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AMERIKING, INC.
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__% SUBORDINATED EXCHANGE DEBENTURES DUE 2008
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INDENTURE
DATED AS OF ________, 1996
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FLEET NATIONAL BANK
Trustee
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS............................................ 1
SECTION 1.02. OTHER DEFINITIONS...................................... 14
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT.......................................... 15
SECTION 1.04. RULES OF CONSTRUCTION.................................. 15
SECTION 1.05. INCORPORATION OF BURGER KING AGREEMENT................. 15
ARTICLE 2
THE EXCHANGE DEBENTURES
SECTION 2.01. FORM AND DATING........................................ 15
SECTION 2.02. EXECUTION AND AUTHENTICATION........................... 16
SECTION 2.03. REGISTRAR AND PAYING AGENT............................. 16
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.................... 17
SECTION 2.05. HOLDER LISTS........................................... 17
SECTION 2.06. TRANSFER AND EXCHANGE.................................. 17
SECTION 2.07. REPLACEMENT EXCHANGE DEBENTURES........................ 20
SECTION 2.08. OUTSTANDING EXCHANGE DEBENTURES........................ 20
SECTION 2.09. TREASURY EXCHANGE DEBENTURES........................... 21
SECTION 2.10. TEMPORARY EXCHANGE DEBENTURES.......................... 21
SECTION 2.11. CANCELLATION........................................... 21
SECTION 2.12. DEFAULTED INTEREST..................................... 22
SECTION 2.13. RECORD DATE............................................ 22
SECTION 2.14. CUSIP NUMBER........................................... 22
ARTICLE 3
OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE
SECTION 3.01. NOTICES TO TRUSTEE..................................... 22
SECTION 3.02. SELECTION OF EXCHANGE DEBENTURES TO BE
REDEEMED OR PURCHASED.................................. 23
SECTION 3.03. NOTICE OF REDEMPTION................................... 23
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION......................... 24
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE............................ 24
SECTION 3.06. EXCHANGE DEBENTURES REDEEMED IN PART................... 25
SECTION 3.07. OPTIONAL REDEMPTION PROVISIONS......................... 25
SECTION 3.08. MANDATORY PURCHASE PROVISIONS.......................... 25
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF EXCHANGE DEBENTURES......................... 27
SECTION 4.02. COMMISSION REPORTS..................................... 27
SECTION 4.03. COMPLIANCE CERTIFICATE................................. 28
SECTION 4.04. STAY, EXTENSION AND USURY LAWS......................... 29
SECTION 4.05. LIMITATION ON RESTRICTED PAYMENTS...................... 29
SECTION 4.06. CORPORATE EXISTENCE.................................... 31
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SECTION 4.07. LIMITATION ON INCURRENCE OF
INDEBTEDNESS........................................... 31
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH
AFFILIATE.............................................. 32
SECTION 4.09. LIMITATION ON LIENS.................................... 33
SECTION 4.10. COMPLIANCE WITH LAWS, TAXES............................ 33
SECTION 4.11. LIMITATION ON DIVIDENDS AND OTHER
PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES................................ 33
SECTION 4.12. MAINTENANCE OF OFFICE OR AGENCIES...................... 34
SECTION 4.13. CHANGE OF CONTROL...................................... 35
SECTION 4.14. LIMITATION ON ASSET SALES.............................. 35
SECTION 4.15. LIMITATION ON GUARANTEES OF COMPANY
INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES........................................... 36
SECTION 4.16. DESIGNATION OF RESTRICTED AND NON-
RESTRICTED SUBSIDIARIES................................ 37
SECTION 4.17. SENIOR SUBORDINATED DEBT............................... 38
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER OR CONSOLIDATION................................ 38
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED...................... 38
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT...................................... 39
SECTION 6.02. ACCELERATION........................................... 40
SECTION 6.03. OTHER REMEDIES......................................... 41
SECTION 6.04. WAIVER OF PAST DEFAULTS................................ 41
SECTION 6.05. CONTROL BY MAJORITY.................................... 41
SECTION 6.06. LIMITATION ON SUITS.................................... 41
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT................... 42
SECTION 6.08. COLLECTION SUIT BY TRUSTEE............................. 42
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM....................... 42
SECTION 6.10. PRIORITIES,............................................ 43
SECTION 6.11. UNDERTAKING FOR COSTS.................................. 43
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE...................................... 43
SECTION 7.02. RIGHTS OF TRUSTEE...................................... 44
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE........................... 45
SECTION 7.04. TRUSTEE'S DISCLAIMER................................... 45
SECTION 7.05. NOTICE TO HOLDERS OF DEFAULTS AND EVENTS
OF DEFAULT............................................. 45
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.......................... 45
SECTION 7.07. COMPENSATION AND INDEMNITY............................. 46
SECTION 7.08. REPLACEMENT OF TRUSTEE................................. 46
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC....................... 47
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.......................... 47
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY.................................... 47
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON EXCHANGE
DEBENTURES;DEFEASANCE.................................. 48
SECTION 8.02. CONDITIONS TO DEFEASANCE............................... 48
SECTION 8.03. APPLICATION OF TRUST MONEY............................. 49
SECTION 8.04. REPAYMENT TO THE COMPANY............................... 50
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS................... 50
SECTION 8.06. REINSTATEMENT.......................................... 50
ARTICLE 9
AMENDMENTS
SECTION 9.01. AMENDMENTS AND SUPPLEMENTS PERMITTED
WITHOUT CONSENT OF HOLDERS............................. 50
SECTION 9.02. AMENDMENTS AND SUPPLEMENTS REQUIRING
CONSENT OF HOLDERS..................................... 51
SECTION 9.03. COMPLIANCE WITH TIA.................................... 52
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS...................... 52
SECTION 9.05. NOTATION ON OR EXCHANGE OF EXCHANGE
DEBENTURES............................................. 52
SECTION 9.06. TRUSTEE PROTECTED...................................... 53
SECTION 9.07. PAYMENT FOR CONSENTS................................... 53
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE............................... 53
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY................... 53
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR
INDEBTEDNESS........................................... 54
SECTION 10.04. ACCELERATION OF SECURITIES............................. 54
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.................... 55
SECTION 10.06. NOTICE BY COMPANY...................................... 55
SECTION 10.07. SUBROGATION............................................ 55
SECTION 10.08. RELATIVE RIGHTS........................................ 56
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY
COMPANY................................................ 56
SECTION 10.10. DISTRIBUTION OR NOTICE TO
REPRESENTATIVE......................................... 56
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT..................... 56
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.................. 57
SECTION 10.13. AMENDMENTS............................................. 57
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS........................... 57
SECTION 11.02. NOTICES................................................ 57
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SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER
HOLDERS................................................ 58
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.............................................. 58
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR
OPINION................................................ 59
SECTION 11.06. RULES BY TRUSTEE AND AGENTS............................ 59
SECTION 11.07. LEGAL HOLIDAYS,........................................ 59
SECTION 11.08. NO RECOURSE AGAINST OTHERS............................. 59
SECTION 11.09. COUNTERPARTS........................................... 59
SECTION 11.10. VARIABLE PROVISIONS.................................... 60
SECTION 11.11. GOVERNING LAW.......................................... 60
SECTION 11.12. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS............................................. 60
SECTION 11.13. SUCCESSORS............................................. 60
SECTION 11.14. SEVERABILITY........................................... 60
SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC....................... 60
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This Indenture, dated as of , 1996, is between AmeriKing, Inc., a
Delaware corporation (the "Company"), and Fleet National Bank, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Company's ___%
Subordinated Exchange Debentures due 2008 (the "Exchange Debentures"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" means any of the following (i) any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, (ii) any spouse, immediate family member or other
relative who has the same principal residence as any Person described in clause
(i) above, (iii) any trust in which any such Persons described in clause (i) or
(ii) above has a beneficial interest, and (iv) any corporation or other
organization of which any such Persons described above collectively own 50% or
more of the equity of such entity.
"Agent" means any Registrar, Paying Agent or co-registrar or any
successor thereto.
"Asset Sale" means the sale, lease, conveyance or other disposition by
the Company or a Restricted Subsidiary of assets or property whether owned on
the Exchange Debenture Issue Date or thereafter acquired, in a single
transaction or in a series of related transactions; provided that Asset Sales
will not include such sales, leases, conveyances or dispositions in connection
with (i) the sale or disposition of any Restricted Investment, (ii) any Equity
Offering by (a) the Company or (b) any Restricted Subsidiary if the proceeds
therefrom are used to make mandatory prepayments of Indebtedness under the
Credit Agreement or Indebtedness of the Restricted Subsidiaries or redeem
Exchange Debentures as described in Section 3.07 hereof, (iii) the surrender or
waiver of contract rights or the settlement, release or surrender of contract,
tort or other claims of any kind, (iv) the sale of inventory in the ordinary
course of business, (v) a sale-leaseback of assets within one year following
the acquisition of such assets, (vi) the grant of any license of patents,
trademarks, registration therefor and other similar intellectual property,
(vii) a transfer of assets by the Company or a Restricted Subsidiary to any of
the Company, a Restricted Subsidiary or a Non-Restricted Subsidiary, (viii) the
designation of a Restricted Subsidiary as a Non-Restricted Subsidiary pursuant
to Section 4.16 hereof, (ix) the sale, lease, conveyance or other disposition
of all or substantially all of the assets of the Company as permitted under
Section 5.01 hereof, (x) the sale
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or disposition of obsolete equipment or other obsolete assets, or (xi)
Restricted Payments permitted by Section 4.05 hereof, (xii) the BKC Designated
Transfer, or (xiii) the exchange of assets for other non-cash assets that (a)
are useful in the business of the Company and its Restricted Subsidiaries and
(b) have a fair market value at least equal to the fair market value of the
assets being exchanged (as determined by the Board of Directors in good faith).
"BBI Note" means the promissory note in the aggregate principal amount
of $600,000 issued by the Company to BancBoston Investments, Inc. and all
related Obligations as in effect on the Preferred Stock Issue Date.
"BKC" means Burger King Corporation and its successors and assigns.
"BKC Agreements" means the franchise, trademark, royalty, lease,
sublease and other agreements, obligations and liabilities of the Company and
its Subsidiaries with or to BKC.
"BKC Designated Transfer" means the sale by the Company of up to 10
Burger King restaurants to a franchisee to be designated by BKC.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Company's board of directors or any
authorized committee of such board of directors.
"Intercreditor Agreement" means the Agreement, dated the date of this
Indenture, among the Trustee, the Company and its Subsidiaries and Burger King
Corporation in the form of Exhibit B.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock, including any
preferred stock.
"Cash Flow" means, for any given period and Person, the sum of,
without duplication, Consolidated Net Income, plus (a) the portion of Net
Income attributable to the minority interests in its Restricted Subsidiaries,
to the extent not included in calculating Consolidated Net Income, plus (b) any
provision for taxes based on income or profits to the extent such income or
profits were included in computing Consolidated Net Income, plus (c)
Consolidated Interest Expense, to the extent deducted in computing Consolidated
Net Income, plus (d) the amortization of all intangible assets, to the extent
such amortization was deducted in computing Consolidated Net Income (including,
but not limited to, inventory write-ups, goodwill, debt and financing
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costs, and Incentive Arrangements), plus (e) any non-capitalized transaction
costs incurred in connection with financings, acquisitions or divestitures
(including, but not limited to, financing and refinancing fees, to the extent
deducted in computing Consolidated Net Income, including those in connection
with the Offerings, to the extent deducted in computing Consolidated Net
Income), plus (f) all depreciation and all other non-cash charges (including,
without limitation, those charges relating to purchase accounting adjustments
and LIFO adjustments), to the extent deducted in computing Consolidated Net
Income, plus (g) any interest income, to the extent such income was not
included in computing Consolidated Net Income, plus (h) all dividend payments
on preferred stock (whether or not paid in cash) to the extent deducted in
computing Consolidated Net Income, plus (i) any extraordinary or non-recurring
charge or expense arising out of the implementation of SFAS 106 or SFAS 109 to
the extent deducted in computing Consolidated Net Income, plus (j) to the
extent not covered in clause (e) above, fees paid or payable in respect of the
TJC Agreement to the extent deducted in computing Consolidated Net Income, plus
(k) the net loss of any Person, other than those of a Restricted Subsidiary, to
the extent deducted in computing Consolidated Net Income, plus (l) net losses
in respect of any discontinued operations, as determined in accordance with
GAAP, to the extent deducted in computing Consolidated Net Income; provided,
however, that if any such calculation includes any period during which an
acquisition or sale of a Person or the incurrence or repayment of Indebtedness
occurred, then such calculation for such period shall be made on a Pro Forma
Basis.
"Cash Flow Coverage Ratio" means, for any given period and Person, the
ratio of: (i) Cash Flow, divided by (ii) the sum of Consolidated Interest
Expense and all dividend payments on any series of preferred stock of such
Person (except dividends paid or payable in additional shares of Capital Stock
(other than Disqualified Stock) and except for accrued and unpaid dividends
with respect to preferred stock outstanding on the Preferred Stock Issue Date),
in each case, without duplication; provided, however, that if any such
calculation includes any period during which an acquisition or sale of a Person
or the incurrence or repayment of Indebtedness occurred, then such calculation
for such period shall be made on a Pro Forma Basis.
"Change of Control" means the occurrence of each of the following: (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), excluding the Existing Stockholders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Stock of the Company; and (ii)
the Company consolidates with, or merges with or into, another Person or sells,
assigns,
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conveys, transfers, leases or otherwise disposes of all or substantially all of
its assets to any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is converted into or exchanged for
cash, securities or other property, other than any such transaction where (A)
the outstanding Voting Stock of the Company is converted into or exchanged for
(1) Voting Stock (other than Disqualified Stock) of the surviving or transferee
corporation or (2) cash, securities and other property in an amount which could
be paid by the Company as a Restricted Payment under this Indenture and (B)
immediately after such transaction no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), excluding the Existing
Stockholders, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 50% of the total Voting
Stock of the surviving or transferee corporation; and (iii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a
majority of the directors then still in office who are entitled to vote to
elect such new director and were either directors at the beginning of such
period or Persons whose election as directors or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office.
"Commission" means the Securities and Exchange Commission.
"Company" means AmeriKing, Inc. until a successor replaces it in
accordance with Article 5 hereof and thereafter means the successor, and shall
include any and all other obligors on the Exchange Debentures.
"Consolidated Interest Expense" means, for any given period and
Person, the aggregate of the interest expense in respect of all Indebtedness of
such Person and its Restricted Subsidiaries for such period, on a consolidated
basis, determined in accordance with GAAP (including amortization of original
issue discount on any such Indebtedness, all non-cash interest payments, the
interest portion of any deferred payment obligation and the interest component
of capital lease obligations, but excluding amortization of deferred financing
fees if such amortization would otherwise be included in interest expense);
provided, however, that for the purpose of the Cash Flow Coverage Ratio,
Consolidated Interest Expense shall be calculated on a Pro Forma Basis;
provided further that any premiums, fees and expenses (including the
amortization thereof) payable in connection with the Offerings and the
application of the net
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proceeds therefrom or any other refinancing of Indebtedness will be excluded.
"Consolidated Net Income" means, for any given period and Person, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, however, that: (i) the Net Income of any Person acquired in a pooling
of interests transaction for any period prior to the date of such acquisition
shall be excluded, and (ii) Consolidated Net Income of any Person will not
include, without duplication, any deduction for: (A) any increased amortization
or depreciation resulting from the write- up of assets pursuant to Accounting
Principles Board Opinion Nos. 16 and 17, as amended or supplemented from time
to time, (B) the amortization of all intangible assets (including amortization
attributable to inventory write-ups, goodwill, debt and financing costs, and
Incentive Arrangements), (C) any non-capitalized transaction costs incurred in
connection with actual or proposed financings, acquisitions or divestitures
(including, but not limited to, financing and refinancing fees), (D) any
extraordinary or nonrecurring charges relating to any premium or penalty paid,
write-off or deferred financing costs or other financial recapitalization
charges in connection with redeeming or retiring any Indebtedness prior to its
stated maturity, and (E) any Restructuring Charges; provided, however, that for
purposes of determining the Cash Flow Coverage Ratio, Consolidated Net Income
shall be calculated on a Pro Forma Basis.
"Consolidated Net Worth" with respect to any Person means, as of any
date, the consolidated equity of the common stockholders of such Person
(excluding the cumulated foreign currency translation adjustment), all
determined on a consolidated basis in accordance with GAAP, but without any
reduction in respect of the payment of dividends on any series of such Person's
preferred stock if such dividends are paid in additional shares of Capital
Stock (other than Disqualified Stock); provided, however, that Consolidated Net
Worth shall also include, without duplication (a) the amortization of all
write- ups of inventory, (b) the amortization of all intangible assets
(including amortization of goodwill, debt and financing costs, and Incentive
Arrangements), (c) any non-capitalized transaction costs incurred in connection
with actual and proposed financings, acquisitions or divestitures (including,
but not limited to, financing and refinancing fees), (d) any increased
amortization or depreciation resulting from the write-up of assets pursuant to
Accounting Principles Board Opinion Nos. 16 and 17, as amended and supplemented
from time to time, (e) any extraordinary or nonrecurring charges or expenses
relating to any premium or penalty paid, write-off or deferred financing costs
or other financial recapitalization charges incurred in connection with
redeeming or retiring any Indebtedness prior to its stated maturity, (f) any
Restructuring Charges, and (g) any extraordinary or non-recurring charge
arising out of the
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implementation of SFAS 106 or SFAS 109; provided, however, that Consolidated
Net Worth shall be calculated on a Pro Forma Basis.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 of this Indenture or such other address as
to which the Trustee gives notice to the Company.
"Credit Agreement" means the Second Amended and Restated Credit
Agreement, dated February 7, 1996, among the Company, certain of its
subsidiaries and the lenders party thereto in their capacities as lenders
thereunder and The First National Bank of Boston, as agent, together with all
loan documents and instruments thereunder (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including,
without limitation, increasing the amount of available borrowings thereunder,
and all Obligations with respect thereto, in each case, to the extent permitted
by Section 4.07 hereof, or adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion of the Indebtedness
under such agreement or any successor or replacement agreement and whether by
the same or any other agent, lender or group of lenders.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Exchange Debentures" means Exchange Debentures that are in
the form of Exhibit A attached hereto (but without including the text referred
to in footnotes 1 and 2 thereto).
"Depositary" means, with respect to the Exchange Debentures issuable
or issued in whole or in part in global form, the Person specified in Section
2.03 hereof as the Depositary with respect to the Exchange Debentures, until a
successor shall have been appointed and become such pursuant to the applicable
provision of this Indenture and, thereafter, "Depositary" shall mean or include
such successor.
"Designated Senior Debt" means (a) Indebtedness under the Company's %
Senior Notes due 2006 and the indenture relating thereto, (b) Indebtedness
under the Credit Agreement and (c) any other Senior Indebtedness permitted to
be incurred pursuant to this Indenture in a principal amount of not less than
$20,000,000 designated by the Company as Designated Senior Debt.
