Exhibit 4.1
EXECUTION COPY
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ADVANSTAR COMMUNICATIONS INC.,
THE GUARANTORS LISTED HEREIN,
AND
XXXXX FARGO BANK MINNESOTA, N.A.,
as Trustee
12% Senior Subordinated Notes due 2011
INDENTURE
Dated as of February 21, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
SECTION 1.1 Definitions...................................................1
SECTION 1.2 Other Definitions............................................17
SECTION 1.3 Incorporation by Reference of Trust Indenture Act............19
SECTION 1.4 Rules of Construction........................................19
ARTICLE II THE SECURITIES...................................................20
SECTION 2.1 Form, Dating and Terms.......................................20
SECTION 2.2 Execution and Authentication.................................26
SECTION 2.3 Registrar and Paying Agent...................................27
SECTION 2.4 Paying Agent To Hold Money in Trust..........................28
SECTION 2.5 Securityholder Lists.........................................28
SECTION 2.6 Transfer and Exchange........................................28
SECTION 2.7 Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors...........32
SECTION 2.8 Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S........................34
SECTION 2.9 Mutilated, Destroyed, Lost or Stolen Securities..............35
SECTION 2.10 Outstanding Securities.......................................36
SECTION 2.11 Temporary Securities.........................................36
SECTION 2.12 Cancellation.................................................36
SECTION 2.13 Payment of Interest; Defaulted Interest......................37
SECTION 2.14 Computation of Interest......................................38
SECTION 2.15 CUSIP Numbers................................................38
ARTICLE III COVENANTS.......................................................38
SECTION 3.1 Payment of Securities........................................38
SECTION 3.2 SEC Reports and Available Information........................39
SECTION 3.3 Limitation on Indebtedness...................................39
SECTION 3.4 Limitation on Layering.......................................40
SECTION 3.5 Limitation on Restricted Payments............................41
SECTION 3.6 Limitation on Restrictions on Distributions from Restricted
Subsidiaries..............................................43
SECTION 3.7 Limitation on Sales of Assets and Subsidiary Stock...........44
SECTION 3.8 Limitation on Affiliate Transactions.........................46
SECTION 3.9 Change of Control............................................47
SECTION 3.10 Limitation on Dispositions of Capital Stock of Restricted
Subsidiaries..............................................49
SECTION 3.11 Limitation on Liens..........................................49
SECTION 3.12 Future Guarantors............................................50
SECTION 3.13 Limitation on Lines of Business..............................50
SECTION 3.14 Limitation on Asset Swaps....................................50
SECTION 3.15 Maintenance of Office or Agency..............................50
SECTION 3.16 Corporate Existence..........................................51
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SECTION 3.17 Payment of Taxes and Other Claims............................51
SECTION 3.18 Compliance Certificate.......................................51
SECTION 3.19 Further Instruments and Acts.................................51
SECTION 3.20 Stay, Extension and Usury Laws...............................52
ARTICLE IV SUCCESSOR COMPANY................................................52
SECTION 4.1 Merger and Consolidation.....................................52
ARTICLE V REDEMPTION OF SECURITIES..........................................53
SECTION 5.1 Optional Redemption..........................................53
SECTION 5.2 Applicability of Article.....................................53
SECTION 5.3 Election to Redeem; Notice to Trustee........................53
SECTION 5.4 Selection by Trustee of Securities to Be Redeemed............53
SECTION 5.5 Notice of Redemption.........................................54
SECTION 5.6 Deposit of Redemption Price..................................55
SECTION 5.7 Notes Payable on Redemption Date.............................55
SECTION 5.8 Securities Redeemed in Part..................................55
ARTICLE VI DEFAULTS AND REMEDIES............................................55
SECTION 6.1 Events of Default............................................55
SECTION 6.2 Acceleration.................................................57
SECTION 6.3 Other Remedies...............................................58
SECTION 6.4 Waiver of Past Defaults......................................58
SECTION 6.5 Control by Majority..........................................58
SECTION 6.6 Limitation on Suits..........................................59
SECTION 6.7 Rights of Holders to Receive Payment.........................59
SECTION 6.8 Collection Suit by Trustee...................................59
SECTION 6.9 Trustee May File Proofs of Claim.............................60
SECTION 6.10 Priorities...................................................60
SECTION 6.11 Undertaking for Costs........................................60
ARTICLE VII TRUSTEE.........................................................61
SECTION 7.1 Duties of Trustee............................................61
SECTION 7.2 Rights of Trustee............................................62
SECTION 7.3 Individual Rights of Trustee.................................62
SECTION 7.4 Trustee's Disclaimer.........................................63
SECTION 7.5 Notice of Defaults...........................................63
SECTION 7.6 Reports by Trustee to Holders................................63
SECTION 7.7 Compensation and Indemnity...................................63
SECTION 7.8 Replacement of Trustee.......................................64
SECTION 7.9 Successor Trustee by Merger..................................65
SECTION 7.10 Eligibility; Disqualification................................65
SECTION 7.11 Preferential Collection of Claims Against Company............65
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE.............................66
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SECTION 8.1 Discharge of Liability on Securities; Defeasance.............66
SECTION 8.2 Conditions to Defeasance.....................................67
SECTION 8.3 Application of Trust Money...................................68
SECTION 8.4 Repayment to Company.........................................68
SECTION 8.5 Indemnity for U.S. Government Obligations....................68
SECTION 8.6 Reinstatement................................................69
ARTICLE IX AMENDMENTS.......................................................69
SECTION 9.1 Without Consent of Holders...................................69
SECTION 9.2 With Consent of Holders......................................70
SECTION 9.3 Compliance with Trust Indenture Act..........................71
SECTION 9.4 Revocation and Effect of Consents and Waivers................71
SECTION 9.5 Notation on or Exchange of Securities........................71
SECTION 9.6 Trustee To Sign Amendments...................................71
ARTICLE X SUBORDINATION.....................................................72
SECTION 10.1 Agreement To Subordinate.....................................72
SECTION 10.2 Liquidation, Dissolution, Bankruptcy.........................72
SECTION 10.3 Default on Senior Indebtedness...............................72
SECTION 10.4 Acceleration of Payment of Securities........................73
SECTION 10.5 When Distribution Must Be Paid Over..........................73
SECTION 10.6 Subrogation..................................................74
SECTION 10.7 Relative Rights..............................................74
SECTION 10.8 Subordination May Not Be Impaired by Company.................74
SECTION 10.9 Rights of Trustee and Paying Agent...........................74
SECTION 10.10 Distribution or Notice to Representative.....................75
SECTION 10.11 Article X Not To Prevent Events of Default or Limit Right To
Accelerate................................................75
SECTION 10.12 Trust Moneys Not Subordinated................................75
SECTION 10.13 Trustee Entitled To Rely.....................................75
SECTION 10.14 Trustee To Effectuate Subordination..........................75
SECTION 10.15 Trustee Not Fiduciary for Holders of Senior Indebtedness.....76
SECTION 10.16 Reliance by Holders of Senior Indebtedness on Subordination
Provisions................................................76
ARTICLE XI GUARANTEE........................................................76
SECTION 11.1 Guarantee....................................................76
SECTION 11.2 Limitation on Liability; Termination, Release and Discharge..78
SECTION 11.3 Right of Contribution........................................78
SECTION 11.4 No Subrogation...............................................78
ARTICLE XII SUBORDINATION OF NOTE GUARANTEES................................79
SECTION 12.1 Agreement To Subordinate.....................................79
SECTION 12.2 Liquidation, Dissolution, Bankruptcy.........................79
SECTION 12.3 Default on Senior Indebtedness...............................80
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SECTION 12.4 Acceleration of Payment of Securities........................80
SECTION 12.5 When Distribution Must Be Paid Over..........................81
SECTION 12.6 Subrogation..................................................81
SECTION 12.7 Relative Rights..............................................81
SECTION 12.8 Subordination May Not Be Impaired by Guarantor...............81
SECTION 12.9 Rights of Trustee and Paying Agent...........................81
SECTION 12.10 Distribution or Notice to Representative.....................82
SECTION 12.11 Article XII Not To Prevent Events of Default or Limit Right
To Accelerate.............................................82
SECTION 12.12 Trust Moneys Not Subordinated................................82
SECTION 12.13 Trustee Entitled To Rely.....................................82
SECTION 12.14 Trustee To Effectuate Subordination..........................83
SECTION 12.15 Trustee Not Fiduciary for Holders of Senior Indebtedness.....83
SECTION 12.16 Reliance on Subordination Provisions.........................83
ARTICLE XIII MISCELLANEOUS..................................................83
SECTION 13.1 Trust Indenture Act Controls.................................83
SECTION 13.2 Notices......................................................84
SECTION 13.3 Communication by Holders with other Holders..................84
SECTION 13.4 Certificate and Opinion as to Conditions Precedent...........85
SECTION 13.5 Statements Required in Certificate or Opinion................85
SECTION 13.6 When Securities Disregarded..................................85
SECTION 13.7 Rules by Trustee, Paying Agent and Registrar.................86
SECTION 13.8 Legal Holidays...............................................86
SECTION 13.9 GOVERNING LAW................................................86
SECTION 13.10 No Recourse Against Others...................................86
SECTION 13.11 Successors...................................................86
SECTION 13.12 Multiple Originals...........................................86
SECTION 13.13 Variable Provisions..........................................86
SECTION 13.14 Qualification of Indenture...................................87
SECTION 13.15 Table of Contents; Headings..................................87
EXHIBIT A Form of the Initial Security
EXHIBIT B Form of the Exchange Security
EXHIBIT C Form of Notation of Guarantee
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CROSS-REFERENCE TABLE
TLA Indenture
Section Section
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310(a)(1) ................................................... 7.10
310(a)(2) ................................................... 7.10
310(a)(3) ................................................... N.A.
