the Company defaults in the payment of the Principal of or premium on
any Note as and when due and payable; or
(b) the Company defaults in the payment of interest on any Note when the
same becomes due and payable and continuance of any such default for a period of
thirty (30) days;
(c) the Company defaults in the performance, or breach, of any material
covenant, obligation or agreement in the Notes or this Indenture (other than
defaults specified in clause (a) or (b) above), and such default or breach
continues for a period of sixty (60) days after written notice to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
twnety-five percent (25%) in aggregate principal amount of the outstanding
Notes;
(d) failure by the Company or any of its Subsidiaries (i) to make any
payment when due with respect to any other Indebtedness under one or more
classes or issues of Indebtedness which one or more classes or issues of
Indebtedness are in an aggregate principal amount of Twenty Million Dollars
($20,000,000) or more and, with respect to Indebtedness under the
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Credit Agreement, such failure results in acceleration of the maturity thereof;
or (ii) to perform any term, covenant, condition, or provision of one or more
classes or issues of Indebtedness which one or more classes or issues of
Indebtedness are in an aggregate principal amount of Twenty Million Dollars
($20,000,000) or more, which failure, in the case of this clause (ii), results
in an acceleration of the maturity thereof;
(e) one or more judgments, orders or decrees for the payment of money in
excess of Fifteen Million Dollars ($15,000,000) (to the extent not covered by
insurance), either individually or in an aggregate amount, shall be entered
against the Company or any of its Subsidiaries or any of their respective
properties and shall not be discharged and there shall have been a period of
sixty (60) days during which a stay of enforcement of such judgment or order, by
reason of pending appeal or otherwise, shall not be in effect;
(f) the Company or any Material Subsidiary of the Company pursuant to or
within the meaning of any Bankruptcy Law: (i) commences a voluntary case or
proceeding with respect to itself, (ii) consents to the entry of an order for
relief against it in an involuntary case or proceeding, (iii) consents to the
appointment of a Custodian of it or for all or any material part of its
property, (iv) makes a general assignment for the benefit of its creditors, (v)
consents to or acquiesces in the institution of bankruptcy or insolvency
proceedings against it, (vi) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay its debts generally,
or (vii) takes any corporate action in furtherance of or to facilitate,
conditionally or otherwise, any of the foregoing;
(g) a court of competent jurisdiction enters a decree, judgment or order
under any Bankruptcy Law that: (i) is for relief against the Company or any
Material Subsidiary of the Company in an involuntary case or proceeding, (ii)
appoints a Custodian of the Company or any Material Subsidiary of the Company
for all or substantially all of its properties, or (iii) orders the winding-up
or liquidation of the Company or any Material Subsidiary of the Company, and in
each case the order or decree remains unstayed and in effect for sixty (60)
days; or
(h) this Indenture ceases to be in full force and effect or ceases to give
the Trustee, in any material respect, the liens, rights, powers and privileges
purported to be created thereby, in each case, as determined by a court of
competent jurisdiction.
Section 6.02 Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified in
clause (f) or (g) of Section 6.01 with respect to the Company or any Material
Subsidiary of the Company) occurs and is continuing, then the Trustee or the
Holders of at least twenty-five percent (25%) in aggregate principal amount of
the outstanding Notes may, by written notice to the Company and the Trustee, and
the Trustee upon the request of the Holders of not less than twenty-five percent
(25%) in aggregate principal amount of the outstanding Notes shall, subject in
each case to Section 10.02(e), declare the Principal of and accrued and unpaid
interest, if any, on all the Notes on the date of such declaration to be due and
payable immediately (the "Default Amount"). Upon any such declaration, the
--------------
Default Amount shall become due and payable immediately. If an Event of Default
specified in clause (f) or (g) of Section 6.01 with respect to the Company
occurs and is continuing, then the Default Amount on all of the Notes shall ipso
----
facto become
-----
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and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder.
(b) After a declaration of acceleration, the Required Holders may, by
notice to the Trustee, rescind such declaration of acceleration if all existing
Events of Default have been cured or waived, other than nonpayment of the
Default Amount on the Notes that have become due solely as a result of such
acceleration and if the rescission of acceleration would not conflict with any
judgment, order or decree by a court of competent jurisdiction. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
Section 6.03 Other Remedies.
--------------
(a) If an Event of Default occurs and is continuing, the Trustee may,
subject to Section 10.02(e), pursue any available remedy by proceeding at law or
in equity to collect the payment of Principal of, or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture as may
be required or permitted thereunder.
(b) The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
Section 6.04 Waiver of Defaults.
------------------
Subject to Sections 6.02, 6.07 and 7.02, the Required Holders by notice to
the Trustee may waive an existing or potential Default or Event of Default and
its consequences, except a Default in the payment of Principal of or interest on
any Note as specified in clauses (a) and (b) of Section 6.01 or in respect of
any provision hereof which cannot be modified or amended without the consent of
the Holder so affected pursuant to Section 7.02. When a Default or Event of
Default is so waived, it shall be deemed cured and ceases to exist, but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
Section 6.05 Control by Required Holders.
---------------------------
The Required Holders may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it including any remedies provided for in Section 6.03.
Subject to Section 6.01, however, the Trustee may refuse to follow any direction
that conflicts with any law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of another Holder, or that may involve the
Trustee in personal liability unless the Trustee has asked for and received
indemnification reasonably satisfactory to it against any loss, liability or
expense caused by its following such direction; provided, that the Trustee may
--------
take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
Section 6.06 Limitation on Suits.
-------------------
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(a) A Holder may not pursue any remedy with respect to this Indenture
or the Notes unless (i) the Holder gives to the Trustee notice of a continuing
Event of Default, (ii) Holders of at least twenty-five percent (25%) in
principal amount of the outstanding Notes make a written request to the Trustee
to pursue the remedy, (iii) such Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request, (iv) the Trustee does not comply with
the request within thirty (30) days after receipt of the request and the offer
of indemnity and (v) during such thirty (30) day period the Required Holders do
not give the Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
(b) A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
Section 6.07 Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, except as set forth
in Article X, the right of any Holder to receive payment of Principal of and
interest on a Note, on or after the respective due dates expressed in such Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.08 Collection Suit by Trustee
--------------------------
If an Event of Default in payment of Principal or interest specified in
clause (a) or (b) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of Principal and
accrued interest remaining unpaid, together with interest on overdue Principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the Notes
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 may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other securities or property payable or deliverable upon the
conversion or exchange of the Notes or upon any such claims and to distribute
the same, and any Custodian in any such judicial proceedings is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to first pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agent and counsel, and any other amounts due the Trustee under
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Section 6.07. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Note
holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
----------
(a) If the Trustee collects any money pursuant to this Article VI, it
shall pay out the money in the following order: (i) first, to the Trustee for
amounts due under Section 6.07, (ii) second, to Holders for Principal and
interest owing under the Notes, ratably, according to the amounts due and
payable on the Notes, in the following order of priority: first to interest and
lastly to Principal; and (iii) third, to the Company or any other obligor on the
Notes, as their interests may appear, or as a court of competent jurisdiction
may direct.