"Disqualified Stock" means any Capital Stock that by its terms (or by
the terms of any security into which it is
6
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder thereof,
in whole or in part on, or prior to, the maturity date of the Exchange
Debentures.
"Equity Interests" means Capital Stock or partnership interests or
warrants, options or other rights to acquire Capital Stock or partnership
interests (but excluding (i) any debt security that is convertible into, or
exchangeable for, Capital Stock or partnership interests, and (ii) any other
Indebtedness or Obligation) provided, however, that Equity Interests will not
include any Incentive Arrangements or obligations or payments thereunder.
"Equity Offering" means a public or private offering by the Company
and/or its Subsidiaries for cash of Capital Stock or other Equity Interests and
all warrants, options or other rights to acquire Capital Stock, other than (i)
an offering of Disqualified Stock or (ii) Incentive Arrangements or obligations
or payments thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debenture Custodian" means the Trustee, as custodian with
respect to the Exchange Debentures in global form, or any successor entity
thereto.
"Exchange Debenture Issue Date" means the date on which the Exchange
Debentures are issued under this Indenture.
"Executive Employment Agreements" means the Employment Agreements,
effective as of September 1, 1994, or, in the case of Xxxxxxx X. Xxxxxx, the
date of issuance of the Senior Notes, between the Company, on the one hand, and
Xxxxxxxx X. Xxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxx and Xxxxx
X. Xxxxxxx, on the other hand, as in effect at the Preferred Stock Issue Date.
"Existing Stockholders" means (a) The Jordan Company and
Jordan/Zalaznick Capital Corporation and their respective affiliates,
principals, partners and employees, family members of any of the foregoing and
trusts for the benefit of any of the foregoing, including, without limitation,
MCIT PLC, Leucadia National Corporation and Jordan Industries, Inc., and their
respective Subsidiaries and (b) the officers and directors of the Company on
the Preferred Stock Issue Date and their respective Affiliates and family
members and trusts for the benefit of any of the foregoing.
"GAAP" means generally accepted accounting principles, consistently
applied, as of the Preferred Stock Issue Date. All
7
financial and accounting determinations and calculations under this Indenture
will be made in accordance with GAAP.
"Global Exchange Debenture" means an Exchange Debenture that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 2 to the form of the Exchange Debenture attached hereto as Exhibit
A.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Persons under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) foreign exchange
contracts, currency swap agreements or similar agreements, and (iii) other
agreements or arrangements designed to protect such Person against
fluctuations, or otherwise to establish financial xxxxxx in respect of,
exchange rates, currency rates or interest rates.
"Holder" means a Person in whose name an Exchange Debenture is
registered.
"Incentive Arrangements" means any earn-out agreements, stock
appreciation rights, "phantom" stock plans, employment agreements,
non-competition agreements, subscription and stockholders agreements and other
incentive and bonus plans and similar arrangements made in connection with
acquisitions of Persons or businesses by the Company or the Restricted
Subsidiaries or the retention of executives, officers or employees by the
Company or the Restricted Subsidiaries.
"Indebtedness" means, with respect to any Person, any indebtedness,
whether or not contingent, in respect of borrowed money or evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or representing the deferred and unpaid balance
of the purchase price of any property (including pursuant to capital leases),
except any such balance that constitutes an accrued expense or a trade payable,
and any Hedging Obligations, if and to the extent such indebtedness (other than
a Hedging Obligation) would appear as a liability upon a balance sheet of such
Person prepared on a consolidated basis in accordance with GAAP, and also
includes, to the extent not otherwise included, the guarantee of items that
would be included within this definition; provided, however, that
"Indebtedness" will not include (i) any Incentive Arrangements or obligations
or payments thereunder, or (ii) any BKC Agreement, except for any indebtedness
in respect of borrowed money or evidenced by bonds, notes, debentures or
similar instruments or representing the deferred and unpaid balance of the
purchase price of any property (including pursuant to capital leases).
"Indenture" means this Indenture, as amended or supplemented from time
to time.
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"Insolvency or Liquidation Proceeding" means (i) any insolvency or
bankruptcy or similar case or proceeding, or any reorganization, receivership,
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, or (ii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company.
"Investment" means any capital contribution to, or other debt or
equity investment in, any Person.
"issue" means create issue, assume, guarantee, incur or otherwise
become directly or indirectly liable for any Indebtedness or Capital Stock, as
applicable; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be issued by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary. For this definition, the terms "issuing," "issuer," "issuance" and
"issued" have meanings correlative to the foregoing.
"Jaro Leases" means the leases between the Company's Subsidiaries and
Xxxxxxxx X. Xxxx relating to two Burger King restaurants as in effect at the
Preferred Stock Issue Date.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell and any filing of
or agreement to give any financing statement under the Uniform Commercial Code
(or equivalent statutes) of any jurisdiction).
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP, excluding, however, any
gain or loss, together with any related provision for taxes, realized in
connection with any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions).
"Net Proceeds" means, with respect to any Asset Sale, the aggregate
amount of cash proceeds (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such
9
deferred payment constituting interest, and including any amounts received as
disbursements or withdrawals from any escrow or similar account established in
connection with any such Asset Sale, but, in either such case, only as and when
so received) received by the Company or any of its Restricted Subsidiaries in
respect of such Asset Sale, net of: (i) the cash expenses of such Asset Sale
(including, without limitation, the payment of principal of, and premium, if
any, and interest on, Indebtedness required to be paid as a result of such
Asset Sale (other than the Exchange Debentures) and legal, accounting,
management and advisory and investment banking fees and sales commissions),
(ii) taxes paid or payable as a result thereof, (iii) any portion of cash
proceeds that the Company determines in good faith should be reserved for
post-closing adjustments, it being understood and agreed that on the day that
all such post-closing adjustments have been determined, the amount (if any) by
which the reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Company or any of its Restricted
Subsidiaries shall constitute Net Proceeds on such date, (iv) any relocation
expenses and pension, severance and shutdown costs incurred as a result
thereof, and (v) any deduction or appropriate amounts to be provided by the
Company or any of its Restricted Subsidiaries as a reserve in accordance with
GAAP against any liabilities associated with the asset disposed of in such
transaction and retained by the Company or such Restricted Subsidiary after
such sale or other disposition thereof, including, without limitation, pension
and other post- employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated
with such transaction.
"Non-Restricted Subsidiary" means any Subsidiary of the Company other
than a Restricted Subsidiary.
"Obligations" means, with respect to any Indebtedness, all principal,
interest, premiums, penalties, fees, indemnities, expenses (including legal
fees and expenses), reimbursement obligations and other liabilities payable to
the holder of such Indebtedness under the documentation governing such
Indebtedness, and any other claims of such holder arising in respect of such
Indebtedness.
"Offerings" means the offer and sale of the Senior Notes and the Units
consisting of $30,000,000 aggregate liquidation preference of Senior Preferred
Stock and ___ shares of Common Stock as contemplated by the Prospectuses.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice President of such Person.
10
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means an opinion from legal counsel that is
reasonably acceptable to the Trustee that meets the requirements of Section
11.05 hereof. Such counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Other Permitted Indebtedness" means: (i) Indebtedness of the Company
and its Restricted Subsidiaries existing as of the Exchange Debenture Issue
Date and all related Obligations as in effect on such date; (ii) Indebtedness
of the Company and its Restricted Subsidiaries in respect of bankers
acceptances and letters of credit (including, without limitation, letters of
credit in respect of workers' compensation claims) issued in the ordinary
course of business, or other Indebtedness in respect of reimbursement-type
obligations regarding workers' compensation claims; (iii) Refinancing
Indebtedness, provided that: (A) the principal amount of such Refinancing
Indebtedness shall not exceed the outstanding principal amount of Indebtedness
(including unused commitments) extended, refinanced, renewed, replaced,
substituted or refunded plus any amounts incurred to pay premiums, fees and
expenses in connection therewith, (B) the Refinancing Indebtedness shall have a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of the Indebtedness being extended, refinanced, renewed,
replaced, substituted or refunded; provided, however, that this limitation in
this clause (B) does not apply to Refinancing Indebtedness of Senior
Indebtedness, and (C) in the case of Refinancing Indebtedness of Subordinated
Indebtedness, such Refinancing Indebtedness shall be subordinated to the
Exchange Debentures at least to the same extent as the Subordinated
Indebtedness being extended, refinanced, renewed, replaced, substituted or
refunded; (iv) intercompany Indebtedness of and among the Company and its
Restricted Subsidiaries (excluding guarantees by Restricted Subsidiaries of
Indebtedness of the Company not issued in compliance with Section 4.15 hereof);
(v) Indebtedness of the Company and its Restricted Subsidiaries incurred in
connection with making permitted Restricted Payments under clauses (iii), (iv)
(but only to the extent that such Indebtedness is provided by the Company or a
Restricted Subsidiary) or (x) of Section 4.05(b) hereof; (vi) Indebtedness of
any Non-Restricted Subsidiary created after the Exchange Debenture Issue Date,
provided that such Indebtedness is nonrecourse to the Company and its
Restricted Subsidiaries and the Company and its Restricted Subsidiaries have no
Obligations with respect to such Indebtedness; (vii) Indebtedness of the
Company and its Restricted Subsidiaries under Hedging Obligations; (viii)
Indebtedness of the Company and its Restricted Subsidiaries arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight overdrafts, which will
not be, and will not be deemed to be,
11
inadvertent) drawn against insufficient funds in the ordinary course of
business; (ix) Indebtedness of any Person at the time it is acquired as a
Restricted Subsidiary, provided that such Indebtedness was not issued by such
Person in connection with or in anticipation of such acquisition; (x)
guarantees by Restricted Subsidiaries of Indebtedness of any Restricted
Subsidiary if such Indebtedness so guaranteed is permitted under this
Indenture; (xi) guarantees by a Restricted Subsidiary of Indebtedness of the
Company if the Indebtedness so guaranteed is permitted under this Indenture and
the Exchange Debentures are guaranteed by such Restricted Subsidiary to the
extent required by Section 4.15 hereof; (xii) guarantees by the Company of
Indebtedness of any Restricted Subsidiary if the Indebtedness so guaranteed is
permitted under this Indenture; (xiii) Indebtedness of the Company and its
Restricted Subsidiaries in connection with performance, surety, statutory,
appeal or similar bonds in the ordinary course of business; and (xiv)
Indebtedness of the Company and its Restricted Subsidiaries in connection with
agreements providing for indemnification, purchase price adjustments and
similar obligations in connection with the sale or disposition of any of their
business, properties or assets; and (xv) if the Company issues Exchange
Debentures in exchange for the Senior Preferred Stock, the issuance of
additional Exchange Debentures in lieu of cash interest with respect to all
interest payments payable on or prior to 2001, in accordance with this
Indenture.
"Permitted Liens" means:
(a) with respect to the Company and its Restricted Subsidiaries, (i)
Liens for taxes, assessments, governmental charges or claims which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if a reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor;
(ii) statutory Liens of landlords and carriers', warehousemen's, mechanics',
suppliers', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor; (iii) Liens incurred on deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (iv) Liens incurred
on deposits made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, government contracts, performance and
return of money bonds and other obligations of a like nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money); (v) easements, rights-of-way, zoning or other restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the business of the
Company or any of its Restricted
12
Subsidiaries incurred in the ordinary course of business; (vi) Liens (including
extensions, renewals and replacements thereof) upon property acquired (the
"Acquired Property") after the Exchange Debenture Issue Date, provided that:
(A) any such Lien is created solely for the purpose of securing Indebtedness
representing, or issued to finance, refinance or refund, the cost (including
the cost of construction) of the Acquired Property, (B) the principal amount of
the Indebtedness secured by such Lien does not exceed 100% of the cost of the
Acquired Property, (C) such Lien does not extend to or cover any property other
than the Acquired Property and any improvements on such Acquired Property, and
(D) the issuance of the Indebtedness to purchase the Acquired Property is
permitted by Section 4.07 hereof; (vii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (viii) judgment and attachment Liens
not giving rise to an Event of Default; (ix) leases or subleases granted to
others not interfering in any material respect with the business of the Company
or any of its Restricted Subsidiaries; (x) Liens securing Indebtedness under
Hedging Obligations; (xi) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty requirements; (xii)
Liens arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or its Restricted Subsidiaries in the ordinary
course of business; (xiii) any interest or title of a lessor in property
subject to any capital lease obligation or operating lease; (xiv) Liens arising
from filing Uniform Commercial Code financing statements regarding leases; (xv)
Liens existing on the Exchange Debenture Issue Date and any extensions,
refinancings, renewals, replacements, substitutions or refundings thereof;
(xvi) any Lien granted to the Trustee and any substantially equivalent Lien
granted to any trustee or similar institution under any indenture for Senior
Indebtedness permitted by the terms of this Indenture; (xvii) Liens in respect
of (A) the BKC Intercreditor Agreement or (B) other BKC Agreements that do not
constitute Indebtedness; and (xviii) additional Liens at any one time
outstanding in respect of properties or assets where aggregate fair market
value does not exceed $6,000,000 (the fair market value to be determined on the
date such Lien is granted on such properties or assets);
(b) with respect to the Restricted Subsidiaries, (i) Liens securing
Restricted Subsidiaries' reimbursement Obligations with respect to letters of
credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (ii) Liens securing Indebtedness
issued by Restricted Subsidiaries if such Indebtedness is (A) under the Credit
Agreement, or (B) permitted by Section 4.07(a) hereof, clauses (i), (ii) or
(iii) of Section 4.07(b) hereof, or clauses (i), (iii) (to the extent the
Indebtedness subject to such Refinancing Indebtedness was subject to Liens),
(vi), (vii), (ix) or (x) of the definition of Other Permitted Indebtedness;
(iii) Liens securing intercompany Indebtedness issued by any Restricted
Subsidiary to the Company or another Restricted Subsidiary; and
13
(iv) Liens securing guarantees by Restricted Subsidiaries of Indebtedness
issued by the Company if such guarantees permitted by clause (xi) (but only in
respect of the property, rights and assets of the Restricted Subsidiaries
issuing such guarantees) of the definition of Other Permitted Indebtedness;
(c) with respect to the Company, (i) Liens securing Indebtedness
issued by the Company if such Indebtedness is (A) under the Credit Agreement,
or (B) if such Indebtedness is permitted by Section 4.07 hereof (including, but
not limited to, Indebtedness issued by the Company under the Credit Agreement
pursuant to clause (i) and/or clause (iii) of Section 4.07(b) hereof); (ii)
Liens securing Indebtedness of the Company if such Indebtedness is permitted by
clauses (i), (iii) (to the extent the Indebtedness subject to such Refinancing
Indebtedness was subject to Liens) or (vii) of the definition of Other
Permitted Indebtedness; (iii) Liens securing guarantees by the Company of
Indebtedness issued by Restricted Subsidiaries if such Indebtedness is
permitted by Section 4.07 hereof (including, but not limited to, Indebtedness
issued by Restricted Subsidiaries under the Credit Agreement pursuant to clause
(i) and/or clause (iii) of Section 4.07(b) hereof) and if such guarantees are
permitted by clause (xii) (but only in respect of Indebtedness issued by the
Restricted Subsidiaries under the Credit Agreement pursuant to Section 4.07
hereof) of the definition of Other Permitted Indebtedness; and (iv) Liens
securing the Company's reimbursement obligations with respect to letters of
credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; provided, however, that,
notwithstanding any of the foregoing, the Permitted Liens referred to in clause
(c) of this definition shall not include any Lien on Capital Stock of
Restricted Subsidiaries held directly by the Company (as distinguished from
Liens on Capital Stock of Restricted Subsidiaries held by other Restricted
Subsidiaries) other than Liens securing (A) Indebtedness of the Company issued
under the Credit Agreement pursuant to Section 4.07 hereof and any permitted
Refinancing Indebtedness of such Indebtedness, (B) Liens in respect of (1) the
BKC Intercreditor Agreement (2) other BKC Agreements that do not constitute
Indebtedness and (C) guarantees by the Company of Indebtedness issued by
Restricted Subsidiaries under the Credit Agreement pursuant to Section 4.07
hereof and any permitted Refinancing Indebtedness of such Indebtedness.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Post-Petition Interest" means, with respect to any Indebtedness, all
interest accrued or accruing on such Indebtedness after the commencement of any
Insolvency or Liquidation proceeding in accordance with and at the contract
rate (including, without limitation, any rate applicable upon
14
default) specified in the agreement or instrument creating, evidencing or
governing such Indebtedness, whether or not, pursuant to applicable law or
otherwise, the claim for such interest is allowed as a claim in such Insolvency
or Liquidation Proceeding.
"Preferred Stock" means the __% Senior Exchangeable Preferred Stock of
the Company.
"Preferred Stock Issue Date" means the date on which the Preferred
Stock is originally issued under the Certificate of Designation relating
thereto.
"Pro Forma Basis" means, for purposes of determining Consolidated Net
Income in connection with the Cash Flow Coverage Ratio (including in connection
with Section 4.05, Section 4.16 and Section 5.01 hereof, the incurrence of
Indebtedness pursuant to Section 4.07(a) hereof and Consolidated Net Worth for
purposes of Section 5.01 hereof), giving pro forma effect to (x) any
acquisition or sale of a Person, business or asset, related incurrence,
repayment or refinancing of Indebtedness or other related transactions,
including any Restructuring Charges which would otherwise be accounted for as
an adjustment pursuant to Regulation S-X under the Securities Act or on a pro
forma basis under GAAP, or (y) any incurrence, repayment or refinancing of any
Indebtedness and the application of the proceeds therefrom, in each case, as if
such acquisition or sale and related transactions, restructurings,
consolidations, cost savings, reductions, incurrence, repayment or refinancing
were realized on the first day of the relevant period permitted by Regulation
S-X under the Securities Act or on a pro forma basis under GAAP. Furthermore,
in calculating the Cash Flow Coverage Ratio, (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the determination date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the determination date; (2) if interest on any
Indebtedness actually incurred on the determination date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate,
a eurocurrency interbank offered rate, or other rates, then the interest rate
in effect on the determination date will be deemed to have been in effect
during the relevant period; and (3) notwithstanding clause (1) above, interest
on Indebtedness determined on a fluctuating basis, to the extent such interest
is covered by agreements relating to interest rate swaps or similar interest
rate protection Hedging Obligations, shall be deemed to accrue at the rate per
annum resulting after giving effect to the operation of such agreements.
"Prospectuses" means the Prospectus, dated _________________, 1996,
relating to the Offerings.
15
"Redeemable Preferred Stock" means preferred stock that by its terms
or otherwise is required to be redeemed or is redeemable at the option of the
holder thereof on, or prior to, the maturity date of the Exchange Debentures.
