EXHIBIT 4.5
================================================================================
WESCO INTERNATIONAL, INC.
11 1/8% Senior Discount Notes due 2008
----------
INDENTURE
Dated as of June 5, 1998
----------
BANK ONE, N.A.,
Senior Discount Notes Trustee
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions....................................................1
SECTION 1.02. Other Definitions.............................................21
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.............21
SECTION 1.04. Rules of Construction.........................................22
ARTICLE 2
The Senior Discount Notes
SECTION 2.01. Form and Dating...............................................22
SECTION 2.02. Execution and Authentication..................................23
SECTION 2.03. Registrar and Paying Agent....................................23
SECTION 2.04. Paying Agent To Hold Money in Trust...........................24
SECTION 2.05. Senior Discount Noteholder Lists..............................24
SECTION 2.06. Transfer and Exchange.........................................24
SECTION 2.07. Replacement Senior Discount Notes.............................25
SECTION 2.08. Outstanding Senior Discount Notes.............................26
SECTION 2.09. Temporary Senior Discount Notes...............................26
SECTION 2.10. Cancelation...................................................26
SECTION 2.11. Defaulted Interest............................................27
SECTION 2.12. CUSIP Numbers.................................................27
ARTICLE 3
Redemption
SECTION 3.01. Notices to Senior Discount Notes Trustee......................27
SECTION 3.02. Selection of Senior Discount Notes To Be Redeemed.............27
SECTION 3.03. Notice of Redemption..........................................28
SECTION 3.04. Effect of Notice of Redemption................................29
SECTION 3.05. Deposit of Redemption Price...................................29
SECTION 3.06. Senior Discount Notes Redeemed in Part........................29
ARTICLE 4
Covenants
SECTION 4.01. Payment of Senior Discount Notes..............................29
SECTION 4.02. SEC Reports...................................................30
SECTION 4.03. Limitation on Indebtedness....................................30
SECTION 4.04. Limitation on Restricted Payments.............................32
SECTION 4.05. Limitation on Restrictions on Distributions from Restricted
Subsidiaries................................................35
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock............36
SECTION 4.07. Limitation on Transactions with Affiliates....................39
SECTION 4.08. Change of Control.............................................40
SECTION 4.09. Compliance Certificate........................................42
SECTION 4.10. Further Instruments and Acts..................................42
SECTION 4.11. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries.....................................42
SECTION 4.12. Limitation on Liens...........................................42
ARTICLE 5
Successor Company
SECTION 5.01. When Holdings May Merge or Transfer Assets....................43
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default.............................................44
SECTION 6.02. Acceleration..................................................46
SECTION 6.03. Other Remedies................................................46
SECTION 6.04. Waiver of Past Defaults.......................................46
SECTION 6.05. Control by Majority...........................................46
SECTION 6.06. Limitation on Suits...........................................47
SECTION 6.07. Rights of Senior Discount Noteholders to
Receive Payment.............................................47
SECTION 6.08. Collection Suit by Senior Discount Notes Trustee..............47
SECTION 6.09. Senior Discount Notes Trustee May File Proofs of Claim........48
SECTION 6.10. Priorities....................................................48
SECTION 6.11. Undertaking for Costs.........................................48
SECTION 6.12. Waiver of Stay or Extension Laws..............................49
ARTICLE 7
Senior Discount Notes Trustee
SECTION 7.01. Duties of Senior Discount Notes Trustee.......................49
SECTION 7.02. Rights of Senior Discount Notes Trustee.......................50
SECTION 7.03. Individual Rights of Senior Discount Notes Trustee............51
SECTION 7.04. Senior Discount Notes Trustee's Disclaimer....................51
SECTION 7.05. Notice of Defaults............................................51
SECTION 7.06. Reports by Senior Discount Notes Trustee to Senior
Discount Noteholders........................................51
SECTION 7.07. Compensation and Indemnity....................................52
SECTION 7.08. Replacement of Senior Discount Notes Trustee..................52
SECTION 7.09. Successor Senior Discount Notes Trustee by Merger.............53
SECTION 7.10. Eligibility; Disqualification.................................54
SECTION 7.11. Preferential Collection of Claims Against Holdings............54
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Senior Discount Notes;
Defeasance..................................................54
SECTION 8.02. Conditions to Defeasance......................................55
SECTION 8.03. Application of Trust Money....................................56
SECTION 8.04. Repayment to Holdings.........................................56
SECTION 8.05. Indemnity for Government Obligations..........................56
SECTION 8.06. Reinstatement.................................................57
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Senior Discount Noteholders................57
SECTION 9.02. With Consent of Senior Discount Noteholders...................58
SECTION 9.03. Compliance with Trust Indenture Act...........................58
SECTION 9.04. Revocation and Effect of Consents and Waivers.................59
SECTION 9.05. Notation on or Exchange of Senior Discount Notes..............59
SECTION 9.06. Senior Discount Notes Trustee To Sign Amendments..............60
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls.................................60
SECTION 10.02. Notices......................................................60
SECTION 10.03. Communication by Senior Discount Noteholders with
Other Senior Discount Noteholders...........................60
SECTION 10.04. Certificate and Opinion as to Conditions Precedent...........61
SECTION 10.05. Statements Required in Certificate or Opinion................61
SECTION 10.06. When Senior Discount Notes Disregarded.......................61
SECTION 10.07. Rules by Senior Discount Notes Trustee, Paying Agent
and Registrar...............................................61
SECTION 10.08. Legal Holidays...............................................62
SECTION 10.09. GOVERNING LAW................................................62
SECTION 10.10. No Recourse Against Others...................................62
SECTION 10.11. Successors...................................................62
SECTION 10.12. Multiple Originals...........................................62
SECTION 10.13. Table of Contents; Headings..................................62
Appendix A - Provisions Relating to Initial Senior Discount Notes, Private
Senior Discount Exchange Notes and Senior Discount Exchange
Notes
Exhibit A - Form of Initial Senior Discount Note
Exhibit B - Form of Face of Senior Discount Exchange Note
Exhibit C - Form of Transferee Letter of Representation
INDENTURE dated as of June 5, 1998, among WESCO
INTERNATIONAL, INC., a Delaware corporation ("Holdings") and
BANK ONE, N.A., a national banking association, as trustee
(the "Senior Discount Notes Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of (i) Holdings' 11 1/8%
Senior Discount Notes due 2008 issued on the date hereof (the "Initial Senior
Discount Notes"), (ii) if and when issued as provided in the Senior Discount
Notes Registration Agreement (as defined in Appendix A hereto (the "Appendix")),
Holdings' 11 1/8% Senior Discount Notes due 2008 issued in the Senior Discount
Notes Registered Exchange Offer (as defined in the Appendix) in exchange for any
Initial Senior Discount Notes (the "Senior Discount Exchange Notes") and (iii)
if and when issued as provided in the Senior Discount Notes Registration
Agreement, the Private Senior Discount Exchange Notes (as defined in the
Appendix) issued in the Senior Discount Notes Private Exchange (as defined in
the Appendix, and together with the Initial Senior Discount Notes and any Senior
Discount Exchange Notes issued hereunder, the "Senior Discount Notes"). Except
as otherwise provided herein, the Senior Discount Notes will be limited to $87
million in aggregate principal amount at maturity outstanding.
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Accreted Value" as of any date (the "Specified Date") means, with
respect to each $1,000 principal amount at maturity of Senior Discount Notes:
(i) if the Specified Date is one of the following dates (each a
"Semi-Annual Accretion Date"), the amount set forth opposite such date below:
Semi-Annual Accretion Date Accreted Value
-------------------------- --------------
Issue Date..................................................... $ 580.21
December 1, 1998............................................... $ 611.89
June 1, 1999................................................... $ 646.07
December 1, 1999............................................... $ 682.17
June 1, 2000................................................... $ 720.29
December 1, 2000............................................... $ 760.54
June 1, 2001................................................... $ 803.03
December 1, 2001............................................... $ 847.90
June 1, 2002................................................... $ 895.28
December 1, 2002............................................... $ 945.30
June 1, 2003................................................... $ 998.12
(ii) if the Specified Date occurs between two Semi-Annual Accretion Dates,
the sum of (a) the Accreted Value for the Semi-Annual Accretion Date immediately
preceding the Specified Date and (b) an amount equal to the product of (x) the
Accreted Value for the immediately following Semi-Annual Accretion Date less the
Accreted Value for the immediately preceding Semi-Annual Accretion Date and (y)
a fraction, the numerator of which is the number of days actually elapsed from
the immediately
2
preceding Semi-Annual Accretion Date to the Specified Date and the denominator
of which is 180, and
(iii) if the Specified Date is after June 1, 2003, $998.12.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by Holdings or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by Holdings or another Restricted Subsidiary; or (iii) Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary; provided, however, that any such Restricted Subsidiary described in
clause (ii) or (iii) above is primarily engaged in a Related Business.
"Additional Senior Subordinated Notes" means up to $200 million
aggregate principal amount of Senior Subordinated Notes which may be issued
subsequent to the Closing Date.
"Adjusted Consolidated Assets" means at any time the total amount of
assets of Holdings and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), after deducting
therefrom all current liabilities of Holdings and its Restricted Subsidiaries
(excluding intercompany items), all as set forth on the Consolidated balance
sheet of Holdings and its Restricted Subsidiaries as of the end of the most
recent fiscal quarter for which financial statements are available prior to the
date of determination.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Premium" means, with respect to a Senior Discount Note
at any redemption date, the greater of (i) 1.0% of the Accreted Value of such
Senior Discount Note and (ii) the excess of (A) the present value at such time
of the redemption price of such Senior Discount Note at June 1, 2003 (such
redemption price being set forth in the table in paragraph 5 of the Senior
Discount Notes) computed using a discount rate equal to the Treasury Rate plus
50 basis points, over (B) the Accreted Value of such Senior Discount Note.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
Holdings or any Restricted Subsidiary, including any disposition by means of a
merger, consolidation, or similar transaction (each referred to for the purposes
of this definition as a "disposition"), of (i) any shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares or shares
required by applicable law to be held by a Person other than Holdings or a
Restricted Subsidiary), (ii) all or substantially all the assets of any division
or line of business of Holdings or any Restricted Subsidiary or (iii) any other
assets of Holdings or any Restricted Subsidiary outside the ordinary course of
business of Holdings or such
3
Restricted Subsidiary (other than, in the case of (i), (ii) and (iii) above, (A)
a disposition by a Restricted Subsidiary to Holdings or by Holdings or a
Restricted Subsidiary to a Wholly Owned Subsidiary, (B) for purposes of the
provisions described in Section 4.06 only, a disposition subject to Section
4.04, (C) a disposition of assets with a fair market value of less than
$1,000,000, (D) a sale of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables Transaction" to a
Receivables Entity in a Qualified Receivables Transaction, (E) a transfer of
accounts receivables and related assets of the type specified in the definition
of "Qualified Receivables Transaction" (or a fractional undivided interest
therein) by a Receivables Entity in a Qualified Receivables Transaction, (F) the
disposition of all or substantially all of the assets of Holdings in a manner
permitted pursuant to the provisions of Section 5.01 or any disposition that
constitutes a Change of Control, (G) any exchange of like property pursuant to
Section 1031 of the Code for use in a Related Business, and (H) any sale of
Capital Stock in, or Indebtedness or other securities of, an Unrestricted
Subsidiary).
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Senior Discount Notes after June 1, 2003, compounded
annually) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock multiplied
by the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement and any Refinancing Indebtedness with respect
thereto, as amended from time to time, including principal, premium (if any),
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to Holdings whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees, indemnities and all other amounts payable
thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of Holdings or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP;
4
and the Stated Maturity thereof shall be the date of the last payment of rent or
any other amount due under such lease prior to the first date upon which such
lease may be prepaid by the lessee without payment of a penalty.
"Change of Control" means the occurrence of any of the following
events:
(i) prior to the first public offering of common stock of Holdings,
the Permitted Holders cease to be the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
a majority in the aggregate of the total voting power of the Voting Stock
of Holdings, whether as a result of issuance of securities of Holdings,
any merger, consolidation, liquidation or dissolution of Holdings, any
direct or indirect transfer of securities by any Permitted Holder or
otherwise (for purposes of this clause (i) and clause (ii) below, the
Permitted Holders shall be deemed to beneficially own any Voting Stock of
an entity (the "specified entity") held by any other entity (the "parent
entity") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the
voting power of the Voting Stock of the parent entity);
(ii) on or after any such public offering referred to in clause (i),
(A) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders, is or becomes the
beneficial owner (as defined in clause (i) above, except that for purposes
of this clause (ii) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 35% of the total voting power
of the Voting Stock of Holdings and (B) the Permitted Holders
"beneficially own" (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of Holdings than such other person and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of Holdings
(for the purposes of this clause (ii), such other person shall be deemed
to beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person is the beneficial owner (as
defined in this clause (ii)), directly or indirectly, of more than 35% of
the voting power of the Voting Stock of such parent corporation and the
Permitted Holders "beneficially own" (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the voting
power of the Voting Stock of such parent corporation and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of such parent
corporation);
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of
Holdings (together with any new directors whose election by the Board of
Directors of Holdings or whose nomination for election by the shareholders
of Holdings was approved by a vote of 66 2/3% of the directors of Holdings
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of Holdings then in office; or
5
(iv) the merger or consolidation of Holdings with or into another
Person or the merger of another Person with or into Holdings, or the sale
of all or substantially all the assets of Holdings to another Person
(other than a Person that is controlled by the Permitted Holders), and, in
the case of any such merger or consolidation, the securities of Holdings
that are outstanding immediately prior to such transaction and which
represent 100% of the aggregate voting power of the Voting Stock of
Holdings are changed into or exchanged for cash, securities or property,
unless pursuant to such transaction such securities are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving Person that represent immediately after such transaction, at
least a majority of the aggregate voting power of the Voting Stock of the
surviving Person; provided, however, that any sale of accounts receivable
in connection with a Qualified Receivables Transaction shall not
constitute a Change of Control.
"Closing Date" means the date of this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means WESCO Distribution, Inc., a Delaware corporation and
Wholly Owned Subsidiary of Holdings.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters for which internal financial statements
are available prior to the date of such determination to (ii) Consolidated
Interest Expense for such four fiscal quarters; provided, however, that (A) if
Holdings or any Restricted Subsidiary has Incurred any Indebtedness since the
beginning of such period that remains outstanding on such date of determination
or if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been Incurred
on the first day of such period and the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness as if such discharge had occurred on the first day of such
period (except that, in making such computation, the amount of Indebtedness
under any revolving credit facility outstanding on the date of such calculation
shall be computed based on (1) the average daily balance of such Indebtedness
(and any Indebtedness under a revolving credit facility replaced by such
Indebtedness) during such four fiscal quarters or such shorter period when such
facility and any replaced facility was outstanding or (2) if such facility was
created after the end of such four fiscal quarters, the average daily balance of
such Indebtedness (and any Indebtedness under a revolving credit facility
replaced by such Indebtedness) during the period from the date of creation of
such facility to the date of the calculation), (B) if Holdings or any Restricted
Subsidiary has repaid, repurchased, defeased or otherwise discharged any
Indebtedness since the beginning of such period or if any Indebtedness is to be
repaid, repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the date
of the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall
be calculated on a pro forma basis as if such discharge had occurred on the
first day of such period and as if Holdings or such Restricted Subsidiary has
not earned the interest income actually earned during such
6
period in respect of cash or Temporary Cash Investments used to repay,
repurchase, defease or otherwise discharge such Indebtedness, (C) if since the
beginning of such period Holdings or any Restricted Subsidiary shall have made
any Asset Disposition, the EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Disposition for such period or increased by an amount
equal to the EBITDA (if negative) directly attributable thereto for such period
and Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of Holdings or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to Holdings and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent Holdings and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (D) if since the beginning of such period Holdings or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any Indebtedness)
as if such Investment or acquisition occurred on the first day of such period
and (E) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into Holdings or any
Restricted Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (C) or (D) above if made by Holdings
or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition of assets
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the amount
of income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the
pro forma calculations shall be determined in good faith by a responsible
financial or accounting Officer of Holdings, and such pro forma calculations
shall include (A)(x) the savings in cost of goods sold that would have resulted
from using Holdings' actual costs for comparable goods and services during the
comparable period and (y) other savings in cost of goods sold or eliminations of
selling, general and administrative expenses as determined by a responsible
financial or accounting Officer of Holdings in good faith in connection with
Holdings' consideration of such acquisition and consistent with Holdings'
experience in acquisitions of similar assets, less (B) the incremental expenses
that would be included in cost of goods sold and selling, general and
administrative expenses that would have been incurred by Holdings in the
operation of such acquired assets during such period. If any Indebtedness bears
a floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term as at the date of determination in
excess of 12 months).
7
"Consolidated Interest Expense" means, for any period, the total
interest expense (net of interest income) of Holdings and its Consolidated
Restricted Subsidiaries, plus, to the extent Incurred by Holdings and its
Restricted Subsidiaries in such period but not included in such interest
expense, (i) interest expense attributable to Capitalized Lease Obligations and
the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction, (ii) amortization of debt discount, (iii)
capitalized interest, (iv) non-cash interest expense, (v) commissions, discounts
and other fees and charges attributable to letters of credit and bankers'
acceptance financing, (vi) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by Holdings or any
Restricted Subsidiary, (vii) net costs associated with Hedging Obligations
(including amortization of fees), (viii) dividends in respect of all Preferred
Stock of Holdings and any of the Restricted Subsidiaries of Holdings (other than
pay in kind dividends and accretions to liquidation value) to the extent held by
Persons other than Holdings or a Wholly Owned Subsidiary, (ix) interest Incurred
in connection with investments in discontinued operations and (x) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than Holdings) in connection with Indebtedness Incurred by
such plan or trust, less, to the extent included in such total interest expense,
the amortization during such period of capitalized financing costs.
Notwithstanding anything to the contrary contained herein, interest expense,
commissions, discounts, yield and other fees and charges Incurred in connection
with any Qualified Receivables Transaction pursuant to which Holdings or any
Subsidiary may sell, convey or otherwise transfer or grant a security interest
in any accounts receivable or related assets of the type specified in the
definition of "Qualified Receivables Transaction" shall not be included in
Consolidated Interest Expense; provided that any interest expense, commissions,
discounts, yield and other fees and charges Incurred in connection with any
receivables financing or securitization that does not constitute a Qualified
Receivables Transaction shall be included in Consolidated Interest Expense.
"Consolidated Net Income" means, for any period, the net income of
Holdings and its Consolidated Subsidiaries for such period; provided, however,
that there shall not be included in such Consolidated Net Income:
(i) any net income of any Person (other than Holdings) if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in clause (iv) below, Holdings' equity in the net
income of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to Holdings or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution made to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (B) Holdings' equity in a
net loss of any such Person for such period shall be included in
determining such Consolidated Net Income;
(ii) any net income (or loss) of any Person acquired by Holdings or
a Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(iii) any net income (or loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions by such
Restricted
8
Subsidiary, directly or indirectly, to Holdings (other than, in the case
of the Company (but not its Subsidiaries), restrictions permitted by
Section 4.05), except that (A) subject to the limitations contained in
clause (iv) below, Holdings' equity in the net income of any such
Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash which could
have been distributed by such Restricted Subsidiary during such period to
Holdings or another Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
made to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) Holdings' equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(iv) any gain (or loss) realized upon the sale or other disposition
of any asset of Holdings or its Consolidated Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise
disposed of in the ordinary course of business and any gain (or loss)
realized upon the sale or other disposition of any Capital Stock of any
Person;
(v) any extraordinary gain or loss;
(vi) the cumulative effect of a change in accounting principles; and
(vii) any expenses or charges paid to third parties related to any
Equity Offering, Permitted Investment, acquisition, recapitalization or
Indebtedness permitted to be Incurred by this Indenture (whether or not
successful) (including such fees, expenses, or charges related to the
Recapitalization).
Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
Holdings or a Restricted Subsidiary to the extent such dividends, repayments or
transfers increase the amount of Restricted Payments permitted under such
Section pursuant to clause (a)(3)(D) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of Holdings and its Restricted Subsidiaries, determined on a
Consolidated basis, as of the end of the most recent fiscal quarter of Holdings
for which internal financial statements are available, as (i) the par or stated
value of all outstanding Capital Stock of Holdings plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus (iii) any retained earnings
or earned surplus less (A) any accumulated deficit and (B) any amounts
attributable to Disqualified Stock.
"Consolidation" means the consolidation of the amounts of each of
the Restricted Subsidiaries with those of Holdings in accordance with GAAP
consistently applied; provided, however, that "Consolidation" shall not include
consolidation of the accounts of any Unrestricted Subsidiary, but the interest
of Holdings or any Restricted Subsidiary in an Unrestricted Subsidiary shall be
accounted for as an investment. The term "Consolidated" has a correlative
meaning.
"Credit Agreement" means the credit agreement to be dated as of the
Closing Date, as amended, waived or otherwise modified from time to time, among
Holdings, WESCO Distribution -- Canada, Inc., certain financial institutions to
be party
9
thereto, The Chase Manhattan Bank, as U.S. administrative agent, syndication
agent and U.S. collateral agent, The Chase Manhattan Bank of Canada, as Canadian
administrative agent and Canadian collateral agent, and Xxxxxx Commercial Paper
Inc., as documentation agent.
"Credit Facilities" means, with respect to Holdings or the Company,
one or more debt facilities, or commercial paper facilities with banks or other
institutional lenders or indentures providing for revolving credit loans, term
loans, receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against receivables), letters of credit or other long-term Indebtedness, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time.
"Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement to which such Person is a party or of which it is a beneficiary.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Noncash Consideration" means the fair market value of
noncash consideration received by Holdings or any of its Restricted Subsidiaries
in connection with an Asset Disposition that is so designated as Designated
Noncash Consideration pursuant to an Officers' Certificate, setting forth the
basis of such valuation, less the amount of cash or cash equivalents received in
connection with a subsequent sale of such Designated Noncash Consideration.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the 91st day
following the Stated Maturity of the Senior Discount Notes; provided, however,
that any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an "asset sale"
or "change of control" occurring prior to the first anniversary of the Stated
Maturity of the Securities shall not constitute Disqualified Stock if the "asset
sale" or "change of control" provisions applicable to such Capital Stock are not
more favorable to the holders of such Capital Stock than the provisions of
Sections 4.06 and 4.08.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense of Holdings and its Consolidated
Restricted Subsidiaries, (ii) Consolidated Interest Expense, (iii) depreciation
expense of Holdings and its Consolidated Restricted Subsidiaries, (iv)
amortization expense of Holdings and its Consolidated Restricted Subsidiaries
(excluding amortization expense attributable to a prepaid cash item that was
paid in a prior period), (v) all other non-cash charges of Holdings and its
Consolidated Restricted Subsidiaries (excluding any such non-cash charge to the
extent it represents an accrual of or reserve for cash expenditures in any
10
future period) in each case for such period and (vi) income attributable to
discontinued operations. Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization and
non-cash charges of, a Restricted Subsidiary of Holdings 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 Restricted Subsidiary was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to Holdings by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Equity Offering" means a private sale or public offering of Capital
Stock (other than Disqualified Stock) of Holdings.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Contribution" means the Net Cash Proceeds received by
Holdings from (a) contributions to its common equity capital and (b) the sale
(other than to a Subsidiary or to any Holdings or Subsidiary management equity
plan or stock option plan or any other management or employee benefit plan or
agreement) of Capital Stock (other than Disqualified Stock) of Holdings, in each
case designated as Excluded Contributions pursuant to an Officers' Certificate
executed by the principal executive officer and the principal financial officer
of Holdings on the date such capital contributions are made or the date such
Capital Stock is sold.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those set forth
in (i) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC. All ratios and
computations based on GAAP contained in this Indenture shall be computed in
conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a
11
verb has a corresponding meaning. The term "Guarantor" shall mean any Person
Guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holdings" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Subsidiary. The term "Incurrence" when used as a
noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall not be deemed the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;
(iii) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto) (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (i),
(ii), (iv) and (v) hereof) to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed
no later than the 30th day following payment on the letter of credit so
long as such letter of credit is entered into in the ordinary course of
business);
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion
of such services;
(v) all Capitalized Lease Obligations and all Attributable Debt of
such Person;
(vi) the amount of all obligations of such Person with respect to
the redemption, repayment or other repurchase of any Disqualified Stock
or, with respect to any Subsidiary of such Person, any Preferred Stock
(but excluding, in each case, any accrued dividends);
12
(vii) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of Indebtedness of such Person
shall be the lesser of (A) the fair market value of such asset at such
date of determination and (B) the amount of such Indebtedness of such
other Persons;
(viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person; and
(ix) all obligations of the type referred to in clauses (i) through
(viii) of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including by means of
any Guarantee.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date; provided, however, that
the amount outstanding at any time of any Indebtedness Incurred with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP. Any "Qualified Receivables
Transaction", whether or not such transfer constitutes a sale for the purposes
of GAAP, shall not constitute Indebtedness hereunder; provided that any
receivables financing or securitization that does not constitute a Qualified
Receivables Transaction and does not qualify as a sale under GAAP shall
constitute Indebtedness hereunder.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Financial Advisor" means an accounting, appraisal,
investment banking firm or consultant of nationally recognized standing that is,
in the good faith determination of Holdings, qualified to perform the task for
which it has been engaged.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary" and Section 4.04, (i) "Investment" shall include the
portion (proportionate to Holdings' equity interest in such Subsidiary) of the
fair market value of the net assets of any Subsidiary of Holdings at the time
that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a
13
redesignation of such Subsidiary as a Restricted Subsidiary, Holdings shall be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) Holdings' "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to Holdings' equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash payments
received (including (a) any cash payments received upon the sale or other
disposition of any Designated Noncash Consideration received in any Asset
Disposition, (b) any cash proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and (c) any
cash proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to the properties or assets that are
the subject of such Asset Disposition or received in any other non-cash form)
therefrom, in each case net of (i) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred (including, without limitation,
all broker's and finder's fees and expenses, all investment banking fees and
expenses, employee severance and termination costs, and trade payable and
similar liabilities solely related to the assets sold or otherwise disposed of
and required to be paid by the seller as a result thereof), and all Federal,
state, provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
relocation expenses incurred as a result thereof, (iii) all payments made on any
Indebtedness which is secured by any assets subject to such Asset Disposition,
in accordance with the terms of any Lien upon or other security agreement of any
kind with respect to such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law be
repaid out of the proceeds from such Asset Disposition, (iv) all distributions
and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (v)
appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or other assets
disposed of in such Asset Disposition and retained by Holdings or any Restricted
Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Financial Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
Holdings.
14
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Senior Discount Notes Trustee. The counsel may be an
employee of or counsel to Holdings or the Senior Discount Notes Trustee.
"Permitted Holders" means (i) The Cypress Group L.L.C., Cypress
Merchant Banking Partners L.P., Cypress Offshore Partners L.P., Chase Equity
Associates, L.P., Co-Investment Partners, L.P. and any Person who on the Senior
Discount Notes Issue Date is an Affiliate of any of the foregoing; (ii) any
Person who is a member of the senior management of Holdings and a stockholder of
Holdings on the Senior Discount Notes Issue Date; and (iii) any Person acting in
the capacity of an underwriter in connection with a public or private offering
of Holdings' Capital Stock.
"Permitted Investment" means an Investment by Holdings or any
Restricted Subsidiary in (i) Holdings, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted Subsidiary; (ii)
another Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, Holdings or a Restricted Subsidiary; (iii) Temporary Cash
Investments; (iv) receivables owing to Holdings or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however, that
such trade terms may include such concessionary trade terms as Holdings or any
such Restricted Subsidiary deems reasonable under the circumstances; (v)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vi) loans or
advances to employees made in the ordinary course of business consistent with
past practices of Holdings or such Restricted Subsidiary and not exceeding $5.0
million in the aggregate outstanding at any one time; (vii) stock, obligations
or securities received in settlement of debts created in the ordinary course of
business and owing to Holdings or any Restricted Subsidiary or in satisfaction
of judgments; (viii) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Disposition that was
made pursuant to and in compliance with Section 4.06; (ix) Investments made in
connection with any Asset Disposition or other sale, lease, transfer or other
disposition permitted under this Indenture; (x) a Receivables Entity or any
Investment by a Receivables Entity in any other Person in connection with a
Qualified Receivables Transaction, including Investments of funds held in
accounts permitted or required by the arrangements governing such Qualified
Receivables Transaction or any related Indebtedness; provided that any
Investment in a Receivables Entity is in the form of a Purchase Money Note,
contribution of additional receivables or an equity interest; (xi) Investments
in a Related Business having an aggregate fair market value, taken together with
all other Investments made pursuant to this clause (xi) that are at that time
outstanding (and not including any Investments outstanding on the Closing Date),
not to exceed 5% of Adjusted Consolidated Assets at the time of such Investments
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value); and (xii) additional
Investments in an aggregate amount which, together with all other Investments
made pursuant to this clause that are then outstanding, does not exceed $10.0
million.
15
"Permitted Liens" means (a) Liens of Holdings securing Indebtedness
of Holdings or any of its Restricted Subsidiaries Incurred under the Credit
Agreement or other Credit Facilities to the extent permitted to be Incurred
under Section 4.03(b)(i) and (xiii); (b) Liens in favor of Wholly Owned
Subsidiaries; (c) Liens of Holdings securing Indebtedness of Holdings Incurred
under Section 4.03(b)(v); (d) Liens of Holdings securing Indebtedness of
Holdings (including under a Sale/Leaseback Transaction) permitted to be Incurred
under Section 4.03(b)(vi), (vii) and (viii) so long as the Capital Stock,
property (real or personal) or equipment to which such Lien attaches solely
consists of the Capital Stock, property or equipment which is the subject of
such acquisition, purchase, lease, improvement, Sale/Leaseback Transaction and
additions and improvements thereto (and the proceeds therefrom); (e) Liens on
property existing at the time of acquisition thereof by Holdings; provided that
such Liens were not Incurred in connection with, or in contemplation of, such
acquisition and such Liens do not extend to or cover any property other than
such property, additions and improvements thereon and any proceeds therefrom;
(f) Liens Incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety or appeal bonds, government contracts,
performance and return of money bonds or other obligations of a like nature
Incurred in the ordinary course of business; (g) Liens existing on the Senior
Discount Notes Issue Date and any additional Liens created under the terms of
the agreements relating to such Liens existing on the Senior Discount Notes
Issue Date; (h) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings; provided that any reserve or other appropriate
provision as shall be required in conformity with GAAP shall have been made
therefor; (i) Liens Incurred in the ordinary course of business of Holdings with
respect to obligations that do not exceed $20.0 million in the aggregate at any
one time outstanding and that (1) are not Incurred in connection with or in
contemplation of the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (2) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of the business by Holdings; (j)
statutory Liens of landlords and warehousemen's, carrier's, mechanics',
suppliers', materialmen's, repairmen's or other like Liens (including
contractual landlords' liens) arising in the ordinary course of business of
Holdings; (k) Liens Incurred or deposits made in the ordinary course of business
of Holdings in connection with workers' compensation, unemployment insurance and
other types of social security; (l) easements, rights of way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the business of
Holdings; (m) Liens securing reimbursement obligations with respect to letters
of credit permitted under Section 4.03 which encumber only cash and marketable
securities and documents and other property relating to such letters of credit
and the products and proceeds thereof; (n) judgment and attachment Liens not
giving rise to an Event of Default; (o) any interest or title of a lessor in the
property subject to any Capitalized Lease Obligation permitted under Section
4.03; (p) Liens on accounts receivable and related assets of the type specified
in the definition of "Qualified Receivables Transaction" Incurred in connection
with a Qualified Receivables Transaction; (q) Liens securing Refinancing
Indebtedness to the extent such Liens do not extend to or cover any property of
Holdings not previously subjected to Liens relating to the Indebtedness being
refinanced; or (r) Liens on pledges of the capital stock of any Unrestricted
Subsidiary securing any Indebtedness of such Unrestricted Subsidiary.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated
16
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"principal" of a Senior Discount Note means the principal of the
Senior Discount Note plus the premium, if any, payable on the Senior Discount
Note that is due or overdue or is to become due at the relevant time.
"Purchase Money Note" means a promissory note of a Receivables
Entity evidencing a line of credit, which may be irrevocable, from Holdings or
any Subsidiary of Holdings in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note (a) shall be repaid from cash
available to the Receivables Entity, other than (i) amounts required to be
established as reserves pursuant to agreements, (ii) amounts paid to investors
in respect of interest, (iii) principal and other amounts owing to such
investors and amounts owing to such investors, (iv) amounts required to pay
expenses in connection with such Qualified Receivables Transaction and (v)
amounts paid in connection with the purchase of newly generated receivables and
(b) may be subordinated to the payments described in (a).
"Qualified Receivables Transaction" means any financing by Holdings
or any of its Subsidiaries of accounts receivable in any transaction or series
of transactions that may be entered into by Holdings or any of its Subsidiaries
pursuant to which (a) Holdings or any of its Subsidiaries sells, conveys or
otherwise transfers to a Receivables Entity and (b) a Receivables Entity sells,
conveys or otherwise transfers to any other Person or grants a security interest
to any Person in, any accounts receivable (whether now existing or arising in
the future) of Holdings or any of its Subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all Guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable; provided that (i) the Board of Directors shall
have determined in good faith that such Qualified Receivables Transaction is
economically fair and reasonable to Holdings and the Receivables Entity and (ii)
all sales of accounts receivable and related assets to the Receivables Entity
are made at fair market value (as determined in good faith by Holdings). The
grant of a security interest in any accounts receivable of Holdings or any of
its Restricted Subsidiaries to secure Bank Indebtedness shall not be deemed a
Qualified Receivables Transaction.
"Receivables Entity" means any Wholly Owned Subsidiary of Holdings
(or another Person in which Holdings or any Subsidiary of Holdings makes an
Investment and to which Holdings or any Subsidiary of Holdings transfers
accounts receivable and related assets) (i) which engages in no activities other
than in connection with the financing of accounts receivable, all proceeds
thereof and all rights (contractual or other), collateral and other assets
relating thereto, and any business or activities incidental or related to such
business, (ii) which is designated by the Board of Directors
17
(as provided below) as a Receivables Entity and (iii) no portion of the
Indebtedness or any other obligations (contingent or otherwise) of which (A) is
Guaranteed by Holdings or any other Subsidiary of Holdings (excluding Guarantees
of obligations (other than the principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings), (B) is recourse to or
obligates Holdings or any other Subsidiary of Holdings in any way other than
pursuant to Standard Securitization Undertakings or (C) subjects any property or
asset of Holdings or any other Subsidiary of Holdings, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings. Any such designation by the Board of
Directors shall be evidenced to the Senior Discount Notes Trustee by filing with
the Senior Discount Notes Trustee a certified copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) any Indebtedness of Holdings or any
Restricted Subsidiary existing on the date of this Indenture or Incurred in
compliance with this Indenture (including Indebtedness of Holdings that
Refinances Refinancing Indebtedness); provided, however, that (i) the
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced, (ii) the Refinancing Indebtedness
has an Average Life at the time such Refinancing Indebtedness is Incurred that
is equal to or greater than the Average Life of the Indebtedness being
refinanced and (iii) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being Refinanced (plus any accrued interest and
premium thereon and reasonable expenses Incurred in connection therewith);
provided further, however, that Refinancing Indebtedness shall not include (x)
Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of Holdings
or (y) Indebtedness of Holdings or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"Related Business" means any businesses of Holdings and the
Restricted Subsidiaries on the Closing Date and any business related, ancillary
or complementary thereto.
"Restricted Subsidiary" means any Subsidiary of Holdings other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by Holdings or a Restricted Subsidiary
whereby Holdings or a Restricted Subsidiary transfers such property to a Person
and Holdings or such Restricted Subsidiary leases it from such Person, other
than leases between Holdings and a Wholly Owned Subsidiary or between Wholly
Owned Subsidiaries.
18
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of Holdings secured by
a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Discount Noteholder" or "Holder" means the Person in whose
name a Senior Discount Note is registered on the Registrar's books.
"Senior Discount Notes" means the Senior Discount Notes issued under
this Indenture.
"Senior Discount Notes Issue Date" means the date on which the
Initial Senior Discount Notes are originally issued.
"Senior Discount Notes Trustee" means the party named as such in
this Indenture until a successor replaces it and, thereafter, means the
successor.
"Senior Indebtedness" of Holdings means the principal of, premium
(if any) and accrued and unpaid interest on (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization of
Holdings, regardless of whether or not a claim for post-filing interest is
allowed in such proceedings), and fees and all other amounts owing in respect
of, the Senior Discount Notes and all other Indebtedness of Holdings, whether
outstanding on the Closing Date or thereafter Incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is provided that such obligations are subordinated in right of payment to the
Senior Discount Notes; provided, however, that Senior Indebtedness shall not
include (i) any obligation of Holdings to any Subsidiary, (ii) any liability for
Federal, state, local or other taxes owed or owing by Holdings, (iii) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including Guarantees thereof or instruments evidencing such
liabilities), (iv) any Indebtedness or obligation of Holdings (and any accrued
and unpaid interest in respect thereof) that by its terms is subordinate or
junior in any respect to any other Indebtedness or obligation of Holdings,
including any Subordinated Obligations, (v) any payment obligations with respect
to any Capital Stock or (vi) any Indebtedness Incurred in violation of this
Indenture.
"Senior Subordinated Notes" means $300 million aggregate principal
amount of the 9 1/8% senior subordinated notes due 2008 issued by the Company on
the Closing Date under the indenture dated as of the Closing Date among the
Company, Holdings and Bank One, N.A., as trustee.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of Holdings within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC, but shall in no event include a
Receivables Entity.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Holdings or any Subsidiary
of Holdings which Holdings has determined in good faith to be customary in an
accounts receivable
19
transaction including, without limitation, those relating to the servicing of
the assets of a Receivables Entity.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Indebtedness of Holdings
(whether outstanding on the Closing Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Senior Discount Notes pursuant
to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within one year of the date of acquisition
thereof issued by a bank or trust company that is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $100,000,000 (or the foreign currency
equivalent thereof) and whose long-term debt is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money market fund sponsored by a registered broker-dealer or mutual fund
distributor, (iii) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (i) above entered
into with a financial institution meeting the qualifications described in clause
(ii) above, (iv) investments in commercial paper, maturing not more than one
year after the date of acquisition, issued by a corporation (other than an
Affiliate of Holdings) organized and in existence under the laws of the United
States of America or any foreign country recognized by the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc. ("S&P"), and (v) investments in securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by S&P or "A" by Xxxxx'x Investors Service, Inc.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-
77bbbb), as amended, as in effect on the date of this Indenture.
20
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled by, and published in, the most recent Federal Reserve Statistical
Release H.15 (519) which has become publicly available at least two Business
Days prior to the date fixed for redemption of the Senior Discount Notes
following a Change of Control (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the redemption date to June 1, 2003; provided, however,
that if the period from the redemption date to June 1, 2003 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the redemption date to June 1, 2003 is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Senior Discount Notes Trustee
assigned by the Senior Discount Notes Trustee to administer its corporate trust
matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of Holdings that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of Holdings (including any newly acquired or newly formed Subsidiary of
Holdings) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, Holdings or any other Subsidiary of Holdings that is
not a Subsidiary of the Subsidiary to be so designated; provided, however, that
either (A) the Subsidiary to be so designated has total Consolidated assets of
$1,000 or less or (B) if such Subsidiary has Consolidated assets greater than
$1,000, then such designation would be permitted under Section 4.04. The Board
of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (x) Holdings could Incur $1.00 of additional Indebtedness under
Section 4.03(a) and (y) no Default shall have occurred and be continuing. Any
such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted
Subsidiary by the Board of Directors shall be evidenced to the Senior Discount
Notes Trustee by promptly filing with the Senior Discount Notes Trustee a copy
of the resolution of the Board of Directors giving effect to such designation
and an Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith
21
and credit of the United States of America is pledged and which are not callable
or redeemable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of Holdings
all the Capital Stock of which (other than directors' qualifying shares) is
owned by Holdings or another Wholly Owned Subsidiary.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"............................................ 4.07
"Bankruptcy Law"................................................... 6.01
"covenant defeasance option"....................................... 8.01(b)
"Change of Control Offer".......................................... 4.08(b)
"Custodian"........................................................ 6.01
"Event of Default"................................................. 6.01
"legal defeasance option".......................................... 8.01(b)
"Legal Holiday".................................................... 10.08
"Offer"............................................................ 4.06(b)
"Offer Amount"..................................................... 4.06(c)(2)
"Offer Period"..................................................... 4.06(c)(2)
"Paying Agent"..................................................... 2.03
"protected purchaser".............................................. 2.07
"Purchase Date".................................................... 4.06(c)(1)
"Registrar"........................................................ 2.03
"Restricted Payment"............................................... 4.04(a)
"Successor Company"................................................ 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Senior Discount Notes.
"indenture security holder" means a Senior Discount Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Senior
Discount Notes Trustee.
22
"obligor" on the indenture securities means Holdings and any other
obligor on the indenture securities.
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 have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared
in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE 2
The Senior Discount Notes
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Senior Discount Notes, the Private Senior Discount Exchange Notes and the Senior
Discount Exchange Notes are set forth in the Appendix, which is hereby
incorporated in and expressly made a part of this Indenture. The (i) Initial
Senior Discount Notes and the Senior Discount Notes Trustee's certificate of
authentication and (ii) Private Senior Discount Exchange Notes and the Senior
Discount Notes Trustee's certificate of authentication shall each be
substantially in the form of Exhibit A hereto, which is hereby incorporated in
and expressly made a part of this Indenture. The Senior Discount Exchange Notes
and the Senior Discount Notes Trustee's certificate of authentication shall be
substantially in the form of Exhibit B hereto, which is hereby incorporated in
23
and expressly made a part of this Indenture. The Senior Discount Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which Holdings is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to Holdings). Each
Senior Discount Note shall be dated the date of its authentication. The Senior
Discount Notes shall be issued only in registered form without coupons and only
in denominations of $1,000 (in principal amount at maturity) and integral
multiples thereof.
SECTION 2.02. Execution and Authentication. One or more Officers
shall sign the Senior Discount Notes for Holdings by manual or facsimile
signature.
If an Officer whose signature is on a Senior Discount Note no longer
holds that office at the time the Senior Discount Notes Trustee authenticates
the Senior Discount Note, the Senior Discount Note shall be valid nevertheless.
A Senior Discount Note shall not be valid until an authorized
signatory of the Senior Discount Notes Trustee manually signs the certificate of
authentication on the Senior Discount Note. The signature shall be conclusive
evidence that the Senior Discount Note has been authenticated under this
Indenture.
The Senior Discount Notes Trustee shall authenticate and make
available for delivery Senior Discount Notes as set forth in the Appendix.
The Senior Discount Notes Trustee may appoint an authenticating
agent reasonably acceptable to Holdings to authenticate the Senior Discount
Notes. Any such appointment shall be evidenced by an instrument signed by a
Trust Officer, a copy of which shall be furnished to Holdings. Unless limited by
the terms of such appointment, an authenticating agent may authenticate Senior
Discount Notes whenever the Senior Discount Notes Trustee may do so. Each
reference in this Indenture to authentication by the Senior Discount Notes
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
SECTION 2.03. Registrar and Paying Agent. Holdings shall maintain an
office or agency where Senior Discount Notes may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Senior Discount Notes may be presented for payment (the "Paying Agent"). The
Registrar shall keep a register of the Senior Discount Notes and of their
transfer and exchange. Holdings may have one or more co-registrars and one or
more additional paying agents. The term "Paying Agent" includes any additional
paying agent, and the term "Registrar" includes any co-registrars. Holdings
initially appoints the Senior Discount Notes Trustee as (i) Registrar and Paying
Agent in connection with the Senior Discount Notes and (ii) the Senior Discount
Notes Custodian (as defined in the Appendix) with respect to the Global Senior
Discount Notes (as defined in the Appendix).
Holdings shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture, which shall incorporate
the terms of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such agent. Holdings shall notify the Senior Discount
Notes Trustee of the name and address of any such agent. If Holdings fails to
maintain a Registrar or Paying Agent, the Senior Discount Notes Trustee shall
act as such and shall be entitled to appropriate
24
compensation therefor pursuant to Section 7.07. Holdings or any of its
domestically organized Wholly Owned Subsidiaries may act as Paying Agent or
Registrar.
Holdings may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Senior Discount Notes
Trustee; provided, however, that no such removal shall become effective until
(1) acceptance of an appointment by a successor as evidenced by an appropriate
agreement entered into by Holdings and such successor Registrar or Paying Agent,
as the case may be, and delivered to the Senior Discount Notes Trustee or (2)
notification to the Senior Discount Notes Trustee that the Senior Discount Notes
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (1) above. The Registrar or Paying Agent may
resign at any time upon written notice; provided, however, that the Senior
Discount Notes Trustee may resign as Paying Agent or Registrar only if the
Senior Discount Notes Trustee also resigns as Senior Discount Notes Trustee in
accordance with Section 7.08.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Senior Discount Note, Holdings shall
deposit with the Paying Agent (or if Holdings or a Subsidiary is acting as
Paying Agent, segregate and hold in trust for the benefit of the Persons
entitled thereto) a sum sufficient to pay such principal and interest when so
becoming due. Holdings shall require each Paying Agent (other than the Senior
Discount Notes Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Senior Discount Noteholders or the Senior Discount
Notes Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Senior Discount Notes and shall notify the Senior Discount
Notes Trustee of any default by Holdings in making any such payment. If Holdings
or a Subsidiary of Holdings acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund. Holdings at any
time may require a Paying Agent to pay all money held by it to the Senior
Discount Notes Trustee and to account for any funds disbursed by the Paying
Agent. Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Senior Discount Notes Trustee.
SECTION 2.05. Senior Discount Noteholder Lists. The Senior Discount
Notes 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 Senior
Discount Noteholders. If the Senior Discount Notes Trustee is not the Registrar,
Holdings shall furnish, or cause the Registrar to furnish, to the Senior
Discount Notes Trustee, in writing at least five Business Days before each
interest payment date and at such other times as the Senior Discount Notes
Trustee may request in writing, a list in such form and as of such date as the
Senior Discount Notes Trustee may reasonably require of the names and addresses
of Senior Discount Noteholders.
SECTION 2.06. Transfer and Exchange. The Senior Discount Notes shall
be issued in registered form and shall be transferable only upon the surrender
of a Senior Discount Note for registration of transfer and in compliance with
the Appendix. When a Senior Discount Note is presented to the Registrar with a
request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(a)(l) of the Uniform Commercial
Code are met. When Senior Discount Notes are presented to the Registrar with a
request to exchange them for an equal principal amount at maturity of Senior
Discount Notes of other denominations, the
25
Registrar shall make the exchange as requested if the same requirements are met.
To permit registration of transfers and exchanges, Holdings shall execute and
the Senior Discount Notes Trustee shall authenticate Senior Discount Notes at
the Registrar's request. Holdings may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section. Holdings shall not be required to
make and the Registrar need not register transfers or exchanges of Senior
Discount Notes selected for redemption (except, in the case of Senior Discount
Notes to be redeemed in part, the portion thereof not to be redeemed) or any
Senior Discount Notes for a period of 15 days before a selection of Senior
Discount Notes to be redeemed.