310(a)(4) ................................................... N.A.
310(b) ................................................... 7.8; 7.10
310(c) ................................................... N.A.
311(a) ................................................... 7.11
311(b) ................................................... 7.11
311(c) ................................................... N.A.
312(a) ................................................... 2.5
312(b) ................................................... 13.3
312(c) ................................................... 13.3
313(a) ................................................... 7.6
313(b)(1) ................................................... N.A.
313(b)(2) ................................................... 7.6
313(c) ................................................... 7.6
313(d) ................................................... 7.6
314(a) ................................................... 3.2; 13.2
314(b) ................................................... N.A.
314(c)(1) ................................................... 13.4
314(c)(2) ................................................... 13.4
314(c)(3) ................................................... N.A.
314(d) ................................................... N.A.
314(e) ................................................... 13.5
315(a) ................................................... 7.1
315(b) ................................................... 7.5; 13.2
315(c) ................................................... 7.1
315(d) ................................................... 7.1
315(e) ................................................... 6.11
316(a)(last sentence).......................................... 13.6
316(a)(1)(A)................................................... 6.5
316(a)(1)(B)................................................... 6.4
316(a)(2) ................................................... N.A.
316(b) ................................................... 6.7
317(a)(1) ................................................... 6.8
317(a)(2) ................................................... 6.9
317(b) ................................................... 2.4
318(a) ................................................... 13.1
N.A. means Not Applicable
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
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INDENTURE dated as of February 21, 2001, among ADVANSTAR
COMMUNICATIONS INC., a New York corporation (the "Company"), THE GUARANTORS (as
defined) and Xxxxx Fargo Bank Minnesota, N.A. (the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holder of the Company's 12% Senior
Subordinated Notes due 2011 (the "Initial Securities") and, if and when issued
in exchange for Initial Securities as provided in the Registration Rights
Agreement (as hereinafter defined), the Company's 12% Senior Subordinated Notes
due 2011 (the "Exchange Securities" and, together with the Initial Securities,
the "Securities"):
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary of the Company; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Company; provided, however, that, in the case of
clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a
Related Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purpose of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer, issuance or
other disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly-Owned Guarantor, (ii) the sale of
Cash Equivalents in the ordinary course of business, (iii) a disposition of
inventory in the ordinary course of business, (iv) a disposition of obsolete or
worn out equipment or equipment that is no longer useful in the conduct of the
business of the Company and its Restricted Subsidiaries and that is disposed of
in each case in the ordinary course of business, (v) transactions permitted
under Section 4.1 of this Indenture, (vi) an Asset Swap effected in compliance
with Section 3.14 of this Indenture, and (vii) for purposes of Section 3.7 of
this Indenture only, a Permitted Investment or a disposition subject to Section
3.5 of this Indenture.
"Asset Swap" means the execution of a definitive agreement, subject
only to customary closing conditions that the Company in good faith believes
will be satisfied, for a concurrent purchase and sale or exchange of Related
Business Assets, between the Company or any of its Restricted Subsidiaries and
another Person, and the consummation of such purchase and sale or exchange;
provided that any amendment to or waiver of any closing condition which
individually or in the aggregate is material to any Asset Swap shall be deemed
to be a new Asset Swap that must comply with Section 3.14.
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded
semi-annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock multiplied
by the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding
on the Issue Date or thereafter Incurred, payable by the Company under or in
respect of the Senior Credit Agreement and any related notes, collateral
documents, letters of credit and guarantees and any Interest Rate Agreement
entered into with a Lender (as defined in the Senior Credit Agreement) in
connection with the Senior Credit Agreement, including principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company at the rate
specified therein whether or not a claim for post filing interest is allowed in
such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banking institutions are authorized or required by law
to close in New York City.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP, and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date such lease may be terminated without penalty.
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"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's
Rating Group, or "A" or the equivalent thereof by Xxxxx'x Investors Service,
Inc., and having capital and surplus in excess of $500 million; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i), (ii) and (iii) entered into with any bank
meeting the qualifications specified in clause (iii) above; (v) commercial paper
rated at the time of acquisition thereof at least "A-2" or the equivalent
thereof by Standard & Poor's Rating Group or "P-2" or the equivalent thereof by
Xxxxx'x Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in either case maturing within 270
days after the date of acquisition thereof; and (vi) interests in any investment
company that invests solely in instruments of the type specified in clauses (i)
through (v) above.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Advanstar Communications Inc. or a successor.
"Consolidated EBITDA" for any period means the Consolidated Net
Income for such period, plus the following to the extent deducted in calculating
such Consolidated Net Income: (i) income tax expense, plus (ii) Consolidated
Interest Expense, plus (iii) depreciation expense, plus (iv) amortization of
intangibles, plus (v) other non-cash charges, including without limitation, any
non-cash charge reflecting compensation expense relating to employee stock
option or similar plans, reducing Consolidated Net Income (excluding any such
non-cash charge to the extent it represents an accrual of or reserve for cash
charges in any future period or amortization of a prepaid cash expense that was
paid in a prior period not included in the calculation), plus (vi) any
non-capitalized transaction costs incurred in connection with actual, proposed
or abandoned financings, acquisitions or divestitures, including, but not
limited to, financing and refinancing fees and costs incurred in connection with
the acquisition of Parent by the Principals, less (vii) other non-cash charges
increasing Consolidated Net Income (excluding any non-cash item to the extent it
represents the reversal of an accrual of, or a cash reserve for, anticipated
cash charges in any prior period). Notwithstanding the foregoing, the provision
for taxes based on the income or profits of, and the interest, depreciation and
amortization of, a Restricted Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated EBITDA of such Person only to
the extent (and in the same proportion) that the net income of such Subsidiary
was included in calculating the Consolidated Net Income of such Person.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Subsidiaries, plus, to the
extent not included in such interest expense, (i) interest expense attributable
to Capitalized Lease Obligations and the interest portion of
3
rent expense associated with Attributable Indebtedness in respect of the
relevant lease giving rise thereto, determined as if such lease were a
capitalized lease in accordance with GAAP, (ii) amortization of debt discount
and debt issuance cost, (iii) capitalized interest and accrued interest, (iv)
non-cash interest expense, (v) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing, (vi)
interest actually paid by the Company or any such Subsidiary under any Guarantee
of Indebtedness or other obligation of any other Person, (vii) net costs
associated with Hedging Obligations (including amortization of fees), (viii)
dividends in respect of all Disqualified Stock of the Company and all Preferred
Stock of Subsidiaries, in each case, held by Persons other than the Company or a
Wholly-Owned Subsidiary and (ix) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust;
provided, however, that there will be excluded therefrom any such interest
expense of any Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted Subsidiary. For purposes
of the foregoing, total interest expense will be determined after giving effect
to any net payments made or received by the Company and its Subsidiaries with
respect to Interest Rate Agreements. Notwithstanding the foregoing, the
Consolidated Interest Expense with respect to any Restricted Subsidiary of the
Company that was not a Wholly-Owned Subsidiary will be included only to the
extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net income
(loss) of the Company and its consolidated Subsidiaries; provided, however, that
there shall be excluded for purposes of calculating Consolidated Net Income: (i)
any net income (loss) of any Person if such Person is not a Restricted
Subsidiary, except that (A) subject to the limitations contained in (iv) below,
the Company's equity in the net income of any such Person for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (B) the Company's equity in a
net loss of any such Person (other thin an Unrestricted Subsidiary) for such
period will be included in determining such Consolidated Net Income to the
extent such loss has been funded with cash from the Company or a Restricted
Subsidiary; (ii) any net income (loss) of any Person acquired by the Company or
a Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition; (iii) any net income of any Restricted Subsidiary if
such Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that (A) subject to
the limitations, contained in (iv) below the Company's equity in the net income
of any such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend (subject, in the case of a dividend
to another Restricted Subsidiary, to the limitation contained in this clause)
and (B) the Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income; (iv)
any gain (loss) realized upon the sale or other disposition of any property,
plant or equipment of the Company or its consolidated Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of
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business and any gain (loss) realized upon the sale or other disposition of any
Capital Stock of any Person; (v) any extraordinary gain or loss and (vi) the
cumulative effect of a change in accounting principles.
"Consolidated Tangible Assets" means, as of any date of
determination, the total assets, less goodwill, deferred financing costs and
other intangibles (in each case net of accumulated amortization) shown on the
balance sheet of the Company and its Restricted Subsidiaries as of the most
recent date for which such balance sheet is available, determined on a
consolidated basis in accordance with GAAP.
"Continuing Member" means, as of any date of determination, any
member of the Board of Directors of the Company who (1) was a member of the
Company's Board of Directors immediately after the Issue Date; or (2) was
nominated for election or elected to the Company's Board of Directors with the
approval of, or whose election to the Board of Directors was ratified by, at
least a majority of the Continuing Members who were members of the Company's
Board of Directors at the time of that nomination or election.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section
2.13.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Designated Noncash Consideration" means noncash consideration
received by the Company or a Restricted Subsidiary in connection with an Asset
Disposition that is so designated as Designated Noncash Consideration pursuant
to an Officers' Certificate, setting forth the basis of determining the fair
market value thereof, executed by the principal executive officer and the
principal financial officer of the Company; provided, that in determining the
aggregate fair market value of Designated Noncash Consideration that is
outstanding from time to time, there shall be subtracted the aggregate amount of
cash or Cash Equivalents received in connection with a sale of any Designated
Noncash Consideration (which sale shall be deemed an Asset Disposition, and
which cash or Cash Equivalents must be applied in accordance with Section 3.7).