"Refinancing Indebtedness" means (i) Indebtedness of the Company and
its Restricted Subsidiaries issued or given in exchange for, or the proceeds of
which are used to, extend, refinance, renew, replace, substitute or refund any
Indebtedness permitted under this Indenture or any Indebtedness issued to so
extend, refinance, renew, replace, substitute or refund such Indebtedness, (ii)
any refinancings of Indebtedness issued under the Credit Agreement, and (iii)
any additional Indebtedness issued to pay premiums and fees in connection with
clauses (i) and (ii).
"Restricted Investment" means any Investment in any person; provided
that Restricted Investments will not include: (i) Investments in marketable
securities and other negotiable instruments permitted by this Indenture; (ii)
any Incentive Arrangement; (iii) Investments in the Company; or (iv)
Investments in any Restricted Subsidiary (provided that any Investment in a
Restricted Subsidiary was made for fair market value (as determined by the
Board of Directors in good faith)). The amount of any Restricted Investment
shall be the amount of cash and the fair market value at the time of transfer
of all other property (as determined by the Board of Directors in good faith)
initially invested or paid for such Restricted Investment, plus all additions
thereto, without any adjustments for increases or decreases in value of or
write-ups, write-downs or write-offs with respect to, such Restricted
Investment.
"Restricted Subsidiary" means: (i) any Subsidiary of the Company
existing on the Exchange Debenture Issue Date, and (ii) any other Subsidiary of
the Company formed, acquired or existing after the Exchange Debenture Issue
Date that is designated as a "Restricted Subsidiary" by the Company pursuant to
a resolution approved by a majority of the Board of Directors, provided,
however, that the term Restricted Subsidiary shall not include any Subsidiary
of the Company that has been redesignated by the Company pursuant to a
resolution approved by a majority of the Board of Directors as a Non-Restricted
Subsidiary in accordance with Section 4.16 hereof unless such Subsidiary shall
have subsequently been redesignated a Restricted Subsidiary in accordance with
clause (ii) of this definition.
"Restructuring Charges" means any charges or expenses in respect of
restructuring or consolidating any business, operations or facilities, any
compensation or headcount reduction, or any other cost savings, of any Persons
or businesses either alone or together with the Company or any Restricted
Subsidiary, as permitted by GAAP or Regulation S-X under the Securities Act.
16
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means: (i) all Obligations (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on any Indebtedness of
the Company, whether outstanding on the Exchange Debenture Issue Date or
thereafter created, incurred or assumed, of the following types: (A) all
Indebtedness of the Company for money borrowed, and (B) all Indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which the Company is responsible or liable; (ii) all capitalized
lease obligations of the Company; (iii) all Obligations of the Company: (A) for
the reimbursement of any obligor on any letter of credit, banker's acceptance
or similar credit transaction, (B) all constituting Hedging Obligations, or (C)
issued as the deferred purchase price of property and all conditional sale
Obligations of the Company and all Obligations of the Company under any title
retention agreement; (iv) all guarantees of the Company with respect to
Obligations of other Persons of the type referred to in clauses (ii) and (iii)
and with respect to the payment of dividends of other Persons; and (v) all
obligations of the Company consisting of modifications, renewals, extensions,
replacements and refundings of any Obligations described in clauses (i), (ii),
(iii) or (iv) unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is expressly provided that such
Obligations are subordinated or junior in right of payment to the Exchange
Debentures; provided, however, that Senior Indebtedness shall not be deemed to
include: (1) any Obligation of the Company to any Subsidiary, (2) any liability
for federal, state, local or other taxes owed or owing by the Company, (3) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness, guarantee or Obligation of the Company that
is contractually subordinated or junior in any respect to any other
Indebtedness, guarantee or Obligation of the Company, or (5) any Indebtedness
to the extent the same is incurred in violation of this Indenture.
To the extent any payment on the Exchange Debentures, whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise, is declared to be fraudulent or preferential, set aside or
required to be paid to a trustee, receiver or other similar party under any
bankruptcy, insolvency, receivership or similar law, then if such payment is
recovered by, or paid over to, such trustee, receiver or other similar party,
the Exchange Debentures or part thereof originally intended to be satisfied by
such payment shall be deemed to be reinstated and outstanding as if such
payment had not occurred.
17
"Senior Preferred Stock" means the Company's % Senior Exchangeable
Preferred Stock due 2008.
"Senior Preferred Stock Issue Date" means
, 1996.
"SFAS 106" means Statement of Financial Accounting Standards
No. 106.
"SFAS 109" means Statement of Financial Accounting Standards
No. 109.
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that would be a "significant subsidiary" as defined in clause (2) of
the definition of such term in Rule 1-02 of Regulation S-X under the Securities
Act and the Exchange Act.
"Subordinated Indebtedness" means all Obligations of the type referred
to in clauses (i) through (v) of the definition of Senior Indebtedness, if the
instrument creating or evidencing the same, or pursuant to which the same is
outstanding, designates such Obligations as subordinated or junior in right of
payment to Senior Indebtedness.
"Subsidiary" of any Person means any entity of which the Equity
Interests entitled to cast at least a majority of the votes that may be cast by
all Equity Interests having ordinary voting power for the election of directors
or other governing body of such entity are owned by such Person (regardless of
whether such Equity Interests are owned directly by such Person or through one
or more Subsidiaries).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as amended, as in effect on the date hereof.
"TJC Agreement" means the Management Consulting Agreement, effective
September 1, 1994, between the Company and TJC Management Corporation, as in
effect on the Preferred Stock Issue Date.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust administration department of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers, and also means, with respect to a particular
18
corporate trust matter, any other officer to whom such matter is referenced
because of his knowledge of, and familiarity with, the particular subject.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged, provided that no U.S. Government
Obligation shall be callable at the issuer's option.
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect the board of directors.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the sum of the
product(s) obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other requirement payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Acceleration Notice"....................................................6.02
"Affiliate Transaction"..................................................4.08
"Asset Sale Disposition Date"............................................4.14
"Asset Sale Trigger Date"................................................4.14
"Change of Control Trigger Date".........................................4.13
"covenant defeasance option".............................................8.01
"Disposition"............................................................5.01
"DTC"....................................................................2.03
"Event of Default".......................................................6.01
"Excess Proceeds"........................................................4.14
"Exchange Debentures" .............................................. Preamble
"legal defeasance option"................................................8.01
"Notice of Default"......................................................6.01
"Offer"..................................................................3.08
"Other Company Indebtedness".............................................4.15
"Other Indebtedness Guarantee"...........................................4.15
"Paying Agent"...........................................................2.03
"Purchase Date"..........................................................3.08
"Registrar"..............................................................2.03
"Restricted Payments"....................................................4.05
"Successor Corporation"..................................................5.01
"Trustee Expenses".......................................................6.08
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
19
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in, and made a part of, this Indenture.
Any terms incorporated by reference in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them therein.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the meaning
assigned to it under GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
SECTION 1.05. INCORPORATION OF BURGER KING AGREEMENT.
Concurrently with the execution of this Indenture, the Trustee shall
execute and deliver to Burger King Corporation the Intercreditor Agreement. The
Exchange Debentures shall be subject to the terms of the Intercreditor
Agreement, which are incorporated by reference herein.
ARTICLE 2
THE EXCHANGE DEBENTURES
SECTION 2.01. FORM AND DATING.
The Exchange Debentures and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is part
of this Indenture. The Exchange Debentures may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Exchange
Debenture shall be dated the date of its authentication. The Exchange
Debentures shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Exchange Debentures shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Each Global Exchange Debenture shall represent such of the outstanding
Exchange Debentures as shall be specified therein and each shall provide that
it shall represent the aggregate amount
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of outstanding Exchange Debentures from time to time endorsed thereon and that
the aggregate amount of outstanding Exchange Debentures represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Exchange Debenture to reflect the
amount of any increase or decrease in the amount of outstanding Exchange
Debentures represented thereby shall be made by the Trustee or the Exchange
Debenture Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Exchange Debentures for the Company by
manual or facsimile signature.
If an Officer whose signature is on an Exchange Debenture no longer
holds that office at the time an Exchange Debenture is authenticated, the
Exchange Debenture shall nevertheless be valid.
An Exchange Debenture shall not be valid until authenticated by the
manual signature of an authorized signatory of the Trustee, and the Trustee's
signature shall be conclusive evidence that the Exchange Debenture has been
authenticated under this Indenture. The form of Trustee's certificate of
authentication to be borne by the Exchange Debentures shall be substantially as
set forth in Exhibit A.
The Trustee shall, upon a written order of the Company signed by two
Officers directing the Trustee to authenticate the Exchange Debentures and
certifying that all conditions precedent to the issuance of the Exchange
Debentures contained herein have been complied with, authenticate Exchange
Debentures for original issuance up to an aggregate principal amount stated in
paragraph 4 of the Exchange Debentures (the aggregate principal amount of
outstanding Exchange Debentures may not exceed that amount at any time, except
as provided in Section 2.07 hereof).
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Exchange Debentures. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Exchange Debentures
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (the "Registrar") where
Exchange Debentures may be presented for registration of transfer or for
exchange and an office or agency (the "Paying Agent") where Exchange Debentures
may be presented
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for payment. The Registrar shall keep a register of the Exchange Debentures and
of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar, and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
prior notice to any Holder. The Company shall notify in writing the Trustee and
the Trustee shall notify the Holders in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, and such agreement shall incorporate the
TIA's provisions and implement the provisions of this Indenture that relate to
such Agent.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Exchange Debentures.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Exchange
Debentures and as Exchange Debenture Custodian with respect to the Global
Exchange Debentures. The Company or any of its Subsidiaries may act as Paying
Agent, Registrar or co-registrar. If the Company fails to appoint or maintain a
Registrar and Paying Agent, the Trustee shall act as such, and shall be
entitled to appropriate compensation in accordance with Section 7.07 hereof.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the Holders'
benefit or the Trustee all money the Paying Agent holds for redemption or
purchase of the Exchange Debentures or for the payment of principal of, or
premium, if any, or interest on, the Exchange Debentures, and will promptly
notify the Trustee of any Default by the Company in providing the Paying Agent
with sufficient funds to (i) purchase Exchange Debentures tendered pursuant to
an Offer arising under Section 4.13 hereof, (ii) redeem Exchange Debentures
called for redemption, or (iii) make any payment of principal, premium or
interest due on the Exchange Debentures. While any such Default continues, the
Trustee may require the Paying Agent to pay all money it holds to the Trustee
and to account for any funds disbursed. The Company at any time may require the
Paying Agent to pay all money it holds to the Trustee and to account for any
funds disbursed. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or any of its Subsidiaries) shall have no further liability
for the money it delivered to the Trustee. If the Company or any of its
Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate
trust
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fund for the Holders' benefit or the Trustee all money it holds as Paying
Agent.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require that sets forth the names and addresses of, and
the aggregate principal amount of Exchange Debentures held by, each Holder, and
the Company shall otherwise comply with Section 312(a) of the TIA.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Exchange Debentures.
When
Definitive Exchange Debentures are presented by a Holder to the
Registrar with
a request:
(x) to register the transfer of the Definitive Exchange
Debentures; or
(y) to exchange such Definitive Exchange Debentures for an equal
principal amount of Definitive Exchange Debentures of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Exchange Debentures presented or surrendered for register of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized in writing.
(b) Transfer of a Definitive Exchange Debenture for a Beneficial
Interest in a Global Exchange Debenture. A Definitive Exchange Debenture may
not be exchanged for a beneficial interest in a Global Exchange Debenture
except upon satisfaction of the requirements set forth herein. Upon receipt by
the Trustee of a Definitive Exchange Debenture, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with written instructions from the Holder thereof directing the
Trustee to make, or to direct the Exchange Debenture Custodian to make, an
endorsement on the Global Exchange Debenture to reflect an increase in the
aggregate principal amount of the Exchange Debentures represented by the Global
Exchange Debenture, the Trustee shall cancel such
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Definitive Exchange Debenture in accordance with Section 2.11 hereof and cause,
or direct the Exchange Debenture Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depositary and the
Exchange Debenture Custodian, the aggregate principal amount of Exchange
Debentures represented by the Global Exchange Debenture to be increased
accordingly. If no Global Exchange Debentures are then outstanding, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate a new Global Exchange
Debenture in the appropriate principal amount.
(c) Transfer and Exchange of Global Exchange Debentures. The transfer
and exchange of Global Exchange Debentures or beneficial interests therein
shall be effected through the Depositary, in accordance with this Indenture and
the procedures of the Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
(d) Transfer of a Beneficial Interest in a Global Exchange Debenture
for a Definitive Exchange Debenture.
(i) Any Person having a beneficial interest in a Global Exchange
Debenture may upon request exchange such beneficial interest for a Definitive
Exchange Debenture. Upon receipt by the Trustee of written instructions or such
other form of instructions as is customary for the Depositary, from the
Depositary or its nominee on behalf of any Person having a beneficial interest
in a Global Exchange Debenture, the Trustee or the Exchange Debenture
Custodian, at the direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the Depositary and the
Exchange Debenture Custodian, cause the aggregate principal amount of Global
Exchange Debentures to be reduced accordingly and, following such reduction,
the Company shall execute and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate and deliver
to the transferee a Definitive Exchange Debenture in the appropriate principal
amount.
(ii) Definitive Exchange Debentures issued in exchange for a beneficial
interest in a Global Exchange Debenture pursuant to this Section 2.06(d)
shall be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver in accordance with the standard procedures of the Depositary such
Definitive Exchange Debentures to the Persons in whose names such Exchange
Debentures are so registered.
(e) Restrictions on Transfer and Exchange of Global
Exchange Debentures. Notwithstanding any other provision of this
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Indenture (other than the provisions set forth in subsection (f) of this
Section 2.06), a Global Exchange Debenture 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.
(f) Authentication of Definitive Exchange Debentures in Absence of
Depositary. If at any time:
(i) the Depositary for the Exchange Debentures notifies the Company
that the Depositary is unwilling or unable to continue as
Depositary for the Global Exchange Debentures and a successor
Depositary for the Global Exchange Debentures is not appointed by
the Company within 90 days after delivery of such notice; or
(ii) The Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive
Exchange Debentures under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Exchange Debentures in an aggregate principal amount equal
to the principal amount of the Global Exchange Debentures in exchange for such
Global Exchange Debentures and registered in such names as the Depositary shall
instruct the Trustee or the Company in writing.
(g) Cancellation and/or Adjustment of Global Exchange Debentures. At
such time as all beneficial interests in Global Exchange Debentures have been
exchanged for Definitive Exchange Debentures, redeemed, repurchased or
cancelled, all Global Exchange Debentures shall be returned to or retained and
cancelled by the Trustee in accordance with Section 2.11 hereof. At any time
prior to such cancellation, if any beneficial interest in a Global Exchange
Debenture is exchanged for Definitive Exchange Debentures, redeemed,
repurchased or cancelled, the principal amount of Exchange Debentures
represented by such Global Exchange Debenture shall be reduced accordingly and
an endorsement shall be made on such Global Exchange Debenture, by the Trustee
or the Exchange Debentures Custodian, at the direction of the Trustee, to
reflect such reduction.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive
Exchange Debentures and Global Exchange Debentures at the
Registrar's request.
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(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to Sections
3.07, 4.13, 4.14 and 9.05 hereof).
(iii) Neither the Company nor the Registrar shall be required to
register the transfer of or exchange any Exchange
Debenture selected for redemption in whole or in part,
except the unredeemed portion of any Exchange Debenture
being redeemed in part.
(iv) All Definitive Exchange Debentures and Global Exchange
Debentures issued upon any registration of transfer or
exchange of Definitive Exchange Debentures or Global Exchange
Debentures in accordance with this Indenture including any
increase in the aggregate principal amount of the Exchange
Debentures represented by the Global Exchange Debenture
pursuant to subsection (b) above) shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the
Definitive Exchange Debentures or Global Exchange Debentures
surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required to issue Exchange Debentures
and the Registrar shall not be required to register the
transfer of or to exchange Exchange Debentures during a period
beginning at the opening of business 15 days before the day of
any selection of Exchange Debentures for redemption under
Section 3.02 hereof and ending at the close of business on the
day of selection, or to register the transfer of or to
exchange an Exchange Debenture between a record date and the
next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Exchange Debenture, the Trustee, any Agent and the Company
may deem and treat the Person in whose name any Exchange
Debenture is registered as the absolute owner of such Exchange
Debenture for the purpose of receiving payment of principal
of, premium, if any, and accrued and unpaid interest on such
Exchange Debentures, and neither the Trustee, any Agent nor
the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Exchange
Debentures and Global Exchange Debentures in
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accordance with the provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT EXCHANGE DEBENTURES.
If any mutilated Exchange Debenture is surrendered to the Trustee, or
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Exchange Debenture, the Company shall issue
and the Trustee, upon the Company's written order signed by two Officers, shall
authenticate a replacement Exchange Debenture if the Trustee's requirements are
met. If the Trustee or the Company requires it, the Holder must supply an
indemnity bond that is sufficient in the judgment of the Trustee and the
Company to protect the Company, the Trustee, any Agent or any authenticating
agent from any loss that any of them may suffer if an Exchange Debenture is
replaced. The Company and the Trustee may charge for their expenses in
replacing an Exchange Debenture. Every replacement Exchange Debenture is an
additional Obligation of the Company.
SECTION 2.08. OUTSTANDING EXCHANGE DEBENTURES.
The Exchange Debentures outstanding at any time are all the Exchange
Debentures the Trustee has authenticated except for those it has cancelled,
those delivered to it for cancellation, those representing reductions in the
interest in a Global Exchange Debenture effected by the Trustee in accordance
with the provisions hereof, and those described in this Section as not
outstanding.
If an Exchange Debenture is replaced pursuant to Section 2.07 hereof,
it ceases to be outstanding unless the Trustee receives proof satisfactory to
it that a bona fide purchaser holds the replaced Exchange Debenture.
If the entire principal of, and premium, if any, and accrued interest
on, any Exchange Debenture is considered paid under Section 4.01 hereof, it
ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.09 hereof, an Exchange Debenture does not cease
to be outstanding because the Company or an Affiliate holds the Exchange
Debenture.
SECTION 2.09. TREASURY EXCHANGE DEBENTURES.
In determining whether the Holders of the required principal amount of
Exchange Debentures have concurred in any direction, waiver or consent,
Exchange Debentures owned by the Company or an Affiliate shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Exchange Debentures that a Trust Officer of the Trustee knows are so owned
shall be so disregarded. Notwithstanding the
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foregoing, Exchange Debentures that the Company or an Affiliate offers to
purchase or acquires pursuant to an Offer, exchange offer, tender offer or
otherwise shall not be deemed to be owned by the Company or an Affiliate until
legal title to such Exchange Debentures passes to the Company or such
Affiliate, as the case may be.
SECTION 2.10. TEMPORARY EXCHANGE DEBENTURES.