Prior to the due presentation for registration of transfer of any
Senior Discount Note, Holdings, the Senior Discount Notes Trustee, the Paying
Agent, and the Registrar may deem and treat the Person in whose name a Senior
Discount Note is registered as the absolute owner of such Senior Discount Note
for the purpose of receiving payment of principal of and interest, if any, on
such Senior Discount Note and for all other purposes whatsoever, whether or not
such Senior Discount Note is overdue, and none of Holdings, the Senior Discount
Notes Trustee, the Paying Agent, or the Registrar shall be affected by notice to
the contrary.
Any Holder of a Global Senior Discount Note shall, by acceptance of
such Global Senior Discount Note, agree that transfers of beneficial interest in
such Global Senior Discount Note may be effected only through a book-entry
system maintained by (i) the Senior Discount Noteholder of such Global Senior
Discount Note (or its agent) or (ii) any Senior Discount Noteholder of a
beneficial interest in such Global Senior Discount Note, and that ownership of a
beneficial interest in such Global Senior Discount Note shall be required to be
reflected in a book entry.
All Senior Discount Notes issued upon any transfer or exchange
pursuant to the terms of this Indenture will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Senior Discount Notes
surrendered upon such transfer or exchange.
SECTION 2.07. Replacement Senior Discount Notes. If a mutilated
Senior Discount Note is surrendered to the Registrar or if the Senior Discount
Noteholder of a Senior Discount Note claims that the Senior Discount Note has
been lost, destroyed or wrongfully taken, Holdings shall issue and the Senior
Discount Notes Trustee shall authenticate a replacement Senior Discount Note if
the requirements of Section 8-405 of the Uniform Commercial Code are met, such
that the Senior Discount Noteholder (i) satisfies Holdings or the Senior
Discount Notes Trustee within a reasonable time after he has notice of such
loss, destruction or wrongful taking and the Registrar does not register a
transfer prior to receiving such notification, (ii) makes such request to
Holdings or the Senior Discount Notes Trustee prior to the Senior Discount Note
being acquired by a protected purchaser as defined in Section 8-303 of the
Uniform Commercial Code (a "protected purchaser") and (iii) satisfies any other
reasonable requirements of the Senior Discount Notes Trustee. If required by the
Senior Discount Notes Trustee or Holdings, such Senior Discount Noteholder shall
furnish an indemnity bond sufficient in the judgment of the Senior Discount
Notes Trustee to protect Holdings, the Senior Discount Notes Trustee, the Paying
Agent and the Registrar from any loss that any of them may suffer if a Senior
Discount Note is replaced. Holdings and the Senior Discount Notes Trustee may
charge the Senior Discount Noteholder for their expenses in replacing a
26
Senior Discount Note. In the event any such mutilated, lost, destroyed or
wrongfully taken Senior Discount Note has become or is about to become due and
payable, Holdings in its discretion may pay such Senior Discount Note instead of
issuing a new Senior Discount Note in replacement thereof.
Every replacement Senior Discount Note is an additional obligation
of Holdings.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken Senior
Discount Notes.
SECTION 2.08. Outstanding Senior Discount Notes. Senior Discount
Notes outstanding at any time are all Senior Discount Notes authenticated by the
Senior Discount Notes Trustee except for those canceled by it, those delivered
to it for cancelation and those described in this Section as not outstanding. A
Senior Discount Note does not cease to be outstanding because Holdings or an
Affiliate of Holdings holds the Senior Discount Note.
If a Senior Discount Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Senior Discount Notes Trustee and Holdings
receive proof satisfactory to them that the replaced Senior Discount Note is
held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the Senior
Discount Notes (or portions thereof) to be redeemed or maturing, as the case may
be, then on and after that date such Senior Discount Notes (or portions thereof)
cease to be outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Senior Discount Notes. In the event that
Definitive Senior Discount Notes (as defined in the Appendix) are to be issued
under the terms of this Indenture, until such Definitive Senior Discount Notes
are ready for delivery, Holdings may prepare and the Senior Discount Notes
Trustee shall authenticate temporary Senior Discount Notes. Temporary Senior
Discount Notes shall be substan tially in the form of Definitive Senior Discount
Notes but may have variations that Holdings considers appropriate for temporary
Senior Discount Notes. Without unreasonable delay, Holdings shall prepare and
the Senior Discount Notes Trustee shall authenticate Definitive Senior Discount
Notes and deliver them in exchange for temporary Senior Discount Notes upon
surrender of such temporary Senior Discount Notes at the office or agency of
Holdings, without charge to the Senior Discount Noteholder.
SECTION 2.10. Cancelation. Holdings at any time may deliver Senior
Discount Notes to the Senior Discount Notes Trustee for cancelation. The
Registrar and the Paying Agent shall forward to the Senior Discount Notes
Trustee any Senior Discount Notes surrendered to them for registration of
transfer, exchange or payment. The Senior Discount Notes Trustee and no one else
shall cancel all Senior Discount Notes surrendered for registration of transfer,
exchange, payment or cancelation and deliver canceled Senior Discount Notes to
Holdings pursuant to written direction by an
27
Officer. Holdings may not issue new Senior Discount Notes to replace Senior
Discount Notes it has redeemed, paid or delivered to the Senior Discount Notes
Trustee for cancelation. The Senior Discount Notes Trustee shall not
authenticate Senior Discount Notes in place of canceled Senior Discount Notes
other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If Holdings defaults in a payment
of interest on the Senior Discount Notes, Holdings shall pay the defaulted
interest (plus interest on such defaulted interest at the rate of 111/8% per
annum to the extent lawful) in any lawful manner. Holdings may pay the defaulted
interest to the Persons who are Senior Discount Noteholders on a subsequent
special record date. Holdings shall fix or cause to be fixed any such special
record date and payment date to the reasonable satisfaction of the Senior
Discount Notes Trustee and shall promptly mail or cause to be mailed to each
Senior Discount Noteholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. Holdings in issuing the Senior Discount
Notes may use "CUSIP" numbers (if then generally in use) and, if so, the Senior
Discount Notes Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Senior Discount Noteholders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Senior Discount Notes or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Senior Discount Notes, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Senior Discount Notes Trustee. If Holdings
elects to redeem Senior Discount Notes pursuant to paragraph 5 of the Senior
Discount Notes, it shall notify the Senior Discount Notes Trustee in writing of
the redemption date and the principal amount at maturity of Senior Discount
Notes to be redeemed.
Holdings shall give each notice to the Senior Discount Notes Trustee
provided for in this Section at least 60 days before the redemption date unless
the Senior Discount Notes Trustee consents to a shorter period. Such notice
shall be accompanied by an Officers' Certificate and an Opinion of Counsel from
Holdings to the effect that such redemption will comply with the conditions
herein. If fewer than all the Senior Discount Notes are to be redeemed, the
record date relating to such redemption shall be selected by Holdings and given
to the Senior Discount Notes Trustee, which record date shall be not fewer than
15 days after the date of notice to the Senior Discount Notes Trustee. Any such
notice may be canceled at any time prior to notice of such redemption being
mailed to any Senior Discount Noteholder and shall thereby be void and of no
effect.
SECTION 3.02. Selection of Senior Discount Notes To Be Redeemed. (a)
If the mandatory redemption of Senior Discount Notes pursuant to paragraph 9 of
the Senior Discount Notes would result in an outstanding Senior Discount Note in
a
28
denomination (i) of less than $1,000 principal amount at maturity or (ii) other
than an integral multiple of $1,000 principal amount at maturity, such Senior
Discount Note will be redeemed (A) in whole, in the case of clause (i), or (B)
by an additional amount so that such Senior Discount Note will be in a
denomination of an integral multiple of $1,000 principal amount at maturity, in
the case of clause (ii).
(b) If fewer than all the Senior Discount Notes are to be redeemed
pursuant to paragraph 5 of the Senior Discount Notes, the Senior Discount Notes
Trustee shall select the Senior Discount Notes to be redeemed pro rata or by
lot. The Senior Discount Notes Trustee shall make the selection from outstanding
Senior Discount Notes not previously called for redemption. The Senior Discount
Notes Trustee may select for redemption pursuant to paragraph 5 of the Senior
Discount Notes portions of the principal of Senior Discount Notes that have
denominations larger than $1,000 (at maturity) Senior Discount Notes and
portions of them the Senior Discount Notes Trustee selects shall be in amounts
of $1,000 (in principal amount at maturity) or a whole multiple of $1,000.
Provisions of this Indenture that apply to Senior Discount Notes called for
redemption also apply to portions of Senior Discount Notes called for
redemption. The Senior Discount Notes Trustee shall notify Holdings promptly of
the Senior Discount Notes or portions of Senior Discount Notes to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Senior Discount Notes, Holdings
shall mail a notice of redemption by first-class mail to each Senior Discount
Noteholder of Senior Discount Notes to be redeemed at such Senior Discount
Noteholder's registered address.
The notice shall identify the Senior Discount Notes to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price and the amount of accrued interest to the
redemption date;
(3) the name and address of the Paying Agent;
(4) that Senior Discount Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Senior Discount Notes are to
be redeemed, the certificate numbers and principal amounts at maturity of
the particular Senior Discount Notes to be redeemed;
(6) that, unless Holdings defaults in making such redemption payment
or the Paying Agent is prohibited from making such payment pursuant to the
terms of this Indenture, Accreted Value and interest on Senior Discount
Notes (or portion thereof) called for redemption ceases to accrete or
accrue on and after the redemption date;
(7) the paragraph of the Senior Discount Notes pursuant to which the
Senior Discount Notes called for redemption are being redeemed;
29
(8) the CUSIP number, if any, printed on the Senior Discount Notes
being redeemed;
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Senior Discount Notes; and
(10) if applicable, that a Change of Control has occurred and the
circumstances and relevant facts regarding such Change of Control.
At Holdings' request, the Senior Discount Notes Trustee shall give
the notice of redemption in Holdings' name and at Holdings' expense. In such
event, Holdings shall provide the Senior Discount Notes Trustee with the
information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Senior Discount Notes called for redemption become due and
payable on the redemption date and at the redemption price stated in the notice.
Upon surrender to the Paying Agent, such Senior Discount Notes shall be paid at
the redemption price stated in the notice, plus accrued interest, if any, to the
redemption date; provided, however, that if the redemption date is after a
regular record date and on or prior to the interest payment date, the accrued
interest shall be payable to the Senior Discount Noteholder of the redeemed
Senior Discount Notes registered on the relevant record date. Failure to give
notice or any defect in the notice to any Senior Discount Noteholder shall not
affect the validity of the notice to any other Senior Discount Noteholder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on
the redemption date, Holdings shall deposit with the Paying Agent (or, if
Holdings or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Senior Discount Notes to be redeemed on that date other than Senior Discount
Notes or portions of Senior Discount Notes called for redemption that have been
delivered by Holdings to the Senior Discount Notes Trustee for cancelation.
SECTION 3.06. Senior Discount Notes Redeemed in Part. Upon surrender
of a Senior Discount Note that is redeemed in part, Holdings shall execute and
the Senior Discount Notes Trustee shall authenticate for the Senior Discount
Noteholder (at Holdings' expense) a new Senior Discount Note equal in principal
amount at maturity to the unredeemed portion of the Senior Discount Note
surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Senior Discount Notes. Holdings shall
promptly pay the principal of and interest (and Accreted Value, if applicable)
on the Senior Discount Notes on the dates and in the manner provided in the
Senior Discount Notes and in this Indenture. Principal and interest (and
Accreted Value, if applicable) shall be considered paid on the date due if on
such date the Senior Discount Notes
30
Trustee or the Paying Agent holds in accordance with this Indenture money
sufficient to pay all principal and interest (and Accreted Value, if applicable)
then due and the Senior Discount Notes Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Senior Discount
Noteholders on that date pursuant to the terms of this Indenture.
Holdings shall pay interest on overdue principal at the rate
specified therefor in the Senior Discount Notes, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that Holdings may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, Holdings shall file with the SEC and provide the Senior Discount Notes
Trustee and any Senior Discount Noteholder or prospective Senior Discount
Noteholder (upon the request of such Senior Discount Noteholder or prospective
Senior Discount Noteholder) with such annual reports and such information,
documents and other reports as are specified in Sections 13 and 15(d) of the
Exchange Act and applicable to a U.S. corporation subject to such Sections, such
information, documents and other reports to be so filed and provided at the
times specified for the filing of such information, documents and reports under
such Sections.
SECTION 4.03. Limitation on Indebtedness. (a) Holdings shall not,
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that Holdings and the Company
may Incur Indebtedness if on the date of such Incurrence and after giving effect
thereto the Consolidated Coverage Ratio would be greater than 2.00:1.00.
(b) Notwithstanding Section 4.03(a), Holdings and its Restricted
Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred pursuant to the Credit Agreement or any
other Credit Facility in an aggregate principal amount at any time
outstanding not to exceed $400 million;
(ii) Indebtedness of Holdings owed to and held by any Wholly Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by
Holdings or any Wholly Owned Subsidiary; provided, however, that (A) any
subsequent issuance or transfer of any Capital Stock or any other event
that results in any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to Holdings or a Wholly Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the issuer
thereof and (B) if Holdings is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all obligations with respect to the Senior Discount Notes;
(iii) Indebtedness (A) represented by the Senior Discount Notes and
the Senior Subordinated Notes (not including any Additional Senior
Subordinated Notes), (B) outstanding on the Closing Date (other than the
Indebtedness described in clauses (i) and (ii) above), (C) consisting of
Refinancing Indebtedness Incurred in respect of any Indebtedness described
in this
31
clause (iii) (including Indebtedness Refinancing Refinancing Indebtedness)
or Section 4.03(a) and (D) consisting of Guarantees of (x) any
Indebtedness permitted under clauses (i) and (ii) of this paragraph (b)
and (y) the Senior Subordinated Notes;
(iv) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Restricted Subsidiary
was acquired by Holdings (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Subsidiary of or was otherwise acquired by Holdings); provided, however,
if the aggregate amount of all such Indebtedness of all such Restricted
Subsidiaries would exceed $20 million, that on the date that such
Restricted Subsidiary is acquired by Holdings, Holdings would have been
able to Incur $1.00 of additional Indebtedness pursuant to Section 4.03(a)
after giving effect to the Incurrence of such Indebtedness pursuant to
this clause (iv) and (B) Refinancing Indebtedness Incurred by a Restricted
Subsidiary in respect of Indebtedness Incurred by such Restricted
Subsidiary pursuant to this clause (iv);
(v) Indebtedness (A) in respect of performance bonds, bankers'
acceptances, letters of credit and surety or appeal bonds provided by
Holdings and the Restricted Subsidiaries in the ordinary course of their
business, and (B) under Hedging Obligations consisting of Interest Rate
Agreements directly related (as determined in good faith by Holdings) to
Indebtedness permitted to be Incurred by Holdings and its Restricted
Subsidiaries pursuant to this Indenture and Currency Agreements Incurred
in the ordinary course of business;
(vi) Indebtedness Incurred by Holdings or any Restricted Subsidiary
(including Capitalized Lease Obligations) financing the purchase, lease or
improvement of property (real or personal) or equipment (whether through
the direct purchase of assets or the Capital Stock of the Person owning
such assets), in each case Incurred no more than 180 days after such
purchase, lease or improvement of such property and any Refinancing
Indebtedness in respect of such Indebtedness; provided, however, that at
the time of the Incurrence of such Indebtedness and after giving effect
thereto, the aggregate principal amount of all Indebtedness incurred
pursuant to this clause (vi) and then outstanding shall not exceed the
greater of $25.0 million and 5% of Adjusted Consolidated Assets;
(vii) Indebtedness Incurred by Holdings or the Company in connection
with the acquisition of a Related Business and any Refinancing
Indebtedness in respect of such Indebtedness; provided, however, that the
aggregate amount of Indebtedness Incurred and outstanding pursuant to this
clause (vii) shall not exceed $50.0 million at any one time;
(viii) Attributable Debt Incurred by Holdings or the Company in
respect of Sale/Leaseback Transactions; provided, however, that the
aggregate amount of Attributable Debt Incurred and outstanding pursuant to
this clause (viii) shall not exceed $75.0 million at any one time;
(ix) Indebtedness arising from agreements of Holdings or a
Restricted Subsidiary providing for indemnification, purchase price
adjustment or similar
32
obligations, in each case, Incurred or assumed in connection with the
disposition of any business, assets or a Subsidiary, other than Guarantees
of Indebtedness Incurred by any Person acquiring all or any portion of
such business, assets or a Subsidiary for the purpose of financing such
acquisition; provided, however, that the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by Holdings and its Restricted Subsidiaries in
connection with such disposition;
(x) any Guarantee by Holdings of Indebtedness or other obligations
of any of its Restricted Subsidiaries so long as the Incurrence of such
Indebtedness Incurred by such Restricted Subsidiary is permitted under the
terms of this Indenture;
(xi) Indebtedness arising from Guarantees to suppliers, lessors,
licensees, contractors, franchisees or customers Incurred in the ordinary
course of business;
(xii) Indebtedness Incurred by a Receivables Entity in a Qualified
Receivables Transaction that is not recourse to Holdings or any other
Restricted Subsidiary of Holdings (except for Standard Securitization
Undertakings); and
(xiii) Indebtedness (other than Indebtedness permitted to be
Incurred pursuant to Section 4.03(a) or any other clause of this Section
4.03(b)) in an aggregate principal amount on the date of Incurrence that,
when added to all other Indebtedness Incurred pursuant to this clause
(xiii) and then outstanding, shall not exceed $50.0 million.
(c) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that Holdings or any Restricted Subsidiary may
Incur pursuant to this Section shall not be deemed to be exceeded solely as a
result of fluctuations in the exchange rates of currencies. For purposes of
determining the outstanding principal amount of any particular Indebtedness
Incurred pursuant to this Section 4.03, (i) Indebtedness permitted by this
Section 4.03 need not be permitted solely by reference to one provision
permitting such Indebtedness but may be permitted in part by one such provision
and in part by one or more other provisions of this Section permitting such
Indebtedness and (ii) in the event that Indebtedness meets the criteria of more
than one of the types of Indebtedness described in this Section, Holdings, in
its sole discretion, shall classify or reclassify such Indebtedness and only be
required to include the amount of such Indebtedness in one of such clauses.
SECTION 4.04. Limitation on Restricted Payments. (a) Holdings shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to
(i) declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving Holdings) or similar payment to the direct or indirect
holders of its Capital Stock except dividends or distributions payable solely in
its Capital Stock (other than Disqualified Stock) and except dividends or
distributions payable to Holdings or another Restricted Subsidiary (and, if such
Restricted Subsidiary has equity holders other than Holdings or other Restricted
Subsidiaries, to its other equity holders on a pro rata basis), (ii) purchase,
redeem, retire or otherwise acquire for value any Capital Stock of Holdings or
any Restricted Subsidiary held by Persons other than Holdings or another
Restricted Subsidiary, (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for
33
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment any Subordinated Obligations of Holdings (other than the purchase,
repurchase or other acquisition of Subordinated Obligations of Holdings
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition) or (iv) make any Investment (other than a Permitted Investment) in
any Person (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment being herein referred to
as a "Restricted Payment") if at the time Holdings or such Restricted Subsidiary
makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) Holdings could not Incur at least $1.00 of additional
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination
shall be conclusive and evidenced by a resolution of the Board of
Directors) declared or made subsequent to the Closing Date would exceed
the sum of:
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the beginning of the
fiscal quarter immediately following the fiscal quarter during which
the Closing Date occurs to the end of the most recent fiscal quarter
for which internal financial statements are available prior to the
date of such Restricted Payment (or, in case such Consolidated Net
Income will be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds or fair market value of
assets or property received by Holdings as a contribution to its
equity capital or from the issue or sale of its Capital Stock (in
each case other than Disqualified Stock and Excluded Contributions)
subsequent to the Closing Date (other than an issuance or sale to
(x) a Subsidiary of Holdings or (y) an employee stock ownership plan
or other trust established by Holdings or any of its Subsidiaries);
(C) the amount by which Indebtedness or Disqualified Stock of
Holdings or its Restricted Subsidiaries is reduced on Holdings'
balance sheet upon the conversion or exchange (other than by a
Subsidiary of Holdings) subsequent to the Closing Date of any
Indebtedness or Disqualified Stock of Holdings or its Restricted
Subsidiaries issued after the Closing Date for Capital Stock (other
than Disqualified Stock) of Holdings (less the amount of any cash or
the fair market value of other property distributed by Holdings or
any Restricted Subsidiary upon such conversion or exchange); and
(D) the amount equal to the net reduction in Investments in
any Person (other than a Restricted Subsidiary) resulting from (i)
payments of dividends, repayments of the principal of loans or
advances or other
34
transfers of assets to Holdings or any Restricted Subsidiary from
such Person, (ii) the sale or liquidation for cash of such
Investment or (iii) the redesignation of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as provided in the
definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made
by Holdings or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount was included in the calculation of the
amount of Restricted Payments.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any Restricted Payment made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of
Holdings (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of Holdings or an employee stock ownership
plan or other trust established by Holdings or any of its Subsidiaries);
provided, however, that (A) such Restricted Payment shall be excluded in
the calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale applied in the manner set forth in this clause (i)
shall be excluded from the calculation of amounts under Section
4.04(a)(3)(B);
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of
Holdings made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of Holdings that is permitted to be
Incurred pursuant to Section 4.03(b); provided, however, that such
purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments;
(iii) any purchase or redemption of Subordinated Obligations of
Holdings from Net Available Cash to the extent permitted by Section 4.06;
provided, however, that such purchase or redemption shall be excluded in
the calculation of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.04(a); provided, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(v) any Restricted Payment made for the repurchase, redemption or
other acquisition or retirement for value of any Capital Stock of Holdings
or any Restricted Subsidiaries held by any employee, former employee,
director or former director of Holdings or any of its Subsidiaries (and
any permitted transferees thereof) pursuant to any equity subscription
agreement, stock option agreement or plan or other similar agreement;
provided, however, that the aggregate amount of such Restricted Payments
shall not exceed $5.0 million in any calendar year and $20.0 million in
the aggregate; provided further, however, that such Restricted Payments
shall be included in the calculation of the amount of Restricted Payments;
35
(vi) following the initial Equity Offering by Holdings, any payment
of dividends or common stock buybacks by Holdings in an aggregate amount
in any year not to exceed 6% of the aggregate Net Cash Proceeds actually
received by Holdings in connection with such initial Equity Offering and
any subsequent Equity Offering by Holdings; provided, however, that no
Default or Event of Default shall have occurred and be continuing
immediately before or after any such payment; provided further, however,
that such dividends or common stock buybacks shall be included in the
calculation of the amount of Restricted Payments;
(vii) any repurchase of Capital Stock deemed to occur upon exercise
of stock options if such Capital Stock represents a portion of the
exercise price of such option; provided, however, that such repurchase
shall be included in the calculation of the amount of Restricted Payments;
(viii) the declaration and payment of dividends to holders of any
class or series of Disqualified Stock of Holdings issued in accordance
with Section 4.03(b) to the extent such dividends are included in the
definition of Consolidated Interest Expense; provided, however, that such
dividends shall be included in the calculation of the amount of Restricted
Payments;
(ix) Investments made with Excluded Contributions; provided,
however, that such Investments shall be excluded in the calculation of the
amount of Restricted Payments;
(x) any Restricted Payment made to fund the Recapitalization
(including fees and expenses); provided, however, that such Restricted
Payment shall be excluded in the calculation of the amount of Restricted
Payments; or
(xi) other Restricted Payments in an aggregate amount not to exceed
$10.0 million; provided, however, that such payments shall be included in
the calculation of the amount of Restricted Payments.
SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. Holdings shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to Holdings, (ii) make
any loans or advances to Holdings or (iii) transfer any of its property or
assets to Holdings, except:
(1) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Closing Date;
(2) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by Holdings (other than Indebtedness
Incurred as consideration in, in contemplation of, or to provide all or
any portion of the funds or credit support utilized to consummate the
transaction or series of related transactions pursuant to
36
which such Restricted Subsidiary became a Restricted Subsidiary or was
otherwise acquired by Holdings) and outstanding on such date;
(3) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an agreement
referred to in clause (1) or (2) of this Section 4.05 or this clause (3)
or contained in any amendment to an agreement referred to in clause (1) or
(2) of this Section 4.05 or this clause (3); provided, however, that the
encumbrances and restrictions contained in any such Refinancing agreement
or amendment are no less favorable to the Senior Discount Noteholders than
the encumbrances and restrictions contained in such predecessor
agreements;
(4) in the case of clause (iii), any encumbrance or restriction (A)
that restricts in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or
similar contract, (B) contained in security agreements or mortgages
securing Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restriction restricts the transfer of the property subject
to such security agreements or mortgages or (C) in connection with
purchase money obligations for property acquired in the ordinary course of
business;
(5) with respect to a Restricted Subsidiary, any restriction imposed
pursuant to an agreement entered into for the sale or disposition of all
or substantially all the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition;
(6) any encumbrance or restriction of a Receivables Entity effected
in connection with a Qualified Receivables Transaction; provided, however,
that such restrictions apply only to such Receivables Entity; and
(7) any encumbrance or restriction existing pursuant to other
Indebtedness permitted to be Incurred subsequent to the Senior Discount
Notes Issue Date pursuant to Section 4.03; provided, however, that any
such encumbrance or restrictions are ordinary and customary with respect
to the type of Indebtedness being Incurred (under the relevant
circumstances).
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
(a) Holdings shall not, and shall not permit any Restricted Subsidiary to, make
any Asset Disposition unless (i) Holdings or such Restricted Subsidiary receives
consideration (including by way of relief from, or by any other Person assuming
sole responsibility for, any liabilities, contingent or otherwise) at the time
of such Asset Disposition at least equal to the fair market value (as determined
in good faith by Holdings) of the shares and assets subject to such Asset
Disposition, (ii) at least 75% of the consideration thereof received by Holdings
or such Restricted Subsidiary is in the form of cash or cash equivalents
(provided that the amount of (w) any liabilities (as shown on Holdings' or such
Restricted Subsidiary's most recent balance sheet or in the notes thereto) of
Holdings or any Restricted Subsidiary (other than liabilities that are by their
terms subordinated to the Senior Discount Notes) that are assumed by the
transferee of any such assets without recourse to Holdings or any of the
Restricted Subsidiaries, (x) any notes or other obligations received by Holdings
or such Restricted Subsidiary from such transferee that are converted by
Holdings or such Restricted Subsidiary into cash (to the
37
extent of the cash received) within 180 days following the closing of such Asset
Disposition, (y) any Designated Noncash Consideration received by Holdings or
any of its Restricted Subsidiaries in such Asset Disposition having an aggregate
fair market value, taken together with all other Designated Noncash
Consideration received pursuant to this clause (y) that is at that time
outstanding, not to exceed 5% of Adjusted Consolidated Assets at the time of the
receipt of such Designated Noncash Consideration (with the fair market value of
each item of Designated Noncash Consideration being measured at the time
received and without giving effect to subsequent changes in value) and (z) any
assets received in exchange for assets related to a Related Business of
comparable market value in the good faith determination of the Board of
Directors shall be deemed to be cash for purposes of this provision) and (iii)
an amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by Holdings (or such Restricted Subsidiary, as the case may be) (A)
first, to the extent Holdings elects (or is required by the terms of any
Indebtedness), to prepay, repay, redeem or purchase Indebtedness (other than any
Disqualified Stock and other than any Preferred Stock) of a Wholly Owned
Subsidiary (in each case other than Indebtedness owed to Holdings or an
Affiliate of Holdings) within 365 days after the later of the date of such Asset
Disposition or the receipt of such Net Available Cash; (B) second, to the extent
of the balance of Net Available Cash after application in accordance with clause
(A), to the extent Holdings or such Restricted Subsidiary elects, to reinvest in
Additional Assets (including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by Holdings or another
Restricted Subsidiary) within 365 days from the later of such Asset Disposition
or the receipt of such Net Available Cash; and (C) third, to the extent of the
balance of such Net Available Cash after application in accordance with clauses
(A) and (B), to make an Offer (as defined below) to purchase Senior Discount
Notes pursuant to and subject to the conditions of Section 4.06(b); provided,
however, that if Holdings elects (or is required by the terms of any other
Senior Indebtedness of Holdings), such Offer may be made ratably to purchase the
Senior Discount Notes and other Senior Indebtedness of Holdings; provided,
however, that in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (A) or (C) above, Holdings or such Restricted
Subsidiary shall retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions of this Section 4.06, Holdings and the Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accordance with this Section
4.06(a) except to the extent that the aggregate Net Available Cash from all
Asset Dispositions that is not applied in accordance with this Section 4.06(a)
exceeds $20.0 million.
(b) In the event of an Asset Disposition that requires the purchase
of Senior Discount Notes (and other Senior Indebtedness of Holdings) pursuant to
Section 4.06(a)(iii)(C), Holdings shall be required to purchase Senior Discount
Notes (and other Senior Indebtedness of Holdings) tendered pursuant to an offer
by Holdings for the Senior Discount Notes (and other Senior Indebtedness of
Holdings) (the "Offer") at a purchase price of (a) 100% of the Accreted Value
thereof at the date of purchase plus liquidated damages thereon, if any, to the
date of purchased, if purchased on or prior to June 1, 2003, and (b) 100% of the
principal amount thereof plus accrued and unpaid interest and liquidated
damages, if any, to the date of purchase, if purchased after June 1, 2003, in
each case in accordance with the procedures (including prorating in the event of
oversubscription), set forth in Section 4.06(c). If the aggregate purchase price
of Senior Discount Notes (and other Senior Indebtedness of Holdings) tendered
pursuant to the
38
Offer is less than the Net Available Cash allotted to the purchase of the Senior
Discount Notes (and other Senior Indebtedness of Holdings), Holdings may apply
the remaining Net Available Cash for any purpose permitted by the terms of this
Indenture. Holdings shall not be required to make an Offer for Senior Discount
Notes (and other Senior Indebtedness of Holdings) pursuant to this Section 4.06
if the Net Available Cash available therefor (after application of the proceeds
as provided in clauses (A) and (B) of Section 4.06(a)(iii)) is less than $10.0
million for any particular Asset Disposition (which lesser amount shall be
carried forward for purposes of determining whether an Offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 30 days after Holdings
becomes obligated to make an Offer, Holdings shall be obligated to deliver to
the Senior Discount Notes Trustee and send, by first-class mail to each Senior
Discount Noteholder, a written notice stating that the Senior Discount
Noteholder may elect to have his Senior Discount Notes purchased by Holdings
either in whole or in part (subject to prorating as hereinafter described in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount at maturity, at the applicable purchase price. The notice shall specify a
purchase date not less than 30 days nor more than 60 days after the date of such
notice (the "Purchase Date") and shall contain or incorporate by reference such
information concerning the business of Holdings which Holdings in good faith
believes will enable such Senior Discount Noteholders to make an informed
decision and all instructions and materials necessary to tender Senior Discount
Notes pursuant to the Offer, together with the address referred to in clause
(3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Senior Discount Notes Trustee as provided above, Holdings shall
deliver to the Senior Discount Notes Trustee an Officers' Certificate as to (i)
the amount of the Offer (the "Offer Amount"), (ii) the allocation of the Net
Available Cash from the Asset Dispositions pursuant to which such Offer is being
made and (iii) the compliance of such allocation with the provisions of Section
4.06(a). On such date, Holdings shall also irrevocably deposit with the Senior
Discount Notes Trustee or with a paying agent (or, if Holdings is acting as its
own paying agent, segregate and hold in trust) an amount equal to the Offer
Amount to be invested in Temporary Cash Investments and to be held for payment
in accordance with the provisions of this Section. Upon the expiration of the
period for which the Offer remains open (the "Offer Period"), Holdings shall
deliver to the Senior Discount Notes Trustee for cancelation the Senior Discount
Notes or portions thereof that have been properly tendered to and are to be
accepted by Holdings. The Senior Discount Notes Trustee (or the Paying Agent, if
not the Senior Discount Notes Trustee) shall, on the date of purchase, mail or
deliver payment to each tendering Senior Discount Noteholder in the amount of
the purchase price. In the event that the aggregate purchase price of the Senior
Discount Notes (and other Senior Indebtedness of Holdings) delivered by Holdings
to the Senior Discount Notes Trustee is less than the Offer Amount applicable to
the Senior Discount Notes (and other Senior Indebtedness of Holdings), the
Senior Discount Notes Trustee shall deliver the excess to Holdings immediately
after the expiration of the Offer Period for application in accordance with this
Section 4.06.
(3) Senior Discount Noteholders electing to have a Senior Discount
Note purchased shall be required to surrender the Senior Discount Note, with an
appropriate form duly completed, to Holdings at the address specified in the
notice at least three Business Days prior to the Purchase Date. Senior Discount
Noteholders shall be entitled
39
to withdraw their election if the Senior Discount Notes Trustee or Holdings
receives not later than one Business Day prior to the Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the Senior
Discount Noteholder, the principal amount at maturity of the Senior Discount
Note which was delivered by the Senior Discount Noteholder for purchase and a
statement that such Senior Discount Noteholder is withdrawing his election to
have such Senior Discount Note purchased. If at the expiration of the Offer
Period the aggregate principal amount (or Accreted Value, if applicable) of
Senior Discount Notes and any other Senior Indebtedness of Holdings included in
the Offer surrendered by holders thereof exceeds the Offer Amount, Holdings
shall select the Senior Discount Notes and other Senior Indebtedness of Holdings
to be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by Holdings so that only Senior Discount Notes and other Senior
Indebtedness of Holdings in denominations of $1,000 (principal amount at
maturity), or integral multiples thereof, shall be purchased). Senior Discount
Noteholders whose Senior Discount Notes are purchased only in part will be
issued new Senior Discount Notes equal in principal amount at maturity to the
unpurchased portion of the Senior Discount Notes surrendered.
(4) At the time Holdings delivers Senior Discount Notes to the
Senior Discount Notes Trustee which are to be accepted for purchase, Holdings
shall also deliver an Officers' Certificate stating that such Senior Discount
Notes are to be accepted by Holdings pursuant to and in accordance with the
terms of this Section. A Senior Discount Note shall be deemed to have been
accepted for purchase at the time the Senior Discount Notes Trustee, directly or
through an agent, mails or delivers payment therefor to the surrendering Senior
Discount Noteholder.
(d) Holdings shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Senior Discount Notes
pursuant to this Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, Holdings shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue thereof.
SECTION 4.07. Limitation on Transactions with Affiliates.
(a) Holdings shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or Guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction") involving
aggregate consideration in excess of $5.0 million, unless (i) such Affiliate
Transaction is on terms that are not materially less favorable to Holdings or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by Holdings or such Restricted Subsidiary with an
unrelated Person and (ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$10.0 million, Holdings delivers to the Senior Discount Notes Trustee a
resolution adopted by the majority of the Board of Directors, approving such
Affiliate Transaction and set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (i) above.
(b) The provisions of Section 4.07(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 4.04, (ii) any
issuance of securities, or
40
other payments, Guarantees, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors, (iii) the grant of stock
options or similar rights to employees and directors of Holdings pursuant to
plans approved by the Board of Directors, (iv) loans or advances to employees in
the ordinary course of business in accordance with past practices of Holdings,
but in any event not to exceed $5.0 million in the aggregate outstanding at any
one time, (v) the payment of reasonable fees to directors of Holdings and its
Restricted Subsidiaries who are not employees of Holdings or its Subsidiaries,
(vi) any transaction between Holdings and a Restricted Subsidiary or between
Restricted Subsidiaries, (vii) any transaction effected as part of a Qualified
Receivables Transaction, (viii) indemnification agreements with, and the payment
of fees and indemnities to, directors, officers and employees of Holdings and
its Restricted Subsidiaries, in each case, in the ordinary course of business,
(ix) any employment, compensation, noncompetition or confidentiality agreement
entered into by Holdings and its Restricted Subsidiaries with its employees in
the ordinary course of business, (x) the payment by Holdings of fees, expenses
and other amounts to Cypress and its Affiliates in connection with the
Recapitalization, (xi) payments by Holdings or any of its Restricted
Subsidiaries to Cypress and its Affiliates made pursuant to any financial
advisory, financing, underwriting or placement agreement, or in respect of other
investment banking activities, in each case, as determined by the Board of
Directors in good faith, (xii) any issuance of Capital Stock of Holdings (other
than Disqualified Stock), (xiii) any agreement as in effect as of the date of
this Indenture or any amendment or replacement hereto so long as any such
amendment or replacement agreement is not more disadvantageous to the Senior
Discount Noteholders of the Senior Discount Notes in any material respect than
the original agreement as in effect on the Closing Date and (xiv) transactions
in which Holdings or any of its Restricted Subsidiaries, as the case may be,
delivers to the Senior Discount Notes Trustee a letter from an Independent
Financial Advisor stating that such transaction is fair to Holdings or such
Restricted Subsidiary from a financial point of view or meets the requirements
of Section 4.07(a).
SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change
of Control, unless all Senior Discount Notes have been called for redemption
pursuant to paragraph 5 of the Senior Discount Notes, each Senior Discount
Noteholder shall have the right to require Holdings to repurchase all or any
part of such Senior Discount Noteholder's Senior Discount Notes at a purchase
price in cash equal to (a) 101% of the Accreted Value thereof at the date of
repurchase plus liquidated damages thereon, if any, to the date of repurchase,
if repurchased on or prior to June 1, 2003, and (b) 101% of the principal amount
thereof plus accrued and unpaid interest and liquidated damages, if any, to the
date of repurchase (subject to the right of Senior Discount Noteholders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if repurchased after June 1, 2003, in each case in
accordance with Section 4.08(b). Prior to the mailing of the notice referred to
below, but in any event within 30 days following the date on which Holdings
becomes aware that a Change of Control has occurred, if the purchase of the
Senior Discount Notes would violate or constitute a default under any other
Indebtedness of Holdings or its Subsidiaries, or not be permitted by (including
because Subsidiaries of Holdings could not provide adequate funds therefor),
then Holdings shall and shall cause its Subsidiaries, to the extent needed to
permit such purchase of Senior Discount Notes, either (i) to repay all such
Indebtedness and terminate all commitments outstanding thereunder or (ii)
request the holders of such Indebtedness to give the requisite consents to
permit the purchase of the Senior Discount Notes as provided below. Until such
time as Holdings is able to repay
41
all such Indebtedness and terminate all commitments outstanding thereunder or
such time as such requisite consents are obtained, Holdings shall not be
required to make the Change of Control Offer or purchase the Senior Discount
Notes pursuant to the provisions described below.
(b) Within 30 days following any Change of Control, unless all
Senior Discount Notes have been called for redemption pursuant to paragraph 5 of
the Senior Discount Notes, Holdings shall mail a notice to each Senior Discount
Noteholder with a copy to the Senior Discount Notes Trustee (the "Change of
Control Offer") stating:
(1) that a Change of Control has occurred and that such Senior
Discount Noteholder has the right to require Holdings to purchase such
Senior Discount Noteholder's Senior Discount Notes at a purchase price in
cash equal to (a) 101% of the Accreted Value thereof at the date of
repurchase plus liquidated damages thereon if any, to the date of
repurchase, if repurchased on or prior to June 1, 2003, and (b) 101% of
the principal amount thereof, plus accrued and unpaid interest and
liquidated damages, if any, to the date of repurchase (subject to the
right of Senior Discount Noteholders of record on the relevant record date
to receive interest on the relevant interest payment date), if repurchased
after June 1, 2003;
(2) the circumstances and relevant facts regarding such Change of
Control;
(3) the repurchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions determined by Holdings, consistent with this
Section, that a Senior Discount Noteholder must follow in order to have
its Senior Discount Notes repurchased.
(c) Senior Discount Noteholders electing to have a Senior Discount
Note repurchased shall be required to surrender the Senior Discount Note, with
an appropriate form duly completed, to Holdings at the address specified in the
notice at least three Business Days prior to the repurchase date. Senior
Discount Noteholders shall be entitled to withdraw their election if the Senior
Discount Notes Trustee or Holdings receives not later than one Business Day
prior to the repurchase date a telegram, telex, facsimile transmission or letter
setting forth the name of the Senior Discount Noteholder, the principal amount
at maturity of the Senior Discount Note which was delivered for repurchase by
the Senior Discount Noteholder and a statement that such Senior Discount
Noteholder is withdrawing his election to have such Senior Discount Note
repurchased.
(d) On the repurchase date, all Senior Discount Notes repurchased by
Holdings under this Section shall be delivered to the Senior Discount Notes
Trustee for cancelation, and Holdings shall pay the purchase price plus accrued
and unpaid interest and liquidated damages, if any, to the Senior Discount
Noteholders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section,
Holdings will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in Section
4.08(b) applicable to a Change
42
of Control Offer made by Holdings and purchases all Senior Discount Notes
validly tendered and not withdrawn under such Change of Control Offer.
(f) Holdings shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Senior Discount Notes
pursuant to this Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, Holdings shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue thereof.
SECTION 4.09. Compliance Certificate. Holdings shall deliver to the
Senior Discount Notes Trustee within 120 days after the end of each fiscal year
of Holdings an Officers' Certificate stating that a review of Holdings'
activities during the preceding fiscal year has been made under the supervision
of the signing Officers with a view to determining whether Holdings has kept,
observed, performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate, whether to
the best of such Officer's knowledge Holdings during such preceding fiscal year
has kept, observed, performed and fulfilled each and every such covenant
contained in this Indenture and that in the course of the performance by the
signers of their duties as Officers of Holdings they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do know of any Default, the certificate
shall describe the Default, its status and what action Holdings is taking or
proposes to take with respect thereto. Holdings also shall comply with Section
314(a)(4) of the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
Senior Discount Notes Trustee, Holdings shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Indenture.
SECTION 4.11. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. Holdings shall not sell or otherwise dispose of any
shares of Capital Stock of a Restricted Subsidiary, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell or otherwise
dispose of any shares of its Capital Stock except: (i) to Holdings or a Wholly
Owned Subsidiary or to any director of a Restricted Subsidiary to the extent
required as director's qualifying shares; (ii) if, immediately after giving
effect to such issuance, sale or other disposition, neither Holdings nor any of
its Subsidiaries own any Capital Stock of such Restricted Subsidiary or (iii)
if, immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect thereto would have been permitted
to be made under Section 4.04 if made on the date of such issuance, sale or
other disposition. The provisions of this Section 4.11 shall not prohibit any
transaction effected as part of a Qualified Receivables Transaction. The
proceeds of any sale of such Capital Stock permitted hereby shall be treated as
Net Available Cash from an Asset Disposition and shall be applied in accordance
with Section 4.06.
SECTION 4.12. Limitation on Liens. Holdings shall not directly or
indirectly Incur or permit to exist any Lien that secures Indebtedness of
Holdings of any
43
nature whatsoever on any of its property or assets (including Capital Stock of a
Restricted Subsidiary), whether owned at the Closing Date or thereafter
acquired, other than Permitted Liens, without effectively providing that the
Senior Discount Notes shall be secured equally and ratably with (or on a senior
basis to in the case of Subordinated Obligations of Holdings) the obligations so
secured for so long as such obligations are so secured.
ARTICLE 5
Successor Company
SECTION 5.01. When Holdings May Merge or Transfer Assets.
Holdings shall not consolidate with or merge with or into, or convey, transfer
or lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the Successor Company (if not Holdings) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Senior Discount Notes Trustee, in form satisfactory to the Senior Discount
Notes Trustee, all the obliga tions of Holdings under the Senior Discount
Notes and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction as
having been Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transac tion), no Default shall have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, (A) the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a) or (B) the Consolidated Coverage
Ratio for the Successor Company and its Restricted Subsidiaries would be
greater than such ratio for Holdings and its Restricted Subsidiaries
immediately prior to such transaction;
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount which is
not less than the Consolidated Net Worth of Holdings immediately prior to
such transaction; and
(v) Holdings shall have delivered to the Senior Discount Notes
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and such supplemental
indenture (if any) comply with this Indenture.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, Holdings under this Indenture, but the
predecessor Holdings in the case of a conveyance, transfer or lease of all or
substantially all its assets shall not be released from the obligation to pay
the principal of and interest on the Senior Discount Notes.
44
Notwithstanding clause (iii) above, a Wholly Owned Subsidiary may be
consolidated with or merged into Holdings and Holdings may consolidate with or
merge with or into another Person, if such Person is a single purpose
corporation that has not conducted any business or Incurred any Indebtedness or
other liabilities and such transaction is being consummated solely to change the
state of incorporation of Holdings.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) Holdings defaults in any payment of interest on any Senior
Discount Note when the same becomes due and payable, and such default
continues for a period of 30 days;
(2) Holdings (i) defaults in the payment of Accreted Value or the
principal of any Senior Discount Note when the same becomes due and
payable at its Stated Maturity, upon redemption, upon declaration or
otherwise, or (ii) fails to redeem or purchase Senior Discount Notes when
required pursuant to this Indenture or the Senior Discount Notes;
(3) Holdings fails to comply with Section 5.01;
(4) Holdings fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.11 or 4.12 (other than a failure to purchase Senior
Discount Notes when required under Section 4.06 or 4.08) and such failure
continues for 30 days after the notice specified below;
(5) Holdings fails to comply with any of its agreements in the
Senior Discount Notes or this Indenture (other than those referred to in
(1), (2), (3) or (4) above) and such failure continues for 60 days after
the notice specified below;
(6) Indebtedness of Holdings or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or the
acceleration of any such Indebtedness by the holders thereof because of a
default and the total amount of such Indebtedness unpaid or accelerated
exceeds $25 million or its foreign currency equivalent at the time and
such failure continues for 10 days after the notice specified below;
(7) Holdings or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
45
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against Holdings or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of Holdings or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of Holdings or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days; or
(9) any judgment or decree for the payment of money in excess of $25
million or its foreign currency equivalent at the time is entered against
Holdings or any Significant Subsidiary and is not discharged, waived or
stayed and either (A) an enforcement proceeding has been commenced by any
creditor upon such judgment or decree or (B) there is a period of 60 days
following the entry of such judgment or decree during which such judgment
or decree is not discharged, waived or the execution thereof stayed and
such judgment or decree is not discharged, waived or the execution thereof
stayed within 10 days after the notice specified below.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4), (5), (6) or (9) above is not an Event of
Default until the Senior Discount Notes Trustee or the Senior Discount
Noteholders of at least 25% in principal amount at maturity of the outstanding
Senior Discount Notes notify Holdings of the Default and Holdings does not cure
such Default within the time specified after receipt of such notice. Such notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".
Holdings shall deliver to the Senior Discount Notes Trustee, within
30 days after the occurrence thereof, written notice in the form of an Officers'
Certificate of any event which with the giving of notice or the lapse of time
would become an Event of Default under clause (4), (5) or (9), its status and
what action Holdings is taking or proposes to take with respect thereto.