"Designated Senior Indebtedness" means (i) the Bank Indebtedness in
the case of the Company and (ii) any other Senior Indebtedness that, at the date
of determination, has an aggregate principal amount outstanding of, or under
which, at the date of determination, the holders thereof are committed to lend
up to, at least $25.0 million and is specifically designated in the instrument
evidencing or governing such Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Indenture.
5
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding capital stock that is convertible or exchangeable
solely at the option of the Company or a Restricted Subsidiary) or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the Stated Maturity of the Securities, provided that (a)
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such Stated Maturity shall be deemed to be Disqualified
Stock and (b) any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the issuer thereof to
repurchase such Capital Stock upon the occurrence of a change of control shall
not constitute Disqualified Stock if the terms of such Capital Stock provide
that the issuer may not repurchase or redeem it pursuant to such provision
unless such repurchase complies with Section 3.5.
"DLJ Merchant Banking Funds" means DLJ Merchant Banking Partners
III, L.P. and its Affiliates.
"Equity Offering" means an offering for cash by the Company,
Holdings or Parent of its respective common stock, or options, warrants or
rights with respect to its common stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Securities" means, if and when issued in exchange for the
Initial Securities as provided in the Registration Rights Agreement, the
Company's 12% Senior Subordinated Notes due 2011.
"Foreign Subsidiary" means any Restricted Subsidiary that is not
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture will be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided,
6
however, that the term "Guarantee" will not include endorsements for collection
or deposit and indemnities given by the Company or any of its Subsidiaries in
connection with exhibitions, in each case, in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each Subsidiary of the Company (other than a
Foreign Subsidiary) in existence on the Issue Date and any Restricted Subsidiary
(other than a Foreign Subsidiary) created or acquired by the Company after the
Issue Date.
"Guarantor Senior Indebtedness" means, with respect to a Guarantor,
the following obligations, whether outstanding on the date of this Indenture or
thereafter issued, without duplication: (i) any Guarantee of the Bank
Indebtedness by such Guarantor and all other Guarantees by such Guarantor of
Senior Indebtedness of the Company or Guarantor Senior Indebtedness for any
other Guarantor; and (ii) all obligations consisting of the principal of and
premium, if any, and accrued and unpaid interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating
to the Guarantor regardless of whether postfiling interest is allowed in such
proceeding) on, and fees and other amounts owing in respect of, all other
Indebtedness of the Guarantor, unless, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is expressly provided
that the obligations in respect of such Indebtedness are not senior in right of
payment to the obligations of such Guarantor under the Note Guarantee; provided,
however, that Guarantor Senior Indebtedness shall not include (1) any
obligations of a Guarantor to another Guarantor, (2) any liability for Federal,
state, local, foreign or other taxes owed or owing by a Guarantor, (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 of a Guarantor that is expressly subordinate
in right of payment to any of the Indebtedness of such Guarantor, including any
Guarantor Senior Subordinated Indebtedness and Guarantor Subordinated
Obligations of such Guarantor or (5) any Capital Stock.
"Guarantor Senior Subordinated Indebtedness" means with respect to a
Guarantor, the obligations of such Guarantor under the Note Guarantee and any
other Indebtedness of such Guarantor that specifically provides that such
Indebtedness is to rank pari passu in right of payment with the obligations of
such Guarantor under the Note Guarantee and is not expressly subordinated by its
terms in right of payment to any Indebtedness of such Guarantor which is not
Guarantor Senior Indebtedness of such Guarantor.
"Guarantor Subordinated Obligation" means, with respect to a
Guarantor, any Indebtedness of such Guarantor (whether outstanding on the Issue
Date or thereafter Incurred) which is expressly subordinate in right of payment
to the obligations of such Guarantor under its Note Guarantee pursuant to a
written agreement.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered in the Note Register.
7
"Holdings" means Advanstar Holdings Corp., a Delaware corporation.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money; (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto), other than (except
for purposes of the cross-acceleration provisions described in Section 6.1)
obligations in respect of the undrawn face amount of letters of credit that are
the functional equivalents of surety or performance bonds or that support
self-insurance programs to the extent that the aggregate amount of all such
obligations does not exceed $3.0 million; (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services other than
trade payables arising and accrued expenses Incurred in the ordinary course of
business, which purchase price is due more than six months after the date of
placing such property in service or taking delivery and title thereto or the
completion of such services (if and to the extent any such obligation would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP); (v) all Capitalized Lease Obligations and all Attributable
Indebtedness of such Person; (vi) the amount of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends); (vii) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however, that the amount of
such Indebtedness will be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness of such
other Persons; (viii) all Indebtedness of other Persons to the extent Guaranteed
by such Person; and (ix) to the extent not otherwise included in this
definition, net obligations of such Person under Currency Agreements and
Interest Rate Agreements (the amount of any such obligations to be equal at any
time to the termination value of such agreement or arrangement giving rise to
such obligation that would be payable by such Person at such time). The amount
of Indebtedness of any Person at any date will be the outstanding balance at
such date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date; provided that the amount outstanding
at any one time of any Indebtedness issued with original issue discount is the
principal amount of such Indebtedness less the remaining unamortized portion of
the original issue discount of such Indebtedness at such time as determined in
conformity with GAAP. Notwithstanding the foregoing, Indebtedness shall exclude
(i) obligations created, issued or incurred by any Person with respect to
customer subscription payments or customer deposits for trade shows and
exhibitions and (ii) any indemnification obligation of the Company to third
parties in respect of customary representations and warranties contained in
stock purchase, asset purchase or similar acquisition agreements to which the
Company is a party, if such indemnification obligation would not appear as a
liability upon a balance sheet of the Company prepared in accordance with GAAP.
8
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Appraiser" means, with respect to any transaction or
series of related transactions, an independent, nationally recognized appraisal
or investment banking firm or other expert with experience in evaluating or
appraising the terms and conditions of such transactions or series of related
transactions.
"Initial Securities" means the Company's 12% Senior Subordinated
Notes due 2011 issued under this Indenture.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is a party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business) or
other extension of credit (including by way of Guarantee or similar arrangement,
but excluding any debt or extension of credit represented by a bank deposit
other than a time deposit) or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by, such Person. For purposes
of Section 3.5, (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such
Restricted Subsidiary of the Company at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary; and (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors of the Company.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Legal Holiday" has the meaning ascribed to it in Section 13.8.
"Leverage Ratio" as of any date of determination means, with respect
to any Person, the ratio of (i) the sum of the aggregate outstanding
Indebtedness of such Person and its Subsidiaries as of the date of calculation
on a consolidated basis in accordance with GAAP to (ii) the aggregate amount of
Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination;
provided, however, that (1) if since the beginning of such period the Company or
any Restricted Subsidiary will have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Leverage Ratio is an Asset
Disposition, the Consolidated EBITDA for such period will be reduced by an
amount equal to the
9
Consolidated EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period or increased by an amount
equal to the Consolidated EBITDA (if negative) directly attributable thereto for
such period, (2) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) will have made an Investment in
any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary or
is merged with or into the Company) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit of a business, Consolidated EBITDA for such period will be
calculated after giving pro forma effect thereto (including the Incurrence of
any Indebtedness and including the pro forma expenses and cost reductions
calculated in accordance with Regulation S-X promulgated by the SEC) as if such
Investment or acquisition occurred on the first day of such period and (3) if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) will have made any Asset
Disposition or any Investment or acquisition of assets that would have required
an adjustment pursuant to clause (1) or (2) above if made by the Company or a
Restricted Subsidiary during such period, Consolidated EBITDA for such period
will be calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness and including the pro forma expenses and cost
reductions calculated in accordance with Regulation S-X promulgated by the SEC)
as if such Asset Disposition or Investment occurred on the first day of such
period. For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, amount of income or earnings relating
thereto, the pro forma calculations will be determined in good faith by a
responsible financial or accounting officer of the Company.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form, whether or not constituting Designated
Noncash Consideration) therefrom, in each case net of (i) all legal, accounting,
investment banking, title and recording tax expenses, commissions and other fees
and expenses Incurred, and all Federal, state, provincial, foreign and local
taxes required to be paid or accrued as a liability under GAAP, as a consequence
of such Asset Disposition, (ii) all payments made on any Indebtedness that is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon such assets, or that must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law be
repaid out of the proceeds from such Asset Disposition, (iii) all distributions
and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (iv)
the deduction of appropriate amounts to be provided by the seller as a reserve,
in accordance with GAAP, against any liabilities associated with the assets
10
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (a) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise) and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Note Guarantee" means, individually, any Guarantee of payment of
the Securities by a Guarantor set forth in Article XI, and, collectively, all
such Guarantees. Each such Note Guarantee will be in the form prescribed in this
Indenture.
"Note Register" means the register of Securities, maintained by the
Trustee, pursuant to Section 2.3.
"Obligations" has the meaning ascribed to it in Section 11.1.