Until Definitive Exchange Debentures are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Exchange
Debentures. Temporary Exchange Debentures shall be substantially in the form of
Definitive Exchange Debentures but may have variations that the Company
considers appropriate for temporary Exchange Debentures, Without unreasonable
delay, the Company shall prepare and the Trustee, upon receipt of the Company's
written order signed by two officers which shall specify the amount of
temporary Exchange Debentures to be authenticated and the date on which the
temporary Exchange Debentures are to be authenticated, shall authenticate
Definitive Exchange Debentures and deliver them in exchange for temporary
Exchange Debentures. Until such exchange, Holders of temporary Exchange
Debentures shall be entitled to the same rights, benefits and privileges as
Definitive Exchange Debentures.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Exchange Debentures to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Exchange Debentures surrendered to them for registration of
transfer, exchange, replacement, payment (including all Exchange Debentures
called for redemption and all Exchange Debentures accepted for payment pursuant
to an Offer) or cancellation, and the Trustee shall cancel all such Exchange
Debentures and shall destroy all cancelled Exchange Debentures (subject to the
Exchange Act's record retention requirements) and deliver a certificate of
their destruction to the Company unless by written order, signed by two
Officers of the Company, the Company shall direct that cancelled Exchange
Debentures be returned to it. The Company may not issue new Exchange Debentures
to replace any Exchange Debentures that have been cancelled by the Trustee or
that have been delivered to the Trustee for cancellation. If the Company or an
Affiliate acquires any Exchange Debentures (other than by redemption or
pursuant to an Offer), such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Exchange Debentures unless
and until such Exchange Debentures are delivered to the Trustee for
cancellation.
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SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Exchange
Debentures, it shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to Holders on a
subsequent special record date, in each case at the rate provided in the
Exchange Debentures and in Section 4.01 of this Indenture. The Company shall
fix or cause to be fixed each such special record date and payment date. As
early as practicable prior to the special record date, the Company (or the
Trustee, in the name of and at the expense of the Company) shall mail a notice
that states the special record date, the related payment date and the amount of
interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders of
Exchange Debentures entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture shall be determined as
provided for in section 316(c) of the TIA.
SECTION 2.14. CUSIP NUMBER.
A "CUSIP" number shall be printed on the Exchange Debentures, and the
Trustee shall use the CUSIP number in notices of redemption, purchase or
exchange as a convenience to Holders, provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Exchange Debentures and that reliance
may be placed only on the other identification numbers printed on the Exchange
Debentures. The Company shall promptly notify the Trustee of any change in the
CUSIP number.
ARTICLE 3
OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Exchange Debentures pursuant to
Section 3.07 hereof, it shall furnish to the Trustee, at least 10 but not more
than 15 days before notice of redemption is to be mailed by the Company to
Holders, an Officers' Certificate stating that the Company has elected to
redeem Exchange Debentures pursuant to Section 3.07(a) or 3.07(b) hereof, as
the case may be, the date notice of redemption is to be mailed to Holders, the
redemption date, the aggregate principal amount of Exchange Debentures to be
redeemed, the redemption price for such Exchange Debentures and the amount of
accrued and unpaid interest on such Exchange Debentures as of the redemption
date. If the Trustee is not the Registrar, the Company shall, concurrently with
delivery of its notice to the Trustee of a redemption, cause the Registrar to
deliver to the Trustee a certificate (upon which
29
the Trustee may rely) setting forth the name of, and the aggregate principal
amount of Exchange Debentures held by, each Holder.
If the Company is required to offer to purchase Exchange Debentures
pursuant to Section 4.13 or 4.14 hereof, it shall furnish to the Trustee, at
least two Business Days before notice of the Offer is to be mailed to Holders,
an Officers' Certificate setting forth that the Offer is being made pursuant to
Section 4.13 or 4.14 hereof, as the case may be, the Purchase Date, the maximum
principal amount of Exchange Debentures the Company is offering to purchase
pursuant to the Offer, the purchase price for such Exchange Debentures, and the
amount of accrued and unpaid interest on such Exchange Debentures as of the
Purchase Date.
The Company will also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption or Offer.
SECTION 3.02. SELECTION OF EXCHANGE DEBENTURES TO BE REDEEMED OR PURCHASED.
If less than all outstanding Exchange Debentures are to be redeemed or
if less than all Exchange Debentures tendered pursuant to an Offer are to be
accepted for payment, the Trustee shall select the outstanding Exchange
Debentures to be redeemed or accepted for payment pro rata, by lot or by a
method that complies with the requirements of any stock exchange on which the
Exchange Debentures are listed and that the Trustee considers fair and
appropriate. If the Company elects to mail notice of a redemption to Holders,
the Trustee shall at least 5 business days prior to the date notice of
redemption is to be mailed, (i) select the Exchange Debentures to be redeemed
from Exchange Debentures outstanding not previously called for redemption and
(ii) notify the Company of the names of each Holder of Exchange Debentures
selected for redemption, the principal amount of Exchange Debentures held by
each such Holder and the principal amount of such Holder's Exchange Debentures
that are to be redeemed. If less than all Exchange Debentures tendered pursuant
to an Offer on the Purchase Date are to be accepted for payment, the Trustee
shall select on or promptly after the Purchase Date the Exchange Debentures to
be accepted for payment. The Trustee shall select for redemption or purchase
Exchange Debentures or portions of Exchange Debentures in principal amounts of
$1,000 or integral multiples of $1,000; except that if all of the Exchange
Debentures of a Holder are selected for redemption or purchase, the aggregate
principal amount of the Exchange Debentures held by such Holder, even if not a
multiple of $1,000, shall be redeemed or purchased. Except as provided in the
preceding sentence, provisions of this Indenture that apply to Exchange
Debentures called for redemption or tendered pursuant to an Offer also apply to
portions of Exchange Debentures called for redemption or tendered pursuant to
an Offer. The Trustee shall notify the
30
Company promptly of the Exchange Debentures or portions of Exchange Debentures
to be called for redemption or selected for purchase.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder of Exchange
Debentures or portions thereof that are to be redeemed at such Holder's
registered address.
The notice shall identify the Exchange Debentures or portions thereof
to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price for the Exchange Debentures and
separately stating the amount of unpaid and accrued interest
on such Exchange Debentures as of the date of redemption;
(3) if any Exchange Debenture is being redeemed in part, the
portion of the principal amount of such Exchange Debentures
to be redeemed and that, after the redemption date, upon
surrender of such Exchange Debenture, a new Exchange
Debenture or Exchange Debentures in principal amount equal
to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Exchange Debentures called for redemption must be
surrendered to the Paying Agent to collect the redemption
price for, and any accrued and unpaid interest on, such
Exchange Debentures;
(6) that, unless the Company defaults in making such redemption
payment, interest on Exchange Debentures called for
redemption ceases to accrue on and after the redemption
date;
(7) the paragraph of the Exchange Debentures pursuant to which
the Exchange Debentures called for redemption are being
redeemed; and
(8) the CUSIP number; provided that no representation is made as
to the correctness or accuracy of the CUSIP number listed in
such notice and printed on the Exchange Debentures.
At the Company's request, the Trustee shall (at the Company's expense)
give the notice of redemption in the Company's name at least 30 but not more
than 60 days before a redemption; provided, however, that the Company shall
deliver to the Trustee,
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at least 45 days prior to the redemption date and at least 10 days prior to the
date that notice of the redemption is to be mailed to Holders, an Officers'
Certificate that (i) requests the Trustee to give notice of the redemption to
Holders, (ii) sets forth the information to be provided to Holders in the
notice of redemption, as set forth in the preceding paragraph. (iii) states
that the Company has elected to redeem Exchange Debentures pursuant to Section
3.07(a) or 3.07(b) hereof, as the case may be, and (iv) sets forth the
aggregate principal amount of Exchange Debentures to be redeemed and the amount
of accrued and unpaid interest thereon as of the redemption date. If the
Trustee is not the Registrar, the Company shall, concurrently with any such
request, cause the Registrar to deliver to the Trustee a certificate (upon
which the Trustee may rely) setting forth the name of, the address of, and the
aggregate principal amount of Exchange Debentures held by, each Holder.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Exchange Debentures called for
redemption become due and payable on the redemption date at the price set forth
in the Exchange Debenture. Upon surrender to the Trustee or Paying Agent, such
Exchange Debentures called for redemption shall be paid at the redemption price
(which shall include accrued interest thereon to the redemption date) but
installments of interest, the maturity of which is on or prior to the
redemption date, shall be payable to Holders of record at the close of business
on the relevant record dates. On and after any redemption or purchase date,
interest shall cease to accrue on the Exchange Debentures or portions thereof
called for redemption or accepted for payment.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price
of, and accrued interest on, all Exchange Debentures to be redeemed on that
date. The Trustee or the Paying Agent shall return to the Company any money
that the Company deposited with the Trustee or the Paying Agent in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Exchange Debentures to be redeemed.
If the Company complies with the preceding paragraph, interest on the
Exchange Debentures to be redeemed will cease to accrue on such Exchange
Debentures on the applicable redemption date, whether or not such Exchange
Debentures are presented for payment. If an Exchange Debenture is redeemed on
or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Exchange Debenture was registered at the close of business
on such record date. If any Exchange Debenture called for redemption shall not
be so paid
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upon surrender for redemption because of the failure of the Company to comply
with the preceding paragraph, interest will be paid on the unpaid principal,
premium, if any, and interest from the redemption date until such principal,
premium and interest is paid, at the rate of interest provided in the Exchange
Debentures and Section 4.01 hereof.
SECTION 3.06. EXCHANGE DEBENTURES REDEEMED IN PART.
Upon surrender of an Exchange Debenture that is redeemed in part, the
Company shall issue and the Trustee shall authenticate for the Holder at the
Company's expense a new Exchange Debenture equal in principal amount to the
unredeemed portion of the Exchange Debenture surrendered.
SECTION 3.07. OPTIONAL REDEMPTION PROVISIONS.
(a) Except as provided in Section 3.07(b) hereof, the Exchange
Debentures may not be redeemed at the option of the Company prior to, __ 2001.
During the 12-month period beginning on ______ of the years indicated below,
the Exchange Debentures will be redeemable at the option of the Company, in
whole or in part, on at least 30 but not more than 60 days' notice to each
Holder of Exchange Debentures to be redeemed, at the redemption prices
(expressed as percentages of the principal amount) set forth below, plus any
accrued and unpaid interest to the redemption date:
Year
Percentage
2001...................................._____%
2002................................... _____%
2003...................................._____%
2004 and thereafter.......................100%
(b) Notwithstanding the foregoing, the Company may (but shall not have
the obligation to), at any time, redeem Exchange Debentures in whole, but not
in part, at a redemption price of __% of the principal amount thereof, plus
accrued and unpaid interest thereon to the redemption date, with the net
proceeds of an Equity Offering; such redemption shall occur within 60 days of
the date of the closing of such Equity Offering.
SECTION 3.08. MANDATORY PURCHASE PROVISIONS.
(a) Within 30 days after any Change of Control Trigger Date or Asset
Sale Trigger Date, the Company shall mail a notice to each Holder of Exchange
Debentures at such Holder's registered address stating: (i) that an offer
("Offer") is being made pursuant to Section 4.13 or Section 4.14 hereof, as the
case may be, the length of time the Offer shall remain open and the maximum
aggregate principal amount of Exchange Debentures that will be accepted for
payment pursuant to such Offer; (ii) the purchase price for the Exchange
Debentures (as set forth in
33
Section 4.13 or Section 4.14 hereof, as the case may be), the amount of accrued
and unpaid interest on such Exchange Debentures as of the purchase date, and
the purchase date (which shall be no earlier than 30 days and no later than 40
days from the date such notice is mailed (the "Purchase Date")); (iii) that any
Exchange Debenture not accepted for payment will continue to accrue interest;
(iv) that, unless the Company fails to deposit with the Paying Agent on the
Purchase Date an amount sufficient to purchase all Exchange Debentures accepted
for payment, interest shall cease to accrue on such Exchange Debentures after
the Purchase Date; (v) that Holders electing to tender any Exchange Debenture
or portion thereof will be required to surrender their Exchange Debenture, with
a form entitled "Option of Holder to Elect Purchase" completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the Business Day preceding the Purchase Date, provided that Holders electing to
tender only a portion of any Exchange Debenture must tender a principal amount
of $1,000 or integral multiples thereof; (vi) that Holders will be entitled to
withdraw their election to tender Exchange Debentures, if the Paying Agent
receives, not later than the close of business on the third Business Day
preceding the Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of Exchange
Debentures delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Exchange Debenture purchased; and (vii)
that Holders whose Exchange Debentures are accepted for payment in part will be
issued new Exchange Debentures equal in principal amount to the unpurchased
portion of Exchange Debentures surrendered; provided that only Exchange
Debentures in a principal amount of $1,000 or integral multiples thereof will
be accepted for payment in part.
(b) On the Purchase Date for any Offer, the Company shall, to the
extent required by this Indenture and such Offer, (i) in the case of an Offer
resulting from a Change of Control, accept for payment all Exchange Debentures
or portions thereof tendered pursuant to such Offer and, in the case of an
Offer resulting from an Asset Sale Trigger Date, accept for payment the maximum
principal amount of Exchange Debentures or portions thereof tendered pursuant
to such Offer that can be purchased out of the Excess Proceeds from such Asset
Sale, (ii) deposit with the Paying Agent the aggregate purchase price of all
Exchange Debentures or portions thereof accepted for payment and any accrued
and unpaid interest on such Exchange Debentures as of the Purchase Date, and
(iii) deliver or cause to be delivered to the Trustee all Exchange Debentures
tendered pursuant to the Offer.
(c) With respect to any Offer, if less than all of the Exchange
Debentures tendered pursuant to an Offer are to be purchased by the Company,
the Trustee shall select on the Purchase Date the Exchange Debentures or
portions thereof to be accepted for payment pursuant to Section 3.02 hereof.
34
(d) Promptly after consummation of an Offer, (i) the Paying Agent
shall mail (or cause to be transferred by book entry) to each Holder of
Exchange Debentures or portions thereof accepted for payment an amount equal to
the purchase price for, plus any accrued and unpaid interest on, such Exchange
Debentures, (ii) with respect to any tendered Exchange Debenture not accepted
for payment in whole or in part, the Trustee shall return such Exchange
Debenture to the Holder thereof, and (iii) with respect to any Exchange
Debenture accepted for payment in part, the Trustee shall authenticate and mail
to each such Holder a new Exchange Debenture equal in principal amount to the
unpurchased portion of the tendered Exchange Debenture.
(e) The Company will publicly announce the results of the Offer on or
as soon as practicable after the Purchase Date.
(f) The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with an Offer required to be made by the Company to repurchase the Exchange
Debentures as a result of a Change of Control or an Asset Sale Trigger Date. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Indenture by virtue thereof.
(g) With respect to any Offer, if the Company deposits prior to 10
a.m. Eastern Standard Time with the Paying Agent on the Purchase Date an amount
in available funds sufficient to purchase all Exchange Debentures accepted for
payment, interest shall cease to accrue on such Exchange Debentures after the
Purchase Date; provided, however, that if the Company fails to deposit such
amount on the Purchase Date, interest shall continue to accrue on such Exchange
Debentures until such deposit is made.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF EXCHANGE DEBENTURES.
The Company shall pay the principal of, and premium, if any, and
accrued and unpaid interest on, the Exchange Debentures on the dates and in the
manner provided in the Exchange Debentures. Holders of Exchange Debentures must
surrender their Exchange Debentures to the Paying Agent to collect principal
payments. Principal of, premium, if any, and accrued and unpaid interest shall
be considered paid on the date due if the Paying Agent (other than the Company
or any of its Subsidiaries), the Global Exchange Debenture Holder or each
Holder that has specified an account, holds, as of 10:00 a.m. Eastern Standard
Time, money the Company deposited in immediately available funds designated for
and sufficient to pay in cash all principal, premium, if any, and accrued and
unpaid interest then due; provided that, to the
35
extent that the Holders have not specified accounts, such amounts shall be
considered paid on the date due if the Company mails a check for such amounts
on such date. The Paying Agent shall return to the Company, no later than five
days following the date of payment, any money (including accrued interest) that
exceeds the amount of principal, premium, if any, and accrued and unpaid
interest, paid on the Exchange Debentures.
To the extent lawful, the Company shall pay interest (including
Post-Petition Interest) on (i) overdue principal and premium at the rate equal
to 2% per annum in excess of the then applicable interest rate on the Exchange
Debentures, compounded semiannually and (ii) overdue installments of interest
(without regard to any applicable grace period) at the same rate as set forth
in clause (i), compounded semi-annually.
SECTION 4.02. COMMISSION REPORTS.
(a) The Company shall file with the Trustee, within 15 days after it
files them with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may by rules and regulations prescribe) that
the Company is required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act. Notwithstanding the foregoing, if the Company is not
subject to the requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall file with the Commission and with the Trustee, within 15 days
after it would have been required to file with the Commission under the
Exchange Act, financial statements, including any notes thereto (and with
respect to annual reports, an auditor's report by a firm of established
national reputation), and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," both comparable to that which the Company
would have been required to include in such annual reports, information,
documents or other reports if the Company were subject to the requirements of
Section 13 or 15(d) of the Exchange Act. Subsequent to the qualification of
this Indenture under the TIA, the Company also shall comply with the provisions
of Section 314(a) of the TIA.
(b) If the Company is required to furnish annual or quarterly reports
to its stockholders pursuant to the Exchange Act, the Company shall cause any
annual report furnished to its stockholders generally and any quarterly or
other financial reports it furnishes to its stockholders generally to be filed
with the Trustee and the Company shall mail to the Holders at their addresses
appearing in the register of Exchange Debentures maintained by the Registrar.
If the Company is not required to furnish annual or quarterly reports to its
stockholders pursuant to the Exchange Act, the Company shall cause its
financial statements referred to in Section 4.02(a) hereof, including any notes
thereto (and with respect to annual reports, an auditors' report by a firm of
established national reputation), and a
36
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," to be so mailed to the Holders within 120 days after the end of
each of the Company's fiscal years and within 60 days after the end of each of
the first three fiscal quarters of each year. The Company shall cause to be
disclosed in a statement accompanying any annual report or comparable
information as of the date of the most recent financial statements in each such
report or comparable information the amount available for payments pursuant to
Section 4.05 hereof.
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that, to the best of
his or her knowledge, the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions
hereof (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge
and what action the Company has taken or proposes to take with respect thereto)
and that, to the best of his or her knowledge no event has occurred and remains
in existence by reason of which payments on account of the principal of,
premium, if any, and accrued and unpaid interest on, the Exchange Debentures
are prohibited or if such event has occurred, a description of the event and
what action the Company is taking or proposes to take with respect thereto.
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the financial statements
delivered pursuant to Section 4.02 hereof shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation reasonably satisfactory to the Trustee) that
in making the examination necessary for certification of such financial
statements nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Sections 4.01, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 or 4.16 or of Article 5
hereof or, if any such violation has occurred, specifying the nature and period
of existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.