(b) The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by a Holder or Holders of more than ten percent (10%) in
principal amount of the outstanding Notes.
Section 6.12 Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.13 Delay or Omission Not Waiver.
----------------------------
No delay or omission by the Trustee or by any Holder of any Note to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
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ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
Section 7.01 Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in this Indenture that are adverse to the
Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture but need
not verify the accuracy of the contents thereof.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity reasonably satisfactory to it against any
loss, liability or expense.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
-36-
(f) 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), (c), (d) and (e) of this Section 7.01.
(g) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree with the Company. Assets held in
trust by the Trustee need not be segregated from other assets except to the
extent required by law.
Section 7.02 Rights of Trustee.
-----------------
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting 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 consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
which shall conform to Sections 11.04 and 11.05 hereof. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.
(c) The Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(d) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent (other than the
negligence or misconduct of an agent who is an employee of the Trustee)
appointed with due care.
(e) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, that the Trustee's conduct does not constitute
negligence or bad faith.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred by
it in compliance with such request, order or direction.
Section 7.03 Individual Rights of Trustee.
----------------------------
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The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company, any Subsidiary of the
Company or their respective Affiliates with the same rights it would have if it
were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes. Further, the Trustee shall not be accountable for the
Company's use of the proceeds from the Notes, nor be responsible for any
statement in the Notes other than the Trustee's certificate of authentication.
Section 7.05 Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Holder, as their names and
addresses appear on the Holder list described in Section 2.05 hereof, notice of
the Default or Event of Default within thirty (30) days after such Default or
Event of Default has occurred, unless such Default or Event of Default shall
have been cured or waived. Except in the case of a Default or an Event of
Default in payment of Principal of or interest on, any Note, and a Default or
Event of Default that resulted from the failure to comply with Section 3.04,
4.15 or 5.01 hereof, the Trustee may withhold the notice if and so long as its
Board of Directors, the executive committee of its Board of Directors or a
committee of its directors and/or Trust Officers in good faith determines that
withholding the notice is in the interest of the Holders.
Section 7.06 Reports by Trustee to Holders.
-----------------------------
(a) If required by law, within sixty (60) days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to the Company and the Holders, at the Company's expense, a brief
report dated as of such reporting date that complies with TIA (S)313(a) (but if
no event described in TIA (S)313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA (S)313(b)(2) to the extent applicable. The Trustee shall
also transmit by mail all reports as required by TIA (S)313(c).
(b) A copy of each report at the time of its mailing to Holders shall
be filed with the SEC and each stock exchange or market on which the Notes are
listed or quoted. The Company shall notify the Trustee when the Notes are listed
on any stock exchange or quoted on any market.
Section 7.07 Compensation and Indemnity.
--------------------------
(a) The Company shall pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all tax
obligations imposed on the Trustee related to this Indenture and all
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reasonable out-of-pocket expenses incurred or made by it. Such expenses shall
include the reasonable fees and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee and its agents for, and
hold them harmless against, any loss, liability or expense incurred by them
without negligence, bad faith or willful misconduct on their part, arising out
of or in connection with the administration of this trust including the
reasonable costs and expenses of enforcing this Indenture against the Company
(including this Section 7.07) and of defending themselves against any claim
(whether asserted by any Holder or the Company) or liability in connection with
the exercise or performance of any of their rights, powers or duties hereunder.
The Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel; provided that the Company will not be required to pay such fees and
--------
expenses if they assume the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
(c) To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay Principal of or interest on Notes.
(d) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(f) or (g) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
Section 7.08 Replacement of Trustee.
----------------------
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign by so notifying the Company in writing at
least thirty (30) days prior to the date of the proposed resignation; provided,
--------
however, that no such resignation shall be effective until a successor Trustee
-------
has accepted its appointment pursuant to this Section 7.08. The Required Holders
may remove the Trustee by so notifying the Company and the Trustee and may
appoint a successor Trustee with the Company's consent. The Company may remove
the Trustee if: (i) the Trustee fails to comply with Section 7.01 or 7.10, (ii)
the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law, (iii) a receiver
Custodian or other public officer takes charge of the Trustee or its property or
(iv) 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 shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one (1) year after
the successor Trustee takes office, the Required
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Holders may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
(d) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
(e) If a successor Trustee does not take office within sixty (60) days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least ten percent (10%) in principal amount of the
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(g) Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the requirement of
TIA (S)(S)310(a)(1) and 310(a)(5). The Trustee (or in the case of a corporation
included in a bank holding company system, the related bank holding company)
shall always have a combined capital and surplus of at least Five Hundred
Million Dollars ($500,000,000) as set forth in its most recent published annual
report of condition. In addition, if the Trustee is a corporation included in a
bank holding company system, the Trustee, independently of such bank holding
company, shall meet the capital requirements of TIA (S)310(a)(2). The Trustee
shall comply with TIA (S)310(b) including the optional provision permitted by
the second sentence of TIA (S)309(b)(9); provided, however, that there shall be
-------- -------
excluded from the operation of TIA (S)310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA (S)310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
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The Trustee shall comply with TIA (S)311(a), excluding any creditor
relationship listed in TIA (S)311(b). A Trustee who has resigned or been removed
shall be subject to TIA (S)311(a) to the extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE;
DEFEASANCE
Section 8.01 Discharge of Indenture.
----------------------
(a) This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 7.07, 8.04 and 8.05 shall survive) as to
all outstanding Notes when all such Notes theretofore authenticated and
delivered (except lost, stolen or destroyed Notes which have been replaced or
paid and Notes for the payment of which money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable hereunder. In
addition, the Company may terminate all of its obligations under this Indenture
(except the Company's obligations under Sections 7.07, 8.04 and 8.05) if:
(i) either (A) pursuant and subject to compliance with Article III,
the Company shall have given notice to the Trustee and mailed a notice of
redemption to each Holder of the redemption of all of the Notes or (B) all
Notes have otherwise become due and payable in accordance with the terms of
this Indenture (including the provisions of Article X) or in accordance
with the terms of this Indenture shall become due and payable within one
(1) year or are to be called for redemption within one (1) year under
arrangements satisfactory to the Trustee upon delivery of notice;
(ii) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, U.S. Legal Tender sufficient to pay
Principal of and interest, if any, on the outstanding Notes to redemption;
provided that the Trustee shall have been irrevocably instructed to apply
such U.S. Legal Tender to the payment of said Principal and interest with
respect to the Notes;
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's obligation under
the Notes and this Indenture have been complied with; and
(iv) the Company shall have paid all sums payable by it hereunder.