46
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to Holdings)
occurs and is continuing, the Senior Discount Notes Trustee by notice to
Holdings, or the Senior Discount Noteholders of at least 25% in principal amount
at maturity of the outstanding Senior Discount Notes by notice to Holdings, may
declare (a) the Accreted Value of all the Senior Discount Notes, if on or prior
to June 1, 2003, or (b) the principal of and accrued but unpaid interest on all
the Senior Discount Notes, if after June 1, 2003, to be due and payable. Upon
such a declaration, such Accreted Value or principal and interest shall be due
and payable immediately. If an Event of Default specified in Section 6.01(7) or
(8) with respect to Holdings occurs, (a) the Accreted Value of all the Senior
Discount Notes, if on or prior to June 1, 2003, or (b) the principal of and
interest on all the Senior Discount Notes, if after June 1, 2003, shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Senior Discount Notes Trustee or any Senior Discount
Noteholders. The Senior Discount Noteholders of a majority in principal amount
at maturity of the Senior Discount Notes by notice to the Senior Discount Notes
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpay ment of Accreted Value or principal or
interest that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Senior Discount Notes Trustee may pursue any available remedy to
collect the payment of Accreted Value or principal of or interest on the Senior
Discount Notes or to enforce the performance of any provision of the Senior
Discount Notes or this Indenture.
The Senior Discount Notes Trustee may maintain a proceeding even if
it does not possess any of the Senior Discount Notes or does not produce any of
them in the proceeding. A delay or omission by the Senior Discount Notes Trustee
or any Senior Discount Noteholder 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.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount at maturity of the Senior Discount Notes by notice to the
Senior Discount Notes Trustee may waive an existing Default and its consequences
except (i) a Default in the payment of Accreted Value or the principal of or
interest on a Senior Discount Note, (ii) a Default arising from the failure to
redeem or purchase any Senior Discount Note when required pursuant to the terms
of this Indenture or (iii) a Default in respect of a provision that under
Section 9.02 cannot be amended without the consent of each Senior Discount
Noteholder affected. When a Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or impair any consequent
right.
SECTION 6.05. Control by Majority. The Senior Discount Noteholders
of a majority in principal amount at maturity of the Senior Discount Notes may
direct the time, method and place of conducting any proceeding for any remedy
available to the Senior Discount Notes Trustee or of exercising any trust or
power conferred on the
47
Senior Discount Notes Trustee. However, the Senior Discount Notes Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Senior Discount Notes Trustee determines is
unduly prejudicial to the rights of other Senior Discount Noteholders or would
involve the Senior Discount Notes Trustee in personal liability; provided,
however, that the Senior Discount Notes Trustee may take any other action deemed
proper by the Senior Discount Notes Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Senior Discount Notes
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of Accreted Value, principal, premium (if any) or interest when
due, no Senior Discount Noteholder may pursue any remedy with respect to this
Indenture or the Senior Discount Notes unless:
(1) the Senior Discount Noteholder gives to the Senior Discount
Notes Trustee written notice stating that an Event of Default is
continuing;
(2) the Senior Discount Noteholders of at least 25% in principal
amount at maturity of the Senior Discount Notes make a written request to
the Senior Discount Notes Trustee to pursue the remedy;
(3) such Senior Discount Noteholder or Senior Discount Noteholders
offer to the Senior Discount Notes Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Senior Discount Notes Trustee does not comply with the
request within 60 days after receipt of the request and the offer of
security or indemnity; and
(5) the Senior Discount Noteholders of a majority in principal
amount at maturity of the Senior Discount Notes do not give the Senior
Discount Notes Trustee a direction inconsistent with the request during
such 60-day period.
A Senior Discount Noteholder may not use this Indenture to prejudice
the rights of another Senior Discount Noteholder or to obtain a preference or
priority over another Senior Discount Noteholder.
SECTION 6.07. Rights of Senior Discount Noteholders to Receive
Payment. Notwithstanding any other provision of this Indenture, the right of any
Senior Discount Noteholder to receive payment of Accreted Value, principal of
and liquidated damages and interest on the Senior Discount Notes held by such
Senior Discount Noteholder, on or after the respective due dates expressed in
the Senior Discount Notes, 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 Senior Discount Noteholder.
SECTION 6.08. Collection Suit by Senior Discount Notes Trustee. If
an Event of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Senior Discount Notes Trustee may recover judgment in its own
name and as trustee of an express trust against Holdings for the whole amount
then due and owing (together with
48
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. Senior Discount Notes Trustee May File Proofs of
Claim. The Senior Discount Notes 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 Senior Discount Notes Trustee and the Senior Discount Noteholders allowed
in any judicial proceedings relative to Holdings, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Senior Discount Noteholders in any election of a trustee in bankruptcy or
other Person performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Senior Discount Noteholder to
make payments to the Senior Discount Notes Trustee and, in the event that the
Senior Discount Notes Trustee shall consent to the making of such payments
directly to the Senior Discount Noteholders, to pay to the Senior Discount Notes
Trustee any amount due it for the reasonable compensation, expenses, disburse
ments and advances of the Senior Discount Notes Trustee, its agents and its
counsel, and any other amounts due the Senior Discount Notes Trustee under
Section 7.07.
SECTION 6.10. Priorities. If the Senior Discount Notes Trustee
collects any money or property pursuant to this Article 6, it shall pay out the
money or property in the following order:
FIRST: to the Senior Discount Notes Trustee for amounts due under
Section 7.07;
SECOND: to Senior Discount Noteholders for amounts due and unpaid on
the Senior Discount Notes for Accreted Value, principal and interest,
ratably, and any liquidated damages without preference or priority of any
kind, according to the amounts due and payable on the Senior Discount
Notes for Accreted Value, principal, any liquidated damages and interest,
respectively; and
THIRD: to Holdings.
The Senior Discount Notes Trustee may fix a record date and payment
date for any payment to Senior Discount Noteholders pursuant to this Section. At
least 15 days before such record date, the Senior Discount Notes Trustee shall
mail to each Senior Discount Noteholder and Holdings a notice that states the
record date, the payment date and amount to be paid.
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 Senior
Discount Notes Trustee for any action taken or omitted by it as Senior Discount
Notes 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 does not apply to a suit by the Senior Discount Notes Trustee, a
suit by a Senior Discount Noteholder pursuant to Section 6.07 or a suit by
Senior Discount Noteholders of more than 10% in principal amount at maturity of
the Senior Discount Notes.
49
SECTION 6.12. Waiver of Stay or Extension Laws. Holdings (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and Holdings (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Senior Discount Notes Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
Senior Discount Notes Trustee
SECTION 7.01. Duties of Senior Discount Notes Trustee. (a) If an
Event of Default has occurred and is continuing, the Senior Discount Notes
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Senior Discount Notes Trustee need only perform such duties
as are specifically set forth in this Indenture and no implied covenants
or obligations shall be read into this Indenture against the Senior
Discount Notes Trustee; and
(2) in the absence of bad faith on its part, the Senior Discount
Notes 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 Senior Discount Notes Trustee and conforming to
the require ments of this Indenture. However, the Senior Discount Notes
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Senior Discount Notes Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own wilful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Senior Discount Notes Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is
proved that the Senior Discount Notes Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Senior Discount Notes 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.
50
(d) Every provision of this Indenture that in any way relates to the
Senior Discount Notes Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(e) The Senior Discount Notes Trustee shall not be liable for
interest on any money received by it except as the Senior Discount Notes Trustee
may agree in writing with Holdings.
(f) Money held in trust by the Senior Discount Notes Trustee need
not be segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Senior Discount
Notes Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or powers, if it shall have reasonable grounds to believe
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Senior Discount Notes
Trustee shall be subject to the provisions of this Section and to the provisions
of the TIA.
SECTION 7.02. Rights of Senior Discount Notes Trustee. (a) The
Senior Discount Notes Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Senior
Discount Notes Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Senior Discount Notes Trustee acts or refrains from
acting, it may require an Officers' Certificate or an Opinion of Counsel. The
Senior Discount Notes Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Officers' Certificate or Opinion
of Counsel.
(c) The Senior Discount Notes Trustee may act through agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Senior Discount Notes Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(e) The Senior Discount Notes Trustee may consult with counsel, and
the advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Senior Discount Notes shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Senior Discount Notes Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other paper or document, but the Senior
Discount Notes Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
51
(g) The Senior Discount Notes 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 Senior Discount Noteholders pursuant
to the provisions of this Indenture, unless such Senior Discount Noteholders
shall have offered to the Senior Discount Notes Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
SECTION 7.03. Individual Rights of Senior Discount Notes Trustee.
The Senior Discount Notes Trustee in its individual or any other capacity may
become the owner or pledgee of Senior Discount Notes and may otherwise deal with
Holdings or its Affiliates with the same rights it would have if it were not
Senior Discount Notes Trustee. Any Paying Agent, Registrar or co-paying agent
may do the same with like rights. However, the Senior Discount Notes Trustee
must comply with Sections 7.10 and 7.11.
SECTION 7.04. Senior Discount Notes Trustee's Disclaimer. The Senior
Discount Notes Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Senior Discount Notes,
it shall not be accountable for Holdings' use of the proceeds from the Senior
Discount Notes, and it shall not be responsible for any statement of Holdings in
this Indenture or in any document issued in connection with the sale of the
Senior Discount Notes or in the Senior Discount Notes other than the Senior
Discount Notes Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. (a) The Senior Discount Notes
Trustee shall not be deemed to have notice of any Default, other than a payment
default, unless a Trust Officer shall have been advised in writing that a
Default has occurred. No duty imposed upon the Senior Discount Notes Trustee in
this Indenture shall be applicable with respect to any Default of which the
Senior Discount Trustee is not deemed to have notice.
(b) If a Default occurs and is continuing and if it is known to the
Senior Discount Notes Trustee, the Senior Discount Notes Trustee shall mail to
each Senior Discount Noteholder notice of the Default within the earlier of 90
days after it occurs or 30 days after it is known to a Trust Officer or written
notice of it is received by the Senior Discount Notes Trustee. Except in the
case of a Default in payment of Accreted Value, principal, premium (if any) or
interest on any Senior Discount Note (including payments pursuant to the
redemption provisions of such Senior Discount Note), the Senior Discount Notes
Trustee may withhold notice if and so long as a committee of its Trust Officers
in good faith determines that withholding notice is in the interests of the
Senior Discount Noteholders.
SECTION 7.06. Reports by Senior Discount Notes Trustee to Senior
Discount Noteholders. As promptly as practicable after each June 30 beginning
with the June 30 following the first anniversary of the date of this Indenture,
and in any event prior to August 31 in each subsequent year, the Senior Discount
Notes Trustee shall, to the extent that any of the events described in TIA ss.
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Senior Discount Noteholder a brief report dated as of June 30 that complies
with Section 313(a) of the TIA. The Senior Discount Notes Trustee shall also
comply with Section 313(b) of the TIA.
52
A copy of each report at the time of its mailing to Senior Discount
Noteholders shall be filed with the SEC and each stock exchange (if any) on
which the Senior Discount Notes are listed. Holdings agrees to notify promptly
the Senior Discount Notes Trustee whenever the Senior Discount Notes become
listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. Holdings shall pay to the
Senior Discount Notes Trustee from time to time such compensation as Holdings
and the Senior Discount Notes Trustee shall from time to time agree in writing.
The Senior Discount Notes Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. Holdings shall reimburse the
Senior Discount Notes Trustee upon request for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Senior Discount
Notes Trustee's agents, counsel, accountants and experts. Holdings shall
indemnify the Senior Discount Notes Trustee, and hold it harmless, against any
and all loss, liability or expense (including reasonable attorneys' fees)
incurred by or in connection with the offer and sale of the Senior Discount
Notes or the administration of this trust and the performance of its duties
hereunder. The Senior Discount Notes Trustee shall notify Holdings of any claim
for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided, however, that any failure so to notify Holdings shall not
relieve Holdings of its indemnity obligations hereunder. Holdings shall defend
the claim and the indemnified party shall provide reasonable cooperation at
Holdings' expense in the defense. Such indemnified parties may have separate
counsel and Holdings shall pay the fees and expenses of such counsel; provided,
however, that Holdings shall not be required to pay such fees and expenses if it
assumes such indemnified parties' defense and, in such indemnified parties'
reasonable judgment, there is no conflict of interest between Holdings and such
parties in connection with such defense. Holdings need not reimburse any expense
or indemnify against any loss, liability or expense incurred by an indemnified
party through such party's own wilful misconduct and negligence.
To secure Holdings' payment obligations in this Section, the Senior
Discount Notes Trustee shall have a lien prior to the Senior Discount Notes on
all money or property held or collected by the Senior Discount Notes Trustee
other than money or property held in trust to pay Accreted Value, principal of
and interest and any liquidated damages on particular Senior Discount Notes.
Holdings' payment obligations pursuant to this Section shall survive
the satisfaction or discharge of this Indenture, any rejection or termination of
this Indenture under any bankruptcy law or the resignation or removal of the
Senior Discount Notes Trustee. When the Senior Discount Notes Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(7) or (8)
with respect to Holdings, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Senior Discount Notes Trustee. The
Senior Discount Notes Trustee may resign at any time by so notifying Holdings.
The Holders of a majority in principal amount at maturity of the Senior Discount
Notes may
53
remove the Senior Discount Notes Trustee by so notifying the Senior Discount
Notes Trustee and may appoint a successor Senior Discount Notes Trustee.
Holdings shall remove the Senior Discount Notes Trustee if:
(1) the Senior Discount Notes Trustee fails to comply with Section
7.10;
(2) the Senior Discount Notes Trustee is adjudged bankrupt or
insolvent;
(3) a receiver or other public officer takes charge of the Senior
Discount Notes Trustee or its property; or
(4) the Senior Discount Notes Trustee otherwise becomes incapable of
acting.
If the Senior Discount Notes Trustee resigns, is removed by Holdings
or by the Holders of a majority in principal amount at maturity of the Senior
Discount Notes and such Senior Discount Noteholders do not reasonably promptly
appoint a successor Senior Discount Notes Trustee, or if a vacancy exists in the
office of Senior Discount Notes Trustee for any reason (the Senior Discount
Notes Trustee in such event being referred to herein as the retiring Senior
Discount Notes Trustee), Holdings shall promptly appoint a successor Senior
Discount Notes Trustee.
A successor Senior Discount Notes Trustee shall deliver a written
acceptance of its appointment to the retiring Senior Discount Notes Trustee and
to Holdings. Thereupon the resignation or removal of the retiring Senior
Discount Notes Trustee shall become effective, and the successor Senior Discount
Notes Trustee shall have all the rights, powers and duties of the Senior
Discount Notes Trustee under this Indenture. The successor Senior Discount Notes
Trustee shall mail a notice of its succession to Senior Discount Noteholders.
The retiring Senior Discount Notes Trustee shall promptly transfer all property
held by it as Senior Discount Notes Trustee to the successor Senior Discount
Notes Trustee, subject to the lien provided for in Section 7.07.
If a successor Senior Discount Notes Trustee does not take office
within 60 days after the retiring Senior Discount Notes Trustee resigns or is
removed, the retiring Senior Discount Notes Trustee or the Holders of 10% in
principal amount at maturity of the Senior Discount Notes may petition any court
of competent jurisdiction for the appointment of a successor Senior Discount
Notes Trustee.
If the Senior Discount Notes Trustee fails to comply with Section
7.10, any Senior Discount Noteholder may petition any court of competent
jurisdiction for the removal of the Senior Discount Notes Trustee and the
appointment of a successor Senior Discount Notes Trustee.
Notwithstanding the replacement of the Senior Discount Notes Trustee
pursuant to this Section, Holdings' obligations under Section 7.07 shall
continue for the benefit of the retiring Senior Discount Notes Trustee.
SECTION 7.09. Successor Senior Discount Notes Trustee by Merger. If
the Senior Discount Notes Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another
54
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Senior Discount Notes
Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Senior Discount Notes Trustee shall succeed
to the trusts created by this Indenture any of the Senior Discount Notes shall
have been authenticated but not delivered, any such successor to the Senior
Discount Notes Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Senior Discount Notes so authenticated;
and in case at that time any of the Senior Discount Notes shall not have been
authenticated, any successor to the Senior Discount Notes Trustee may
authenticate such Senior Discount Notes either in the name of any predecessor
hereunder or in the name of the successor to the Senior Discount Notes Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Senior Discount Notes or in this Indenture provided that the
certificate of the Senior Discount Notes Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Senior Discount
Notes Trustee shall at all times satisfy the requirements of TIA ss. 310(a). The
Senior Discount Notes Trustee shall have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition. The Senior Discount Notes Trustee shall comply with TIA ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of Holdings are
out standing if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Holdings.
The Senior Discount Notes Trustee shall comply with TIA ss. 311(a), excluding
any creditor relationship listed in TIA ss. 311(b). A Senior Discount Notes
Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to
the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Senior Discount Notes;
Defeasance. (a) When (i) Holdings delivers to the Senior Discount Notes Trustee
all outstanding Senior Discount Notes (other than Senior Discount Notes replaced
pursuant to Section 2.07) for cancelation or (ii) all outstanding Senior
Discount Notes have become due and payable, whether at maturity or as a result
of the mailing of a notice of redemption pursuant to Article 3 hereof, and
Holdings irrevocably deposits with the Senior Discount Notes Trustee funds or
U.S. Government Obligations on which payment of principal and interest when due
will be sufficient to pay at maturity or upon redemption all outstanding Senior
Discount Notes, including interest thereon to maturity or such redemption date
(other than Senior Discount Notes replaced pursuant to Section 2.07), and if in
either case Holdings pays all other sums payable hereunder by Holdings, then
this Indenture shall, subject to Section 8.01(c), cease to be of further effect.
The Senior Discount Notes Trustee shall acknowledge satisfaction and discharge
of this Indenture on demand of Holdings accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of Holdings.
55
(b) Subject to Sections 8.01(c) and 8.02, Holdings at any time may
terminate (i) all of its obligations under the Senior Discount Notes and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and 4.12 and the
operation of Section 5.01(iii), 5.01(iv), 6.01(4), 6.01(6), 6.01(7) (with
respect to Significant Subsidiaries of Holdings only), 6.01(8) (with respect to
Significant Subsidiaries of Holdings only) and 6.01(9) ("covenant defeasance
option"). Holdings may exercise its legal defeasance option not withstanding its
prior exercise of its covenant defeasance option.
If Holdings exercises its legal defeasance option, payment of the
Senior Discount Notes may not be accelerated because of an Event of Default. If
Holdings exer cises its covenant defeasance option, payment of the Senior
Discount Notes may not be accelerated because of an Event of Default specified
in Section 6.01(4), 6.01(6), 6.01(7) (with respect to Significant Subsidiaries
of Holdings only) or 6.01(8) (with respect to Significant Subsidiaries of
Holdings only) or because of the failure of Holdings to comply with clauses
(iii) and (iv) of Section 5.01.
Upon satisfaction of the conditions set forth herein and upon
request of Holdings, the Senior Discount Notes Trustee shall acknowledge in
writing the discharge of those obligations that Holdings terminates.
(c) Notwithstanding clauses (a) and (b) above, Holdings' obligations
in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07, 7.08 and in this Article 8
shall survive until the Senior Discount Notes have been paid in full.
Thereafter, Holdings' obligations in Sections 7.07, 8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. Holdings may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) Holdings irrevocably deposits in trust with the Senior Discount
Notes Trustee money or U.S. Government Obligations for the payment of
principal, premium (if any) and interest on the Senior Discount Notes to
maturity or redemption, as the case may be;
(2) Holdings delivers to the Senior Discount Notes Trustee a
certificate from a nationally recognized firm of independent accountants
expressing their opinion that the payments of principal and interest when
due and without reinvestment on the deposited U.S. Government Obligations
plus any deposited money without investment will provide cash at such
times and in such amounts as will be sufficient to pay principal and
interest when due on all the Senior Discount Notes to maturity or
redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 6.01(7) or (8) with respect to
Holdings occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on Holdings;
(5) Holdings delivers to the Senior Discount Notes Trustee an
Opinion of Counsel to the effect that the trust resulting from the deposit
does not constitute,
56
or is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(6) in the case of the legal defeasance option, Holdings shall have
delivered to the Senior Discount Notes Trustee an Opinion of Counsel
stating that (i) Holdings has received from, or there has been published
by, the Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Senior Discount Noteholders will not
recognize income, gain or loss for Federal income tax purposes as a result
of such deposit and defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred;
(7) in the case of the covenant defeasance option, Holdings shall
have delivered to the Senior Discount Notes Trustee an Opinion of Counsel
to the effect that the Senior Discount Noteholders will not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit and defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred; and
(8) Holdings delivers to the Senior Discount Notes Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Senior
Discount Notes as contemplated by this Article 8 have been complied with.
Before or after a deposit, Holdings may make arrangements
satisfactory to the Senior Discount Notes Trustee for the redemption of Senior
Discount Notes at a future date in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Senior Discount Notes
Trustee shall hold in trust money or U.S. Government Obligations deposited with
it pursuant to this Article 8. It shall apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance with
this Indenture to the payment of principal of and interest on the Senior
Discount Notes.
SECTION 8.04. Repayment to Holdings. The Senior Discount Notes
Trustee and the Paying Agent shall promptly turn over to Holdings upon request
any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Senior
Discount Notes Trustee and the Paying Agent shall pay to Holdings upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years, and, thereafter, Senior Discount Noteholders
entitled to the money must look to Holdings for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. Holdings shall
pay and shall indemnify the Senior Discount Notes Trustee against any tax, fee
or other
57
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Senior Discount Notes Trustee or
Paying Agent is unable to apply any money or U.S. Government Obligations in
accordance with this Article 8 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, Holdings' obligations
under this Indenture and the Senior Discount Notes shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Senior Discount Notes Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that, if Holdings has made any payment of interest
on or principal of any Senior Discount Notes because of the reinstatement of its
obligations, Holdings shall be subrogated to the rights of the Senior Discount
Noteholders of such Senior Discount Notes to receive such payment from the money
or U.S. Government Obligations held by the Senior Discount Notes Trustee or
Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Senior Discount Noteholders.
Holdings and the Senior Discount Notes Trustee may amend this Indenture or the
Senior Discount Notes without notice to or consent of any Senior Discount
Noteholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Senior Discount Notes in addition
to or in place of certificated Senior Discount Notes; provided, however,
that the uncertificated Senior Discount Notes are issued in registered
form for purposes of Section 163(f) of the Code or in a manner such that
the uncertificated Senior Discount Notes are described in Section
163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Senior Discount Notes or
to secure the Senior Discount Notes;
(5) to add to the covenants of Holdings for the benefit of the
Senior Discount Noteholders or to surrender any right or power herein
conferred upon Holdings;
(6) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA;
(7) to make any change that does not adversely affect the rights of
any Senior Discount Noteholder; or
58
(8) to provide for the issuance of the Senior Discount Exchange
Notes or Private Senior Discount Exchange Notes, which shall have terms
substantially identical in all material respects to the Initial Senior
Discount Notes (except that the transfer restrictions contained in the
Initial Senior Discount Notes shall be modified or eliminated, as
appropriate), and which shall be treated, together with any outstanding
Initial Senior Discount Notes, as a single issue of securities.
After an amendment under this Section becomes effective, Holdings
shall mail to Senior Discount Noteholders a notice briefly describing such
amendment. The failure to give such notice to all Senior Discount Noteholders,
or any defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 9.02. With Consent of Senior Discount Noteholders. Holdings
and the Senior Discount Notes Trustee may amend this Indenture or the Senior
Discount Notes with the written consent of the Holders of at least a majority in
principal amount at maturity of the Senior Discount Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for the Senior Discount Notes), without notice to any other Senior Discount
Noteholder. However, without the consent of each Holder of an outstanding Senior
Discount Note affected, an amendment may not:
(1) reduce the principal amount of Senior Discount Notes whose
Senior Discount Noteholders must consent to an amendment;
(2) reduce the rate of or extend the time for payment of interest or
any liquidated damages on any Senior Discount Note;
(3) reduce the Accreted Value or principal of or extend the Stated
Maturity of any Senior Discount Note;
(4) reduce the premium payable upon the redemption of any Senior
Discount Note or change the time at which any Senior Discount Note may be
redeemed in accordance with Article 3;
(5) make any Senior Discount Note payable in money other than that
stated in the Senior Discount Note; or
(6) make any change in Section 6.04 or 6.07 or the second sentence
of this Section 9.02.