The Company shall, so long as any of the Exchange Debentures are
outstanding, deliver to the Trustee, forthwith upon any
37
Officer becoming aware of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
SECTION 4.04. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that might affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.05. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on account of the Company's or such Restricted Subsidiary's
Capital Stock or other Equity Interests (other than dividends or distributions
payable in Capital Stock or other Equity Interests (other than Disqualified
Stock) of the Company or a Restricted Subsidiary and dividends or distributions
payable by a Restricted Subsidiary to a Restricted Subsidiary or to the
Company); (ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock or other Equity Interests of the Company or any of its Restricted
Subsidiaries (other than any such Equity Interest purchased from the Company or
any Restricted Subsidiary for fair market value (as determined by the Board of
Directors in good faith)); (iii) voluntarily prepay any Subordinated
Indebtedness of the Company, whether any such Subordinated Indebtedness is
outstanding on, or issued after, the Exchange Debenture Issue Date except as
specifically permitted by the covenants of this Indenture; (iv) make any
Restricted Investment (all such dividends, distributions, purchases,
redemptions, acquisitions, retirements, prepayments and Restricted Investments
being collectively referred to as "Restricted Payments"), if, at the time of
such Restricted Payment:
(A) a Default or Event of Default shall have occurred and be continuing or
shall occur as a consequence thereof; or
(B) immediately after such Restricted Payment and after giving effect thereto
on a Pro Forma Basis, the Company shall not be able to issue $1.00 of
additional Indebtedness pursuant to Section 4.07(a) of this Indenture; or
38
(C) such Restricted Payment, together with the aggregate of all other
Restricted Payments made from the Preferred Stock Issue Date, without
duplication, exceeds the sum of (1) 50% of the aggregate Consolidated Net
Income (including, for this purpose, gains from Asset Sales and, to the
extent not included in Consolidated Net Income, any gain from a sale or
disposition of a Restricted Investment) of the Company (or, in case such
aggregate is a loss, 100% of such loss) for the period (taken as one
accounting period) from the beginning of the first quarter commencing
immediately after the Preferred Stock Issue Date and ended as of the
Company's most recently ended fiscal quarter at the time of such Restricted
Payment, plus (2) 100% of the aggregate net cash proceeds and the fair
market value of any property or securities (as determined by the Board of
Directors in good faith) received by the Company from the issue or sale of
Capital Stock or other Equity Interests of the Company subsequent to the
Preferred Stock Issue Date (other than (x) Capital Stock or other Equity
Interests issued or sold to a Restricted Subsidiary and (y) the issuance or
sale of Disqualified Stock), plus (3) $6,000,000, plus (4) the amount by
which the principal amount of and any accrued interest on either (x) Senior
Indebtedness of the Company or (y) any Indebtedness of any Restricted
Subsidiary, is reduced on the Company's consolidated balance sheet upon the
conversion or exchange other than by a Restricted Subsidiary subsequent to
the Preferred Stock Issue Date of any Indebtedness of the Company or any
Restricted Subsidiary (not held by the Company or any Restricted
Subsidiary) for Capital Stock or other Equity Interests (other than
Disqualified Stock) of the Company (less the amount of any cash, or the
fair market value of any other property or securities (as determined by the
Board of Directors in good faith), distributed by the Company or any
Restricted Subsidiary (to Persons other than the Company or any other
Restricted Subsidiary) upon such conversion or exchange), plus (5) if any
Non-Restricted Subsidiary is redesignated as a Restricted Subsidiary, the
value of the Restricted Payment that would result if such Subsidiary were
redesignated as a Non-Restricted Subsidiary at such time, as determined in
accordance with the second sentence of Section 4.16(a) hereof; provided,
however, that for purposes of this clause (5), the value of any
redesignated Non- Restricted Subsidiary shall be reduced by the amount that
any such redesignation replenishes or increases the amount of Restricted
Investments permitted to be made pursuant to Section 4.05(b)(ii) hereof.
(b) Notwithstanding Section 4.05(a) hereof, the following shall not be
prohibited as Restricted Payments; (i) the payment of any dividend within 60
days after the date of declaration thereof, if at said date of declaration such
payment would comply with all the provisions hereof (including, but not limited
to, this Section 4.05); (ii) making Restricted Investments at any
39
time, and from time to time, in an aggregate outstanding amount of $12,000,000
after the Preferred Stock Issue Date (it being understood that if any
Restricted Investment after the Preferred Stock Issue Date pursuant to this
clause (ii) is sold, transferred or otherwise conveyed to any Person other than
the Company or a Restricted Subsidiary, the portion of the net cash proceeds or
fair market value of securities or properties paid or transferred to the
Company and its Restricted Subsidiaries in connection with such sale, transfer
or conveyance that relates or corresponds to the repayment or return of the
original cost of such a Restricted Investment will replenish or increase the
amount of Restricted Investments permitted to be made pursuant to this Section
4.05(b)(ii), so that up to $12,000,000 of Restricted Investments may be
outstanding under this Section 4.05(b)(ii) at any given time); provided that,
without otherwise limiting this clause (ii), any Restricted Investment in a
Subsidiary made pursuant to this clause (ii) is made for fair market value (as
determined by the Board of Directors in good faith); (iii) the repurchase,
redemption, retirement or acquisition of the Company's stock from the
executives, management, employees or consultants of the Company or its
Subsidiaries pursuant to the terms of any subscription, stockholder or other
agreement or plan, up to an aggregate amount not to exceed $6,000,000; (iv) any
loans, advances, distributions or payments from the Company to its Restricted
Subsidiaries, or any loans, advances, distributions or payments by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary, in each case
pursuant to intercompany Indebtedness, intercompany management agreements and
other intercompany agreements and obligations; (v) the purchase, redemption,
retirement or other acquisition of (A) any Senior Indebtedness of the Company
or any Indebtedness of Restricted Subsidiaries required by its terms to be
purchased, redeemed, retired or acquired with the net proceeds from asset sales
(as defined in the instrument evidencing such Senior Indebtedness or
Indebtedness) or upon a change of control (as defined in the instrument
evidencing such Senior Indebtedness or Indebtedness) and (B) the Exchange
Debentures pursuant to Sections 4.13 and 4.14 hereof; (vi) the payment of (A)
consulting, financial and investment banking fees under the TJC Agreement,
provided, that no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof, and the Company's
Obligations to pay such fees under the TJC Agreement shall be subordinated
expressly to the Company's Obligations in respect of the Exchange Debentures,
and (B) indemnities, expenses and other amounts under the TJC Agreement; (vii)
the redemption, repurchase, retirement or other acquisition of any Capital
Stock or other Equity Interests of the Company or any Restricted Subsidiary in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Capital Stock or other
Equity Interests of the Company (other than any Disqualified Stock) or the
redemption, repurchase, retirement or other acquisition of any Capital Stock or
other Equity Interests of any Restricted Subsidiary in exchange for, or out of
the proceeds of, the
40
substantially concurrent sale (other than to the Company or a Subsidiary of the
Company) of other Capital Stock or other Equity Interests of such Restricted
Subsidiary; provided that, in each case, any net cash proceeds that are
utilized for any such redemption, repurchase, retirement or other acquisition,
and any Net Income resulting therefrom, shall be excluded from Section
4.05(a)(C)(1) and (C)(2) hereof; (viii) the defeasance, redemption or
repurchase of pari passu or Subordinated Indebtedness with the net cash
proceeds from an issuance of permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Capital Stock or other Equity Interests of the Company or of a Restricted
Subsidiary (other than Disqualified Stock); provided that any net cash proceeds
that are utilized for any such defeasance, redemption or repurchase, and any
Net Income resulting therefrom, shall be excluded from Section 4.05(a)(C)(1)
and (C)(2) hereof; (ix) Restricted Investments made or received in connection
with the sale, transfer or disposition of any business, properties or assets of
the Company or any Restricted Subsidiary, provided, that if such sale, transfer
or disposition constitutes an Asset Sale, the Company complies with Section
4.14 hereof; (x) any Restricted Investment constituting securities or
instruments of a Person issued in exchange for trade or other claims against
such Person in connection with a financial reorganization or restructuring of
such Person; (xi) payments in connection with the application of the net
proceeds of the Offerings as described under "Use of Proceeds" in the
Prospectuses; and (xii) payments of fees, expenses and indemnities to the
directors of the Company and its Restricted Subsidiaries.
SECTION 4.06. CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5 hereof, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other
existence of each of its Restricted Subsidiaries in accordance with the
respective organizational documents of each of its Restricted Subsidiaries and
the rights (charter and statutory), licenses and franchises of the Company and
each of its Restricted Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any Restricted Subsidiary, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.07. LIMITATION ON INCURRENCE OF INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, issue any Indebtedness (other than the
41
Indebtedness represented by the Exchange Debentures) unless the Company's Cash
Flow Coverage Ratio for its four full fiscal quarters next preceding the date
such additional Indebtedness is issued would have been at least 2.0 to 1
determined on a Pro Forma Basis (including, for this purpose, any other
Indebtedness incurred since the end of the applicable four-quarter period) as
if such additional Indebtedness and any other Indebtedness issued since the end
of such four-quarter period had been issued at the beginning of such
four-quarter period.
(b) Section 4.07(a) hereof shall not apply to the issuance of (i)
Indebtedness of the Company and/or its Restricted Subsidiaries as measured on
such date of issuance in an aggregate principal amount outstanding on any such
date of issuance not exceeding $90,000,000 aggregate principal amount under the
Credit Agreement (provided that the aggregate principal amount of Indebtedness
outstanding under this clause (i) together with the aggregate principal amount
of Indebtedness outstanding under clause (iii) below shall not exceed
$96,000,000 in aggregate principal amount at any one time outstanding); (ii)
Indebtedness of the Company and its Restricted Subsidiaries in connection with
capital leases, sale and leaseback transactions, purchase money obligations,
capital expenditures or similar financing transactions relating to (A) their
properties, assets and rights as of the date of original issuance of the
Exchange Debentures up to $6,000,000 in aggregate principal amount or (B) their
properties, assets and rights acquired after the date of original issuance of
the Exchange Debentures, provided that the aggregate principal amount of such
Indebtedness under this clause (ii)(B) does not exceed 100% of the cost of such
properties, assets and rights; (iii) additional Indebtedness of the Company and
its Restricted Subsidiaries in an aggregate principal amount up to $30,000,000
(all or any portion of which may be issued as additional Indebtedness under the
Credit Agreement); provided that the aggregate principal amount of Indebtedness
outstanding under this clause (iii) together with the aggregate principal
amount of Indebtedness outstanding under clause (i) above shall not exceed
$96,000,000 in aggregate principal amount at any one time outstanding; and (iv)
Other Permitted Indebtedness.
(c) Notwithstanding Sections 4.07(a) and (b) hereof, no Restricted
Subsidiary shall under any circumstances issue a guarantee of any Indebtedness
of the Company except for guarantees issued by Restricted Subsidiaries pursuant
to Section 4.15 hereof, provided, however, that the foregoing will not limit or
restrict guarantees issued by Restricted Subsidiaries in respect of
Indebtedness of other Restricted Subsidiaries.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH AFFILIATE.
(a) Except as otherwise set forth herein, neither the Company nor any
of its Restricted Subsidiaries shall make any loan, advance, guarantee or
capital contribution to, or for the benefit of, or sell, lease, transfer or
dispose of any properties
42
or assets to, or for the benefit of, or purchase or lease any property or
assets from, or enter into or amend any contract, agreement or understanding
with, or for the benefit of, an Affiliate (each such transaction or series of
related transactions that are part of a common plan are referred to as an
"Affiliate Transaction"), except in good faith and on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction on an arm's length basis
from an unrelated Person.
(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Affiliate Transaction involving aggregate payments
or other transfers by the Company and its Restricted Subsidiaries in excess of
$3,000,000 (including cash and non-cash payments and benefits valued at their
fair market value by the Board of Directors of the Company in good faith)
unless the Company delivers to the Trustee: (i) a resolution of the Board of
Directors stating that the Board of Directors (including a majority of the
disinterested directors, if any) has, in good faith, determined that such
Affiliate Transaction complies with the provisions of this Indenture; and
(ii)(A) with respect to any Affiliate Transaction involving the incurrence of
Indebtedness, a written opinion of a nationally recognized investment banking
or accounting firm experienced in the review of similar types of transactions,
(B) with respect to any Affiliate Transaction involving the transfer of real
property, fixed assets or equipment, either directly or by a transfer of 50% or
more of the Capital Stock of a Restricted Subsidiary which holds any such real
property, fixed assets or equipment, a written appraisal from a nationally
recognized appraiser experienced in the review of similar types of transactions
or (C) with respect to any Affiliate Transaction not otherwise described in (A)
or (B) above, a written certification from a nationally recognized professional
or firm experienced in evaluating similar types of transactions, in each case,
stating that the terms of such transaction are fair to the Company or such
Restricted Subsidiary, as the case may be, from a financial point of view.
(c) Notwithstanding Sections 4.08(a) and (b) hereof, this Section 4.08
shall not apply to: (i) transactions between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries; (ii) payments under the TJC
Agreement; (iii) any other payments or transactions permitted pursuant to
Section 4.05 hereof; (iv) (A) payments and transactions under the Executive
Employment Agreements and (B) reasonable compensation paid to officers,
employees or consultants of the Company or any Subsidiary as determined in good
faith by the Company's Board of Directors or executives; (v) payments and
transactions under the Jaro Leases; (vi) payments and transactions involving
First National Bank of Boston and its subsidiaries and affiliates in connection
with the BBI Note, the Credit Agreement and any other Indebtedness permitted by
Section 4.07 hereof; or (vii) payments
43
and transactions in connection with the Offerings and the application of the
net proceeds therefrom as described under "Use of Proceeds" in the
Prospectuses.
SECTION 4.09. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) upon any property or asset now
owned or hereafter acquired by them, or any income or profits therefrom, or
assign or convey any right to receive income therefrom; provided, however, that
in addition to creating Permitted Liens on its properties or assets, the
Company and any of its Restricted Subsidiaries may create any Lien upon any of
their properties or assets (including, but not limited to, any Capital Stock of
its Subsidiaries) if the Exchange Debentures are equally and ratably secured.
SECTION 4.10. COMPLIANCE WITH LAWS, TAXES.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, comply with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, the non-compliance with which would
materially adversely affect the business, prospects, earnings, properties,
assets or condition, financial or otherwise, of the Company and its Restricted
Subsidiaries taken as a whole.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, pay prior to delinquency all taxes, assessments and governmental levies,
except those contested in good faith by appropriate proceedings.
SECTION 4.11. LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective, any encumbrance or restriction on the ability of any
Restricted Subsidiary to: (i) pay dividends or make any other distributions on
its Capital Stock or any other interest or participation in, or measured by,
its profits, owned by the Company or any Restricted Subsidiary, or pay any
Indebtedness owed to, the Company or any Restricted Subsidiary; (ii) make loans
or advances to the Company; or (iii) transfer any of its properties or assets
to the Company, except for such encumbrances or restrictions existing under or
by reason of: (A) applicable law; (B) Indebtedness permitted (1) under Section
4.07(a) hereof, (2) under Sections 4.07(b)(i) or (iii) hereof and clauses (i),
(v), (vi), (vii), (ix), (x) or (xi) of the definition of Other Permitted
Indebtedness, or (3) by agreements and transactions permitted under Section
4.05 hereof; (C) customary provisions restricting subletting or assignment of
any lease or license of
44
the Company or any Restricted Subsidiary; (D) (1) the terms of the BKC
Intercreditor Agreement and any other BKC Agreement, and (2) customary
provisions of any franchise, distribution or similar agreement; (E) any
instrument governing Indebtedness or any other encumbrance or restriction of a
Person acquired by the Company or any Restricted Subsidiary at the time of such
acquisition, which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; (F) Indebtedness or other
agreements existing on the Exchange Debenture Issue Date; (G) any Refinancing
Indebtedness permitted under Section 4.07(b) hereof and clauses (i), (v), (vi),
(vii), (ix), (x) or (xi) of the definition of Other Permitted Indebtedness;
provided that the encumbrances and restrictions created in connection with such
Refinancing Indebtedness are no more restrictive in any material respect with
regard to the interests of the Holders of Exchange Debentures than the
encumbrances and restrictions in the refinanced Indebtedness; (H) any
restrictions, with respect to a Restricted Subsidiary, imposed pursuant to an
agreement that has been entered into for the sale or disposition of the stock,
business, assets or properties of such Restricted Subsidiary; (I) the terms of
any Indebtedness of the Company incurred in connection with Section 4.07
hereof, provided that the terms of such Indebtedness constitute no greater
encumbrance or restriction on the ability of any Restricted Subsidiary to pay
dividends or make distributions, make loans or advances or transfer properties
or assets than is otherwise permitted by this Section 4.11; or (J) the terms of
purchase money obligations, but only to the extent such purchase money
obligations restrict or prohibit transfer of the property so acquired.
(b) Nothing contained in this Section 4.11 shall prevent the Company
from entering into any agreement or instrument providing for the incurrence of
Permitted Liens or restricting the sale or other disposition of property or
assets of the Company or any of its Restricted Subsidiaries that are subject to
Permitted Liens.
SECTION 4.12. MAINTENANCE OF OFFICE OR AGENCIES.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or an agency (which may be an office of any Agent) where
Exchange Debentures may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the Exchange
Debentures and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of any change in the location of such office or
agency. If at any time the Company shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office.
45
The Company may also from time to time designate one or more other
offices or agencies where the Exchange Debentures may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any matter relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee located at 00 Xxxx Xxxxxx, 0xx Xxxxx, Window #2, New York, New York
10005, as one such office or agency of the Company in accordance with Section
2.03 hereof.
SECTION 4.13. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control (such date being the
"Change of Control Trigger Date"), each Holder of Exchange Debentures shall
have the right to require the Company to purchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Exchange Debentures
pursuant to an Offer at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus any accrued and unpaid interest to the date of
purchase. Although the failure of the Company to purchase all Exchange
Debentures tendered in such an Offer shall be a Default, if the Company is
unable to purchase all Exchange Debentures tendered in such an Offer, the
Company shall nevertheless purchase the maximum principal amount of Exchange
Debentures that it is able to purchase at that time.
Prior to the mailing of the notice referred to in Section 3.08(a)
hereof, but in any event within 30 days following any Change of Control Trigger
Date, the Company covenants to (i) repay in full and terminate all commitments
under Indebtedness under the Credit Agreement and all other Senior Indebtedness
the terms of which require repayment upon a Change of Control or offer to repay
in full and terminate all commitments under all Indebtedness under the Credit
Agreement and all other such Senior Indebtedness and to repay the Indebtedness
owed to each lender which has accepted such offer or (ii) obtain the requisite
consents under the Credit Agreement and all such other Senior Indebtedness to
permit the repurchase of the Exchange Debentures as provided herein. The
Company shall first comply with the covenant in the immediately preceding
sentence before it shall be required to repurchase Exchange Debentures as
provided herein. The Company's failure to comply with this covenant shall
constitute an Event of Default described in clause (iii) and not in clause (ii)
under Section 6.01(a) hereof.