"Officer" means the Chairman of the Board, the President, Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Parent" means Advanstar, Inc., a Delaware corporation.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) the Company, a Restricted Subsidiary or a Person
which will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is a
Related Business; (ii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) cash and Cash Equivalents; (iv) receivables
11
owing to the Company or any Restricted Subsidiary created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (vi) loans or advances to employees made in the ordinary
course of business not exceeding in the aggregate, at any time, $1.0 million;
(vii) stock, obligations or securities received in settlement of debts created
in the ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; (viii) any Asset Swap made in
accordance with Section 3.14 or any Investment in securities or other assets
received in connection with an Asset Disposition made in accordance with the
provisions of Section 3.7; (ix) Investments made after the Issue Date in a
Related Business in the form of joint ventures, operating agreements,
partnership agreements or other similar or customary agreements, interests or
arrangements with unaffiliated third parties, the aggregate outstanding amount
of which does not exceed $25.0 million (which aggregate amount outstanding will
be reduced by returns of capital received by the Company or any Restricted
Subsidiary in respect of such Investments) at any time; (x) Currency Agreements,
Interest Rate Agreements and related Hedging Obligations, which transactions or
obligations are Incurred in compliance with Section 3.3; and (xi) other
Investments in an aggregate amount outstanding at any time not to exceed $20.0
million.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business; (b) Liens imposed by law,
including carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate proceedings; or
other Liens arising out of judgments or awards against such Person with respect
to which such Person is then proceeding with an appeal or other proceedings for
review; (c) Liens for taxes, assessments or other governmental charges not yet
subject to penalties for non-payment or which are being contested in good faith
by appropriate proceedings provided appropriate reserves have been taken on the
books of this Company; (d) Liens in favor of issuers of surety bonds or letters
of credit issued pursuant to the request of and for the account of such Person
in the ordinary course of its business; provided, however, that such letters of
credit do not constitute Indebtedness; (e) encumbrances, easements or
reservations of, or rights of others for, licenses, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real properties or liens
incidental to the conduct of the business of such Person or to the ownership of
its properties which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person; (f) Liens securing an Interest Rate Agreement so long
as the related Indebtedness is, and is permitted to be under this Indenture,
secured by a Lien on the same property securing the Interest Rate Agreement; (g)
leases and subleases of real property which do not materially interfere with the
ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries; (h) judgement Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal
12
proceedings which may have been duly initiated for the review of such judgment
shall not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired; (i) Liens for the purpose
of securing the payment (or the refinancing of the payment) of all or a part of
the purchase price of, or Capitalized Lease Obligations with respect to, assets
or property acquired or constructed in the ordinary course of business provided
that (x) the aggregate principal amount of Indebtedness secured by such Liens is
otherwise permitted to be Incurred under this Indenture and does not exceed the
cost of the assets or property so acquired or constructed and (y) such Liens are
created within 180 days of construction or acquisition of such assets or
property and do not encumber any other assets or property of the Company or any
Restricted Subsidiary other than such assets or property and assets affixed or
appurtenant thereto; (j) Liens arising solely by virtue of any statutory or
common law provision relating to banker's Liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor expository institution; provided that (x) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the Federal Reserve Board, and (y) such deposit account is not intended by the
Company or any Restricted Subsidiary to provide collateral to the depository
institution; (k) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business; (l) Liens existing
on the Issue Date; (m) Liens on property or shares of stock of a Person at the
time such Person becomes a Subsidiary; provided, however, that such Liens are
not created, Incurred or assumed in connection with, or in contemplation of,
such other Person becoming a Subsidiary; provided further, however, that any
such Lien may not extend to any other property owned by the Company or any
Restricted Subsidiary; (n) Liens on property at the time the Company or a
Subsidiary acquired the property, including any acquisition by means of a merger
or consolidation with or into the Company or any Restricted Subsidiary;
provided, however, that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such acquisition; provided further,
however, that such Liens may not extend to any other property owned by the
Company or any Restricted Subsidiary; (o) Liens securing Indebtedness or other
obligations of a Subsidiary owing to the Company or a Wholly-Owned Subsidiary;
(p) Liens securing Refinancing Indebtedness Incurred to Refinance Indebtedness
that was previously so secured; provided that any such Lien is limited to all or
part of the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure) the
obligations to which such Liens relate; and (q) Liens on money or U.S.
Government Obligations incurred for the purpose of defeasing the Company's 91/4%
Senior Subordinated Notes due 2008.
"Person" means individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision hereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Principals" means the DLJ Merchant Banking Funds.
13
"Private Exchange Securities" shall have the meaning set forth in
the Registration Rights Agreement.
A "Public Market" exists at any time with respect to the common
stock of the Company, Holdings or Parent, as the case may be, if (i) the common
stock of the Company, Holdings or Parent, as the case may be, is then registered
with the SEC pursuant to Section 12(b) or 12(g) of the Exchange Act and traded
either on a national securities exchange or in the National Association of
Securities Dealers Automated Quotation System and (ii) at least 15% of the total
issued and outstanding common stock of the Company, Holdings or Parent, as the
case may be, has been distributed prior to such time by means of an effective
registration statement under the Securities Act. Unless the context otherwise
requires, references to "Public Market" shall refer to Public Markets with
respect to any of Parent, Holdings or the Company.
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A under the Securities Act).
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance of discharge mechanism) (collectively, "refinance," "refinances" and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
date of this Indenture or Incurred in compliance with this Indenture (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness, provided, however, that (i) (x) if the
Stated Maturity of the Indebtedness being refinanced is earlier than the Stated
Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being refinanced or (y)
if the Stated Maturity of the Indebtedness being refinanced is later than the
Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated
Maturity later than the Securities, (ii) the Refinancing Indebtedness has an
Average Life at the time such Refinancing Indebtedness is Incurred that is equal
to or greater than the Average Life of the Indebtedness being refinanced, and
(iii) such Refinancing Indebtedness is Incurred in an aggregate principal amount
(or if issued with original issue discount, an aggregate issue price) that is
equal to or less than the sum of the aggregate principal amount (or if issued
with original issue discount, the aggregate accreted value) then outstanding
(plus fees and expenses, including any premium and defeasance costs) of the
Indebtedness being refinanced.
"Registered Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of February 21, 2001, among the Company, the Guarantors,
Credit Suisse First Boston Corporation and the other initial purchasers party
thereto.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Related Business Assets" means assets used or useful in a Related
Business.
14
"Related Party" means, with respect to any Principal (1) any
controlling stockholder or partner of that Principal on the date hereof; or (2)
any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding (directly or
through one or more Subsidiaries) a 51% or more controlling interest of which
consist of the Principals and/or such other Persons referred to in the
immediately preceding clauses (1) or (2).
"Representative" means any trustee, agent or representative (if any)
of an issue of Senior Indebtedness.
"Restricted Period" means the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Securities are offered
to persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement Legend
set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set forth
in clause (B) of Section 2.1(c) as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by the Depositary), or any successor Person
thereto and shall initially be the Trustee.
"Senior Credit Agreement" means (i) the Credit Agreement dated as of
October 11, 2000, among the Company, as borrower, the various financial
institutions party thereto as lenders, Fleet National Bank as the administrative
agent and DLJ Capital Funding, Inc. as syndication agent, documentation agent,
sole book runner and lead arranger, as the same has been or may be amended,
supplemented or otherwise modified from time to time and any guarantees issued
thereunder and (ii) any renewal, extension, refunding, restructuring,
replacement or refinancing thereof (whether with the original administrative
agent and lenders or another administrative agent or agents or other lenders,
whether provided under the original Senior Credit Agreement or any other credit
or other agreement or indenture and whether entered into concurrently with or
subsequent to the termination of the prior Senior Credit Agreement).
15
"Senior Indebtedness" means, whether outstanding on the Issue Date
or thereafter issued, created, incurred or assumed, the Bank Indebtedness and
all other Indebtedness of the Company, including accrued and unpaid interest
thereon (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company at the rate specified
in the documentation with respect thereto whether or not a claim for post filing
interest is allowed in such proceeding) and fees relating thereto, unless, in
the instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that the obligations in respect of such Indebtedness
are not superior in right of, or are subordinate to, payment of the Securities;
provided, however, that Senior Indebtedness will not include (i) any obligation
of the Company to any Subsidiary, (ii) any liability for Federal, state,
foreign, local or other taxes owes or owing by the Company, (iii) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including Guarantees thereof or instruments evidencing such
liabilities), (iv) any Indebtedness, Guarantee or obligation of the Company that
is expressly subordinate or junior in right of payment to any other
Indebtedness, Guarantees or obligation of the Company, including any Senior
Subordinated Indebtedness and any Subordinated Obligations or (v) any Capital
Stock.
"Senior Subordinated Indebtedness" means the Securities and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Securities in right of payment and
is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of the Company which is not Senior Indebtedness.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary shall refer to a Subsidiary of the Company.
"TIA" or "Trusted Indenture Act" means Trusted Indenture Act of 1939
(15 U.S.C. xx.xx. 77aaa-77bbbb), as in effect on the date of this Indenture.
16
"Trustee" means the party named as such in this Indenture until a
successor replaces it and thereafter, means the successor.
"Trust Officer" shall mean, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee, including any
vice president, assistant vice president, assistant secretary, assistant
treasurer, trust officer or any other officer of the Trustee who customarily
performs functions to those performed by the Person who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted Subsidiary
by the Board of Directors in the manner provided below and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of,
or owns or holds any Lien on any property of, the Company or any Restricted
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so
designated has total consolidated assets of $10,000 or less or (B) if such
Subsidiary has consolidated assets greater than $10,000, then such designation
would be permitted under Section 3.5. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of additional Indebtedness pursuant to Section 3.3 (a) and (y) no Default
shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are noticeable, or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares) is owned by the Company or another Wholly-Owned Subsidiary.
"Wholly-Owned Guarantor" means a Wholly-Owned Subsidiary that is a
Guarantor.
SECTION 1.2 Other Definitions.