It shall not be necessary for the consent of the Senior Discount
Noteholders under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment under this Section becomes effective, Holdings
shall mail to Senior Discount Noteholders a notice briefly describing such
amendment. The failure to give such notice to all Senior Discount Noteholders,
or any defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Senior Discount Notes shall comply with the TIA as then
in effect.
59
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Senior Discount Noteholder of a Senior
Discount Note shall bind the Senior Discount Noteholder and every subsequent
Senior Discount Noteholder of that Senior Discount Note or portion of the Senior
Discount Note that evidences the same debt as the consenting Senior Discount
Noteholder's Senior Discount Note, even if notation of the consent or waiver is
not made on the Senior Discount Note. However, any such Senior Discount
Noteholder or subsequent Senior Discount Noteholder may revoke the consent or
waiver as to such Senior Discount Noteholder's Senior Discount Note or portion
of the Senior Discount Note if the Senior Discount Notes Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
After an amendment or waiver becomes effective, it shall bind every Senior
Discount Noteholder. An amendment or waiver becomes effective once both (i) the
requisite number of consents have been received by Holdings or the Senior
Discount Notes Trustee and (ii) such amendment or waiver has been executed by
Holdings and the Senior Discount Notes Trustee.
Holdings may, but shall not be obligated to, fix a record date for
the purpose of determining the Senior Discount Noteholders entitled to give
their consent or take any other action described above or required or permitted
to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Senior Discount Noteholders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to give such consent or to
revoke any consent previously given or to take any such action, whether or not
such Persons continue to be Senior Discount Noteholders after such record date.
No such consent shall be valid or effective for more than 120 days after such
record date.
SECTION 9.05. Notation on or Exchange of Senior Discount Notes. If
an amendment changes the terms of a Senior Discount Note, the Senior Discount
Notes Trustee may require the Senior Discount Noteholder of the Senior Discount
Note to deliver it to the Senior Discount Notes Trustee. The Senior Discount
Notes Trustee may place an appropriate notation on the Senior Discount Note
regarding the changed terms and return it to the Senior Discount Noteholder.
Alternatively, if Holdings or the Senior Discount Notes Trustee so determines,
Holdings in exchange for the Senior Discount Note shall issue and the Senior
Discount Notes Trustee shall authenticate a new Senior Discount Note that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Senior Discount Note shall not affect the validity of such amendment.
SECTION 9.06. Senior Discount Notes Trustee To Sign Amendments. The
Senior Discount Notes Trustee shall sign any amendment authorized pursuant to
this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Senior Discount Notes Trustee. If it does, the
Senior Discount Notes Trustee may but need not sign it. In signing such
amendment the Senior Discount Notes Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture and that such amendment is the legal, valid and binding
obligation of Holdings enforceable against it in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof
(including Section 9.03).
60
ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls. 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 10.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to Holdings:
WESCO International, Inc.
Commerce Court, Suite 000
Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
if to the Senior Discount Notes Trustee:
Bank One, N.A.
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Department
Holdings or the Senior Discount Notes Trustee by notice to the other
may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Senior Discount Noteholder
shall be mailed to the Senior Discount Noteholder at the Senior Discount
Noteholder's address as it appears on the registration books of the Registrar
and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Senior Discount
Noteholder or any defect in it shall not affect its sufficiency with respect to
other Senior Discount Noteholders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.
SECTION 10.03. Communication by Senior Discount Noteholders with
Other Senior Discount Noteholders. Senior Discount Noteholders may communicate
pursuant to TIA ss. 312(b) with other Senior Discount Noteholders with respect
to their rights under this Indenture or the Senior Discount Notes. Holdings, the
Senior Discount Notes Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c).
61
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by Holdings to the Senior Discount Notes Trustee
to take or refrain from taking any action under this Indenture, Holdings shall
furnish to the Senior Discount Notes Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Senior Discount Notes Trustee stating that, in the
opinion of the signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Senior Discount Notes Trustee stating that, in the
opinion of such counsel, all such conditions precedent have been complied
with.
SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.06. When Senior Discount Notes Disregarded. In
determining whether the Senior Discount Noteholders of the required principal
amount at maturity of Senior Discount Notes have concurred in any direction,
waiver or consent, Senior Discount Notes owned by Holdings or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with Holdings shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Senior
Discount Notes Trustee shall be protected in relying on any such direction,
waiver or consent, only Senior Discount Notes which the Senior Discount Notes
Trustee knows are so owned shall be so disregarded. Subject to the fore going,
only Senior Discount Notes outstanding at the time shall be considered in any
such determination.
SECTION 10.07. Rules by Senior Discount Notes Trustee, Paying Agent
and Registrar. The Senior Discount Notes Trustee may make reasonable rules for
action by or a meeting of Senior Discount Noteholders. The Registrar and the
Paying Agent may make reasonable rules for their functions.
62
SECTION 10.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York or the State of Ohio. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 10.09. GOVERNING LAW. THIS INDENTURE AND THE SENIOR DISCOUNT
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 10.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of Holdings shall not have any liability for
any obligations of Holdings under the Senior Discount Notes or this Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Senior Discount Note, each Senior Discount Noteholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Senior Discount Notes.
SECTION 10.11. Successors. All agreements of Holdings in this
Indenture and the Senior Discount Notes shall bind its successors. All
agreements of the Senior Discount Notes Trustee in this Indenture shall bind its
successors.
SECTION 10.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 10.13. Table of Contents; Headings. 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, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
63
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
WESCO INTERNATIONAL, INC.,
by /s/ [Illegible]
--------------------------------
Name:
Title:
BANK ONE, N.A., as Senior Discount
Notes Trustee,
by /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: XXXX X. XXXXXXX
Title: VICE PRESIDENT
CORPORATE TRUST DEPT.
APPENDIX A
PROVISIONS RELATING TO INITIAL SENIOR DISCOUNT NOTES,
PRIVATE SENIOR DISCOUNT EXCHANGE
NOTES AND SENIOR DISCOUNT EXCHANGE NOTES
1. Definitions
1.1 Definitions
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Regulation S Global Senior Discount Note or beneficial
interest therein, the rules and procedures of the Depositary for such Global
Senior Discount Note, Euroclear and Cedel, in each case to the extent applicable
to such transaction and as in effect from time to time.
"Cedel" means Cedel Bank, S.A., or any successor securities clearing
agency.
"Definitive Senior Discount Note" means a certificated Initial
Senior Discount Note or Senior Discount Exchange Note (bearing the Restricted
Senior Discount Notes Legend if the transfer of such Senior Discount Note is
restricted by applicable law) that does not include the Global Senior Discount
Notes Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Global Senior Discount Notes Legend" means the legend set forth
under that caption in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Chase Securities Inc. and Xxxxxx Brothers
Inc.
"Private Senior Discount Exchange Notes" means the Senior Discount
Notes of Holdings issued in exchange for Initial Senior Discount Notes pursuant
to this Indenture in connection with the Senior Discount Notes Private Exchange
pursuant to the Senior Discount Notes Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated May 29,
1998, among the Company, Holdings and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Regulation S" means Regulation S under the Securities Act.
2
"Regulation S Senior Discount Notes" means all Initial Senior
Discount Notes offered and sold outside the United States in reliance on
Regulation S.
"Restricted Period", with respect to any Senior Discount Notes,
means the period of 40 consecutive days beginning on and including the later of
(i) the day on which such Senior Discount Notes are first offered to persons
other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the Senior Discount Notes Issue Date with
respect to such Senior Discount Notes.
"Restricted Senior Discount Notes Legend" means the legend set forth
in Section 2.3(e)(i) herein.
"Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Senior Discount Notes" means all Initial Senior Discount
Notes offered and sold to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Discount Notes Custodian" means the custodian with respect
to a Global Senior Discount Note (as appointed by the Depositary) or any
successor person thereto, who shall initially be the Senior Discount Notes
Trustee.
"Senior Discount Notes Private Exchange" means an offer by Holdings,
pursuant to the Senior Discount Notes Registration Agreement, to issue and
deliver to certain purchasers, in exchange for the Initial Senior Discount Notes
held by such purchasers as part of their initial distribution, a like aggregate
principal amount at maturity of Private Senior Discount Exchange Notes.
"Senior Discount Notes Registered Exchange Offer" means the offer by
Holdings, pursuant to the Senior Discount Notes Registration Agreement, to
certain Holders of Initial Senior Discount Notes, to issue and deliver to such
Holders, in exchange for their Initial Senior Discount Notes, a like aggregate
principal amount at maturity of Senior Discount Exchange Notes registered under
the Securities Act.
"Senior Discount Notes Registration Agreement" means the Exchange
and Registration Rights Agreement dated June 5, 1998, among Holdings and the
Initial Purchasers.
"Senior Discount Notes Shelf Registration Statement" means a
registration statement filed by Holdings in connection with the offer and sale
of Initial Senior Discount Notes pursuant to the Senior Discount Notes
Registration Agreement.
"Transfer Restricted Senior Discount Notes" means Definitive Senior
Discount Notes and any other Senior Discount Notes that bear or are required to
bear the Restricted Senior Discount Notes Legend.
3
1.2 Other Definitions
Term: Defined in Section:
----- ------------------
"Agent Members"..........................................................2.1(b)
"IAI Global Senior Discount Note.........................................2.1(a)
"Global Senior Discount Note"............................................2.1(a)
"Regulation S Global Senior Discount Note"...............................2.1(a)
"Rule 144A Global Senior Discount Note"..................................2.1(a)
2. The Senior Discount Notes
2.1 Form and Dating
The Initial Senior Discount Notes issued on the date hereof will be
(i) offered and sold by Holdings pursuant to the Purchase Agreement and (ii)
resold, initially only to (A) QIBs in reliance on Rule 144A and (B) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on Regulation
S. Such Initial Senior Discount Notes may thereafter be transferred to, among
others, QIBs, purchasers in reliance on Regulation S and, except as set forth
below, IAIs in accordance with Rule 501.
(a) Global Senior Discount Notes. Rule 144A Senior Discount Notes
shall be issued initially in the form of one or more permanent global Senior
Discount Notes in definitive, fully registered form (collectively, the "Rule
144A Global Senior Discount Note") and Regulation S Senior Discount Notes shall
be issued initially in the form of one or more global Senior Discount Notes
(collectively, the "Regulation S Global Senior Discount Note"), in each case
without interest coupons and bearing the Global Senior Discount Notes Legend and
Restricted Senior Discount Notes Legend, which shall be deposited on behalf of
the purchasers of the Senior Discount Notes represented thereby with the Senior
Discount Notes Custodian, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by Holdings and authenticated by the
Senior Discount Notes Trustee as provided in this Indenture. One or more global
securities in definitive, fully registered form without interest coupons and
bearing the Global Senior Discount Notes Legend and the Restricted Senior
Discount Notes Legend (collectively, the "IAI Global Senior Discount Note")
shall also be issued on the Closing Date, deposited with the Senior Discount
Notes Custodian, and registered in the name of the Depositary or a nominee of
the Depositary, duly executed by Holdings and authenticated by the Senior
Discount Notes Trustee as provided in this Indenture to accommodate transfers of
beneficial interests in the Senior Discount Notes to IAIs subsequent to the
initial distribution. Beneficial ownership interests in the Regulation S Global
Senior Discount Note will not be exchangeable for interests in the Rule 144A
Global Senior Discount Note, the IAI Global Senior Discount Note or any other
Senior Discount Note without a Restricted Senior Discount Notes Legend until the
expiration of the Restricted Period. The Rule 144A Global Senior Discount Note,
the IAI Global Senior Discount Note and the Regulation S Global Senior Discount
Note are each referred to herein as a "Global Senior Discount Note" and are
collectively referred to herein as "Global Senior Discount Notes." The aggregate
principal amount at maturity of the Global Senior Discount Notes may from time
to time be increased or decreased by adjustments made on the records of the
Senior Discount Notes Trustee and the Depositary or its nominee as hereinafter
provided.
4
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Senior Discount Note deposited with or on behalf of the Depositary.
Holdings shall execute and the Senior Discount Notes Trustee shall,
in accordance with this Section 2.1(b) and pursuant to an order of Holdings,
authenticate and deliver initially one or more Global Senior Discount Notes that
(a) shall be registered in the name of the Depositary for such Global Senior
Discount Note or Global Senior Discount Notes or the nominee of such Depositary
and (b) shall be delivered by the Senior Discount Notes Trustee to such
Depositary or pursuant to such Depositary's instructions or held by the Senior
Discount Notes Trustee as Senior Discount Notes Custodian.
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Senior
Discount Note held on their behalf by the Depositary or by the Senior Discount
Notes Trustee as Senior Discount Notes Custodian or under such Global Senior
Discount Note, and the Depositary may be treated by Holdings, the Senior
Discount Notes Trustee and any agent of Holdings or the Senior Discount Notes
Trustee as the absolute owner of such Global Senior Discount Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
Holdings, the Senior Discount Notes Trustee or any agent of Holdings or the
Senior Discount Notes Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices of
such Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Senior Discount Note.
(c) Definitive Senior Discount Notes. Except as provided in Section
2.3 or 2.4, owners of beneficial interests in Global Senior Discount Notes will
not be entitled to receive physical delivery of certificated Senior Discount
Notes.
2.2 Authentication. The Senior Discount Notes Trustee shall
authenticate and make available for delivery upon a written order of Holdings
signed by two Officers (1) Initial Senior Discount Notes for original issue on
the date hereof in an aggregate principal amount at maturity of $87 million and
(2) the (A) Senior Discount Exchange Notes for issue only in a Senior Discount
Notes Registered Exchange Offer and (B) Private Senior Discount Exchange Notes
for issue only in the Senior Discount Notes Private Exchange, in the case of
each of (A) and (B) pursuant to the Senior Discount Notes Registration Agreement
and for a like principal amount at maturity of Initial Senior Discount Notes
exchanged pursuant thereto. Such order shall specify the amount of the Senior
Discount Notes to be authenticated, the date on which the original issue of
Senior Discount Notes is to be authenticated and whether the Senior Discount
Notes are to be Initial Senior Discount Notes, Senior Discount Exchange Notes or
Private Senior Discount Exchange Notes. The aggregate principal amount at
maturity of Senior Discount Notes outstanding at any time may not exceed $87
million, except as provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive
Senior Discount Notes. When Definitive Senior Discount Notes are presented to
the Registrar with a request:
(x) to register the transfer of such Definitive Senior Discount
Notes; or
5
(y) to exchange such Definitive Senior Discount Notes for an equal
principal amount at maturity of Definitive Senior Discount Notes of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Senior Discount Notes surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to Holdings and the Registrar,
duly executed by the Senior Discount Noteholder thereof or his attorney
duly authorized in writing; and
(ii) are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Senior Discount Notes are being
delivered to the Registrar by a Senior Discount Noteholder for
registration in the name of such Senior Discount Noteholder, without
transfer, a certification from such Senior Discount Noteholder to
that effect (in the form set forth on the reverse side of the
Initial Senior Discount Note); or
(B) if such Definitive Senior Discount Notes are being
transferred to Holdings, a certification to that effect (in the form
set forth on the reverse side of the Initial Senior Discount Note);
or
(C) if such Definitive Senior Discount Notes are being
transferred pursuant to an exemption from registration in accordance
with Rule 144 under the Securities Act or in reliance upon another
exemption from the registration requirements of the Securities Act,
(i) a certification to that effect (in the form set forth on the
reverse side of the Initial Senior Discount Note) and (ii) if
Holdings so requests, an opinion of counsel or other evidence
reasonably satisfactory to it as to the compliance with the
restrictions set forth in the legend set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Senior Discount Note
for a Beneficial Interest in a Global Senior Discount Note. A Definitive Senior
Discount Note may not be exchanged for a beneficial interest in a Global Senior
Discount Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Senior Discount Notes Trustee of a Definitive Senior Discount
Note, duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to Holdings and the Registrar, together with:
(i) certification (in the form set forth on the reverse side of the
Initial Senior Discount Note) that such Definitive Senior Discount Note is
being transferred (A) to a QIB in accordance with Rule 144A, (B) to an IAI
that has furnished to the Senior Discount Notes Trustee a signed letter
substantially in the form of Exhibit D or (C) outside the United States in
an offshore transaction within the meaning of Regulation S and in
compliance with Rule 904 under the Securities Act; and
(ii) written instructions directing the Senior Discount Notes
Trustee to make, or to direct the Senior Discount Notes Custodian to make,
an adjustment on its books
6
and records with respect to such Global Senior Discount Note to reflect an
increase in the aggregate principal amount at maturity of the Senior
Discount Notes represented by the Global Senior Discount Note, such
instructions to contain information regarding the Depositary account to be
credited with such increase,
then the Senior Discount Notes Trustee shall cancel such Definitive Senior
Discount Note and cause, or direct the Senior Discount Notes Custodian to cause,
in accordance with the standing instructions and procedures existing between the
Depositary and the Senior Discount Notes Custodian, the aggregate principal
amount at maturity of Senior Discount Notes represented by the Global Senior
Discount Note to be increased by the aggregate principal amount at maturity of
the Definitive Senior Discount Note to be exchanged and shall credit or cause to
be credited to the account of the Person specified in such instructions a
beneficial interest in the Global Senior Discount Note equal to the principal
amount at maturity of the Definitive Senior Discount Note so canceled. If no
Global Senior Discount Notes are then outstanding and the Global Senior Discount
Note has not been previously exchanged for certificated securities pursuant to
Section 2.4, Holdings shall issue and the Senior Discount Notes Trustee shall
authenticate, upon written order of Holdings in the form of an Officers'
Certificate, a new Global Senior Discount Note in the appropriate principal
amount at maturity.
(c) Transfer and Exchange of Global Senior Discount Notes. (i) The
transfer and exchange of Global Senior Discount Notes or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Indenture (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor. A transferor of a beneficial
interest in a Global Senior Discount Note shall deliver a written order given in
accordance with the Depositary's procedures containing information regarding the
participant account of the Depositary to be credited with a beneficial interest
in such Global Senior Discount Note or another Global Senior Discount Note and
such account shall be credited in accordance with such order with a beneficial
interest in the applicable Global Senior Discount Note and the account of the
Person making the transfer shall be debited by an amount equal to the beneficial
interest in the Global Senior Discount Note being transferred. Transfers by an
owner of a beneficial interest in the Rule 144A Global Senior Discount Note or
the IAI Global Senior Discount Note to a transferee who takes delivery of such
interest through the Regulation S Global Senior Discount Note, whether before or
after the expiration of the Restricted Period, will be made only upon receipt by
the Senior Discount Notes Trustee of a certification from the transferor to the
effect that such transfer is being made in accordance with Regulation S or (if
available) Rule 144 under the Securities Act and that, if such transfer is being
made prior to the expiration of the Restricted Period, the interest transferred
will be held immediately thereafter through Euroclear or Cedel. In the case of a
transfer of a beneficial interest in either the Regulation S Global Senior
Discount Note or the Rule 144A Global Senior Discount Note for an interest in
the IAI Global Senior Discount Note, the transferee must furnish a signed letter
substantially in the form of Exhibit D to the Senior Discount Notes Trustee.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Senior Discount Note to a beneficial interest in another
Global Senior Discount Note, the Registrar shall reflect on its books and
records the date and an increase in the principal amount at maturity of
the Global Senior Discount Note to which such interest is being
transferred in an amount equal to the principal amount at maturity of the
interest to be so transferred, and the Registrar shall reflect on its
books and
7
records the date and a corresponding decrease in the principal amount at
maturity of Global Senior Discount Note from which such interest is being
transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Senior Discount
Note may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
(iv) In the event that a Global Senior Discount Note is exchanged
for Definitive Senior Discount Notes pursuant to Section 2.4 prior to the
consummation of the Senior Discount Notes Registered Exchange Offer or the
effectiveness of the Senior Discount Notes Shelf Registration Statement
with respect to such Senior Discount Notes, such Senior Discount Notes may
be exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial Senior
Discount Notes intended to ensure that such transfers comply with Rule
144A, Regulation S or such other applicable exemption from registration
under the Securities Act, as the case may be) and such other procedures as
may from time to time be adopted by Holdings.
(d) Restrictions on Transfer of Regulation S Global Senior Discount
Note. (i) Prior to the expiration of the Restricted Period, interests in the
Regulation S Global Senior Discount Note may only be held through Euroclear or
Cedel. During the Restricted Period, beneficial ownership interests in the
Regulation S Global Senior Discount Note may only be sold, pledged or
transferred through Euroclear or Cedel in accordance with the Applicable
Procedures and only (A) to Holdings, (B) so long as such security is eligible
for resale pursuant to Rule 144A, to a person whom the selling holder reasonably
believes is a QIB that purchases for its own account or for the account of a QIB
to whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, (C) in an offshore transaction in accordance with
Regulation S, (D) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if applicable) under the Securities Act,
(E) to an IAI purchasing for its own account, or for the account of such an IAI,
in a minimum principal amount at maturity of Senior Discount Notes of $250,000
or (F) pursuant to an effective registration statement under the Securities Act,
in each case in accordance with any applicable securities laws of any state of
the United States. Prior to the expiration of the Restricted Period, transfers
by an owner of a beneficial interest in the Regulation S Global Senior Discount
Note to a transferee who takes delivery of such interest through the Rule 144A
Global Senior Discount Note or the IAI Global Senior Discount Note will be made
only in accordance with Applicable Procedures and upon receipt by the Senior
Discount Notes Trustee of a written certification from the transferor of the
beneficial interest in the form provided on the reverse of the Initial Senior
Discount Note to the effect that such transfer is being made to (i) a person
whom the transferor reasonably believes is a QIB within the meaning of Rule 144A
in a transaction meeting the requirements of Rule 144A or (ii) an IAI purchasing
for its own account, or for the account of such an IAI, in a minimum principal
amount at maturity of the Senior Discount Notes of $250,000. Such written
certification will no longer be required after the expiration of the Restricted
Period. In the case of a transfer of a beneficial interest in the Regulation S
Global Senior Discount Note for an interest in the IAI Global Senior Discount
Note, the transferee must furnish a signed letter substantially in the form of
Exhibit D to the Senior Discount Notes Trustee.
8
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Regulation S Global Senior Discount Note will
be transferable in accordance with applicable law and the other terms of
this Indenture.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Senior Discount Note certificate evidencing the Global Senior
Discount Notes and the Definitive Senior Discount Notes (and all Senior
Discount Notes issued in exchange therefor or in substitution thereof)
shall bear a legend in substantially the following form (each defined term
in the legend being defined as such for purposes of the legend only):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH HOLDINGS OR
ANY AFFILIATE OF HOLDINGS WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO HOLDINGS, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR,
IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT AT MATURITY OF THE SECURITIES
OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
9
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO HOLDINGS' AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
Each Definitive Senior Discount Note will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Senior
Discount Note that is a Definitive Senior Discount Note, the Registrar
shall permit the Senior Discount Noteholder thereof to exchange such
Transfer Restricted Senior Discount Note for a Definitive Senior Discount
Note that does not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted Senior Discount
Note if the Senior Discount Noteholder certifies in writing to the
Registrar that its request for such exchange was made in reliance on Rule
144 (such certification to be in the form set forth on the reverse of the
Initial Senior Discount Note).
(iii) After a transfer of any Initial Senior Discount Notes or
Private Exchange Senior Discount Notes during the period of the
effectiveness of a Senior Discount Notes Shelf Registration Statement with
respect to such Initial Senior Discount Notes or Private Senior Discount
Exchange Notes, as the case may be, all requirements pertaining to the
Restricted Senior Discount Notes Legend on such Initial Senior Discount
Notes or such Private Senior Discount Exchange Notes will cease to apply
and the requirements that any such Initial Senior Discount Notes or such
Private Senior Discount Exchange Notes be issued in global form will
continue to apply.