(b) In the event of a Change of Control, the Company shall not offer
to purchase or redeem any Subordinated Indebtedness required or entitled by its
terms to be redeemed or purchased
46
until the Offer for the Exchange Debentures has been consummated and all
Exchange Debentures tendered pursuant to such Offer have been accepted for
payment.
SECTION 4.14. LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale (including the
sale of any of the Capital Stock of any Restricted Subsidiary) providing for
Net Proceeds in excess of $3,000,000 unless at least 75% of the Net Proceeds
from such Asset Sale are applied (in any manner otherwise permitted hereunder)
to one or more of the following purposes in such combination as the Company
shall elect: (i) an investment in another asset or business in the same line of
business as, or a line of business similar to that of, the line of business of
the Company and its Restricted Subsidiaries at the time of the Asset Sale;
provided that such investment occurs on or prior to the 365th day following the
date of such Asset Sale (the "Asset Sale Disposition Date"), (ii) to reimburse
the Company or its Subsidiaries for expenditures made, and costs incurred, to
repair, rebuild, replace or restore property subject to loss, damage or taking
to the extent that the Net Proceeds consist of insurance proceeds received on
account of such loss, damage or taking, (iii) the purchase, redemption or other
prepayment or repayment of outstanding Senior Indebtedness of the Company or
Indebtedness of the Company's Restricted Subsidiaries on or prior to the 365th
day following the Asset Sale Disposition Date or (iv) an Offer expiring on or
prior to the Purchase Date (as defined herein).
(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale unless at least
75% of the consideration thereof received by the Company or such Restricted
Subsidiary is in the form of cash, cash equivalents or marketable securities;
provided that, solely for purposes of calculating such 75% of the
consideration, the amount of (i) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet or in the notes thereto,
excluding contingent liabilities and trade payables) of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Exchange Debentures) that are assumed by the transferee of
any such assets and (ii) any notes or other obligations received by the Company
or any such Restricted Subsidiary from such transferee that are promptly, but
in no event more than 30 days after receipt, converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash and cash equivalents for purposes of this provision. Any Net
Proceeds from any Asset Sale that are not applied or invested as provided in
Section 4.14(a) hereof shall constitute "Excess Proceeds."
47
(c) When the aggregate amount of Excess Proceeds exceeds $6,000,000
(such date being an "Asset Sale Trigger Date"), the Company shall make an Offer
to all Holders of Exchange Debentures to purchase the maximum principal amount
of the Exchange Debentures then outstanding that may be purchased out of Excess
Proceeds, at an offer price in cash in an amount equal to 100% of principal
amount thereof plus any accrued and unpaid interest to the Purchase Date in
accordance with the procedures set forth in this Indenture.
(d) To the extent that any Excess Proceeds remain after completion of
an Offer, the Company may use such remaining amount for general corporate
purposes.
(e) If the aggregate principal amount of Exchange Debentures
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Exchange Debentures to be purchased on a pro rata
basis by lot or by a method that complies with the requirements of any stock
exchange on which the Senior Notes are listed and that the Trustee considers
fair and appropriate.
(f) Upon completion of an Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
(g) Notwithstanding the foregoing, to the extent that any or all of
the Net Proceeds of an Asset Sale is prohibited or delayed by applicable local
law from being repatriated to the United States, the portion of such Net
Proceeds so affected will not be required to be applied pursuant to this
Section 4.14, but may be retained for so long, but only for so long, as the
applicable local law prohibits repatriation to the United States. The Company
will promptly take all reasonable actions required by the applicable local law
to permit such repatriation, and once such repatriation of any affected Net
Proceeds is not prohibited under applicable local law, such repatriation will
be immediately effected and such repatriated Net Proceeds will be applied in
the manner set forth above as if such Asset Sale have occurred on the date of
repatriation.
SECTION 4.15. LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES.
(a) The Company shall not permit any Restricted Subsidiary, directly
or indirectly, to guarantee any Indebtedness of the Company other than the
Exchange Debentures (the "Other Company Indebtedness") unless (i) such
Restricted Subsidiary contemporaneously executes and delivers a supplemental
indenture to this Indenture providing for a guarantee of payment of the
Exchange Debentures then outstanding by such Restricted Subsidiary to the same
extent as the guarantee of payment (the "Other Company Indebtedness Guarantee")
of the Other Company Indebtedness (including waiver of subrogation, if any) and
(ii) if the Other Company Indebtedness guaranteed by such Restricted
48
Subsidiary is (A) Senior Indebtedness, the guarantee for the Exchange
Debentures may be subordinated in right of payment, to the same extent that the
Exchange Debentures are subordinated to Senior Indebtedness, to the Other
Company Indebtedness Guarantee and (B) Subordinated Indebtedness, the guarantee
for the Exchange Debentures shall be pari passu or senior in right of payment
to the Other Company Indebtedness Guarantee; provided that the foregoing will
not limit or restrict guarantees issued by Restricted Subsidiaries in respect
of Indebtedness of other Restricted Subsidiaries.
(b) Each guarantee of the Exchange Debentures created by a Restricted
Subsidiary pursuant to Section 4.15(a) hereof shall be in form and substance
satisfactory to the Trustee and shall provide, among other things, that it will
be automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer permitted by this Indenture of (A) all of the Company's
Capital Stock in such Restricted Subsidiary or (B) the sale of all or
substantially all of the assets of the Restricted Subsidiary and upon the
application of the Net Proceeds from such sale in accordance with the
requirements of Section 4.14 hereof or (ii) the release or discharge of the
Other Company Indebtedness Guarantee that resulted in the creation of such
guarantee of the Exchange Debentures, except a discharge or release by or as a
result of direct payment under such Other Company Indebtedness Guarantee.
SECTION 4.16. DESIGNATION OF RESTRICTED AND NON-RESTRICTED SUBSIDIARIES.
(a) From and after the Exchange Debenture Issue Date, the Company may
designate any existing or newly formed or acquired Subsidiary as a
Non-Restricted Subsidiary, provided that (i) either (A) the Subsidiary to be so
designated has total assets of $1,200,000 or less or (B) immediately before and
after giving effect to such designation on a Pro Forma Basis; (1) the Company
could incur $1.00 of additional Indebtedness pursuant to Section 4.07(a) hereof
determined on a Pro Forma Basis; and (2) no Default or Event of Default shall
have occurred and be continuing, and (ii) all transactions between the
Subsidiary to be so designated and its Affiliates remaining in effect are
permitted pursuant to Section 4.08 hereof. Any Investment made by the Company
or any Restricted Subsidiary which is redesignated from a Restricted Subsidiary
to a Non-Restricted Subsidiary shall thereafter be considered as having been a
Restricted Payment (to the extent not previously included as a Restricted
Payment) made on the day such Subsidiary is designated a Non-Restricted
Subsidiary in the amount of the greater of (i) the fair market value (as
determined by the Board of Directors of the Company in good faith) of the
Equity Interests of such Subsidiary held by the Company and its Restricted
Subsidiaries on such date, and (ii) the amount of the Investments determined in
accordance with GAAP made by the Company and any of its Restricted Subsidiaries
in such Subsidiary.
49
(b) A Non-Restricted Subsidiary may be redesignated as a Restricted
Subsidiary. The Company shall not, and shall not permit any Restricted
Subsidiary to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition, the redesignation of a Non-Restricted
Subsidiary or otherwise, but not including through the creation of a new
Restricted Subsidiary) unless, immediately before and after giving effect to
such action, transaction or series of transactions on a Pro Forma Basis, (i)
the Company could incur at least $1.00 of additional Indebtedness pursuant to
Section 4.07(a) hereof and (ii) no Default or Event of Default shall have
occurred and be continuing.
(c) The designation of a Subsidiary as a Restricted Subsidiary or the
removal of such designation is required to be made by a resolution adopted by a
majority of the Board of Directors of the Company stating that the Board of
Directors has made such designation in accordance with this Indenture, and the
Company is required to deliver to the Trustee such resolution together with an
Officers' Certificate certifying that the designation complies with this
Indenture. Such designation shall be effective as of the date specified in the
applicable resolution, which may not be before the date the applicable
Officers' Certificate is delivered to the Trustee.
SECTION 4.17. SENIOR SUBORDINATED DEBT.
The Company shall not, and shall not permit any Restricted Subsidiary
to, incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Indebtedness and senior in any respect in right of payment to the Exchange
Debentures.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER OR CONSOLIDATION.
(a) The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets
to, any Person (any such consolidation, merger or sale being a "Disposition")
unless: (i) the successor corporation of such Disposition or the corporation to
which such Disposition shall have been made (each, a "Successor Corporation")
is a corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the Successor Corporation of
such Disposition or the corporation to which such Disposition shall have been
made expressly assumes the Obligations of the Company, pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee, under
this Indenture and the Exchange Debentures; (iii) immediately after such
Disposition, no
50
Default or Event of Default shall exist; and (iv) the corporation formed by or
surviving any such Disposition, or the corporation to which such Disposition
shall have been made, shall (A) have Consolidated Net Worth (immediately after
the Disposition but prior to giving any pro forma effect to purchase accounting
adjustments or Restructuring Charges resulting from the Disposition) equal to
or greater than the Consolidated Net Worth of the Company immediately preceding
the Disposition, (B) be permitted immediately after the disposition by the
terms of this Indenture to issue at least $1.00 of additional Indebtedness
determined on a Pro Forma Basis, and (C) have a Cash Flow Coverage Ratio, for
the four fiscal quarters immediately preceding the applicable Disposition, and
determined on a Pro Forma Basis, equal to or greater than the actual Cash Flow
Coverage Ratio of the Company for such four-quarter period. The limitations in
this Section 5.01(a) on the Company's ability to make a Disposition do not
restrict the Company's ability to sell less than all or substantially all of
its assets, such sales being governed by Section 4.14 hereof.
(b) Prior to the consummation of any proposed Disposition, the Company
shall deliver to the Trustee an Officers' Certificate to the foregoing effect
and an Opinion of Counsel stating that the proposed Disposition and such
supplemental indenture comply with this Indenture.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any Disposition, the Successor Corporation resulting from such
Disposition shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such Successor Corporation has been named as the Company herein; provided,
however, that neither the Company nor any Successor Corporation shall be
released from its Obligation to pay the principal of, premium, if any, and
accrued and unpaid interest on, the Exchange Debentures.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
(a) An Event of Default is:
(i) a default for 30 days in payment of interest on the
Exchange Debentures;
(ii) a default in payment when due of principal of, or premium,
if any, on the Exchange Debentures;
(iii) the failure of the Company to comply with any of its other
agreements or covenants in, or provisions of, this
Indenture or the Exchange Debentures outstanding under this
Indenture
51
and the Default continues for the period, if applicable,
and after the notice specified in Section 6.01(b) hereof;
(iv) a default by the Company or any Restricted Subsidiary under
any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any
Restricted Subsidiary (or the payment of which is guaranteed
by the Company or any Restricted Subsidiary), whether such
Indebtedness or guarantee now exists or shall be created
hereafter, if (A) either (1) such default results from the
failure to pay principal of or interest on any such
Indebtedness (after giving effect to any extensions thereof)
or (2) as a result of such default the maturity of such
Indebtedness has been accelerated prior to its expressed
maturity, and (B) the principal amount of such Indebtedness,
together with the principal amount of any other such
Indebtedness in default for failure to pay principal or
interest thereon, or because of the acceleration of the
maturity thereof, aggregates in excess of $6,000,000;
(v) a failure by the Company or any Restricted Subsidiary to pay
final judgments (not covered by insurance) aggregating in
excess of $6,000,000 which judgments a court of competent
jurisdiction does not rescind, annul or stay within 45 days
after their entry;
(vi) in existence when the Company 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 all or substantially all of its
property, or
(D) makes a general assignment for the benefit of
its creditors; and
(vii) in existence when a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
52
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the
property of the Company or any Significant Subsidiary,
or
(C) orders the liquidation of the Company or any
Significant Subsidiary,
and any such order or decree remains unstayed and in effect
for 60 days.
(b) A Default or Event of Default under Section 6.01(a)(iii) hereof
(other than an Event of Default arising under Section 5.01, which shall be an
Event of Default with the notice but without the passage of time specified in
this Section 6.01(b)), is not an Event of Default under this Indenture until
the Trustee or the Holders of at least 25% in principal amount of the Exchange
Debentures then outstanding notify the Company of the Default and the Company
does not cure the Default within 30 days after receipt of the notice. The
notice must specify the Default, demand that it be remedied, and state that the
notice is a "Notice of Default."
(c) In the case of any Event of Default pursuant to Section 6.01(a)(i)
or (ii) hereof occurring by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have to pay if the Company then
had elected to redeem the Exchange Debentures pursuant to Section 3.07 hereof,
an equivalent premium shall also become and be immediately due and payable to
the extent permitted by law, anything in this Indenture or in the Exchange
Debentures contained to the contrary notwithstanding.
(d) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless written notice thereof shall have been given to a Trust
Officer at the Corporate Trust Office of the Trustee by the Company or any
other Person.
SECTION 6.02. ACCELERATION.
(a) Upon the occurrence of an Event of Default (other than an Event of
Default under Section 6.01(a)(vi) or (vii) hereof), the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Exchange Debentures
may declare all Exchange Debentures to be due and payable immediately by notice
in writing to the Company and the Trustee specifying the respective Event of
Default and that it is a "notice of acceleration" (the "Acceleration Notice").
Upon such declaration, the principal of, premium, if any, and any accrued and
unpaid interest on, all
53
Exchange Debentures shall be due and payable immediately provided, however,
that if an Event of Default arises under Section 6.01(a)(vi) or (vii) hereof,
the principal of, premium, if any, and any accrued and unpaid interest on, all
Exchange Debentures, shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders
of Exchange Debentures.
(b) The Holders of a majority in principal amount of the Exchange
Debentures then outstanding under this Indenture, by notice to the Trustee, may
rescind any Notice of Acceleration of such Exchange Debentures and its
consequences (if the rescission would not conflict with any judgment or decree)
if all existing Events of Default (other than the nonpayment of principal of or
interest on such Exchange Debentures that shall have become due by such
declaration) shall have been cured or waived.
(c) If there has been a Notice of Acceleration of the Exchange
Debentures because an Event of Default under Section 6.01(a)(iv) hereof has
occurred and is continuing, such Notice of Acceleration shall be automatically
annulled if the Holders of the Indebtedness described in Section 6.01(a)(iv)
hereof have rescinded the declaration of acceleration in respect of such
Indebtedness within 30 Business Days thereof and if (i) the annulment of such
acceleration would not conflict with any judgment or decree of a court of
competent jurisdiction, (ii) all existing Events of Default, except non-payment
of principal, premium or interest that shall have become due solely because of
the acceleration, have been cured or waived, and (iii) the Company has
delivered an Officers' Certificate to the Trustee to the effect of clauses (i)
and (ii) above.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, if
any, or any accrued and unpaid interest on, the Exchange Debentures or to
enforce the performance of any provision of the Exchange Debentures or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Exchange Debentures or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
54
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of the
Exchange Debentures then outstanding by notice to the Trustee may on behalf of
all Holders of Exchange Debentures waive any existing Default or Event of
Default under this Indenture and its consequences, except a continuing Default
in the payment of the principal of, premium, if any, and interest on, such
Exchange Debentures, which may only be waived with the consent of each Holder
of Exchange Debentures affected. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; provided that no such waiver
shall extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 7.01(e) hereof, the Holders of a majority in
principal amount of the then outstanding Exchange Debentures may direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee or exercising any trust or power conferred on it by
this Indenture. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Exchange Debentures only if (i) the Holder gives to the Trustee notice of a
continuing Event of Default; (ii) the Holders of at least 25% in principal
amount of the then outstanding Exchange Debentures make a request to the
Trustee to pursue the remedy; (iii) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of indemnity; and (v) during such 60-day period
the Holders of a majority in principal amount of the then outstanding Exchange
Debentures do not give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Holders of the Exchange Debentures may not enforce this Indenture,
except as provided herein.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
55
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, and any accrued
and unpaid interest on, an Exchange Debenture, on or after a respective due
date expressed in the Exchange Debenture, or to bring suit for the enforcement
of any such payment on or after such respective date, shall not be impaired or
affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for (i) the
principal, premium and interest remaining unpaid on the Exchange Debentures,
(ii) interest on overdue principal and premium, if any, and, to the extent
lawful, interest, and (iii) such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
("Trustee Expenses").
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable to have the claims of the Trustee
(including any claim for Trustee Expenses) and the Holders allowed in any
Insolvency or Liquidation Proceeding or other judicial proceeding relative to
the Company (or any other obligor upon the Exchange Debentures), its creditors
or its property and shall be entitled and empowered to collect, receive and
distribute to Holders any money or other property payable or deliverable on any
such claims and each Holder authorizes any Custodian in any such Insolvency or
Liquidation Proceeding or other judicial proceeding to make such payments to
the Trustee, and if the Trustee shall consent to the making of such payments
directly to the Holders any such Custodian is hereby authorized to make such
payments directly to the Holders, and to pay to the Trustee any amount due to
it hereunder for Trustee Expenses, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such Trustee
Expenses, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such proceeding, shall be denied for any reason, payment
of the same shall be secured by a Lien on, and shall be paid out of, any and
all distributions, dividends, money, securities and other properties which the
Holders may be entitled to receive in such proceeding, whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Exchange Debentures or the
rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any Insolvency or Liquidation Proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 hereof;
Second: to Holders for amounts due and unpaid on the Exchange
Debentures for principal, premium and interest, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Exchange Debentures for
principal, premium and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Exchange Debentures.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default occurs (and has not been cured) the Trustee
shall (i) exercise the rights and powers vested in it by this Indenture, and
(ii) use the same degree of care and skill in exercising such rights and powers
as a prudent person would exercise or use under the circumstances in the
conduct of its own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee's duties shall be determined solely by the
express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in
this Indenture and no
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others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to
determine whether they conform to this Indenture's
requirements.
(c) The 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:
(i) this paragraph does not limit the effect of Section 7.01(b)
hereof;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction it receives pursuant to Section 6.05 hereof.
(d) Whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (e) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money it
receives except as the Trustee may agree in writing with the Company. Money the
Trustee holds in trust need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may rely on any document it believes to be genuine and
to have been signed or presented by the proper Person. The Trustee shall not be
obligated to investigate any fact or matter stated in the document.
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(b) Before the Trustee acts or refrains from acting, it may reasonably
require an officers' Certificate or an Opinion of Counsel, or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any Agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take, except to the extent that such action or omission to act constitutes
negligence or wilful misconduct on the part of the Trustee.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Exchange Debentures and may otherwise deal with the Company
or an Affiliate with the same rights it would have if it were not Trustee.
However, if the Trustee acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the Commission for permission to
continue as Trustee or resign. Any Agent may do the same with like rights. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Exchange Debentures, it
shall not be accountable for the Company's use of the proceeds from the
Exchange Debentures or for any money paid to the Company or upon the Company's
direction under any provisions hereof, it shall not be responsible for the use
or application of any money any Paying Agent other than the Trustee receives,
and it shall not be responsible for any statement or recital herein or any
statement in the Exchange Debentures or any other document furnished or issued
in connection with the sale of the Exchange Debentures or pursuant to this
Indenture, other than its certificate of authentication.