Term Defined in Section
---- ------------------
"Affiliate Transaction"......................................3.8
17
"Agent Member"...............................................2.1(d)
"Authenticating Agent" ......................................2.2
"Bankruptcy Law .............................................6.1
"Blockage Notice"...........................................10.3
"Change of Control" .........................................3.9
"Change of Control Offer"....................................3.9
"Change of Control Payment"..................................3.9
"Change of Control Payment Date".............................3.9
"Company Order" .............................................2.2
"covenant defeasance option".................................8.1(b)
"Custodian"..................................................6.1
"Definitive Securities"......................................2.1(e)
"Event of Default"...........................................6.1
"Excess Proceeds"............................................3.7
"Exchange Global Note".......................................2.1
"Global Securities"..........................................2.1 (a)
"Institutional Accredited Investor Global Note"..............2.1
"Institutional Accredited Investor Note".....................2.1
"legal defeasance option ....................................8.1(b)
"Offer"......................................................3.7
"Offer Amount"...............................................3.7
"Offer Period"...............................................3.7
"pay the Securities"........................................10.3
"Paying Agent"...............................................2.3
"Payment Blockage Period"...................................10.3
"Private Placement Legend"...................................2.1(c)
"Purchase Date"..............................................3.7
"Registrar"..................................................2.3
"Regulation S"...............................................2.1(a)
"Regulation S Certificate"...................................2.1
"Regulation S Global Note"...................................2.1
"Regulation S Legend"........................................2.1
"Regulation S Note"..........................................2.1
"Regulation S Permanent Global Note".........................2.1
"Regulation S Temporary Global Note".........................2.1
"Release Date"...............................................2.1
"Resale Restriction Termination Date"........................2.6
"Restricted Payment".........................................3.5
"Rule 144A"..................................................2.1(b)
"Rule 144A Global Note"......................................2.1
"Rule 144A Note".............................................2.1
"Special Interest Payment Date"..............................2.13
"Special Record Date"........................................2.13
"Successor Company"..........................................4.1
18
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee " means Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions,
SECTION 1.4 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in accordance
with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect to such Preferred Stock,
whichever is greater.
19
ARTICLE II
THE SECURITIES
SECTION 2.1 Form, Dating and Terms. (a) The Initial Securities are
being offered and sold by the Company pursuant to a Purchase Agreement, dated
February 13, 2001, among the Company, the Guarantors, Credit Suisse First Boston
Corporation and the other initial purchasers party thereto.
Initial Securities offered and sold to the qualified institutional
buyers (as defined in Rule 144A under the Securities Act ("Rule 144A")) in the
United States of America (the "Rule 144A Note") will be issued on the Issue Date
in the form of a permanent global Security substantially in the form of Exhibit
A, which is hereby incorporated by reference and made a part of this Indenture,
together with appropriate legends as set forth in Section 2.1(c) (the "Rule 144A
Global Note"), deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Rule 144A Global Note may be represented by more than one
certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Rule 144A Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States of
America ("Regulation S Note") in reliance on Regulation S will be issued on the
Issue Date in the form of a temporary global Security, without interest coupons,
substantially in the form set forth in Exhibit A which are hereby incorporated
by reference and made a part of this Indenture, together with appropriate
legends as set forth in Section 2.1(c) (a "Regulation S Temporary Global Note").
Beneficial interests in a Regulation S Temporary Global Note will be
exchangeable for beneficial interests in a single permanent global security (the
"Regulation S Permanent Global Note", together with the Regulation S Temporary
Global Note, the "Regulation S Global Note") on or after the expiration of the
Restricted Period (the "Release Date") upon the receipt by the Trustee or its
agent of a certificate certifying that the Holder of the beneficial interest in
the Regulation S Temporary Global Note is a non-United States Person within the
meaning of Regulation S (a "Regulation S Certificate"), substantially in the
form set forth in Section 2.8 Upon receipt by the Trustee or Paying Agent of a
Regulation S Certificate, (i) with respect to the first such Regulation S
Certificate, the Company shall execute and upon receipt of a Company Order for
authentication, the Authenticating Agent (as defined in Section 2.2) shall
authenticate and deliver to the custodian, the applicable Regulation S Permanent
Global Note and (ii) with respect to the first and all subsequent Regulation S
Certificates, the custodian shall exchange on behalf of the applicable
beneficial owners the portion of the applicable Regulation S Temporary Global
Note covered by such Regulation S Certificates for a comparable portion of the
applicable Regulation S Permanent Global Note. Upon any exchange of a portion of
a Regulation S Temporary Global Note for a comparable portion of a Regulation S
Permanent Global Note, the custodian shall endorse on the schedules affixed to
each of such Regulation S Global Note (or on continuations of such schedules
affixed to each of such Regulation S Global Note and made parts thereof)
appropriate notations evidencing the date of transfer and (x) with respect to
the applicable Regulation S Temporary Global Note, a decrease in the principal
20
amount thereof equal to the amount covered by the applicable certification and
(y) with respect to the applicable Regulation S Permanent Global Note, an
increase in the principal amount thereof equal to the principal amount of the
decrease in the applicable Regulation S Temporary Global Note pursuant to clause
(x) above. The Regulation S Global Note will be deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Regulation S Global Note may be
represented by more than one certificate, if so required by the Depositary's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Regulation S Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Initial Securities resold to institutional "accredited investors"
(as defined in Rules 501(a)(1), (2), (3) and (7) under the Securities Act) in
the United States of America (the "Institutional Accredited Investor Note") will
be issued in the form of a permanent global Security substantially in the form
of Exhibit A, which is hereby incorporated by reference and made a part of this
Indenture, together with appropriate legends as set forth in Section 2.l(c) (the
"Institutional Accredited Investor Global Note") deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Institutional Accredited Investor
Global Note may be represented by more than one certificate, if so required by
the Depositary's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Institutional
Accredited Investor Global Note may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A Note,
the Regulation S Note and the Institutional Accredited Investor Note will be
issued in the form of a permanent global Security substantially in the form of
Exhibit B, which is hereby incorporated by reference and made a part of this
Indenture, deposited with the Trustee as hereinafter provided, with the
appropriate legend set forth in Section 2.1(c) (the "Exchange Global Note"). The
Exchange Global Note may be represented by more than one certificate, if so
required by the Depositary's rules regarding the maximum principal amount to be
represented by a single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the
Exchange Global Note and the Institutional Accredited Investor Global Note are
sometimes collectively herein referred to as the "Global Securities."
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to Section 2.3;
provided, however, that, at the -option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
thereto as such addresses shall appear on the Note Register or (ii) wire
transfer to an account located in the United States maintained by the payee.
21
The Private Exchange Securities shall be in the form of Exhibit A.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage, in addition to those set forth on Exhibits A and B
and in Section 2.1(c). The Company and the Trustee shall approve the forms of
the Securities and any notation, endorsement or legend on them. Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to be bound by such terms.
(b) Denominations. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial Security is
sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement, (A) the
Rule 144A Global Note and the Institutional Accredited Investor Global Note
shall bear the following legend (the, "Private Placement Legend") on the face
thereof:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(a) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (As
defined in Rule 144A under the Securities Act) (A "QIB"), (B) IT HAS
ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (As defined in Rule 501(A) (1), (2), (3) or
(7) of Regulation D under the Securities Act (AN "IAI"),
(b) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE
(the form of which can be obtained from the trustee) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
22
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(c) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING"; and
(B) the Regulation S Global Note shall bear the following legend
(the "Regulation S Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITY ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT XXXXX
XXXXXXX
00
XXX XXXXXX XXXXXX WITHIN THE MEANING OF REGULATION S, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN TRANSACTION INVOLVING A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM AND IN THE CASE OF THE FOREGOING
CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
COMPANY AND THE TRUSTEE. THIS LEGEND WELL BE REMOVED AFTER 40 CONSECUTIVE
DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON WHICH THE
SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN
REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT."
The Global Securities, whether or not an Initial Security, shall
bear the following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK,
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER; PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN
24
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF."
The Regulation S Temporary Global Note shall also bear the following
legend on the face thereof:
THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE
REFERRED TO BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO
RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERM OF THE INDENTURE.
(d) Book Entry Provisions.
(i) This Section 2.1(d) shall apply only to Global Securities
deposited with the Trustee, as custodian for the Depositary.
(ii) Each Global Security initially shall (x) be registered in the
name of the Depositary for such Global Security or the nominee of such
Depositary, (y) be delivered to the Trustee as custodian for such Depositary and
(z) bear legends as set forth in Section 2.1(c)
(iii) Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depositary or by the Trustee as the
custodian of the Depositary or under such Global Security, and the Depositary
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (e) of this Section to
beneficial owners who are required to hold Definitive Securities, the Security
Trustee shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (e) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
to Company shall execute, and the Trustee shall
25
authenticate and deliver, to each beneficial owner identified by the Depositary
in exchange for its beneficial interest in such Global Security, an equal
aggregate principal amount of Definitive Securities of authorized denominations.
(e) Definitive Securities. Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("Definitive Securities"). If required to do so pursuant
to any applicable law or regulation, beneficial owners may obtain Definitive
Securities in exchange for their beneficial interests in a Global Security upon
written request in accordance with the Depositary's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security or the Depositary
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depositary is required to be so registered in order to act as Depositary,
and in each case a successor depositary is not appointed by the Company within
90 days of such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Security shall
be so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depositary.
(f) Any Definitive Security delivered in exchange for an interest in
a Global Security pursuant to Section 2.1(d)(iv) or (v) shall, except as
otherwise provided by Section 2.6(c); bear the applicable legend regarding
transfer restrictions applicable to the Definitive Security set forth in Section
2.1(c).
(g) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled w take under this Indenture or the Securities.
SECTION 2.2 Execution and Authentication. One Officer shall sign the
Securities for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
At any time and from time to time after the execution and delivery
of this Indenture, the Trustee shall authenticate and make available for
delivery: (1) Initial Securities for original issue on the Issue Date in an
aggregate principal amount of $160.0 million and (2) Exchange Securities for
issue only in a Registered Exchange Offer pursuant to the Registration Rights
Agreement, and only in exchange for Initial Securities of an equal principal
amount, in each case upon a written order of the Company signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company (the "Company Order"). Such Company Order shall specify the amount
of the Securities to be authenticated and the date
26
on which the original issue Securities is to be authenticated and whether the
Securities are to be Initial Securities or Exchange Securities.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company, pursuant to Article IV, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article IV, any of the Securities authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Order of
the successor Person, shall authenticate and deliver Securities as specified in
such order for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section 2.2 in exchange or substitution for or upon registration of
transfer of any Securities, such successor Person, at the option of the Holders
but without expense to them, shall provide for the exchange of all Securities at
the time outstanding for Securities authenticated and delivered in such new
name.