(b) Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.02, 7.07, 7.08, 8.03, 8.04 and
8.05 hereof shall survive until the Notes are no longer outstanding. After the
Notes are no longer outstanding, the Company's obligations in Sections 7.07,
8.04 and 8.05 hereof shall survive.
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(c) After such delivery or irrevocable deposit the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations specified
above.
Section 8.02 Legal Defeasance And Covenant Defeasance.
----------------------------------------
(a) The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either paragraph (b) or paragraph (c) below
be applied to the outstanding Notes upon compliance with the conditions set
forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"legal defeasance"). For this purpose, such legal defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (e) below and to have satisfied
all its other obligations under such Notes and this Indenture insofar as such
Notes are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following,
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of holders of outstanding Notes to receive solely from the trust fund
described in paragraph (d) below and as more fully set forth in such paragraph,
payments in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due, (ii) the Company's obligations with respect to
such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.02, 7.07, 7.08, 8.03,
8.04 and 8.05, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder, and (iv) this Section 8.02. Subject to compliance with this
Section 8.02, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) below with
respect to the Notes.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article V and in Sections
3.04, and 4.09 through 4.16 with respect to the outstanding Notes on and after
the date the conditions set forth in paragraph (d) are satisfied (hereinafter,
"covenant defeasance"), and the Notes shall thereafter be deemed to be not
"outstanding" for the purpose of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document, and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01,
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Notes:
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(i) The Company shall have irrevocably deposited in trust with the
Trustee (or another trustee satisfying the requirements of Section 7.10 who
shall agree to comply with the provisions of this Section 8.02 applicable
to it), pursuant to an irrevocable trust and security agreement in form and
substance satisfactory to the Trustee, U.S. Legal Tender or U.S. Government
Obligations maturing as to principal and interest at such times, or a
combination thereof, in such amounts as are sufficient, without
consideration of the reinvestment of such interest and after payment of all
federal, state and local taxes or other charges or assessments in respect
thereof payable by the Trustee, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof (in form and substance reasonably satisfactory to the Trustee)
delivered to the Trustee, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the dates on which any such payments
are due and payable in accordance with the terms of this Indenture and of
the Notes;
(ii) (A) No Default or Event of Default shall have occurred or be
continuing on the date of such deposit, and (B) no Default or Event of
Default under Section 6.01(f) and (g) shall occur on or before the 123rd
day after the date of such deposit;
(iii) Such legal defeasance or covenant defeasance shall not result in
a Default under this Indenture or a breach or violation of, or constitute a
default or event of default under, any other instrument or agreement to
which the Company is a party or by which it or its property is bound;
(iv) In the case of a legal defeasance under paragraph (b) above, the
Company has delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the
holders of the Notes shall not recognize income, gain or loss for federal
income tax purposes as a result of such deposit, defeasance and discharge
and shall be subject to federal income tax on the same amounts and in the
same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred; and, in the case of a
covenant defeasance under paragraph (c) above, the Company shall deliver to
the Trustee an Officers' Certificate and an Opinion of Counsel, in form and
substance reasonably satisfactory to the Trustee, to the effect that
holders of the Notes shall not recognize income, gain or loss for federal
income tax purposes as a result of such deposit and defeasance and shall be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such deposit and
defeasance had not occurred;
(v) The Company shall have delivered to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee, to
the effect that, after the passage of one hundred twenty-three (123) days
following the deposit, the trust funds shall not be subject to any
applicable bankruptcy, insolvency, reorganization or similar law affecting
creditors' rights generally;
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(vi) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
specified herein relating to the defeasance contemplated by this Section
8.02 have been complied with; provided, that no deposit under clause (i)
shall be effective to terminate the obligations of the Company under the
Notes or this Indenture prior to the passage of one hundred twenty three
(123) days following such deposit.
(e) All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this paragraph (e), the "Trustee") pursuant to paragraph (d)
-------
above in respect of the outstanding Notes shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Notes and this Indenture,
to the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of Principal, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to paragraph (d) above 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.
Anything in this Section 8.02 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request, in
writing, by the Company any money or U.S. Government Obligations held by it as
provided in paragraph (d) above which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent legal defeasance
or covenant defeasance.
Section 8.03 Application of Trust Money.
--------------------------
The Trustee shall hold in trust U.S. Legal Tender or U.S. Government
Obligations deposited with it pursuant to Sections 8.01 and 8.02, and shall
apply the deposited U.S. Legal Tender and the U.S. Legal Tender from U.S.
Government Obligations in accordance with this Indenture to the payment of
Principal of and interest on the Notes.
Section 8.04 Repayment to the Company.
------------------------
Subject to Sections 7.07, 8.01 and 8.02, the Trustee shall, subject to
Article X, promptly pay to the Company, upon receipt by the Trustee of an
Officers' Certificate, any excess money, determined in accordance with Sections
8.02(d)(i) and (e), held by it at any time. The Trustee and the Paying Agent
shall pay to the Company upon receipt by the Trustee or the Paying Agent, as the
case may be, of an Officers' Certificate, any money held by it for the payment
of Principal or interest that remains unclaimed for two (2) years, provided,
--------
however, that the Trustee and the Paying Agent before being required to make any
-------
payment may, but need not, at the expense of the Company, cause to be published
once in a newspaper of general circulation in The City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least thirty (30) days
from the
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date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to money must look solely to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.
Section 8.05 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with this Indenture by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then and only then the Company's obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had been made
pursuant to this Indenture until such time as the Trustee is permitted to apply
all such U.S. Legal Tender or U.S. Government Obligations in accordance with
this Indenture; provided, however, that if the Company has made any payment of
-------- -------
Principal of or interest on of 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 U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
Section 8.06 Acknowledgment of Discharge by Trustee.
--------------------------------------
After (a) the conditions of Section 8.02 have been satisfied, (b) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company, and (c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (d) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon written
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified in Section
8.01.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders.
--------------------------
The Company, when authorized by its Board Resolution, and the Trustee,
together, may without notice to or the consent of any Holder amend, waive or
supplement this Indenture or the Notes:
(a) to cure any ambiguity, defect or inconsistency or to make any other
provisions with respect to matters or questions arising under this Indenture;
provided that such action does not materially adversely affect the rights of any
--------
Holder;
(b) to add to the covenants of the Company for the benefit of the Holders,
or to surrender any right or power herein conferred upon the Company, or to
provide any additional rights or benefits to the Holders;
-45-
(c) to evidence the succession of another person to the Company, and the
assumption by any such successor of the obligations of the Company herein and in
the Notes in accordance with Article V;
(d) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(e) to make any other change that does not adversely affect the rights of
any Holders hereunder;
(f) to comply with the TIA; or
(g) to comply with any requirements of the SEC in connection with the
qualification of this Indenture under the TIA;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
--------
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
Section 9.02 With Consent of Holders.