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SECTION 7.05. NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to Holders a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment on any Exchange Debenture
(including any failure to redeem Exchange Debentures called for redemption or
any failure to purchase Exchange Debentures tendered pursuant to an Offer that
are required to be purchased by the terms of this Indenture), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the Holders' interests.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with May 15, 1997, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with section 313(a) of the TIA (but if no event described in
section 313(a) of the TIA has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with section 313(b)(2) of the TIA. The Trustee shall also transmit by mail all
reports as required by section 313(c) of the TIA.
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to Holders shall be filed with
the Commission and each national securities exchange on which the Exchange
Debentures are listed. The Company shall notify the Trustee when the Exchange
Debentures are listed on any national securities exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee (in its capacities as Trustee,
Paying Agent and/or Registrar) from time to time reasonable compensation for
its services hereunder. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, advances,
fees and expenses it incurs or makes in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee (in its
capacities as Trustee, Paying Agent and/or Registrar) against any and all
losses, liabilities or expenses the Trustee incurs arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except as set forth below. The Trustee shall notify the Company
promptly of
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any claim for which it may seek indemnity. Failure by the Trustee to so notify
the Company shall not relieve the Company of its Obligations hereunder. The
Company shall defend the claim and the Trustee shall reasonably cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be
unreasonably withheld.
The Company's Obligations under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability the Trustee incurs through negligence or bad faith.
To secure the Company's payment of its Obligations in this Section,
the Trustee shall have a Lien prior to the Exchange Debentures on all money or
property the Trustee holds or collects, except that held in trust to pay
principal of, premium, if any, and any accrued and unpaid interest on,
particular Exchange Debentures, Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(vi) or (vii) hereof occurs, the expenses
and the compensation for the services including the fees and expenses of its
agents and counsel) are intended to constitute administrative expenses under
any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in principal amount of
the then outstanding Exchange Debentures may remove the Trustee by so notifying
the Trustee and the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a Custodian or public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee, provided that the Holders of a majority in principal amount
of the then outstanding Exchange Debentures may appoint a successor Trustee to
replace any successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the then outstanding
Exchange Debentures may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
appointment to Holders. The retiring Trustee shall promptly transfer all
property it holds as Trustee to the successor Trustee, provided all sums owing
to the retiring Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the retiring Trustee's benefit with respect to
expenses and liabilities it incurred prior to being replaced.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times (i) be a corporation organized and
doing business under the laws of the United States of America, of any state
thereof, or the District of Columbia authorized under such laws to exercise
corporate trustee power, (ii) be subject to supervision or examination by
federal or state authority, (iii) have a combined capital and surplus of at
least $100,000,000 as set forth in its most recent published annual report of
condition, and (iv) satisfy the requirements of sections 310(a)(1), (2) and (5)
of the TIA. The Trustee is subject to section 310(b) of the TIA.
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to section 311(a) of the TIA, excluding any
creditor relationship listed in section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to section 311(a) of the TIA to the
extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON EXCHANGE DEBENTURES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding
Exchange Debentures (other than Exchange Debentures replaced pursuant to
Section 2.07 hereof) for cancellation, or (ii) all outstanding Exchange
Debentures have become due and payable and the Company irrevocably deposits
with the Trustee funds sufficient to pay at maturity all outstanding Exchange
Debentures, including interest and premium thereon (other than Exchange
Debentures replaced pursuant to Section 2.07 hereof), and if in either case the
Company pays all other sums payable under this Indenture by the Company, then
this Indenture shall, subject to Sections 8.01(c) and 8.06 hereof, cease to be
of further effect.
(b) Subject to Sections 8.01(c), 8.02, and 8.06 hereof, the Company at
any time may terminate (i) all its obligations under the Exchange Debentures
and this Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.02, 4.03, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.14,
4.15, and 4.16 hereof, and the operation of Sections 5.01(a)(iii), 5.01(a)(iv),
or 6.01(a)(iii) through (a)(v) hereof ("covenant defeasance option"). The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Exchange Debentures may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option, payment of the Exchange
Debentures shall not be accelerated because of an Event of Default specified in
Section 6.01(a)(iii) through (a)(v) hereof or because of the Company's failure
to comply with Section 5.01(a)(iii) and 5.01(a)(iv) hereof.
Upon satisfaction of the conditions set forth herein and upon the
Company's request (and at the Company's expense), the Trustee shall acknowledge
in writing the discharge of those obligations that the Company has terminated.
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(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.04, 7.07, 7.08,
8.04, 8.05 and 8.06 hereof, and the Trustee's and the Paying Agent's
obligations in Section 8.04 hereof shall survive until the Exchange Debentures
have been paid in full. Thereafter, the Company's obligations in Sections 7.07
and 8.05 hereof and the Company's, the Trustee's and the Paying Agent's
obligations in Section 8.04 hereof shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE.
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(1) the Company irrevocably deposits in trust (the
"defeasance trust") with the Trustee money or U.S.
Government Obligations sufficient for the payment in
full of the principal of, premium, if any, and any
accrued and unpaid interest on, the Exchange Debentures
then outstanding, as of the maturity date, the
redemption date or the Purchase Date, as the case may
be;
(2) the Company delivers to the 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 of 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 when due principal of, premium, if any, and any
accrued and unpaid interest on, all the Exchange
Debentures to maturity or redemption, as the case may
be;
(3) since the Company's irrevocable deposit provided for in
Section 8.02(1) hereof, 91 days have passed;
(4) no Default has occurred and is continuing on the date
of such deposit and after giving effect to it;
(5) the deposit does not constitute a default under any
other agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment
company under the Investment Company Act of 1940, as amended;
(7) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating
that (i) the Company has received from, or there has been
published by, the Internal Revenue
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Service a ruling or (ii) under applicable federal income tax
law, in either case, to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders 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 amount, in the
same manner and at the same times as would have been the case
if such defeasance had not occurred;
(8) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders will not
recognize income, gain or loss for federal income tax
purposes as a result of such deposit and covenant
defeasance and will be subject to federal income tax on
the same amount, in the same manner and at the same
times as would have been the case if such covenant
defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Exchange
Debentures contemplated by this Article 8 have been
satisfied.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption or purchase of Exchange
Debentures at a future date in accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The 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, premium,
if any, and any accrued and unpaid interest on, the Exchange Debentures.
SECTION 8.04. REPAYMENT TO THE COMPANY.
After the Exchange Debentures have been paid in full, the Trustee and
the Paying Agent shall promptly turn over to the Company any excess money or
securities they hold.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money they hold for the payment of principal,
premium or interest that remains unclaimed for 1 year after the date upon which
such payment shall have become due; provided, however, that the Company shall
have either caused notice of such payment to be mailed to each Holder entitled
thereto no less than 30 days prior to such repayment or
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within such period shall have published such notice in a financial newspaper of
widespread circulation published in The City of New York including, without
limitation, The Wall Street Journal). After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. REINSTATEMENT.
If the 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, the
Company's obligations under this Indenture and the Exchange Debentures shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article 8 until such time as the 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 the Company has made any payment of principal
of, premium, if any, and any accrued and unpaid interest on, any Exchange
Debentures because of the reinstatement of its Obligations, the Company shall
be subrogated to the Holders' rights to receive such payment from the money or
U.S. Government Obligations the Trustee or Paying Agent holds.
ARTICLE 9
AMENDMENTS
SECTION 9.01. AMENDMENTS AND SUPPLEMENTS PERMITTED WITHOUT CONSENT OF HOLDERS.
Notwithstanding Section 9.02 hereof, the Company and the Trustee may
amend or supplement this Indenture or the Exchange Debentures without the
consent of any Holder (a) to cure any ambiguity, defect or inconsistency; (b)
to provide for uncertificated Exchange Debentures in addition to or in place of
certificated Exchange Debentures; (c) to provide for the assumption by a
Successor Corporation of the Company's Obligations to the Holders in the event
of a Disposition pursuant to Article 5; (d) to comply with the Commission's
requirements to effect or maintain the qualification of this Indenture under
the TIA; (e) to provide for guarantees with respect to the Exchange Debentures;
or (f) to make any change that does not materially adversely affect any
Holder's legal rights under this Indenture.
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Upon the Company's request, after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any amended
or supplemental indenture, the documents described in Section 9.06 hereof, the
Trustee shall join with the Company in the execution of any amended or
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
contained in any such amended or supplemental indenture, but the Trustee shall
not be obligated to enter into an amended or supplemental indenture that
affects its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS.
Subject to Section 6.07 hereof, the Company and the Trustee may amend
or supplement this Indenture or the Exchange Debentures with the written
consent of the Holders of at least a majority in principal amount of the then
outstanding Exchange Debentures (including consents obtained in connection with
a tender offer or exchange offer for the Exchange Debentures). Subject to
Sections 6.04 and 6.07 hereof, the Holders of a majority in principal amount of
the Exchange Debentures then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Exchange Debentures)
may also waive any existing Default or Event of Default (other than a payment
Default) and its consequences or compliance in a particular instance by the
Company with any provision of this Indenture or the Exchange Debentures.
Upon the Company's request and after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any
supplemental indenture, evidence of the Holders' consent, and the documents
described in Section 9.06 hereof, the Trustee shall join with the Company in
the execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but not be obligated to, enter into such amended or supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to each Holder affected thereby a notice briefly describing
the amendment, supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental indenture or waiver. Without
the consent of each Holder affected, an amendment, supplement or waiver under
this Section may not (1) reduce the
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principal amount of Exchange Debentures whose Holders must consent to an
amendment, supplement or waiver; (2) reduce the rate of or change the time for
payment of interest, including default interest as set forth in Section 4.01
hereof or alter the redemption or purchase provisions with respect thereto
(other than the provisions of Sections 4.13 and 4.14 hereof) or the price at
which the Company is required to offer to purchase any Exchange Debenture; (3)
reduce the principal of or change the fixed maturity of any Exchange Debenture;
(4) make any Exchange Debenture payable in money other than that stated in the
Exchange Debenture; (5) make any change in Section 6.04 or 6.07 hereof or in
this sentence of this Section 9.02 hereof; or (6) waive a default in the
payment of the principal of, or premium, if any, or any accrued and unpaid
interest on, or redemption or purchase payment with respect to, any Exchange
Debenture (except a rescission of acceleration of the Exchange Debentures by
the Holders of at least a majority in aggregate principal amount of the then
outstanding Exchange Debentures and a waiver of the payment default that
resulted from such acceleration).
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment or supplement to this Indenture or the Exchange
Debentures shall be set forth in an amended supplemental indenture that
complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of an Exchange Debenture is a continuing consent by the
Holder and every subsequent Holder of an Exchange Debenture or portion of an
Exchange Debenture that evidences the same Indebtedness as the consenting
Holder's Exchange Debenture, even if notation of the consent is not made on any
Exchange Debenture. However, any such Holder or subsequent Holder may revoke
the consent as to his or her Exchange Debenture or portion of an Exchange
Debenture if the Trustee receives the notice of revocation before the date on
which the Trustee receives an Officer's Certificate certifying that the Holders
of the requisite principal amount of Exchange Debentures have consented to the
amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Exchange Debentures entitled to
consent to any amendment or waiver. If a record date is fixed, then,
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders of Exchange Debentures at such record date (or their
duly designated proxies), and only those Persons, shall be entitled to consent
to such amendment or waiver or to revoke any consent previously given, whether
or not such Persons continue to be Holders of Exchange Debentures after such
record date. No consent shall be valid or effective for more than 90 days after
such record date unless consents from Holders of the principal
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amount of Exchange Debentures required hereunder for such amendment or waiver
to be effective shall have also been given and not revoked within such 90-day
period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (1) through (6) of
Section 9.02 hereof. In such case, the amendment or waiver shall bind each
Holder who has consented to it and every subsequent Holder of an Exchange
Debenture that evidences the same debt as the consenting Holder's Exchange
Debenture.
SECTION 9.05. NOTATION ON OR EXCHANGE OF EXCHANGE DEBENTURES.
The Trustee may (at the Company's expense) place an appropriate
notation about an amendment, supplement or waiver on any Exchange Debenture
thereafter authenticated. The Company in exchange for all Exchange Debentures
may issue and the Trustee shall authenticate new Exchange Debentures that
reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Exchange
Debenture shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE PROTECTED.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, sign it. In signing such amendment or
supplemental indenture, the Trustee shall be entitled to receive and, subject
to Section 7.01 hereof, shall be fully protected in relying upon, an Officers'
Certificate and Opinion of Counsel as conclusive evidence that such amendment
or supplemental indenture is authorized or permitted by this Indenture, that it
is not inconsistent herewith, and that it will be valid and binding upon the
Company in accordance with its terms. The Company may not sign an amendment or
supplemental indenture until the Board of Directors approves it.
SECTION 9.07. PAYMENT FOR CONSENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any holder of
Exchange Debentures for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Indenture or the Exchange Debentures
unless such consideration is offered to be paid or agreed to be paid to all
holders of the Exchange Debentures that consent, waive or agree to amend in the
time frame set forth in the
69
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting an Exchange Debenture
agrees, that the Indebtedness evidenced by each Exchange Debenture is
subordinated in right of payment, to the extent and in the manner provided
herein, to the prior payment in full of the principal of, and premium, if any,
and accrued and unpaid interest,on, all existing and future Senior Indebtedness
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed) of the Company, and that the subordination is for the benefit of
the holders of such Senior Indebtedness.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon (a) any distribution to creditors of the Company in a liquidation
or dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property or
(b) an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities:
(i) the holders of Senior Indebtedness shall be entitled to
receive payment in full of all Obligations due in respect of such
Senior Indebtedness (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior
Indebtedness) before Holders of the Exchange Debentures shall be
entitled to receive any payment with respect to the Exchange
Debentures (except that Holders of the Exchange Debentures may receive
securities that are subordinated, at least to the same extent as the
Exchange Debentures, to (A) Senior Indebtedness and (B) any securities
issued in exchange for Senior Indebtedness); and
(ii) until all Obligations with respect to Senior
Indebtedness (as provided in clause (i) above) are paid in full, any
distribution to which Holders of the Exchange Debentures would be
entitled but for this Article 10 shall be made to holders of Senior
Indebtedness (except that holders of the Exchange Debentures may
receive securities that are subordinated, at least to the same extent
as the Exchange Debentures, to (A) Senior Indebtedness and (B) any
securities issued in exchange for Senior Indebtedness), as their
interests may appear.
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
70
The Company shall not make any payment or distribution to the Trustee
or any Holder of Exchange Debentures upon or in respect of Obligations with
respect to the Exchange Debentures and may not acquire from the Trustee or any
Holder of Exchange Debentures any Exchange Debentures for cash or property
(other than securities that are subordinated, at least to the same extent as
the Exchange Debentures, to (A) Senior Indebtedness and (B) any securities
issued in exchange for Senior Indebtedness) until all principal and other
Obligations with respect to the Senior Indebtedness have been paid in full if:
(a) a default in the payment of any principal, premium, if
any, interest or other Obligations with respect to any Designated
Senior Debt occurs and is continuing beyond any applicable grace
period in the agreement, indenture or other document governing such
Designated Senior Debt (whether upon maturity, as a result of
acceleration or otherwise); or
(b) any other default occurs and is continuing with respect
to any Designated Senior Debt that permits holders of such Designated
Senior Debt to accelerate its maturity, and the Company and the
Trustee receive a notice of such default (a "Payment Blockage Notice")
from the holders, or from the trustee, agent or other representative
(the "Representative") of the holders, of any such Designated Senior
Debt. If the Trustee receives any such notice, a subsequent notice
received within 360 days thereafter shall not be effective for
purposes of this Section 10.03. No nonpayment default that existed or
was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent
Payment Blockage Notice unless such default shall have been cured or
waived for a period of not less than 180 days.
The Company may and shall resume payments on and distributions in
respect of the Exchange Debentures and may acquire them upon the earlier of:
(i) the date upon which the default is cured or
waived, or
(ii) in the case of a default referred to in clause (b) of
this Section 10.03, 179 days after the date on which the applicable
Payment Blockage Notice is received, unless the maturity of any
Designated Senior Debt has been accelerated,
if this Article 10 otherwise permits such payment, distribution or acquisition
at the time of such payment or acquisition.
SECTION 10.04. ACCELERATION OF SECURITIES.
71
If payment of the Exchange Debentures is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior
Indebtedness of such acceleration.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of Exchange Debentures
receives any payment of any Obligations with respect to the Exchange Debentures
at a time when a Trust Officer of the Trustee has actual knowledge that such
payment is prohibited by Section 10.03 hereof, such payment shall be held by
the Trustee or such Holder of Exchange Debentures in trust for the benefit of,
and shall be paid forthwith over and delivered upon written request to, the
holders of Senior Indebtedness (or their Representative under the indenture or
other agreement (if any) pursuant to which Senior Indebtedness may have been
issued), as their respective interests may appear, for application to the
payment of all Obligations with respect to Senior Indebtedness remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with
their terms, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness.
If a distribution is made to the Trustee or any Holder of Exchange
Debentures that because of this Article 10 should not have been made to it, the
Trustee or such Holder of Exchange Debentures who receives the distribution
shall hold it in trust for the benefit of, and upon written request pay it over
to, the holders of Senior Indebtedness (or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Indebtedness may
have been issued), as their respective interests may appear, for application to
the payment of all Obligations with respect to Senior Indebtedness remaining
unpaid to the extent necessary to pay such Obligations in full in accordance
with their terms, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders of Exchange Debentures or the Company or any other Person
money or assets to which any holders of Senior Indebtedness shall be entitled
by virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
72
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Exchange Debentures to violate this Article 10, but failure
to give such notice shall not affect the subordination of the Exchange
Debentures to Senior Indebtedness as provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Indebtedness is paid in full and until the Exchange
Debentures are paid in full, Holders of the Exchange Debentures shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Exchange Debentures) to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to the Holders of the Exchange Debentures have
been applied to the payment of Senior Indebtedness. A distribution made under
this Article 10 to holders of Senior Indebtedness that otherwise would have
been made to Holders of the Exchange Debentures is not, as between the Company
and Holders of the Exchange Debentures, a payment by the Company on the
Exchange Debentures.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of the Exchange
Debentures and holders of Senior Indebtedness.
Nothing in this Indenture shall:
(a) impair, as between the Company and Holders of the
Exchange Debentures, the obligation of the Company, which is absolute
and unconditional, to pay principal of and interest on the Exchange
Debentures in accordance with their terms;
(b) affect the relative rights of Holders of the Exchange
Debentures and creditors of the Company other than their rights in
relation to holders of Senior Indebtedness; or
(c) prevent the Trustee or any Holder of Exchange Debentures
from exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders and owners of Senior
Indebtedness to receive distributions and payments otherwise payable
to Holders of the Exchange Debentures.