SECTION 2.3 Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Note
Registrar"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated Wholly-Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
27
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4 Paying Agent To Hold Money in Trust. By at least 10:00
a.m. (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Guarantor in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund. The Company at any
time may require a Paying Agent (other than the Trustee) to pay all money held
by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money delivered
to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with
respect to the Company, the Trustee shall serve as Paying Agent for the
Securities.
SECTION 2.5 Securityholder 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 Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6 Transfer and Exchange.
(a) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Note or an Institutional Accredited Investor
Note prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Securities (or any predecessor thereto) (the
"Resale Restriction Termination Date"):
(i) a transfer of an Institutional Accredited Investor Note or
a beneficial interest therein to a QIB shall be made upon the
representation of the transferee in the form of an assignment on the
reverse of the certificate that it is purchasing the Security for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations -in order to claim the exemption from
registration provided by Rule 144A;
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(ii) a transfer of a Rule 144A Note or a beneficial interest
therein to an institutional accredited investor shall be made upon receipt
by the Trustee or its agent of a certificate substantially in the form set
forth in Section 2.7 from the proposed transferee and, if requested by the
Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them, and
(iii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.8 from the
proposed transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(i) a transfer of a Regulation S Note or a beneficial interest
therein to a QIB shall be made upon the representation of the transferee,
in the form of assignment on the reverse of the certificate, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a "qualified institutional buyer" within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial
interest therein to an institutional accredited investor shall be made
upon receipt by the Trustee or its agent of a certificate substantially in
the form m forth in Section 2.7 from the proposed transferee and, if
requested by the Company or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
After the expiration of the Restricted Period, interests in the
Regulation S Note shall be freely transferable.
(c) Restricted Securities Legend. Upon the transfer, exchange or
replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing a
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear a Restricted Securities Legend unless there is delivered to the Registrar
an Opinion of Counsel to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(d) The Company shall deliver to the Trustee an Officer's
Certificate setting forth the Resale Restriction Termination Date and the
Restricted Period.
29
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.1 or this Section 2.6. The
Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
(e) Obligations with Respect to Transfers and Exchanges-of
Securities.
(i) To permit registrations of transfer and exchanges, the
Company shall, subject to the other terms and conditions of this Article
II, execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
(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, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to Sections 3.7, 3.9 or 9.5).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning (1) 15 days before the mailing of a notice to redeem Securities
and ending at the close of business on the day of such mailing or (2) 15
days before an interest payment date and ending on such interest payment
due.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose name
a Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such Security
and for all other purposes whatsoever, whether or not such Security is
overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar shall be affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d) shall, except as
otherwise provided by Section 2.6(c), bear the applicable legend regarding
transfer restrictions applicable to the Definitive Security set forth in
Section 2.1(c),
(vi) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt and
shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee. (i) (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, the Depositary or other Person with respect to
the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) of any notice
(including any notice of redemption) or the
30
payment of any amount or delivery of any Securities (or other security or
property) under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
in respect of the Securities shall be given or made only to or upon the order of
the registered Holders (which shall be the Depositary or its nominee in the case
of a Global Security). The rights of beneficial owners in any Global Security
shall be exercised only through the Depositary subject to the applicable rules
and procedures of the Depositary. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depositary with respect
to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
31
SECTION 2.7 Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors.
[Date]
Xxxxx Fargo Bank Minnesota, N.A.
Sixth & Marquette
MAC X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Trustee Administration
Dear Sirs:
This certificate is delivered to request a transfer of $ principal
amount of the 12% Senior Subordinated Notes due 2011 (the "Securities") of
Advanstar Communications Inc. (the "Company").
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Securities
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited
32
investor," in each case in a minimum principal amount of Securities of $250,000
or (f) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases to
any requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their control
and in compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Securities is proposed
to be made pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the transferee
substantially in the form of this letter to the Company and the Trustee, which
shall provide, among other things, that the transferee is an institutional
"accredited investor" (within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) and that it is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
Each purchaser acknowledges that the Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Termination Date
of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
TRANSFEREE:
By:____________________________________
Signature Medallion Guaranteed
33
SECTION 2.8 Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S.
[Date]
Xxxxx Fargo Bank Minnesota, N.A.
Sixth & Marquette
MAC X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Trustee Administration
Re: Advanstar Communications Inc.
12% Senior Subordinated Notes due 2011 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act
of 1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a person in
the United States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting
on our behalf reasonably believed that the transferee was outside
the United States or (ii) the transaction was executed in, on or
through the facilities of a designated off-shore securities market
and neither we nor any person acting on our behalf knows that the
transaction his been pre-arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
34
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_____________________
________________________
Authorized Signature Signature Medallion Guaranteed
SECTION 2.9 Mutilated, Destroyed, Lost or Stolen Securities. If a
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced, and, in the absence of notice to the Company, any Guarantor or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
make available for delivery, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) `in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Guarantor (if applicable)
and any other obligor upon the Securities, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
35
SECTION 2.10 Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security ceases to be outstanding in the event the
Company or an Affiliate of the Company holds the Security provided, however,
that in determining whether the Trustee shall be protected in making a
determination whether the holders of the requisite principal amount of
outstanding Securities are present at a meeting of holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which the Trustee actually knows to be held by the Company or an Affiliate of
the Company shall not be considered outstanding.
If a Security is replaced pursuant to Section 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.11 Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities.
SECTION 2.12 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
return to the Company all Securities surrendered for registration of transfer,
exchange, payment or cancellation. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.
36
SECTION 2.13 Payment of Interest; Defaulted Interest. Interest on
any Security which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to the Person in whose name such
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of
business on a Special Record Date (as defined below) for the payment
of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security
and the date (not less than 30 days after such notice) of the
proposed payment (the "Special Interest Payment Date"), and at the
same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a record date
(the "Special Record Date") for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the Special Interest Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
Special Record Date, and in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest
Payment Date therefor to be given in the manner provided for in
Section 13.2, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date and Special Interest Payment Date therefor
having been so given, such Defaulted Interest shall be paid on the
Special Interest Payment Date to the Persons in whose names the
Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and
upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of
37
the proposed payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14 Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.15 CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, die Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such CUSIP
numbers.
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 3.2 SEC Reports and Available Information. Notwithstanding
that the Company may not be subject to the reporting requirements of Section
13(a) or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act,
the Company will file with the SEC, and provide, within 15 days after the
Company is or would be required to file the same with the SEC, the Trustee and
the holders of Securities with the annual reports and the information, documents
and other reports (or copies of such portions of any of the foregoing as the SEC
may, by rules and regulations prescribe), that are specified in Sections 13 and
15(d) of the Exchange
38
Act. In the event that the Company is not permitted to file such reports,
documents and information with the SEC pursuant to the Exchange Act, the Company
will nevertheless deliver such Exchange Act information to the Trustee and the
holders of the Securities as if the Company were subject to the reporting
requirements of Section 13 or 15(d) of The Exchange Act. In addition, for so
long as any of the Securities remain outstanding the Company shall make
available to any prospective purchaser of the Securities or beneficial owner of
the Securities in connection with any sale thereof the information required by
Rule 144A(d)(4) under the Securities Act. The Company shall also comply with the
other provisions of TIA ss.314(a). Delivery of such reports, information and
documents to the Trustee is for information purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 3.3 Limitation on Indebtedness. (a) The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness; provided, however, that the Company and its Restricted
Subsidiaries that are Guarantors may Incur Indebtedness if on the date thereof,
after giving pro forma effect to the incurrence of such Indebtedness, the
Leverage Ratio for the Company and its Restricted Subsidiaries is less than 6.00
to 1.00.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness
Incurred pursuant to the Senior Credit Agreement of up to $545.0 million
outstanding at any time; (ii) the Note Guarantees and Guarantees of Indebtedness
Incurred pursuant to paragraph (a) or clause (i) of this paragraph (b); (iii)
Indebtedness of the Company owing to and held by any Wholly-Owned Subsidiary or
Indebtedness of a Restricted Subsidiary owing to and held by the Company or any
Wholly-Owned Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock or any other event that results in any such
Wholly-Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary or any
subsequent transfer of any such Indebtedness (except to the Company or a
Wholly-Owned Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof; (iv) Indebtedness
represented by (x) $150.0 million aggregate principal amount of the Securities
and the Note Guarantees, (y) any Indebtedness (other than the Indebtedness
described in clauses (i), (ii) and (iii)) outstanding on the Issue Date and (z)
any Refinancing Indebtedness Incurred in respect of any Indebtedness described
in this clause (iv) or clause (v) or Incurred pursuant to paragraph (a) above;
(v) Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date
on which such Restricted Subsidiary, was acquired by the Company; provided,
however, that at the time such Restricted Subsidiary is acquired by the Company,
the Company would have been able to Incur $1.00 of additional Indebtedness
pursuant to paragraph (a) above after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (v); (vi) Indebtedness under Currency
Agreements and Interest Rate Agreements; provided, however, that in the case of
Currency Agreements and Interest Rate Agreements, such Currency Agreements and
Interest Rate Agreements are entered into for bona fide hedging purposes of the
Company or its Restricted Subsidiaries (as determined in good faith by the Board
of Directors or senior management of the Company) and correspond in terms of
notional amount, duration, currencies and interest rates, as applicable, to
Indebtedness of the Company or its Restricted Subsidiaries Incurred without
violation of this Indenture or to business transactions of the Company or its
Restricted
39
Subsidiaries on customary terms entered into in the ordinary course of business;
and (vii) Indebtedness (other than Indebtedness described in clauses (i)-(vi))
in a principal amount that, when taken together with the principal amount of all
other Indebtedness Incurred pursuant to this clause (vii) and then outstanding,
will not exceed $20.0 million.