` -----------------------
(a) Subject to Section 6.07, the Company when authorized by its Board
Resolution, and the Trustee, together, may amend or supplement this Indenture or
the Notes, without notice to any Holders. However, without the consent of each
Holder affected, no amendment, supplement or waiver, including a waiver pursuant
to Section 6.04, may:
(i) reduce the principal amount of any Note or premium, if any, with
respect thereto;
(ii) change the Maturity Date of, or alter the redemption or
repurchase or other provisions of the Notes, in a manner that adversely
affects the rights of any Holder;
(iii) impair the right to institute suit for the enforcement of any
payment on or with respect to the Notes;
(iv) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Notes or the rights of
Holders to recover the Principal of or interest on, with respect to,
any Note;
(v) make any change in or affecting the ranking of the Notes with
respect to any other obligation of the Company or any Subsidiary in a way
that adversely affects the rights of any Holder;
(vi) reduce the interest rate or extend the time for payment of
interest, if any, on the Notes;
(vii) make the Principal of or the interest on, any Note payable with
anything, at any place of payment or in any manner other then as provided
for in this Indenture and the Note as in effect on the date hereof;
-46-
(viii) following the mailing of a Change of Control Offer, modify the
provisions of this Indenture with respect to such Change of Control Offer
in a manner adverse to any Holder; or
(ix) make any changes in this Section 9.02 in a manner that
adversely affects the rights of any Holder.
(b) It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
(c) After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
Section 9.03 Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents.
---------------------------------
(a) Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. However, prior to becoming effective, any such Holder or subsequent Holder
may revoke the consent as to his Note or portion of his Note by notice to the
Trustee or the Company if such notice is received by the Trustee or the Company
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Notes have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver. Notwithstanding the above, nothing in this paragraph shall
impair the right of any Holder under (S)316(b) of the TIA.
(b) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those persons who were Holders
at such record date (or their duly designated proxies), and only those persons,
shall be entitled to revoke any consent previously given, whether or not such
persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than ninety (90) days after such record date unless
consents from Holders of the principal amount of Notes required hereunder for
such amendment, supplement or waiver to be effective shall have been given and
not revoked within such ninety (90) day period.
(c) After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (i)
through (vii) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who
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has consented to it and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder's Note; provided, however,
-------- -------
that any such waiver shall not impair or affect the right of any Holder to
receive payment of Principal of and interest on a Note, on or after the
respective dates set for such amounts to become due and payable expressed in
such Note, or to bring suit for the enforcement of any such payment on or after
such respective dates.
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 the Note to the Trustee.
The Trustee may place an appropriate notation on the Note about the changed
terms and return the Note to the Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Note shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms. Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee To Sign Amendments, Etc.
-------------------------------
Subject to the next sentence, the Trustee shall execute any amendment,
supplement or waiver authorized pursuant to this Article IX, provided, however,
-------- -------
that the Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture. The Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate each stating that the execution of any amendment, supplement or
waiver is authorized or permitted by this Indenture.
ARTICLE X
SUBORDINATION
Section 10.01 Notes Subordinated to Senior Indebtedness.
-----------------------------------------
The Company covenants and agrees, and each Holder (and each Person holding
any Note, whether upon original issue, or upon transfer, assignment or exchange
thereof) of the Notes, by its acceptance thereof, likewise covenants and agrees
that: (a) all Notes shall be issued subject to the provisions of this Article X;
(b) the payment of the Principal of, and interest on, the Notes by the Company
shall, to the extent and in the manner herein set forth, be subordinated and
junior in right of payment to the prior payment in full, in cash or Cash
Equivalents, of the Senior Indebtedness; and (c) the subordination is for the
benefit of, and shall be relied upon and be enforceable directly by, the holders
of Senior Indebtedness. The Company and each Holder hereby agree not to amend,
modify or change in any manner any provision of this Article X (and any defined
term used in this Article X) so that the terms and conditions hereof, as so
amended, modified or changed, are less favorable to the holders of the Senior
Indebtedness and their Representative than the terms hereof on the Issue Date,
without the prior written consent of the necessary holders of Senior
Indebtedness as required under the Credit Agreement.
-48-
Section 10.02 Suspension of Payment on Notes in Certain Events.
------------------------------------------------
(a) If (i) any default occurs and is continuing after the expiration of any
applicable cure period (each a "Senior Debt Payment Default"), in the payment
---------------------------
when due, whether at maturity, upon any redemption, by declaration or otherwise,
of any Principal of, or interest on the Senior Indebtedness, or fees or other
amounts due under the terms of the Credit Agreement, and (ii) the Representative
of the holders of the Senior Indebtedness gives written notice (a "Default
-------
Notice") of such Senior Debt Payment Default to the Trustee, then no payment of
------
any kind or character shall be made by or on behalf of the Company or any other
Person on its behalf with respect to any Principal of, or interest on or fees or
other amounts due with respect to, the Notes or to redeem, repurchase or
otherwise acquire any of the Notes for cash or property or otherwise, until such
payment is made in full or Senior Debt Payment Default has been cured to the
satisfaction of the Representative of the Holders of the Senior Indebtedness,
or waived to the satisfaction of the Representative of the Holders of the Senior
Indebtedness.
(b) If (i) any event of default other than a Senior Debt Payment Default (a
"Senior Debt Other Default") occurs and is continuing with respect to the Senior
-------------------------
Indebtedness, as such Senior Debt Other Default is defined in the instrument
creating or evidencing such Senior Indebtedness, permitting the holders of such
Senior Indebtedness to accelerate the maturity thereof, and (ii) the
Representative of the holders of the Senior Indebtedness gives a Default Notice
to the Trustee, then until the earlier of (A) the Trustee receiving notice from
the Representative of the holders of the Senior Indebtedness terminating the
Blockage Period (as defined below), (B) the date on which the Senior Debt Other
Default giving rise to the Blockage Period is cured to the satisfaction of the
Representative of the Holders of the Senior Indebtednessor or waived to the
satisfaction of the Representative of the Holders of the Senior Indebtedness, or
(C) one hundred eighty (180) days after the delivery of such Default Notice (the
"Blockage Period"), neither the Company nor any other Person on its behalf shall
---------------
make any payment of any kind or character with respect to any Principal of, or
interest on, or fees or other amounts due with respect to the Notes, or redeem,
repurchase or otherwise acquire any of the Notes for cash or property or
otherwise; provided, however, that if such Senior Indebtedness has not been
-------- -------
accelerated or becomes the subject of judicial proceedings within the Blockage
Period, then the Company shall resume making any and all required payments in
respect of the Notes upon expiration of the Blockage Period. At the expiration
or termination, as applicable, of such Blockage Period, the Company shall
promptly pay to the Trustee all sums not paid during such Blockage Period as a
result of this subsection (b). Notwithstanding anything herein to the contrary,
in no event will a Blockage Period extend beyond one hundred eighty (180) days
from the date of delivery of a Default Notice of the Senior Debt Other Default
and only one such Blockage Period may be commenced within any period of three
hundred sixty (360) consecutive days. No Senior Debt Other Default or event
which, with the giving of notice and/or lapse of time or otherwise, would become
a Senior Debt Other Default which existed on the date of the commencement of
such Blockage Period, may be used as the basis for declaring any subsequent
Blockage Period unless such Senior Debt Other Default or event, as the case may
be, shall in the interim have been cured or waived for a period of not less than
ninety (90) consecutive days.