If the Company fails because of this Article 10 to pay principal of or
interest an Exchange Debenture on the due date, such failure shall still
constitute a Default or Event of Default.
73
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Exchange Debentures shall be
impaired by any act or failure to act by the Company or any Holder of the
Exchange Debentures or by the failure of the Company any Holder of the Exchange
Debentures to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of the Exchange Debentures
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of the Exchange Debentures for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other Indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Exchange Debentures, unless the Trustee shall have
received, at least five Business Days prior to the date of such payment,
written notice of facts that would cause the payment of any Obligations with
respect to the Exchange Debentures to violate this Article 10, Only the Company
or a Representative may give the notice. Nothing in this Article 10 shall
impair the claims of, or payments to, the Trustee under or pursuant to Section
7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Exchange Debentures by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this
74
Article 10, and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes. If the Trustee does not file a proper proof of claim or
proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, the Representatives are hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Exchange Debentures.
SECTION 10.13. AMENDMENTS.
The provisions of this Article 10 including the related definitions)
shall not be amended or modified without the written consent of the holders of
all Senior Indebtedness.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of section 318(c) of the TIA, the imposed
duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person, mailed by registered or
certified mail, postage prepaid, return receipt requested or delivered by
telecopier or overnight air courier guaranteeing next day delivery to the
other's address:
If to the Company:
AmeriKing, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Trustee:
Fleet National Bank
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
75
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; the date receipt is acknowledged, if mailed by registered
or certified mail; when answered back, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail to his or her address shown on the register kept by the Registrar. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to Section 312(b) of the TIA with
other Holders with respect to their rights under this Indenture or the Exchange
Debentures. The Company, the Trustee, the Registrar and any other Person shall
have the protection of Section 312(c) of the TIA.
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate (which shall include the statements
set forth in Section 11.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
76
(b) an Opinion of Counsel (which shall-include the statements set
forth in Section 11.05 hereof) stating that, in the opinion
of such counsel, all such conditions precedent provided for
in this Indenture relating to the proposed action have been
complied with.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to section 314(a)(4) of the TIA) shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements
or opinions contained in such certificate or opinion
are based;
(3) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether, in such Person's opinion,
such condition or covenant has been complied with.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. LEGAL HOLIDAYS,
If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 11.08. NO RECOURSE AGAINST OTHERS.
No officer, employee, director, stockholder or Subsidiary of the
Company shall have any liability for any Obligations of the Company under the
Exchange Debentures or this Indenture, or for any claim based on, in respect
of, or by reason of, such Obligations or the creation of any such Obligation,
except, in the case of a Subsidiary, for an express guarantee or an express
creation of any Lien by such Subsidiary of the Company's
77
Obligations under the Exchange Debentures issued in accordance with this
Indenture. Each Holder by accepting an Exchange Debenture waives and releases
all such liability, and such waiver and release is part of the consideration
for the issuance of the Exchange Debentures.
SECTION 11.09. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
SECTION 11.10. VARIABLE PROVISIONS.
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent.
The first compliance certificate to be delivered by the Company to the
Trustee pursuant to Section 4.03 hereof shall be for the fiscal year ending on
January 1, 1997.
SECTION 11.11. GOVERNING LAW.
The internal laws of the State of New York shall govern this Indenture
and the Exchange Debentures, without regard to the conflict of laws provisions
thereof.
SECTION 11.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries, and no other
indenture, loan or debt agreement may be used to interpret this Indenture.
SECTION 11.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Exchange
Debentures shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 11.14. SEVERABILITY.
If any provision in this Indenture or in the Exchange Debentures shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a
78
part hereof, and shall in no way modify or restrict any of the terms or
provisions hereof.
[NEXT PAGE IS THE SIGNATURE PAGE]
79
Dated as of ______, 1996 AMERIKING, INC.
By:
Name:
Title:
Dated as of _______, 1996 FLEET NATIONAL BANK
as Trustee
By:
Name:
Title:
80
EXHIBIT A
(Face of Exchange Debenture)
___% EXCHANGE DEBENTURE DUE 2008
No. $________
CUSIP No.
AMERIKING, INC.
promises to pay to
or registered assigns,
the principal sum of ______________
Dollars on _______ 2008.
Interest Payment Dates: _____________ and _____________
Record Dates: _______________ and ________________.
Dated: ___________, 1996
AMERIKING, INC.
By:______________________
Name:
Title:
Trustee's Certificate of Authentication
Dated:_______________________________
This is one of the [Global]
Exchange Debentures referred to in the
within-mentioned Indenture:
FLEET NATIONAL BANK
as Trustee
By:____________________________
(Authorized Signatory)
A-1
[Unless and until it is exchanged in whole or in part for Exchange
Debentures in definitive form, this Exchange Debenture may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. The Depository Trust Company shall
act as the Depositary until a successor shall be appointed by the Company and
the Registrar. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) ("XXX"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY Person
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]1
Additional provisions of this Exchange Debenture are set forth on the
other side of this Exchange Debenture.
-----------
(1) This paragraph should be included only if the Senior Note is issued in
global form.
A-2
(Back of Exchange Debenture)
___% EXCHANGE DEBENTURE DUE 2008
1. INTEREST. AmeriKing, Inc. (the "Company") promises to pay interest
on the principal amount of the Exchange Debentures at the rate and in the
manner specified below. Interest on the Exchange Debentures will accrue at
_______% per annum from the date this Exchange Debenture is issued until
maturity. Interest will be payable semiannually in cash (or, on or prior to
___________, in additional Exchange Debentures, at the option of the Company)
in arrears on ____________ and ____________ of each year, commencing with the
first such date after the Exchange Debenture Issue Date, or if any such day is
not a Business Day on the next succeeding Business Day (each, an "Interest
Payment Date"). Interest will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from the date of
original issuance. The Company shall pay interest on overdue principal and
premium, if any, from time to time on demand at the rate of 2% per annum in
excess of the interest rate then in effect and shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Exchange
Debentures (except defaulted interest) to the Persons who are registered
holders of Exchange Debentures at the close of business on the record date for
the next Interest Payment Date even if such Exchange Debentures are cancelled
after such record date and on or before such Interest Payment Date. On or prior
to _________, interest shall be payable, at the option of the Company in (i)
cash, (ii) additional Exchange Debentures with a principal amount equal to such
interest or (iii) in any combination of (i) and (ii). Any amount not in
denominations of $1,000 or integral multiples thereof, shall, at the Company's
option, be payable in cash or additional Exchange Debentures in denominations
of less than $1,000. After ____________, interest shall be paid only in cash.
Holders must surrender Exchange Debentures to a Paying Agent to collect
principal payments on such Exchange Debentures. The Company will pay principal,
premium, if any, and (except as provided above) interest, in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. The Company will pay principal, premium, if any, and, to the
extent paid in cash, interest, by wire transfer of immediately available funds
to the accounts specified by the Holders or, if no such account is specified,
by mailing a check to each such Holder's registered address; provided that
payment by wire transfer of immediately available funds will be required with
respect to principal, premium, if any, and, to the extent paid in cash,
interest, on all Global Exchange Debentures.
A-3
3. PAYING AGENT AND REGISTRAR. Fleet National Bank (the "Trustee")
will initially act as the Paying Agent and Registrar. The Company may appoint
additional paying agents or co- registrars, and change the Paying Agent, any
additional paying agent, the Registrar or any co-registrar without prior notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Exchange Debentures under an
indenture, dated as of _______________, 1996 (the "Indenture"), among the
Company and the Trustee. The terms of the Exchange Debentures 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 Exchange Debenture Issue Date (the "Trust Indenture Act"). The Exchange
Debentures are subject to, and qualified by, all such terms, certain of which
are summarized herein, and Holders are referred to the Indenture and the Trust
Indenture Act for a statement of such terms (all capitalized terms not defined
herein shall have the meanings assigned them in the Indenture). The Exchange
Debentures are unsecured senior obligations of the Company limited in aggregate
principal amount to the aggregate liquidation preference of the Preferred
Stock, plus accrued and unpaid dividends, on the Exchange Debenture Issue Date
(plus any additional Exchange Debentures issued in lieu of cash interest as
described in paragraph 2 above).
5. OPTIONAL REDEMPTION. (a) Except as described in paragraph 5(b)
below, the Exchange Debentures may not be redeemed at the option of the Company
prior to ____________, 2001. During the twelve (12) month period beginning
_____________ of the years indicated below, the Exchange Debentures will be
redeemable at the option of the Company, in whole or in part, on at least 30
but not more than 60 days' notice to each Holder of Exchange Debentures to be
redeemed, at the redemption prices (expressed as percentages of the principal
amount) set forth below, plus any accrued and unpaid interest to the date of
redemption
Year Percentage
---- ----------
(b) Notwithstanding the foregoing, the Company may (but shall not have
the obligation to), at any time, redeem Exchange Debentures in whole, but not
in part, at a redemption price of ______ % of the principal amount thereof,
plus accrued and unpaid interest to the redemption date, with the net proceeds
of a public offering of common stock of the Company; provided that such
redemption shall occur within 60 days of the date of the closing of such public
Offering.
6. MANDATORY REDEMPTION. Subject to the Company's obligation to make
an offer to purchase Exchange Debentures under certain circumstances pursuant
to Sections 4.13 and 4.14 of the Indenture (as described in paragraph 7 below),
the Company is not
A-4
required to make any mandatory redemption, purchase or sinking fund payments
with respect to the Exchange Debentures.
7. MANDATORY OFFERS TO PURCHASE EXCHANGE DEBENTURES. (a) Upon the
occurrence of a Change of Control (such date being the "Change of Control
Trigger Date"), each Holder of Exchange Debentures shall have the right to
require the Company to purchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Exchange Debentures pursuant to an offer (a
"Change of Control Offer") at a purchase price in cash equal to 101% of the
aggregate principal amount thereof, plus any accrued and unpaid interest to the
date of purchase.
(b) If the Company or any Restricted Subsidiary consummates one or
more Asset Sales and does not use all of the Net Proceeds from such Asset Sales
as provided in the Indenture, the Company will be required, under certain
circumstances, to utilize the Excess Proceeds from such Asset Sales to offer
(an "Asset Sale Offer") to purchase Exchange Debentures at a purchase price
equal to 100% of the principal amount of the Exchange Debentures, plus any
accrued and unpaid interest to the date of purchase. If the Excess Proceeds are
insufficient to purchase all Exchange Debentures tendered pursuant to any Asset
Sale Offer, the Trustee shall select the Exchange Debentures to be purchased in
accordance with the terms of the Indenture.
(c) Holders may tender all or, subject to paragraph 8 below, any
portion of their Exchange Debentures in a Change of Control Offer or Asset Sale
Offer (collectively, an "Offer") by completing the form below entitled "OPTION
OF HOLDER TO ELECT PURCHASE."
(d) The Indenture provides that the Company will comply with any
tender offer rules under the Exchange Act which may then be applicable,
including Rule 14e-1, in connection with an Offer required to be made by the
Company to repurchase the Exchange Debentures as a result of a Change of
Control or an Asset Sale Trigger Date. To the extent that the provisions of any
securities laws or regulations conflict with provisions of the Indenture, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under the Indenture by
virtue thereof.
8. NOTICE OF REDEMPTION OR PURCHASE. Notice of an optional redemption
or an Offer will be mailed to each Holder at its registered address at least 30
days but not more than 60 days before the date of redemption or purchase.
Exchange Debentures may be redeemed or purchased in part, but only in whole
multiples of $1,000 unless all Exchange Debentures held by a Holder are to be
redeemed or purchased. On or after any date on which Exchange Debentures are
redeemed or purchased, interest ceases to accrue on the Exchange Debentures or
portions thereof called for redemption or accepted for purchase on such date.
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9. DENOMINATIONS, TRANSFER, EXCHANGE. The Exchange Debentures are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof; provided, however, that in connection with the payment of
interest on the Exchange Debentures in additional Exchange Debentures and the
original issuance of Exchange Debentures hereunder in exchange for shares of
the Preferred Stock, the Company may elect to pay any amount remaining after
issuance of Exchange Debentures in denominations of $1,000 and/or integral
multiples thereof, in cash or in additional Exchange Debentures in
denominations of less than $1,000. The transfer of Exchange Debentures may be
registered and Exchange Debentures may be exchanged as provided in the
Indenture, Holders seeking to transfer or exchange their Exchange Debentures
may be required, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted
by the Indenture. The Registrar need not exchange or register the transfer of
any Exchange Debenture or portion of an Exchange Debenture selected for
redemption or tendered pursuant to an Offer. Also, it need not exchange or
register the transfer of any Exchange Debentures for a period of 15 Business
Days before a selection of Exchange Debentures to be redeemed or between a
record date and the next succeeding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of an Exchange
Debenture may be treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture or the Exchange Debentures may be amended or supplemented with the
written consent of the Holders of at least a majority in principal amount of
the then outstanding Exchange Debentures, and any existing Default or Event of
Default (except a payment Default) may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Exchange
Debentures. Without the consent of any Holder, the Indenture or the Exchange
Debentures may be amended to: cure any ambiguity, defect or inconsistency;
provide for uncertificated Exchange Debentures in addition to or in place of
certificated Exchange Debentures; provide for the assumption by another
corporation of the Company's obligations to Holders in the event of a merger or
consolidation of the Company in which the Company is not the surviving
corporation or a sale of substantially all of the Company's assets to such
other corporation; comply with the Securities and Exchange Commission's
requirements to effect or maintain the qualification of the Indenture under the
Trust Indenture Act; provide for guarantees with respect to the Exchange
Debentures: or, make any change that does not materially adversely affect any
Holder's rights under the Indenture. Notwithstanding the foregoing, the
provisions of the Indenture relating to subordination shall not be amended or
modified without the written consent of the holders of all Senior Indebtedness.
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12. DEFAULTS AND REMEDIES. Events of Default include: default for 30
days in payment of interest on the Exchange Debentures; default in payment of
principal of, or premium, if any, on the Exchange Debentures; subject to
certain exceptions, failure by the Company for 30 days after notice to it to
comply with any of its other agreements or covenants in, or provisions of, the
Indenture or the Exchange Debentures; certain defaults under and acceleration
prior to maturity of, or failure to pay at maturity, certain other
Indebtedness; certain final judgments that remain undischarged; and certain
events of bankruptcy or insolvency involving the Company or any Restricted
Subsidiary that is a Significant Subsidiary. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount
of the Exchange Debentures may declare all the Exchange Debentures to be
immediately due and payable in an amount equal to the principal of, premium, if
any, and any accrued and unpaid interest on, such Exchange Debentures;
provided, however, that in the case of an Event of Default arising from certain
events of bankruptcy or insolvency, the principal of, premium, if any, and any
accrued and unpaid interest on, the Exchange Debentures becomes due and payable
immediately without further action or notice. Subject to certain exceptions,
Holders of a majority in principal amount of the then outstanding Exchange
Debentures may direct the Trustee in its exercise of any trust or power,
provided that the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request of Holders unless such
Holders have offered to the Trustee security and indemnity satisfactory to it.
Holders may not enforce the Indenture or the Exchange Debentures except as
provided in the Indenture. The Trustee may withhold from Holders notice of any
continuing default (except a payment Default) if it determines that withholding
notice is in their interests. The Company must furnish an annual compliance
certificate to the Trustee.
14. SUBORDINATION. Each Holder by accepting an Exchange Debenture
agrees that the Indebtedness evidenced by each Exchange Debenture is
subordinated in right of payment, to the extent and in the manner provided in
the Indenture, to the prior payment in full of the principal of, and premium if
any, and accrued and unpaid interest on, all existing and future Senior
Indebtedness (whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed), and that the subordination is for
the benefit of the holders of Senior Indebtedness.
15. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or any Affiliate, and may otherwise deal with the
Company or any Affiliate, as if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS. No officer, employee, director,
stockholder or Subsidiary of the Company shall have any
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liability for any Obligations of the Company under the Exchange Debentures or
the Indenture, or for any claim based on, in respect of, or by reason of, such
Obligations or the creation of any such Obligation, except, in the case of a
Subsidiary, for an express guarantee or an express creation of any Lien by such
Subsidiary of the Company's Obligations under the Exchange Debentures. Each
Holder by accepting an Exchange Debenture waives and releases all such
liability. and such waiver and release is part of the consideration for the
issuance of the Exchange Debentures.
17. SUCCESSOR SUBSTITUTED. Upon the consolidation or merger by the
Company with or into another corporation, or upon the sale, lease, conveyance
or other disposition of all or substantially all of its assets to another
corporation, in accordance with the Indenture, the corporation surviving any
such merger or consolidation (if not the Company) or the corporation to which
such assets were sold or transferred to shall succeed to, and be substituted
for, and may exercise every right and power of the Company under the Indenture
with the same effect as if such surviving or other corporation had been named
as the Company in the Indenture.
18. GOVERNING LAW. This Exchange Debenture shall be governed by and
construed in accordance with the internal laws of the State of New York without
regard to the conflict of laws provisions thereof.
19. AUTHENTICATION. This Exchange Debenture shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
20. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Exchange Debenture Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Exchange Debentures and have
directed the Trustee to use CUSIP numbers in notices of redemption as a
convenience to Holders. No representation is made as to the accuracy of such
numbers either as printed on the Exchange Debentures or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers printed on the Exchange Debentures.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture, which has in it the text of this
Exchange Debenture in larger type. Request may be made to:
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AmeriKing, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx-0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Exchange Debenture, fill in the form below: (I) or (we) assign
and transfer this Exchange Debenture to:
------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________
_____________________ as agent to transfer this Exchange Debenture on the books
of the Company. The agent may substitute another to act for him.
Date: Your Signature:
------------------------ -------------------------
(Sign exactly as your
name appears on the face
of this Exchange
Debenture)
Signature Guarantee:
-------------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Exchange Debenture purchased by the Company
pursuant to Section 4.13 of the Indenture, check the box: [ ]
If you elect to have this Exchange Debenture purchased by the Company
pursuant to Section 4.14 of the Indenture, check the box: [ ]
If you elect to have only part of this Exchange Debenture purchased by
the Company pursuant to Section 4.13 or 4.14 of the Indenture, state the amount
(multiples of $1000 only):
$
-----------------------
Date: Your Signature:
-------------------- -----------------------
(Sign exactly as your
name appears on the face
of this Exchange
Debenture)
Signature Guarantee:
--------------------------
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SCHEDULE OF EXCHANGES OF DEFINITIVE EXCHANGE DEBENTURES2
The following exchanges of a part of this Global Exchange Debenture
for Definitive Exchange Debentures have been made:
Principal
Amount of
this Global Signature
Amount of Amount of Exchange of
decrease in increase in Debenture authorized
Principal Principal following officer of
Amount of Amount of such Trustee or
this Global this Global decrease Exchange
Date of Exchange Exchange (or Debenture
Exchange Debenture Debenture increase) Custodian
-------- ----------- ------------ ----------- ---------
--------------
2 This should be included only if the Senior Note is issued in global form.
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