(c) Neither the Company nor any Restricted Subsidiary shall Incur
any Indebtedness under Section 3.3(b) if the proceeds thereof are used, directly
or indirectly, to refinance any Subordinated Obligations of the Company unless
such Indebtedness shall be subordinated to the Securities to at least the same
extent as such Subordinated Obligations. No Guarantor shall Incur any
Indebtedness under Section 3.3(b) if the proceeds thereof are used, directly or
indirectly, to refinance any Guarantor Subordinated Obligations of such
Guarantor unless such Indebtedness shall be subordinated to the obligations of
such Guarantor under its Note Guarantee to at least the same extent as such
Guarantor Subordinated Obligations.
(d) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this Section 3.3, in the event that Indebtedness meets the
criteria of more than one of the types of Indebtedness described in Section
3.3(b), the Company, in its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
(e) The Company shall not permit any Unrestricted Subsidiary to
Incur any Indebtedness other than Non-Recourse Debt.
SECTION 3.4 Limitation on Layering. The Company shall not Incur any
Indebtedness if such Indebtedness is subordinate or junior in ranking in any
respect to any Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of payment
to Senior Subordinated Indebtedness. No Guarantor shall Incur any Indebtedness
if such Indebtedness is contractually subordinate or junior in ranking in any
respect to any Guarantor Senior Indebtedness of such Guarantor unless such
Indebtedness is Guarantor Senior Subordinated Indebtedness of such Guarantor or
is contractually subordinated in right of payment to Guarantor Senior
Subordinated Indebtedness of such Guarantor.
SECTION 3.5 Limitation on Restricted Payments. (a) The Company shall
not, and shall not permit any of its Restricted Subsidiaries, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) except (A) dividends or distributions payable in its Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock and (B) dividends or distributions payable to the
Company or a Restricted Subsidiary of the Company (and if such Restricted
Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of Capital
Stock on a pro rata basis), (ii) purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company held by Persons other than a
Restricted Subsidiary of the Company or any Capital Stock of a Restricted
Subsidiary of the Company held by any Affiliate of the Company, other than
another Restricted Subsidiary (in either case, other than in exchange for its
Capital Stock (other than Disqualified Stock)), (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled
40
repayment or scheduled sinking fund payment, any Subordinated Obligations (other
than the purchase, repurchase or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
purchase, repurchase or acquisition) or (iv) make any Investment (other than a
Permitted Investment) in any Person (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Investment
being herein referred to in clauses (i) through (iv) as a "Restricted Payment"),
if at the time the Company or such Restricted Subsidiary makes such Restricted
Payment: (1) a Default shall have occurred and be continuing (or would result
therefrom); or (2) the Company shall not be able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) pursuant to Section 3.3(a); or (3) the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made subsequent to the Issue Date would exceed the sum of: (A) (i)
Consolidated EBITDA accrued during the period (treated as one accounting period)
from January 1, 2001 to the end of the most recent fiscal quarter ending prior
to the date of such Restricted Payment as to which financial results are
available (or, in case such Consolidated EBITDA is a deficit, minus 100% of such
deficit) less (ii) 150% of Consolidated Interest Expense for such period; (B)
the aggregate Net Cash Proceeds received by the Company from the issue or sale
of its Capital Stock (other than Disqualified Stock) or other capital
contributions subsequent to the Issue Date (other than net proceeds to the
extent (x) used to redeem Securities or (y) received from an issuance or sale of
such Capital Stock to a Subsidiary of the Company or an employee stock ownership
plan or similar trust to the extent such sale to an employee stock ownership
plan or similar trust is financed by loans from or guaranteed by the Company or
any Restricted Subsidiary unless such loans have been repaid with cash on or
prior to the date of determination); (C) the amount by which Indebtedness of the
Company is reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company) subsequent to the Issue
Date of any Indebtedness of the Company convertible or exchangeable for Capital
Stock of the Company (less the amount of any cash, or other property,
distributed by the Company upon such conversion or exchange); and (D) the amount
equal to the net reduction in Investments (other than Permitted Investments)
made by the Company or any of its Restricted Subsidiaries in any Person
resulting from (i) repurchases or redemptions of such Investments by such
Person, proceeds realized upon the sale of such Investment to an unaffiliated
purchaser, repayments of loans or advances or other transfers of assets as a
return of capital or similar payment (excluding by way of dividend or
distribution) by such Person to the Company or any Restricted Subsidiary of the
Company or (ii) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of "Investment")
not to exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously made by the Company or
any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was
included in the calculation of the amount of Restricted Payments; provided,
however, that no amount will be included under this clause (D) to the extent it
is already included in Consolidated Net Income.
(b) The provisions of Section 3.5(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary or an employee stock
ownership plan or similar trust to the extent such sale to an employee stock
ownership plan or similar trust is financed by loans from or guaranteed by the
Company or any
41
Restricted Subsidiary unless such loans have been repaid with cash on or prior
to the date of determination); provided, however, that (A) such purchase or
redemption shall be excluded in subsequent calculations of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale shall be
excluded from clause (3) (B) of paragraph (a); (ii) any purchase or redemption
of Subordinated Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Subordinated Obligations of
the Company; provided, however, that such purchase or redemption shall be
excluded in subsequent calculations of the amount of Restricted Payments; (iii)
any purchase or redemption of Subordinated Obligations from Net Available Cash
to the extent permitted under Section 3.7; provided, however, that such purchase
or redemption shall be excluded in subsequent calculations of the amount of
Restricted Payments; (iv) dividends paid within 60 days after the date of
declaration if at such date of declaration such dividend would have complied
with this provision; provided, however, that such dividends shall be included in
subsequent calculations of the amount of Restricted Payments; (v) cash dividends
to Parent or Holdings for the purpose of, and in amounts equal to, amounts
required to permit Parent or Holdings (A) to redeem or repurchase Capital Stock
of Parent or Holdings from existing or former employees or management of Parent,
Holdings, the Company or any Subsidiary or their assigns, estates or heirs, in
each case in connection with the repurchase provisions under employee stock
option or stock purchase agreements or other agreements to compensate management
employees provided, however, that such dividends shall be included in subsequent
calculations of the amount of Restricted Payments; (B) to make loans or advances
to employees or directors of the Company or any Subsidiary the proceeds of which
are used to purchase Capital Stock of Parent or Holdings; provided, however,
that such dividends shall be included in subsequent calculations of the amount
of Restricted Payments; (C) to pay any Federal, state or local income taxes to
the extent that such income taxes are attributable to the income of the Company
and its Subsidiaries, pay franchise taxes and other fees required to maintain
its legal existence, corporate overhead expenses Incurred in the ordinary course
of business, and salaries or other compensation of employees who perform
services for both Parent or Holdings and the Company; provided, however, that
such dividends shall be excluded in subsequent calculations of the amount of
Restricted Payments and (D) so long as no Default or Event of Default shall have
occurred and be continuing, in an amount not to exceed $100,000 in any fiscal
year to enable Parent or Holdings to make payments to holders of its Capital
Stock in lieu of the issuance of fractional shares of its Capital Stock;
provided, however, that such dividends will be excluded in subsequent
calculations of the amount of Restricted Payments; provided further, however,
that the aggregate amount of dividends paid to Parent or Holdings pursuant to
this clause (v) (other than payments for taxes permitted by clause (C)) shall
not exceed $3.0 million in any fiscal year; (vi) repurchases of Capital Stock
deemed to occur upon the exercise of stock options if such Capital Stock
represents a portion of the exercise price hereof; provided, however, that such
repurchases shall be excluded from subsequent calculations of the amount of
Restricted Payments; and (vii) so long as no Default or Event of Default has
occurred and is continuing, any other Restricted Payment which, together with
all other Restricted Payments made under this clause (vii) since the Issue Date,
does not exceed $20.0 million; provided that such payments shall be included in
subsequent calculations of the amounts of Restricted Payments.
SECTION 3.6 Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or
42
consensual restriction on the ability of any Restricted Subsidiary to (i) pay
dividends or make any other distributions on its Capital Stock or pay any
Indebtedness or other obligations owed to the Company, (ii) make any loans or
advances to the Company or (iii) transfer any of its property or assets to the
Company, except (a) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the date of this Indenture (including, without
limitation, the Senior Credit Agreement); (b) any encumbrance or restriction
with respect to a Restricted Subsidiary pursuant to an agreement relating to any
Indebtedness Incurred by a Restricted Subsidiary on or prior to the date on
which such Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, or to provide, all or any portion of
the funds utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding on such date; (c) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement effecting a refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (a) or (b) of this Section 3.6 or this clause
(c) or contained in any amendment to an agreement referred to in clause (a) or
(b) of this Section 3.6 or this clause (c); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such agreement or amendment are no less favorable to the
Holders of the Securities than encumbrances and restrictions contained in such
agreements; (d) in the case of clause (iii) above, any encumbrance or
restriction (A) that restricts in a customary manner the subletting, assignment
or transfer of any property or asset that is subject to a lease, license or
similar contract, or the assignment or transfer of any such lease, license or
other contract, (B) by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets of the Company or
any Restricted Subsidiary not otherwise prohibited by this Indenture, (C)
contained in mortgages, pledges or other security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such mortgages,
pledges or other security agreements or (D) pursuant to customary provisions
restricting dispositions of real property interests set forth in any reciprocal
easement agreements of the Company or any Restricted Subsidiary; (e) any
restriction with respect to a Restricted Subsidiary (or any of its property or
assets) imposed pursuant to an agreement entered into for the direct or indirect
sale or disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition; (f) encumbrances
or restrictions arising or existing by reason of applicable law; and (g)
encumbrances or restrictions arising or existing by reason of customary
provisions in joint venture agreements and other similar agreements.