(c) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by
Sections 10.02(a) and (b), then unless and until such payment is no longer
prohibited by this Section 10.02, such payment shall be held in trust for the
benefit of, and shall as soon as practicable be paid over or delivered to, the
Representative of the holders of the Senior Indebtedness. No amount paid by the
Company, or any other Person on its behalf, to the Trustee or any Holder of the
Notes, and paid over by such
-49-
Person to the Representative of the holders of the Senior Indebtedness pursuant
to this Article X shall, as between the Company and the Holders of the Notes, be
deemed a payment by the Company to or on account of any payments due in respect
of the Notes.
(d) The Company shall give prompt written notice to the Trustee of any
Senior Debt Payment Default or any Senior Debt Other Default, under the Senior
Indebtedness or under any agreement pursuant to which Senior Indebtedness may
have been issued. Failure to give such notice shall not affect the subordination
of the Notes to the Senior Indebtedness provided in this Article X.
(e) Nothing contained in this Article X shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies available
under this Indenture or otherwise; provided that the Trustee or the Holders
--------
shall, prior to commencing any such action, provide the Representative of the
holders of the Senior Indebtedness with five (5) days prior written notice of
its intention to take such action; provided further that all Senior Indebtedness
-------- -------
thereafter due or declared to be due shall first be paid in full, in cash or
Cash Equivalents, before the Holders are entitled to receive any payment of any
kind or character with respect to Principal of, or interest on or fees or other
amounts due with respect to, the Notes.
Section 10.03 Notes Subordinated to Prior Payment of All Senior Indebtedness on
--------------------------------------------------------------
Dissolution, Liquidation or Reorganization of Company.
-----------------------------------------------------
(a) Upon any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors or marshaling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
the Company or its property, whether voluntary or involuntary, all Senior
Indebtedness shall first be paid in full in, cash or Cash Equivalents (or such
payment shall be duly provided for), before any payment or distribution of any
kind or character is made on account of any Principal of, or interest on, or
fees or other amounts due with respect to, the Notes, or for the acquisition of
any of the Notes for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders of the Notes or
the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders or by the Trustee under this Indenture if received by them, to
the Representative of the holders of the Senior Indebtedness, for application to
the payment of Senior Indebtedness remaining unpaid until all such Senior
Indebtedness has been paid in full, in cash or Cash Equivalents, after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency,
-50-
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Indebtedness or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment has not occurred.
(c) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article V hereof and as long as permitted under the terms of the Senior
Indebtedness shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, assume in
writing, to the reasonable satisfaction of the Representative, the Company's
obligations hereunder in accordance with Article V hereof.
(d) The Company shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of the Company, but
failure to give such notice shall not affect the subordination of the Notes to
the Senior Indebtedness provided in this Article X.
Section 10.04 Holders to be Subrogated to Rights of Holders of Senior
-------------------------------------------------------
Indebtedness.
------------
Subject to the payment in full, in cash or Cash Equivalents, of the
Senior Indebtedness, the Holders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the Notes shall be paid in full. For the purposes of such subrogation, no
such payments or distributions of cash, property or securities of the Company to
the holders of the Senior Indebtedness by or on behalf of the Company or by or
on behalf of the Holders by virtue of this Article which otherwise would have
been made to the Holders shall, as between the Company and the Holders, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness, it being understood that the provisions of this Article are and
are intended solely for the purpose of defining the relative rights of the
Holders of the Notes, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Section 10.05 Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article X or elsewhere in this Indenture or
in the Notes, is intended to or shall impair, as between the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the Principal of, and interest on, the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article X of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy. Upon any payment or distribution of cash,
property or securities of the Company referred to in this Article X, the
Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any liquidation, dissolution,
-51-
winding-up or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee or agent or other Person
making any payment or distribution to the Trustee or to the Holders for the
purpose of ascertaining (a) the Persons entitled to participate in such payment
or distribution, (b) the holders of Senior Indebtedness and other Indebtedness
of the Company, (c) the amount thereof or payable thereon, (d) the amount or
amounts paid or distributed thereon, and (e) all other facts pertinent thereto
or to this Article X. Nothing in this Article X shall apply to the claims of, or
payments to, the Trustee under or pursuant to Section 7.07. The Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be the Representative of the holders of the
Senior Indebtedness. In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a
Representative of the holders of the Senior Indebtedness, the Trustee may
request such Person to furnish evidence thereof to the reasonable satisfaction
of the Trustee, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to right of such Person
to receive such payment on behalf of the holders of the Secured Indebtedness.
Section 10.06 Trustee Entitled to Assume Payments Not Prohibited in Absence
-------------------------------------------------------------
of Notice.
---------
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article X.
Regardless of anything to the contrary contained in this Article X or elsewhere
in this Indenture, the Trustee shall not be charged with knowledge of the
existence of any Senior Debt Payment Default or Senior Debt Other Default or of
any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing from
the Company, or from a holder of Senior Indebtedness or a Representative
thereof, together with proof satisfactory to the Trustee of such holding of
Senior Indebtedness or of the authority of such Representative, and, prior to
the receipt of any such written notice, the Trustee shall be entitled to assume
(in the absence of actual knowledge to the contrary), subject to the provisions
of Section 7.01 and 7.02 that no such facts exist.
Section 10.07 Application by Trustee of Assets Deposited with It.