(iv) Upon the consummation of a Senior Discount Notes Registered
Exchange Offer with respect to the Initial Senior Discount Notes pursuant
to which Senior Discount Noteholders of such Initial Senior Discount Notes
are offered Senior Discount Exchange Notes in exchange for their Initial
Senior Discount Notes, all requirements pertaining to Initial Senior
Discount Notes that Initial Senior Discount Notes be issued in global form
will continue to apply, and Senior Discount Exchange Notes in global form
without the Restricted Senior Discount Notes Legend will be available to
Senior Discount Noteholders that exchange such Initial Senior Discount
Notes in such Senior Discount Notes Registered Exchange Offer.
(v) Upon the consummation of a Senior Discount Notes Private
Exchange with respect to the Initial Senior Discount Notes pursuant to
which Holders of such Initial Senior Discount Notes are offered Private
Senior Discount Exchange Notes in exchange for their Initial Senior
Discount Notes, all requirements pertaining to such Initial Senior
Discount Notes that Initial Senior Discount Notes be issued in global
10
form will continue to apply, and Private Senior Discount Exchange Notes in
global form with the Restricted Senior Discount Notes Legend will be
available to Senior Discount Noteholders that exchange such Initial Senior
Discount Notes in such Senior Discount Notes Private Exchange.
(vi) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Senior Discount Note acquired pursuant to Regulation
S, all requirements that such Initial Senior Discount Note bear the
Restricted Senior Discount Notes Legend will cease to apply and the
requirements requiring any such Initial Senior Discount Note be issued in
global form will continue to apply.
(f) Cancelation or Adjustment of Global Senior Discount Note. At
such time as all beneficial interests in a Global Senior Discount Note have
either been exchanged for Definitive Senior Discount Notes, transferred,
redeemed, repurchased or canceled, such Global Senior Discount Note shall be
returned by the Depositary to the Senior Discount Notes Trustee for cancelation
or retained and canceled by the Senior Discount Notes Trustee. At any time prior
to such cancelation, if any beneficial interest in a Global Senior Discount Note
is exchanged for Definitive Senior Discount Notes, transferred in exchange for
an interest in another Global Senior Discount Note, redeemed, repurchased or
canceled, the principal amount at maturity of Senior Discount Notes represented
by such Global Senior Discount Note shall be reduced and an adjustment shall be
made on the books and records of the Senior Discount Notes Trustee (if it is
then the Senior Discount Notes Custodian for such Global Senior Discount Note)
with respect to such Global Senior Discount Note, by the Senior Discount Notes
Trustee or the Senior Discount Notes Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and Exchanges of Senior
Discount Notes.
(i) To permit registrations of transfers and exchanges, Holdings
shall execute and the Senior Discount Notes Trustee shall authenticate,
Definitive Senior Discount Notes and Global Senior Discount Notes at the
Registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but Holdings may require payment of a sum sufficient
to cover any transfer tax, assessments, or similar governmental charge
payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or
transfer pursuant to Section 3.06, 4.06, 4.08 and 9.05).
(iii) Prior to the due presentation for registration of transfer of
any Senior Discount Note, Holdings, the Senior Discount Notes Trustee, the
Paying Agent or the Registrar may deem and treat the person in whose name
a Senior Discount Note is registered as the absolute owner of such Senior
Discount Note for the purpose of receiving payment of principal of and
interest on such Senior Discount Note and for all other purposes
whatsoever, whether or not such Senior Discount Note is overdue, and none
of Holdings, the Senior Discount Notes Trustee, the Paying Agent or the
Registrar shall be affected by notice to the contrary.
(iv) All Senior Discount Notes issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt and
shall be entitled to the
11
same benefits under this Indenture as the Senior Discount Notes
surrendered upon such transfer or exchange.
(h) No Obligation of the Senior Discount Notes Trustee.
(i) The Senior Discount Notes Trustee shall have no responsibility
or obligation to any beneficial owner of a Global Senior Discount Note, a
member of, or a participant in the Depositary or any other Person with
respect to the accuracy of the records of the Depositary or its nominee or
of any participant or member thereof, with respect to any ownership
interest in the Senior Discount Notes or with respect to the delivery to
any participant, member, beneficial owner or other Person (other than the
Depositary) of any notice (including any notice of redemption or
repurchase) or the payment of any amount, under or with respect to such
Senior Discount Notes. All notices and communications to be given to the
Senior Discount Noteholders and all payments to be made to Senior Discount
Noteholders under the Senior Discount Notes shall be given or made only to
the registered Senior Discount Noteholders (which shall be the Depositary
or its nominee in the case of a Global Senior Discount Note). The rights
of beneficial owners in any Global Senior Discount Note shall be exercised
only through the Depositary subject to the applicable rules and procedures
of the Depositary. The Senior Discount Notes Trustee may rely and shall be
fully protected in relying upon information furnished by the Depositary
with respect to its members, participants and any beneficial owners.
(ii) The Senior Discount Notes Trustee shall have no obligation or
duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under applicable
law with respect to any transfer of any interest in any Senior Discount
Note (including any transfers between or among Depositary participants,
members or beneficial owners in any Global Senior Discount Note) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
2.4 Definitive Senior Discount Notes
(a) A Global Senior Discount Note deposited with the Depositary or
with the Senior Discount Notes Trustee as Senior Discount Notes Custodian
pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in
the form of Definitive Senior Discount Notes in an aggregate principal amount at
maturity equal to the principal amount at maturity of such Global Senior
Discount Note, in exchange for such Global Senior Discount Note, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies Holdings that
it is unwilling or unable to continue as a Depositary for such Global Senior
Discount Note or if at any time the Depositary ceases to be a "clearing agency"
registered under the Exchange Act, and a successor depositary is not appointed
by Holdings within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) Holdings, in its sole discretion, notifies
the Senior Discount Notes Trustee in writing that it elects to cause the
issuance of certificated Senior Discount Notes under this Indenture.
(b) Any Global Senior Discount Note that is transferable to the
beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by
the Depositary to the Senior Discount Notes Trustee, to be so transferred, in
whole or from time to time in part,
12
without charge, and the Senior Discount Notes Trustee shall authenticate and
deliver, upon such transfer of each portion of such Global Senior Discount Note,
an equal aggregate principal amount at maturity of Definitive Senior Discount
Notes of authorized denominations. Any portion of a Global Senior Discount Note
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 (in principal amount at maturity) and
any integral multiple thereof and registered in such names as the Depositary
shall direct. Any certificated Initial Senior Discount Note in the form of a
Definitive Senior Discount Note delivered in exchange for an interest in the
Global Senior Discount Note shall, except as otherwise provided by Section
2.3(e), bear the Restricted Senior Discount Notes Legend.
(c) Subject to the provisions of Section 2.4(b), the registered
Senior Discount Noteholder of a Global Senior Discount Note may grant proxies
and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Senior Discount
Noteholder is entitled to take under this Indenture or the Senior Discount
Notes.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), Holdings will promptly make available to the
Senior Discount Notes Trustee a reasonable supply of Definitive Senior Discount
Notes in fully registered form without interest coupons.
EXHIBIT A
[FORM OF FACE OF INITIAL SENIOR DISCOUNT NOTE]
[Global Senior Discount Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO HOLDINGS OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Senior Discount Notes Legend]
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH HOLDINGS OR
ANY AFFILIATE OF HOLDINGS WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO HOLDINGS, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL
2
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT AT MATURITY OF THE SECURITIES OF $250,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO HOLDINGS' AND THE TRUSTEE'S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Definitive Senior Discount Note will also bear the following additional
legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS."
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
No. $__________
11 1/8% Senior Discount Note due 2008
CUSIP No. ______
WESCO International, Inc., a Delaware corporation, promises to pay
to Cede & Co., or registered assigns, the principal sum [of Dollars]
[listed on the Schedule of Increases or Decreases in Global Senior Discount Note
attached hereto](1) on June 1, 2008.
Interest Payment Dates: June 1 and December 1, commencing on June 1,
2003.
Record Dates: May 15 and November 15.
----------
(1) Use the Schedule of Increases and Decreases language if Note is in Global
Form.
2
Additional provisions of this Senior Discount Note are set forth on
the other side of this Senior Discount Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.
WESCO INTERNATIONAL, INC.,
by
---------------------------------------
Name:
Title:
by
---------------------------------------
Name:
Title:
Dated:
SENIOR DISCOUNT NOTES TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BANK ONE, N.A.,
as Senior Discount Notes Trustee, certifies
that this is one of
the Senior Discount Notes referred
to in the Indenture.
By:
----------------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF SENIOR DISCOUNT NOTE]
11 1/8% Senior Discount Note due 2008
1. Interest
(a) WESCO INTERNATIONAL, INC., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called "Holdings"), promises to pay interest on the
principal amount at maturity of this Senior Discount Note at the rate per annum
shown above. Cash interest will not accrue or be payable on this Senior Discount
Note prior to June 1, 2003. From June 1, 2003, Holdings will pay interest
semiannually on June 1 and December 1 of each year. Interest on the Senior
Discount Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from June 1, 2003. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
(b) Liquidated Damages. The holder of this Senior Discount Note is
entitled to the benefits of an Exchange and Registration Rights Agreement, dated
as of June 5, 1998, among Holdings and the Initial Purchasers named therein (the
"Senior Discount Notes Registration Agreement"). Capitalized terms used in this
paragraph (b) but not defined herein have the meanings assigned to them in the
Senior Discount Notes Registration Agreement. If (i) the Senior Discount Notes
Shelf Registration Statement or Senior Discount Notes Exchange Offer
Registration Statement, as applicable under the Senior Discount Notes
Registration Agreement, is not filed with the Commission on or prior to 90 days
after the Senior Discount Notes Issue Date (or, in the case of a Senior Discount
Notes Shelf Registration Statement required to be filed in response to a change
in law or applicable interpretations of the Commission's staff, if later, within
45 days after publication of the change in law or interpretations, but in no
event before 90 days after the Senior Discount Notes Issue Date), (ii) the
Senior Discount Notes Exchange Offer Registration Statement or the Senior
Discount Notes Shelf Registration Statement, as the case may be, is not declared
effective within 200 days after the Senior Discount Notes Issue Date (or in the
case of a Senior Discount Notes Shelf Registration Statement required to be
filed in response to a change in law or the applicable interpretations of
Commission's staff, if later, within 90 days after publication of the change in
law or interpretation, but in no event before 200 days after the Senior Discount
Notes Issue Date), (iii) the Senior Discount Notes Registered Exchange Offer is
not consummated on or prior to 230 days after the Senior Discount Notes Issue
Date (other than in the event Holdings files a Senior Discount Notes Shelf
Registration Statement), or (iv) the Senior Discount Notes Shelf Registration
Statement is filed and declared effective within 200 days after the Senior
Discount Notes Issue Date but shall thereafter cease to be effective (at any
time that Holdings is obligated to maintain the effectiveness thereof) without
being succeeded within 90 days by an additional Senior Discount Notes
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), Holdings shall pay
liquidated damages to each holder of Transfer Restricted Senior Discount Notes,
during the period of such Registration Default, in an amount equal to $0.192 per
week per $1,000 Accreted Value of the Senior Discount Notes constituting
Transfer Restricted Senior Discount Notes held by such holder until (i) the
applicable Senior Discount Notes Registration Statement is filed, (ii) the
Senior Discount Notes Exchange Offer Registration Statement is declared
effective and the Senior Discount Notes Registered Exchange Offer is
consummated, (iii) the Senior Discount Notes Shelf Registration Statement is
declared effective or (iv) the Senior Discount
2
Notes Shelf Registration Statement again becomes effective, as the case may be.
All accrued liquidated damages shall be paid to holders on the next semi-annual
accretion date (if on or prior to June 1, 2003) or in the same manner as
interest payments on the Senior Discount Notes on semi-annual payment dates
which correspond to interest payment dates for the Senior Discount Notes (if
after June 1, 2003). Following the cure of all Registration Defaults, the
accrual of liquidated damages will cease. The Senior Discount Notes Trustee
shall have no responsibility with respect to the determination of the amount of
any such liquidated damages. For purposes of the foregoing, "Transfer Restricted
Senior Discount Notes" means (i) each Initial Senior Discount Note until the
date on which such Initial Senior Discount Note has been exchanged for a freely
transferable Senior Discount Exchange Note in the Senior Discount Notes
Registered Exchange Offer, (ii) each Initial Senior Discount Note or Private
Senior Discount Exchange Note until the date on which such Initial Senior
Discount Note or Private Senior Discount Exchange Note has been effectively
registered under the Securities Act and disposed of in accordance with a Senior
Discount Notes Shelf Registration Statement or (iii) each Initial Senior
Discount Note or Private Senior Discount Exchange Note until the date on which
such Initial Senior Discount Note or Private Senior Discount Exchange Note is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.
2. Method of Payment
Holdings will pay interest on the Senior Discount Notes (except
defaulted interest) to the Persons who are registered holders of Senior Discount
Notes at the close of business on the May 15 or November 15 next preceding the
interest payment date even if Senior Discount Notes are canceled after the
record date and on or before the interest payment date. Holders must surrender
Senior Discount Notes to a Paying Agent to collect principal payments. Holdings
will pay principal and interest in money of the United States of America that at
the time of payment is legal tender for payment of public and private debts.
Payments in respect of the Senior Discount Notes represented by a Global Senior
Discount Note (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. Holdings will make all payments in respect of a
certificated Senior Discount Note (including principal, premium and interest),
by mailing a check to the registered address of each Senior Discount Noteholder
thereof; provided, however, that payments on the Senior Discount Notes may also
be made, in the case of a Senior Discount Noteholder of at least $1,000,000
aggregate principal amount at maturity of Senior Discount Notes, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Senior Discount Noteholder elects payment by wire transfer
by giving written notice to the Senior Discount Notes Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately
preceding the relevant due date for payment (or such other date as the Senior
Discount Notes Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Bank One, N.A., a national banking association (the
"Senior Discount Notes Trustee"), will act as Paying Agent and Registrar.
Holdings may appoint and change any Paying Agent, Registrar or co-registrar
without notice. Holdings or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
3
4. Indenture
Holdings issued the Senior Discount Notes under an Indenture dated
as of June 5, 1998 (the "Indenture"), among Holdings and the Senior Discount
Notes Trustee. The terms of the Senior Discount Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-77bbbb) as in effect on the date
of the Indenture (the "TIA"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Senior Discount
Notes are subject to all such terms, and Senior Discount Noteholders are
referred to the Indenture and the TIA for a statement of those terms.
The Senior Discount Notes are senior unsecured obligations of
Holdings limited to $87 million aggregate principal amount at maturity at any
one time outstanding (subject to Section 2.07 of the Indenture). This Senior
Discount Note is one of the Initial Senior Discount Notes referred to in the
Indenture issued in an aggregate principal amount at maturity of $87 million.
The Senior Discount Notes include the Initial Senior Discount Notes and any
Senior Discount Exchange Notes issued in exchange for Initial Senior Discount
Notes. The Initial Senior Discount Notes and the Senior Discount Exchange Notes
are treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the ability of Holdings and its Restricted
Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Indebtedness,
enter into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, issue or sell shares of capital
stock of such Restricted Subsidiaries, enter into or permit certain transactions
with Affiliates, create or incur Liens and make asset sales. The Indenture also
imposes limitations on the ability of Holdings to consolidate or merge with or
into any other Person or convey, transfer or lease all or substantially all of
the property of Holdings.
5. Optional Redemption
Except as set forth in the following two paragraphs, the Senior
Discount Notes will not be redeemable at the option of Holdings prior to June 1,
2003. Thereafter, the Senior Discount Notes will be redeemable at the option of
Holdings, in whole or in part, on not less than 30 nor more than 60 days' prior
notice, at the following redemption prices (expressed as percentages of
principal amount at maturity), plus accrued and unpaid interest and liquidated
damages (if any) to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
June 1, of the years set forth below:
Redemption
Year Price
---- ------------
2003..................................................... 105.563%
2004..................................................... 103.708%
2005..................................................... 101.854%
2006 and thereafter...................................... 100.000%
In addition, at any time prior to June 1, 2001, Holdings may redeem,
in whole but not in part, the Senior Discount Notes with the Net Cash Proceeds
of one or more Equity Offerings by Holdings, at a redemption price equal to
111.125% of the Accreted Value at the
4
date of redemption plus liquidated damages, if any, thereon to the date of
redemption. Any such redemption shall be made within 120 days of such Equity
Offering upon not less than 30 nor more than 60 days' notice mailed to each
holder of Senior Discount Notes being redeemed and otherwise in accordance with
the procedures set forth in the Indenture.
At any time prior to June 1, 2003, the Senior Discount Notes may be
redeemed, in whole but not in part, at the option of Holdings at any time within
180 days after a Change of Control, at a redemption price equal to the sum of
(i) 100% of the Accreted Value thereof together with liquidated damages, if any,
to the redemption date plus (ii) the Applicable Premium.
6. Sinking Fund
The Senior Discount Notes are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Senior
Discount Noteholder of Senior Discount Notes to be redeemed at his or her
registered address. Senior Discount Notes in denominations larger than $1,000
(in principal amount at maturity) may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Senior Discount Notes (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Senior Discount Notes (or such
portions thereof) called for redemption.
8. Repurchase of Senior Discount Notes at the Option of Senior Discount
Noteholders upon Change of Control
Upon a Change of Control, any Senior Discount Noteholder of Senior
Discount Notes will have the right, subject to certain conditions specified in
the Indenture, to cause Holdings to repurchase all or any part of the Senior
Discount Notes of such Senior Discount Noteholder at a purchase price equal to
(a) 101% of the Accreted Value thereof at the date of repurchase plus liquidated
damages thereon, if any, to the date of repurchase, if repurchased on or prior
to June 1, 2003, and (b) 101% of the principal amount of the Senior Discount
Notes to be repurchased plus accrued and unpaid interest and liquidated damages,
if any, to the date of repurchase (subject to the right of Senior Discount
Noteholders of record on the relevant record date to receive interest due on the
relevant interest payment date), if repurchased after June 1, 2003, as provided
in, and subject to the terms of, the Indenture.
9. Mandatory Principal Redemption
On June 1, 2003, Holdings will be required to redeem an amount equal
to $354.96 per $1,000 principal amount at maturity of each Senior Discount Note
then outstanding ($30,881,520 in aggregate principal amount at maturity of the
Senior Discount Notes, assuming all of the Senior Discount Notes remain
outstanding on such date (the "Mandatory Principal Redemption Amount")) on a pro
rata basis at a redemption price of 100% of the principal amount at maturity of
the Senior Discount Notes so redeemed. If the redemption of a Senior Discount
Note pursuant to this paragraph 9 would result in an outstanding Senior Discount
Note in a denomination (i) of less than $1,000 principal amount
5
at maturity or (ii) other than an integral multiple of $1,000 principal amount
at maturity, such Senior Discount Note will be redeemed (A) in whole, in the
case of clause (i), or (B) by an additional amount so that such Senior Discount
Note will be in a denomination of an integral multiple of $1,000 principal
amount at maturity, in the case of clause (ii).
10. Denominations; Transfer; Exchange
The Senior Discount Notes are in registered form without coupons in
denominations of $1,000 (in principal amount at maturity) and whole multiples of
$1,000. A Senior Discount Noteholder may transfer or exchange Senior Discount
Notes in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Senior Discount Notes Trustee may require a Senior Discount
Noteholder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the Indenture.
The Registrar need not register the transfer of or exchange any Senior Discount
Notes selected for redemption (except, in the case of a Senior Discount Note to
be redeemed in part, the portion of the Senior Discount Note not to be redeemed)
or to transfer or exchange any Senior Discount Notes for a period of 15 days
prior to a selection of Senior Discount Notes to be redeemed.
11. Persons Deemed Owners
The registered Senior Discount Noteholder of this Senior Discount
Note may be treated as the owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Senior Discount Notes Trustee or Paying Agent shall pay the
money back to Holdings at its written request unless an abandoned property law
designates another Person. After any such payment, Senior Discount Noteholders
entitled to the money must look only to Holdings and not to the Senior Discount
Notes Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, Holdings at any time may terminate
some of or all its obligations under the Senior Discount Notes and the Indenture
if Holdings deposits with the Senior Discount Notes Trustee money or U.S.
Government Obligations for the payment of principal and interest on the Senior
Discount Notes to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Senior Discount Notes may be amended without prior notice to
any Senior Discount Noteholder but with the written consent of the Senior
Discount Noteholders of at least a majority in aggregate principal amount at
maturity of the outstanding Senior Discount Notes and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Senior Discount Noteholders of at least a majority in principal amount at
maturity of the outstanding Senior Discount Notes. Subject to certain exceptions
set forth in the Indenture, without the consent of any Senior Discount
Noteholder of Senior Discount Notes, Holdings and the Senior Discount Notes
Trustee may amend the Indenture or the
6
Senior Discount Notes (i) to cure any ambiguity, omission, defect or
inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide
for uncertificated Senior Discount Notes in addition to or in place of
certificated Senior Discount Notes; (iv) to add Guarantees with respect to the
Senior Discount Notes; (v) to secure the Senior Discount Notes; (vi) to add
additional covenants of Holdings for the benefit of the Senior Discount
Noteholders or to surrender rights and powers conferred on Holdings; (vii) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA; (viii) to make any change that
does not adversely affect the rights of any Senior Discount Noteholder; or (ix)
to provide for the issuance of the Senior Discount Exchange Notes or Private
Senior Discount Exchange Notes.
15. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of
Holdings) and is continuing, the Senior Discount Notes Trustee or the Senior
Discount Noteholders of at least 25% in principal amount at maturity of the
outstanding Senior Discount Notes may declare (a) the Accreted Value of all the
Senior Discount Notes, if on or prior to June 1, 2003, or (b) the principal of
and accrued but unpaid interest on all the Senior Discount Notes, if after June
1, 2003, to be due and payable. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of Holdings occurs, (a) the
Accreted Value of all the Senior Discount Notes, if on or prior to June 1, 2003,
or (b) the principal of and interest on all the Senior Discount Notes, if after
June 1, 2003, will become immediately due and payable without any declaration or
other act on the part of the Senior Discount Notes Trustee or any Senior
Discount Noteholders. Under certain circumstances, the Senior Discount
Noteholders of a majority in principal amount at maturity of the outstanding
Senior Discount Notes may rescind any such acceleration with respect to the
Senior Discount Notes and its consequences.
If an Event of Default occurs and is continuing, the Senior Discount
Notes Trustee will be under no obligation to exercise any of the rights or
powers under the Indenture at the request or direction of any of the Senior
Discount Noteholders unless such Senior Discount Noteholders have offered to the
Senior Discount Notes Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of Accreted
Value, principal, premium (if any) or interest when due, no Senior Discount
Noteholder may pursue any remedy with respect to the Indenture or the Senior
Discount Notes unless (i) such Senior Discount Noteholder has previously given
the Senior Discount Notes Trustee notice that an Event of Default is continuing,
(ii) Senior Discount Noteholders of at least 25% in principal amount at maturity
of the outstanding Senior Discount Notes have requested the Senior Discount
Notes Trustee in writing to pursue the remedy, (iii) such Senior Discount
Noteholders have offered the Senior Discount Notes Trustee reasonable security
or indemnity against any loss, liability or expense, (iv) the Senior Discount
Notes Trustee has not complied with such request within 60 days after the
receipt of the request and the offer of security or indemnity and (v) the Senior
Discount Noteholders of a majority in principal amount at maturity of the
outstanding Senior Discount Notes have not given the Senior Discount Notes
Trustee a direction inconsistent with such request within such 60-day period.
Subject to certain restrictions, the Senior Discount Noteholders of a majority
in principal amount at maturity of the outstanding Senior Discount Notes are
given the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Senior Discount Notes Trustee or of
exercising any trust or power conferred on the Senior Discount Notes Trustee.