--------------------------------------------------
U.S. Legal Tender or U.S. Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Sections 8.01 and 8.02 shall
be for the sole benefit of the Holders of the Notes and, to the extent allocated
for the payment of Notes, shall not be subject to the subordination provisions
of this Article X unless delivered in violation of this Article X. Otherwise,
any deposit of assets, property or securities by or on behalf of the Company
with the Trustee or any Paying Agent (whether or not in trust) for the payment
of Principal of, or interest on, any Notes shall be subject to the provisions
of this Article X; provided, however, that if prior to the second Business Day
-------- -------
preceding the date on which by the terms of this Indenture any such assets may
become distributable for any purpose (including the payment of either Principal
of, or interest on, any Note) the Trustee or such Paying Agent shall not have
received with respect to such assets the notice provided for in Section 10.06,
then the Trustee or such Paying Agent shall have full power and authority to
receive such assets and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary received by it
on or after such
-52-
date. Nothing contained in this Section 10.07 shall limit the right of the
holders of Senior Indebtedness to recover payments as contemplated by this
Article X.
Section 10.08 No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 10.08, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustees or the Holders,
without incurring responsibility to the Holders and without impairing or
releasing the subordination provided in this Article X or the obligations
hereunder of the Holders to the holders of Senior Indebtedness, do any one or
more of the following: (i) change the manner, place, terms or time of payment
of, or renew or alter, Senior Indebtedness or any instrument evidencing the same
or any agreement under which Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any Person liable in any
manner for the collection or payment of Senior Indebtedness; and (iv) exercise
or refrain from exercising any rights against the Company and any other Person.
Section 10.09 Holders Authorize Trustee to Effectuate Subordination of Notes.
--------------------------------------------------------------
Each Holder of the Notes by such Holders' acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate, as between the Holders and the holders
of Senior Indebtedness, the subordination provisions contained in this Article
X, and appoints the Trustee such Holders' attorney-in-fact for such purpose,
including, in the event of any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of assets
of the Company (whether in bankruptcy, insolvency or receivership proceedings or
upon assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the immediate filing of a
claim for the unpaid balance of such Holder's Notes in the form required in said
proceedings and cause said claim to be approved. If the Trustee does not file a
proper claim or proof of debt in the form required in such proceeding prior to
thirty (30) days before the expiration of the time to file such claim or proof,
then any of the holders of the Senior Indebtedness or their Representative is
hereby authorized, but is not obligated, to file an appropriate claim for and on
behalf of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorized the
Trustee or the holders of Senior Indebtedness or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
Section 10.10 Right of Trustee to Hold Senior Indebtedness.
--------------------------------------------
-53-
(a) The Trustee and any agent of the Company shall be entitled to
all the rights set forth in this Article X with respect to any Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
(b) With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article X, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee.
(c) Whenever a distribution is to be made or a notice given to
holders or owners of Senior Indebtedness, the distribution will be made and the
notice will be given to their Representative.
Section 10.11 This Article X Not To Prevent Events of Default.
-----------------------------------------------
(a) The failure to make a payment on account of Principal of, or
interest on, the Notes by reason of any provision of this Article X will not be
construed as preventing the occurrence of an Event of Default.
(b) Nothing contained in this Article X shall limit the right of the
Trustee or the Holders of the Notes to take any action to accelerate the
maturity of the Notes pursuant to Article VI or to pursue any rights or remedies
hereunder or under applicable law, subject to the rights, if any, under this
Article X of the holders, from time to time, of Senior Indebtedness.
Section 10.12 No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.
--------------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness, and it undertakes to perform or observe such of
its covenants and obligations as are specifically set forth in this Article X,
and no implied covenants or obligations with respect to the Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
liable to any such holders (other than for its willful misconduct or gross
negligence) if it shall pay over or deliver to the Holders or the Company or any
other Person money or assets in compliance with the terms of this Indenture.
Nothing in this Section 10.12 shall affect the obligation of any Person other
than the Trustee to hold such payment for the benefit of, and to pay such
payment over to, the holders of Senior Indebtedness or their Representative.
Section 10.13 Relationship to Senior Subordinated Notes.
-----------------------------------------
The Notes are pari passu with the Company's 5% Senior Subordinated
Convertible Notes due November 30, 2002.
ARTICLE XI
MISCELLANEOUS
Section 11.01 TIA Controls.
------------
-54-
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
Section 11.02 Notices.
-------
(a) Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, or overnight courier addressed as follows:
if to the Company:
CellStar Corporation
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Attention: General Counsel
Fax: 000-000-0000
with a copy to:
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx, III
Fax: 000-000-0000
if to the Trustee:
The Bank of New York
Attention: ______________________
Fax: ________________
Each of the Company and the Trustee by written notice to each other may
designate additional or different addresses for notices. Any notice or
communication to the Company or the Trustee shall be deemed to have been given
or made as of the date so delivered, if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if faxed; five (5) calendar days
after mailing, if sent by registered or certified mail, postage prepaid (except
that a notice of change of address shall not be deemed to have been given until
actually received by the addressee); and the next Business Day after timely
delivery to the courier, if sent by overnight air courier guaranteeing next day
delivery.
(b) Any notice or communication mailed to a Holder, including any
notice delivered in connection with TIA (S)310(b), TIA (S)313(c), TIA (S)314(a)
and TIA (S)315(b) shall be mailed to him by first class mail or other equivalent
means at his address as it appears on the registration books of the Registrar
and shall be sufficiently given to him if so mailed within the time prescribed.
-55-
(c) Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 11.03 Communications by Holders with Other Holders.
--------------------------------------------
Holders may communicate pursuant to TIA (S)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
(S)312(c).
Section 11.04 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 at the
request of the Trustee:
(a) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel (in form and reasonably satisfactory to
the Trustee) stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Section 11.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(a) a statement that the person making such certificate or opinion
has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such person, he 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 complied with; and
(d) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided, however,
-------- -------
that, with respect to certain matters of fact not involving any legal
conclusion, an Opinion of Counsel may, upon the consent of the parties relying
on such opinion, rely on an Officers' Certificate or certificates of public
officials.
Section 11.06 Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules and set reasonable requirements for its
functions.
-56-
Section 11.07 Legal Holidays.
--------------
If a payment date is a Legal Holiday at such place, payment may be made
at such place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
Section 11.08 Governing Law.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. THE PARTIES HERETO AGREE TO IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE AND THE NOTES, AND IRREVOCABLY ACCEPT FOR
THEMSELVES AND IN RESPECT OF THEIR PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. THE PARTIES HERETO IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY
JURY AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OR THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE TRUSTEE OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
Section 11.09 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries, except to the extent
necessary to interpret the meanings of provisions or defined terms specifically
incorporated by reference. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture, except to the extent necessary to interpret
the meanings of provisions or defined terms specifically incorporated by
reference.
Section 11.10 No Recourse Against Others.
--------------------------
A director, officer, employee, stockholder or Affiliate, as such, of
the Company and each of its Subsidiaries shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. Such waiver
and release are part of the consideration for the issuance of the Notes.
Section 11.11 Successors.
----------
-57-
All agreements of the Company in this Indenture and the Notes shall
bind its successors and assigns. All agreements of the Trustee in this Indenture
shall bind its successors and assigns.