The Senior Discount Notes Trustee, however, may
7
refuse to follow any direction that conflicts with law or the Indenture or that
the Senior Discount Notes Trustee determines is unduly prejudicial to the rights
of any other Senior Discount Noteholder or that would involve the Senior
Discount Notes Trustee in personal liability. Prior to taking any action under
the Indenture, the Senior Discount Notes Trustee will be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
16. Senior Discount Notes Trustee Dealings with Holdings
Subject to certain limitations imposed by the TIA, the Senior
Discount Notes Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Senior Discount Notes and may
otherwise deal with and collect obligations owed to it by Holdings or its
Affiliates and may otherwise deal with Holdings or its Affiliates with the same
rights it would have if it were not Senior Discount Notes Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of Holdings
shall not have any liability for any obligations of Holdings under the Senior
Discount Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Senior Discount
Note, each Senior Discount Noteholder waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Senior
Discount Notes.
18. Authentication
This Senior Discount Note shall not be valid until an authorized
signatory of the Senior Discount Notes Trustee (or an authenticating agent)
manually signs the certificate of authentication on the other side of this
Senior Discount Note.
19. Abbreviations
Customary abbreviations may be used in the name of a Senior Discount
Noteholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. GOVERNING LAW
THIS SENIOR DISCOUNT NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Holdings has caused CUSIP numbers to be
printed on the Senior Discount Notes and has directed the Senior Discount Notes
Trustee to use CUSIP numbers in notices of redemption as a convenience to Senior
Discount Noteholders. No
8
representation is made as to the accuracy of such numbers either as printed on
the Senior Discount Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
Holdings will furnish to any Senior Discount Noteholder of Senior
Discount Notes upon written request and without charge to the Senior Discount
Noteholder a copy of the Indenture which has in it the text of this Senior
Discount Note.
ASSIGNMENT FORM
To assign this Senior Discount Note, fill in the form below:
I or we assign and transfer this Senior Discount Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Senior Discount Note
on the books of Holdings. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
----------------------------- -----------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Senior Discount
Note.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SENIOR DISCOUNT NOTES
This certificate relates to $_________ principal amount at maturity of Senior
Discount Notes held in (check applicable space) ____ book-entry or _____
definitive form by the undersigned.
The undersigned (check one box below):
|_| has requested the Senior Discount Notes Trustee by written order to
deliver in exchange for its beneficial interest in the Global Senior
Discount Note held by the Depositary a Senior Discount Note or Senior
Discount Notes in definitive, registered form of authorized denominations
and an aggregate principal amount at maturity equal to its beneficial
interest in such Global Senior Discount Note (or the portion thereof
indicated above);
|_| has requested the Senior Discount Notes Trustee by written order to
exchange or register the transfer of a Senior Discount Note or Senior
Discount Notes.
In connection with any transfer of any of the Senior Discount Notes evidenced by
this certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act, the undersigned confirms that such Senior
Discount Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) |_| to Holdings; or
(2) |_| pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) |_| inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933) that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and
in compliance with Rule 144A under the Securities Act of 1933; or
(4) |_| outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance
with Rule 904 under the Securities Act of 1933; or
(5) |_| to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that
has furnished to the Senior Discount Notes Trustee a signed letter
containing certain representations and agreements; or
(6) |_| pursuant to another available exemption from registration provided
by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Senior Discount Notes Trustee will
refuse to register any of the Senior Discount Notes evidenced by this
certificate in the name of any Person other than the registered holder thereof;
provided, however, that if box (4), (5) or (6) is checked, the Senior Discount
Notes Trustee may require, prior to registering any such transfer of the Senior
Discount Notes, such legal opinions, certifications and other information as
Holdings has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933.
---------------------------
Your Signature
Signature Guarantee:
Date:
--------------------------- -------------------------------
Signature must be guaranteed Signature of Signature
by a participant in a Guarantee
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Senior Discount Notes Trustee
------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Senior Discount Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding Holdings as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:
--------------------- ------------------------------
NOTICE: To be executed by
an executive officer
[TO BE ATTACHED TO GLOBAL SENIOR DISCOUNT NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SENIOR
DISCOUNT NOTE
The initial principal amount at maturity of this Global Senior
Discount Note is $[ ]. The following increases or decreases in this Global
Senior Discount Note have been made:
Date of Amount of decrease in Amount of increase in Principal Amount at Signature of authorized
Exchange Principal Amount at Principal Amount at Maturity of this Global signatory of Senior
Maturity of this Global Maturity of this Global Senior Discount Note Discount Notes Trustee or
Senior Discount Note Senior Discount Note following such decrease or Senior Discount Notes
increase Custodian
OPTION OF SENIOR DISCOUNT NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Discount Note purchased by
Holdings pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of
the Indenture, check the box:
Asset Sale |_| Change of Control |_|
If you want to elect to have only part of this Senior Discount Note
purchased by Holdings pursuant to Section 4.06 or 4.08 of the Indenture, state
the amount:
$
Date:_________________ Your Signature:_________________________________________
(Sign exactly as your name appears on the
other side of the Senior Discount Note)
Signature Guarantee: ___________________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Senior Discount
Notes Trustee
EXHIBIT B
[FORM OF FACE OF SENIOR DISCOUNT EXCHANGE NOTE]
No. $__________
11 1/8% Senior Discount Note due 2008
CUSIP No. ______
WESCO International, Inc., a Delaware corporation, promises to pay
to Cede & Co., or registered assigns, the principal sum [of Dollars]
[listed on the Schedule of Increases or Decreases in Global Senior Discount Note
attached hereto(2) on June 1, 2008.
Interest Payment Dates: June 1 and December 1, commencing on June 1,
2003.
Record Dates: May 15 and November 15.
----------
(2) Use the Schedule of Increases and Decreases language if Note is in Global
Form.
2
Additional provisions of this Senior Discount Note are set forth on
the other side of this Senior Discount Note.
IN WITNESS WHEREOF, the parties have caused this instrument to be
duly executed.
WESCO INTERNATIONAL, INC.,
by
---------------------------------------
Name:
Title:
by
---------------------------------------
Name:
Title:
Dated:
SENIOR DISCOUNT NOTES TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BANK ONE, N.A.,
as Senior Discount Notes Trustee, certifies
that this is one of
the Senior Discount Notes referred
to in the Indenture.
By:
----------------------------------
Authorized Signatory
----------
(*) If the Senior Discount Note is to be issued in global form, add the Global
Senior Discount Notes Legend and the attachment from Exhibit A captioned "TO BE
ATTACHED TO GLOBAL SENIOR DISCOUNT NOTES - SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL SENIOR DISCOUNT NOTE".
[FORM OF REVERSE SIDE OF SENIOR DISCOUNT EXCHANGE NOTE]
11 1/8% Senior Discount Note due 2008
1. Interest.
WESCO INTERNATIONAL, INC., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called "Holdings"), promises to pay interest on the principal
amount at maturity of this Senior Discount Note at the rate per annum shown
above. Cash interest will not accrue or be payable on this Senior Discount Note
prior to June 1, 2003. From June 1, 2003, Holdings will pay interest
semiannually on June 1 and December 1 of each year. Interest on the Senior
Discount Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from June 1, 2003. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
Holdings will pay interest on the Senior Discount Notes (except
defaulted interest) to the Persons who are registered holders of Senior Discount
Notes at the close of business on the May 15 or November 15 next preceding the
interest payment date even if Senior Discount Notes are canceled after the
record date and on or before the interest payment date. Senior Discount
Noteholders must surrender Senior Discount Notes to a Paying Agent to collect
principal payments. Holdings will pay principal and interest in money of the
United States of America that at the time of payment is legal tender for payment
of public and private debts. Payments in respect of the Senior Discount Notes
represented by a Global Senior Discount Note (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. Holdings will make all
payments in respect of a certificated Senior Discount Note (including principal,
premium and interest), by mailing a check to the registered address of each
Senior Discount Noteholder thereof; provided, however, that payments on the
Senior Discount Notes may also be made, in the case of a Senior Discount
Noteholder of at least $1,000,000 aggregate principal amount at maturity of
Senior Discount Notes, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Senior Discount Noteholder
elects payment by wire transfer by giving written notice to the Senior Discount
Notes Trustee or the Paying Agent to such effect designating such account no
later than 30 days immediately preceding the relevant due date for payment (or
such other date as the Senior Discount Notes Trustee may accept in its
discretion).
3. Paying Agent and Registrar
Initially, Bank One, N.A., a national banking association (the
"Senior Discount Notes Trustee"), will act as Paying Agent and Registrar.
Holdings may appoint and change any Paying Agent, Registrar or co-registrar
without notice. Holdings or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
2
4. Indenture
Holdings issued the Senior Discount Notes under an Indenture dated
as of June 5, 1998 (the "Indenture"), among Holdings and the Senior Discount
Notes Trustee. The terms of the Senior Discount Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa- 77bbbb) as in effect on the date
of the Indenture (the "TIA"). Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture. The Senior Discount
Notes are subject to all such terms, and Senior Discount Noteholders are
referred to the Indenture and the TIA for a statement of those terms.
The Senior Discount Notes are senior unsecured obligations of
Holdings limited to $87 million aggregate principal amount at maturity at any
one time outstanding. This Senior Discount Note is one of the Initial Senior
Discount Notes referred to in the Indenture. The Senior Discount Notes include
the Initial Senior Discount Notes and any Senior Discount Exchange Notes and
Private Senior Discount Exchange Notes issued in exchange for the Initial Senior
Discount Notes pursuant to the Indenture. The Initial Senior Discount Notes, the
Senior Discount Exchange Notes and the Private Senior Discount Exchange Notes
are treated as a single class of securities under the Indenture. The Indenture
imposes certain limitations on the ability of Holdings and its Restricted
Subsidiaries to, among other things, make certain Investments and other
Restricted Payments, pay dividends and other distributions, incur Indebtedness,
enter into consensual restrictions upon the payment of certain dividends and
distributions by such Restricted Subsidiaries, issue or sell shares of capital
stock of such Restricted Subsidiaries, enter into or permit certain transactions
with Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of Holdings to consolidate or merge with or
into any other Person or convey, transfer or lease all or substantially all of
the property of Holdings.
5. Optional Redemption
Except as set forth in the following two paragraphs, the Senior
Discount Notes will not be redeemable at the option of Holdings prior to June 1,
2003. Thereafter, the Senior Discount Notes will be redeemable at the option of
Holdings, in whole or in part, on not less than 30 nor more than 60 days' prior
notice, at the following redemption prices (expressed as percentages of
principal amount at maturity), plus accrued and unpaid interest and liquidated
damages (if any) to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period commencing on
June 1 of the years set forth below:
Redemption
Year Price
---- ------------
2003...................................................... 105.563%
2004...................................................... 103.708%
2005...................................................... 101.854%
2006 and thereafter....................................... 100.000%
In addition, at any time prior to June 1, 2001, Holdings may redeem,
in whole but not in part, the Senior Discount Notes with the Net Cash Proceeds
of one or more Equity Offerings by Holdings, at a redemption price equal to
111.125% of the Accreted Value at the
3
date of redemption plus liquidated damages, if any, thereon to the date of
redemption. Any such redemption shall be made within 120 days of such Equity
Offering upon not less than 30 nor more than 60 days' notice mailed to each
holder of Senior Discount Notes being redeemed and otherwise in accordance with
the procedures set forth in the Indenture.
At any time prior to June 1, 2003, the Senior Discount Notes may be
redeemed, in whole but not in part, at the option of Holdings at any time within
180 days after a Change of Control, at a redemption price equal to the sum of
(i) 100% of the Accreted Value thereof together with liquidated damages, if any,
to the redemption date plus (ii) the Applicable Premium.
6. Sinking Fund
The Senior Discount Notes are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Senior
Discount Noteholder of Senior Discount Notes to be redeemed at his or her
registered address. Senior Discount Notes in denominations larger than $1,000
(in principal amount at maturity) may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Senior Discount Notes (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or before
the redemption date and certain other conditions are satisfied, on and after
such date interest ceases to accrue on such Senior Discount Notes (or such
portions thereof) called for redemption.
8. Repurchase of Senior Discount Notes at the Option of Senior Discount
Noteholders upon Change of Control
Upon a Change of Control, any Senior Discount Noteholder of Senior
Discount Notes will have the right, subject to certain conditions specified in
the Indenture, to cause Holdings to repurchase all or any part of the Senior
Discount Notes of such Senior Discount Noteholder at a purchase price equal to
(a) 101% of the Accreted Value thereof at the date of repurchase plus liquidated
damages thereon, if any, to the date of repurchase, if repurchased on or prior
to June 1, 2003, and (b) 101% of the principal amount of the Senior Discount
Notes to be repurchased plus accrued and unpaid interest and liquidated damages,
if any, to the date of repurchase (subject to the right of Senior Discount
Noteholders of record on the relevant record date to receive interest due on the
relevant interest payment date), if repurchased after June 1, 2003, as provided
in, and subject to the terms of, the Indenture.
9. Mandatory Principal Redemption
On June 1 , 2003, Holdings will be required to redeem an amount
equal to $354.96 per $1,000 principal amount at maturity of each Senior Discount
Note then outstanding ($30,881,520 in aggregate principal amount at maturity of
the Senior Discount Notes, assuming all of the Senior Discount Notes remain
outstanding on such date (the "Mandatory Principal Redemption Amount")) on a pro
rata basis at a redemption price of 100% of the principal amount at maturity of
the Senior Discount Notes so redeemed. If the redemption of a Senior Discount
Note pursuant to this paragraph 9 would result in an outstanding Senior Discount
Note in a denomination (i) of less than $1,000 principal amount
4
at maturity or (ii) other than an integral multiple of $1,000 principal amount
at maturity, such Senior Discount Note will be redeemed (A) in whole, in the
case of clause (i), or (B) by an additional amount so that such Senior Discount
Note will be in a denomination of an integral multiple of $1,000 principal
amount at maturity, in the case of clause (ii).
10. Denominations; Transfer; Exchange
The Senior Discount Notes are in registered form without coupons in
denominations of $1,000 (in principal amount and maturity) and whole multiples
of $1,000. A Senior Discount Noteholder may transfer or exchange Senior Discount
Notes in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Senior Discount Notes Trustee may require a Senior Discount
Noteholder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes required by law or permitted by the Indenture.
The Registrar need not register the transfer of or exchange any Senior Discount
Notes selected for redemption (except, in the case of a Senior Discount Note to
be redeemed in part, the portion of the Senior Discount Note not to be redeemed)
or to transfer or exchange any Senior Discount Notes for a period of 15 days
prior to a selection of Senior Discount Notes to be redeemed or 15 days before
an interest payment date.
11. Persons Deemed Owners
The registered Senior Discount Noteholder of this Senior Discount
Note may be treated as the owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Senior Discount Notes Trustee or Paying Agent shall pay the
money back to Holdings at its written request unless an abandoned property law
designates another Person. After any such payment, Senior Discount Noteholders
entitled to the money must look only to Holdings and not to the Senior Discount
Notes Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, Holdings at any time may terminate
some of or all its obligations under the Senior Discount Notes and the Indenture
if Holdings deposits with the Senior Discount Notes Trustee money or U.S.
Government Obligations for the payment of principal and interest on the Senior
Discount Notes to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Senior Discount Notes may be amended without prior notice to
any Senior Discount Noteholder but with the written consent of the Senior
Discount Noteholders of at least a majority in aggregate principal amount at
maturity of the outstanding Senior Discount Notes and (ii) any default or
noncompliance with any provision may be waived with the written consent of the
Senior Discount Noteholders of at least a majority in principal amount at
maturity of the outstanding Senior Discount Notes. Subject to certain exceptions
set forth in the Indenture, without the consent of any Senior Discount
Noteholder of Senior Discount Notes, Holdings and the Senior Discount Notes
Trustee may amend the Indenture or the
5
Senior Discount Notes (i) to cure any ambiguity, omission, defect or
inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide
for uncertificated Senior Discount Notes in addition to or in place of
certificated Senior Discount Notes; (iv) to add Guarantees with respect to the
Senior Discount Notes; (v) to secure the Senior Discount Notes; (vi) to add
additional covenants of Holdings for the benefit of the Senior Discount
Noteholders or to surrender rights and powers conferred on Holdings; (vii) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA; (viii) to make any change that
does not adversely affect the rights of any Senior Discount Noteholder; or (ix)
to provide for the issuance of the Senior Discount Exchange Notes or Private
Senior Discount Exchange Notes.
15. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default
relating to certain events of bankruptcy, insolvency or reorganization of
Holdings) and is continuing, the Senior Discount Notes Trustee or the Senior
Discount Noteholders of at least 25% in principal amount at maturity of the
outstanding Senior Discount Notes may declare (a) the Accreted Value of all the
Senior Discount Notes, if on or prior to June 1, 2003, or (b) the principal of
and accrued but unpaid interest on all the Senior Discount Notes, if after June
1, 2003, to be due and payable. If an Event of Default relating to certain
events of bankruptcy, insolvency or reorganization of Holdings occurs, (a) the
Accreted Value of all the Senior Discount Notes, if on or prior to June 1, 2003,
or (b) the principal of and interest on all the Senior Discount Notes, if after
June 1, 2003, will become immediately due and payable without any declaration or
other act on the part of the Senior Discount Notes Trustee or any Senior
Discount Noteholders. Under certain circumstances, the Senior Discount
Noteholders of a majority in principal amount at maturity of the outstanding
Senior Discount Notes may rescind any such acceleration with respect to the
Senior Discount Notes and its consequences.
If an Event of Default occurs and is continuing, the Senior Discount
Notes Trustee will be under no obligation to exercise any of the rights or
powers under the Indenture at the request or direction of any of the Senior
Discount Noteholders unless such Senior Discount Noteholders have offered to the
Senior Discount Notes Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of Accreted
Value, principal, premium (if any) or interest when due, no Senior Discount
Noteholder may pursue any remedy with respect to the Indenture or the Senior
Discount Notes unless (i) such Senior Discount Noteholder has previously given
the Senior Discount Notes Trustee notice that an Event of Default is continuing,
(ii) Senior Discount Noteholders of at least 25% in principal amount at maturity
of the outstanding Senior Discount Notes have requested the Senior Discount
Notes Trustee in writing to pursue the remedy, (iii) such Senior Discount
Noteholders have offered the Senior Discount Notes Trustee reasonable security
or indemnity against any loss, liability or expense, (iv) the Senior Discount
Notes Trustee has not complied with such request within 60 days after the
receipt of the request and the offer of security or indemnity and (v) the Senior
Discount Noteholders of a majority in principal amount at maturity of the
outstanding Senior Discount Notes have not given the Senior Discount Notes
Trustee a direction inconsistent with such request within such 60-day period.
Subject to certain restrictions, the Senior Discount Noteholders of a majority
in principal amount at maturity of the outstanding Senior Discount Notes are
given the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Senior Discount Notes Trustee or of
exercising any trust or power conferred on the Senior Discount Notes Trustee.
The Senior Discount Notes Trustee, however, may
6
refuse to follow any direction that conflicts with law or the Indenture or that
the Senior Discount Notes Trustee determines is unduly prejudicial to the rights
of any other Senior Discount Noteholder or that would involve the Senior
Discount Notes Trustee in personal liability. Prior to taking any action under
the Indenture, the Senior Discount Notes Trustee will be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
16. Senior Discount Notes Trustee Dealings with Holdings
Subject to certain limitations imposed by the TIA, the Senior
Discount Notes Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Senior Discount Notes and may
otherwise deal with and collect obligations owed to it by Holdings or its
Affiliates and may otherwise deal with Holdings or its Affiliates with the same
rights it would have if it were not Senior Discount Notes Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of Holdings
shall not have any liability for any obligations of Holdings under the Senior
Discount Notes or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Senior Discount
Note, each Senior Discount Noteholder waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Senior
Discount Notes.
18. Authentication
This Senior Discount Note shall not be valid until an authorized
signatory of the Senior Discount Notes Trustee (or an authenticating agent)
manually signs the certificate of authentication on the other side of this
Senior Discount Note.
19. Abbreviations
Customary abbreviations may be used in the name of a Senior Discount
Noteholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. GOVERNING LAW
THIS SENIOR DISCOUNT NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
21. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, Holdings has caused CUSIP numbers to be
printed on the Senior Discount Notes and has directed the Senior Discount Notes
Trustee to use CUSIP numbers in notices of redemption as a convenience to Senior
Discount Noteholders. No
7
representation is made as to the accuracy of such numbers either as printed on
the Senior Discount Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
Holdings will furnish to any Senior Discount Noteholder of Senior
Discount Notes upon written request and without charge to the Senior Discount
Noteholder a copy of the Indenture which has in it the text of this Senior
Discount Note.
ASSIGNMENT FORM
To assign this Senior Discount Note, fill in the form below:
I or we assign and transfer this Senior Discount Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Senior Discount
Note on the books of Holdings. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
----------------------------- -----------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Senior Discount
Note. Signature must be guaranteed by a participant in a recognized signature
guaranty medallion program or other signature guarantor acceptable to the Senior
Discount Notes Trustee.
OPTION OF SENIOR DISCOUNT NOTEHOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Discount Note purchased by
Holdings pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of
the Indenture, check the box:
Asset Sale |_| Change of Control |_|
If you want to elect to have only part of this Senior Discount Note
purchased by Holdings pursuant to Section 4.06 or 4.08 of the Indenture, state
the amount:
$
Date:_________________ Your Signature:_________________________________________
(Sign exactly as your name appears on the
other side of the Senior Discount Note)
Signature Guarantee: ___________________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Senior Discount
Notes Trustee.
EXHIBIT C
Form of
Transferee Letter of Representation
WESCO International, Inc.
In care of Bank One, N.A.
Bank One Trust Company, N.A.
c/o First Chicago Trust Company
00 Xxxx Xxxxxx
0xx Xxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $
principal amount at maturity of the 11 1/8% Senior Discount Notes due 2008 (the
"Senior Discount Notes") of WESCO International, Inc. ("Holdings").
Upon transfer, the Senior Discount Notes would be registered in the
name of the new beneficial owner as follows:
Name:
-------------------------------
Address:
----------------------------
Taxpayer ID Number:
------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount at
maturity of the Senior Discount Notes, and we are acquiring the Senior Discount
Notes not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act. We have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Senior Discount Notes, and we invest
in or purchase Senior Discount Notes similar to the Senior Discount Notes in the
normal course of our business. We, and any accounts for which we are acting, are
each able to bear the economic risk of our or its investment.
2. We understand that the Senior Discount Notes have not been
registered under the Securities Act and, unless so registered, may not be sold
except as permitted in the following sentence. We agree on our own behalf and on
behalf of any investor account for which we are purchasing Senior Discount Notes
to offer, sell or otherwise transfer such Senior Discount Notes prior to the
date that is two years after the later of the date of original issue and the
last date on which Holdings or any affiliate of Holdings was the owner of such
2
Senior Discount Notes (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to Holdings, (b) pursuant to a registration
statement that has been declared effective under the Securities Act, (c) in a
transaction complying with the requirements of Rule 144A under the Securities
Act ("Rule 144A"), to a person we reasonably believe is a qualified
institutional investor under Rule 144A (a "QIB") that purchases for its own
account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional "accredited investor" within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount at maturity of
Notes of $250,000, or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes is
proposed to be made pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the transferee
substantially in the form of this letter to Holdings and the Senior Discount
Notes Trustee, which shall provide, among other things, that the transferee is
an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act and that it is acquiring such Senior
Discount Notes for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that Holdings and the Senior
Discount Notes Trustee reserve the right prior to the offer, sale or other
transfer prior to the Resale Termination Date of the Senior Discount Notes
pursuant to clause (d), (e) or (f) above to require the delivery of an opinion
of counsel, certifications or other information satisfactory to Holdings and the
Senior Discount Notes Trustee.
TRANSFEREE:___________________,
by:___________________________