Section 11.12 Counterparts.
------------
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be and original and all of which taken together shall constitute one
and the same agreement.
Section 11.13 Severability.
------------
In case any provision in this Indenture or in the Notes shall be held
invalid, illegal or unenforceable, in any respect for any reason, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby; it being intended that all of the provisions
hereof shall be enforceable to the full extent of the law.
Section 11.14 Table of Contents, Headings. Etc.
--------------------------------
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, and are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
-58-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
CELLSTAR CORPORATION, as Issuer
By:_____________________________
Name:
Title:
The Bank of New York, as Trustee
By:_____________________________
Name:
Title:
Exhibit A
THIS NOTE IS SUBORDINATED TO THE PRIOR PAYMENT IN CASH OF ALL SENIOR
INDEBTEDNESS, AS DEFINED IN THAT CERTAIN INDENTURE DATED AS OF [___], 2001, AS
THE SAME MAY BE AMENDED FROM TIME TO TIME IN THE MANNER PROVIDED IN THE
INDENTURE.
CELLSTAR CORPORATION
12% SENIOR SUBORDINATED PROMISSORY NOTE DUE 2007
$[________] New York, New York
[________], 2002
FOR VALUE RECEIVED, the undersigned, CELLSTAR CORPORATION, a
Delaware corporation (the "Borrower," which term includes any successor entity),
hereby promises to pay to the order of [__________] (together with its
registered assigns, the "Holder"), the principal sum of [__________ Dollars
($__________)] on [________], 2007 (the "Maturity Date"), with interest thereon
from time to time as provided herein.
Interest Payment Dates: August 15 and February 15
Record Dates: August 1 and February 1
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
CELLSTAR CORPORATION
By: ________________________
Name:
Title:
Attest:
By: _______________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes in the within-mentioned Indenture.
[_______________], as Trustee
By: _____________________________
Authorized Signatory
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[FORM OF REVERSE OF NOTE]
CELLSTAR CORPORATION
12% SENIOR SUBORDINATED PROMISSORY NOTE DUE 2007
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Indenture, dated as of [________] (the
"Indenture"), as amended from time to time, by and between CellStar Corporation,
a Delaware corporation (the "Company"), and The Bank of New York, as trustee
(the "Trustee").
1. Interest.
--------
The Company promises to pay interest on the unpaid principal amount of
this Note at a rate of twelve percent (12%) per annum (the "Interest Rate")
commencing on the date hereof. The Company will pay interest semi-annually in
arrears on August 15, 2002 and February 15 of each year or, if any such day is
not a Business Day, on the next succeeding Business Day (the "Interest Payment
Date"), commencing August 15. 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, however, 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. Interest shall accrue with respect to principal on this Note to, but not
including the date of repayment of such principal; provided, however, that if
-------- -------
payment to the Paying Agent occurs after 10:00 a.m., New York City time,
interest shall be deemed to accrue until the following Business Day. On each
Interest Payment Date, interest on the Notes will be paid for the immediately
preceding accrual period. Any accrued and unpaid interest outstanding on the
Maturity Date shall be paid on the Maturity Date concurrently with payment of
the Principal.
To the extent lawful, the Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on (i)
overdue Principal, if any, at a rate equal to the sum of the Interest Rate and
an additional two percent (2%) per annum (such sum being referred to herein as
the "Default Rate"), compounded semiannually; and (ii) overdue installments of
interest, if any (without regard to any applicable grace period) at the Default
Rate, compounded semiannually. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment.
-----------------
The Company shall pay interest on the Notes to the persons who are the
registered Holders at the close of business on the Record Date immediately
preceding the Interest Payment Date even if the Notes are canceled on
registration of transfer or registration of exchange after such Record Date.
Interest on the Notes shall be paid on the Interest Payment Dates and on the
Maturity Date in cash. Except as set forth in the Indenture, Holders must
surrender Notes to the Paying Agent to collect principal payments. The Principal
on the Notes shall be paid on the Maturity Date in cash. The Notes will be
payable as to Principal and interest at the office or
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agency of the Company maintained for such purpose within the City and State of
New York, or, at the option of the Company, payment of interest may be made by
check mailed to the Holders of the Notes at their addresses set forth in the
register of Holders. If this Note is a Global Note, all payments in respect of
this Note will be made to the Depository or its nominee in immediately available
funds in accordance with customary procedures established from time to time by
the Depository.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee under the Indenture will act as Paying Agent
and Registrar. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders. The Company or any of its
Subsidiaries may act as Registrar.
4. Indenture.
---------
The Company issued the Notes under an Indenture, dated as of
[________, 2002] (the "Indenture"), between the Company and the Trustee. This
Note is one of a duly authorized issue of Notes of the Company designated as its
12% Senior Subordinated Notes Due 2007 (the "Notes"). Each Holder, by accepting
the Notes, agrees to be bound by all the terms and provisions of the Indenture,
as the same may be amended from time to time in accordance with its terms. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)
77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. The Notes are unsecured obligations of the Company
limited (except as otherwise provided in the Indenture) in aggregate principal
amount to Sixty Million One Hundred Forty-Two Thousand Dollars ($60,142,000)
plus amounts, if any, sufficient to pay interest and premium, if any, on
outstanding Notes as set forth in Paragraph 2 hereof.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: CellStar
Corporation, 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx 00000, Attn.: General
Counsel.
5. Optional Redemption.
-------------------
On and after the date hereof, the Notes may be redeemed, at the option
of the Company, in whole dollar amounts of at least One Thousand Dollars
($1,000) of principal at a redemption price equal to one hundred percent (100%)
of the principal amount thereof, plus accrued interest, if any, to the
Redemption Date (subject to the right of Holders of record on relevant Record
Dates to receive interest due on an Interest Payment Date). The Company may at
any time or from time to time purchase Notes from Holders in market transactions
and such purchases shall not be considered redemptions.
If the Redemption Date is subsequent to a Record Date with respect to
any Interest Payment Date and on or prior to such Interest Payment Date, then
such accrued interest, if any, will be paid to the person in whose name such
Notes are registered at the close of business on
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such Record Date and no other interest will be payable thereon. In the event of
a partial redemption, the Trustee will select the Notes to be redeemed pro rata
or by such manner as the Trustee deems fair to the Holders of the Notes. In the
event of any conflict between the Note and the Indenture, the Indenture shall
govern.
6. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first class mail at least
thirty (30) days but not more than sixty (60) days before the Redemption Date to
each Holder of Notes to be redeemed at such Holder's registered address. Notes
in denominations larger than One Thousand Dollars ($1,000) may be redeemed in
part but only in multiples of One Thousand Dollars ($1,000).
Except as set forth in the Indenture, from and after any Redemption
Date, if on such Redemption Date the Paying Agent holds U.S. Legal Tender
sufficient for the redemption of the Notes called for redemption on such
Redemption Date, then, unless the Company defaults in the payment of the
Redemption Price or the Paying Agent is otherwise prohibited from paying the
Redemption Price, the Notes called for redemption will cease to bear interest
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price.
7. Offers to Purchase.
------------------
If there is a Change of Control, the Company will be required to offer
to purchase all Notes at the price equal to one hundred one percent (101%) of
the principal amount thereof, plus accrued and unpaid interest to the date of
purchase. Holders of Notes that are subject to an offer to purchase will receive
an offer to purchase from the Company prior to any related purchase date, and
may elect to have such Notes purchased as set forth in the Indenture.
If the Company consummates any Asset Sale, the Company may be required
to utilize certain of the Net Asset Sale Proceeds received from such Asset Sale,
to fund an offer to redeem Notes at the price equal to one hundred percent
(100%) of the principal amount thereof, plus accrued and unpaid interest to the
date of redemption. Holders of Notes which are the subject of an offer to redeem
will receive an offer to redeem from the Company prior to any related purchase
date, and may elect to have such Notes redeemed as set forth in the Indenture.
8. Subordination.
-------------
The Indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness, and this Note is issued
subject to such provisions. Each Holder of this Note, by accepting the same, (i)
agrees to and shall be bound by such provisions; (ii) authorized and directs the
Trustee, on behalf of such holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture; and
(iii) appoints the Trustee attorney-in-fact of such Holder for such purpose.
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9. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form, without coupons, in
denominations of One Thousand Dollars ($1,000) and integral multiples of One
Thousand Dollars ($1,000). A Holder shall register the transfer of or exchange
Notes in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay certain taxes or similar governmental charges required by law and as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Notes or portions thereof selected for redemption. No service
charge shall be made for any registration of transfer or exchange or redemption
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. 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, it need not exchange or register the transfer of any
Notes for a period of fifteen (15) days before a selection of Notes to be
redeemed.
10. Discharge Prior to Redemption or Maturity; Defeasance.
-----------------------------------------------------
The Company's obligations pursuant to the Indenture will be
discharged, except for obligations pursuant to certain sections thereof, subject
to the terms of the Indenture, upon the payment of all the Notes or upon the
irrevocable deposit with the Trustee of U.S. Legal Tender sufficient to pay when
due Principal of and interest, if any, on the Notes to maturity or redemption,
as the case may be.
The Indenture contains provisions (which provisions apply to this
Note) for defeasance at any time of (i) the entire Indebtedness of the Company
on this Note or (ii) certain restrictive covenants and the Defaults and Events
of Default related thereto, in each case upon compliance by the Company with
certain conditions set forth therein.
11. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the written consent of the Holders, and any
existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Required Holders. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, cure among other things, any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, comply with Article V of the Indenture or comply with any requirements of
the SEC in connection with the qualification of the Indenture under the TIA, or
make any other change that does not adversely affect the rights of any Holder of
a Note.
12. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other
things, limit the ability of the Company and its Subsidiaries to incur
additional Indebtedness, transfer or sell assets, pay dividends, make certain
other Restricted Payments and Investments, create Liens or enter into
5
transactions with Affiliates and mergers. The Company must report quarterly to
the Trustee on compliance with such limitations.
13. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least twenty-five percent (25%) in the aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the Notes
unless it has received indemnity reasonably satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, the Required Holders
to direct the Trustee in its exercise of any trust or power.
14. Trustee Dealings with Company.
-----------------------------
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company, its
Subsidiaries or their respective Affiliates, as if it were not the Trustee.
15. No Recourse Against Others.
--------------------------
A stockholder, director, officer, employee or Affiliate, as such,
of the Company or any of its Subsidiaries shall not have any liability for any
obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation,
including with respect to any certificates delivered hereunder or thereunder
from any such person. Each Holder of a Note by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating
agent manually signs the certificate of authentication on this Note.
17. Governing Law.
-------------
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed within the State of New York without regard to principles of
conflicts of laws.
18. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act).
6
19. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company may cause CUSIP numbers
to be printed on the Notes immediately prior to the qualification of the
Indenture under the TIA as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
20. Successors.
----------
When a successor assumes all the obligations of its predecessor
under the Notes and the Indenture and the transaction complies with the terms of
Article V of the Indenture, the predecessor will be released from those
obligations.
21. Unclaimed Money.
---------------
If money for the payment of Principal or interest remains
unclaimed for two (2) years, the Trustee or Paying Agent shall return the money
to the Company upon its request. After that, all liability of the Trustee and
Paying Agent with respect to such money shall cease and Holders entitled to
money must look to the Company for payment.
7
IN WITNESS WHEREOF, the undersigned has executed this Note as of
the date first written above.
CELLSTAR CORPORATION
By:
-----------------------------------
Name:
Title:
8
[FORM OF ASSIGNMENT]
I or we assign this Note to
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_______________________________
and irrevocably appoint ___________________________ agent to transfer this Note
on the books of the Company. The agent may substitute another to act for it.
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to (x) the date which is two years after the date
the undersigned acquired such Notes, and (y) such later date, if any, as may be
required by any subsequent change in applicable law (the "Resale Restriction
Termination Date"), if the undersigned is an affiliate of the Company, the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer and that such Notes are
being transferred:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to a registration statement which has been declared effective
under the Securities Act; or
(3) [_] pursuant to and in compliance with Rule 144A under the Securities Act;
or
(4) [_] pursuant to and in compliance with Regulation S under the Securities
Act; or
(5) [_] to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Company and the Trustee the Transferee Certificate
in the form attached as Exhibit C to the Indenture (such Transferee
Certificate can be obtained from the Trustee); or
(6) [_] pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered holder thereof; provided, however, that if box (3), (4), (5) or (6)
-------- -------
is checked, the Company and the Trustee may require, prior to registering any
such transfer of the Notes, in their sole discretion, such opinions of counsel,
certifications and/or other information satisfactory to each of them to confirm
that such
9
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.06 of the Indenture shall have been satisfied.
Dated:_______________ Signed:______________________________________________
(Sign exactly as your name appears on the front of
this Note)
Signature Guarantee:___________________________________________________________
NOTICE: Signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Bond
Registrar which requirements will include membership or
participation in the Securities Transfer Agents Medallion
Program or such other "signature guarantee program" as may
be determined by the Bond Registrar in addition to, or in
substitution for, the Securities Transfer Agents Medallion
Program, all in accordance with the Securities Exchange Act
of 1934, as amended.
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[FORM OF LEGEND FOR BOOK-ENTRY NOTES]
Any Global Note authenticated and delivered hereunder shall bear a legend
in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A
DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY
TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
11