SECTION 3.7 Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company shall not, and shall not permit any of its Restricted Subsidiaries
to, make any Asset Disposition unless (i) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset Disposition at least
equal to the fair market value, as determined in good faith by the Board of
Directors (including as to the value of all non-cash consideration), of the
shares and assets subject to such Asset Disposition and (ii) at least 85% of the
consideration thereof received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents. With respect to any Asset Disposition
occurring on or after the Issue Date from which the Company or any Restricted
Subsidiary receives Net Available Cash, the Company or such Restricted
Subsidiary shall apply an amount equal to 100% of the Net Available Cash from
such Asset Disposition at its election, to either (i) prepay, repay or purchase
Senior Indebtedness
43
or Indebtedness (other than any Preferred Stock) of a Wholly-Owned Subsidiary
(in each case other than Indebtedness owed to the Company or an Affiliate of the
Company (other than Bank Indebtedness)), within 365 days from the later of the
date of such Asset Disposition or the receipt of such Net Available Cash; (ii)
invest in Additional Assets within 365 days from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash; or (iii) make an
offer pursuant to Section 3.7(b) to purchase the notes and other Senior
Subordinated Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Indebtedness with the proceeds from
any Asset Disposition (the "Pari Passu Notes") at 100% of the principal amount
thereof (or 100% of the accreted value of such Pari Passu Notes so tendered if
such Pari Passu Notes were issued at a discount) plus accrued and unpaid
interest, if any, to the date of purchase; provided, however, that, in
connection with any prepayment, repayment or purchase of Indebtedness pursuant
to clause (i) above, the Company or such Restricted Subsidiary will retire such
Indebtedness and will cause the related loan commitment (if any), unless such
commitment is for the provision of a revolving credit facility, to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased. Notwithstanding the foregoing provisions, the Company and
its Restricted Subsidiaries will not be required to apply any Net Available Cash
in accordance herewith except to the extent that the aggregate Net Available
Cash from all Asset Dispositions which are not applied in accordance with this
covenant exceed $1.0 million. Any Net Available Cash from an Asset Disposition
that is not invested or applied as provided and within the time period set forth
in clauses (i) and (ii) of the first sentence of this paragraph will be deemed
to constitute "Excess Proceeds."
For the purposes of this Section 3.7 and for no other purpose, the
following will be deemed to be cash: (x) the assumption by the transferee of
Senior Indebtedness of the Company or Indebtedness of any Restricted Subsidiary
of the Company and the release of the Company or such Restricted Subsidiary from
all liability on such Senior Indebtedness or Indebtedness in connection with
such Asset Disposition (in which case the Company will, without further action,
be deemed to have applied such assumed Indebtedness in accordance with clause
(i) of the preceding paragraph); (y) securities received by the Company or any
Restricted Subsidiary of the Company from the transferee that are promptly
converted by the Company or such Restricted Subsidiary into cash; and (z) the
fair market value, as determined by the Board of Directors of the Company in
good faith, of any Designated Noncash Consideration received by the Company or
any of its Restricted Subsidiaries in any Asset Disposition, taken together with
the fair market value, as determined by the Board of Directors of the Company in
good faith, of all other Designated Noncash Consideration received pursuant to
this clause (z) that is at that time outstanding, not to exceed $25.0 million at
the time of the receipt of such Designated Noncash Consideration (with the fair
market value of each item of Designated Noncash Consideration being measured at
the time received and without giving effect to subsequent changes in value), in
which case such Designated Noncash Consideration shall not constitute Net
Available Cash.
(b) When the aggregate amount of Excess Proceeds exceeds $5.0
million (with lesser amounts to be carried forward for purposes of determining
whether an Offer (as defined) is required with respect to the Excess Proceeds
from any subsequent Asset Disposition), the Company will be required to apply
such Excess Proceeds to the repayment of the Securities and any Pari Passu Notes
as follows: (A) the Company will make an offer to purchase (an "Offer") within
ten days of such time from all holders in accordance with the procedures set
44
forth in this Indenture in the maximum principal amount (expressed as a multiple
of $1,000) of Securities that may be purchased out of an amount (the "Note
Amount") equal to the product of such Excess Proceeds multiplied by a fraction,
the numerator of which is the outstanding principal amount of the Securities and
the denominator of which is the sum of the outstanding, principal amount of the
Securities and the outstanding principal amount (or accreted value, as the case
may be) of the Pari Passu Notes at a purchase price of 100% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of purchase
and (B) the Company will make an offer to purchase any Pari Passu Notes (a "Pari
Passu Offer") in an amount equal to the excess of the Excess Proceeds over the
Security Amount at a purchase price of 100% of the principal amount (or accreted
value, as the case may be) thereof plus accrued and unpaid interest, if any, to
the date of purchase in accordance with the procedures (including prorating in
the event of oversubscription) set forth in the documentation governing such
Pari Passu Notes with respect to the Pari Passu Offer. If the aggregate purchase
price of the Securities and Pari Passu Notes tendered pursuant to the Offer and
the Pari Passu Offer is less than the Excess Proceeds, the remaining Excess
Proceeds will be available to the Company to fund other corporate purposes not
otherwise prohibited by this Indenture.
(1) Promptly, and in any event within 10 days after the Company is
required to make an Offer, the Company will deliver to the Trustee and send, by
first-class mail to each Holder, a written notice stating that the Holder may
elect to have his Securities purchased by the Company either in whole or in part
(subject to prorating as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date").
(2) Not later than the date upon which such written notice of an
Offer is delivered to the Trustee and the Holders, the Company will deliver to
the Trustee an Officers' Certificate setting forth (i) the amount of the Offer
(the "Offer Amount"), (ii) the allocation of the Net Available Cash from the
Asset Dispositions as a result of which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 3.7(a). Upon the
expiration of the period (the "Offer Period") for which the Offer remains open,
the Company shall deliver to the Trustee for cancellation the Securities or
portions thereof which have been properly tendered to and are to be accepted by
the Company. The Trustee shall, on the Purchase Date, mail or deliver payment to
each tendering Holder in the amount of the purchase price of the Securities
tendered by such Holder to the extent such funds are available to the Trustee.
(3) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form entitled "Option of Holder
to Elect Purchase" duly completed, to the Company at the address specified in
the notice prior to the expiration of the Offer Period. Each Holder will be
entitled to withdraw its election if the Trustee or the Company receives, not
later than one Business Day prior to the expiration of the Offer Period, a
facsimile transmission or overnight mail from such Holder setting forth the name
of such Holder, the principal amount of the Security or Securities which were
delivered for purchase by such Holder and a statement that such Holder is
withdrawing his election to have such Security or Securities purchased. If at
the expiration of the Offer Period the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the
45
Company so that only Securities in denominations of $1,000, or integral
multiples thereof, shall be purchased). Holders whose Securities are purchased
only in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(d) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.7, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
SECTION 3.8 Limitation on Affiliate Transactions. (a) The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into or conduct any transaction (including the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Company (an "Affiliate Transaction") unless: (i) the terms
of such Affiliate Transaction are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained at
the time of such transaction in arm's-length dealings with a Person who is not
such an Affiliate; (ii) in the event such Affiliate Transaction involves an
aggregate amount in excess of $1.0 million, the terms of such transaction have
been approved by a majority of the members of the Board of Directors of the
Company and by a majority of the members of such Board having no personal stake
in such transaction, if any (and such majority or majorities, as the case may
be, determines that such Affiliate Transaction satisfies the criteria in (i)
above); and (iii) in the event such Affiliate Transaction involves an aggregate
amount in excess of $5.0 million, the Company has received a written opinion
from an independent investment banking firm of nationally recognized standing
that such Affiliate Transaction is not materially less favorable than those that
might reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate; provided, however,
that this clause (iii) will not apply to any Affiliate Transaction with any
joint venture or similar entity in which the Principals and their Related
Parties do not have any direct or indirect interests other than the interests of
the Company and its Restricted Subsidiaries in such joint venture or similar
entity.
(b) The foregoing paragraph (a) shall not apply to (i) any
Restricted Payment permitted to be made pursuant to Section 3.5; (ii) any
issuance of (A) securities to any of the Principals and Related Parties or (B)
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors of the Company; (iii) loans
or advances to employees in the ordinary course of business of Advanstar or any
of its Restricted Subsidiaries; (iv) any transaction between the Company and a
Wholly-Owned Subsidiary or between Wholly-Owned Subsidiaries; (v) payments of
customary fees by the Company or any of its Restricted Subsidiaries to the DLJ
Merchant Banking Funds and their Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures; and (vi) transactions on arm's-length basis with
Advanstar IH, Inc. and its subsidiaries in the ordinary course of business;
provided, in the case of this clause (vi), that any individual transaction or
series of related transactions consummated in a twelve month period in excess of
$5.0 million shall require the written opinion referred to in clause (a)(iii)
above.
46
SECTION 3.9 Change of Control. Upon the occurrence of any of the
following events (each a "Change of Control"), unless the Company shall have
exercised its right to redeem the Securities as described in Section 5.1, each
holder will have the right to require the Company to repurchase all or any part
of such holder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date) (the "Change
of Control Payment"):
(i) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole to any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)
other than the Principals and their Related Parties; or
(ii) the adoption of a plan for the liquidation or dissolution
of the Company; or
(iii) the consummation of any transaction, including, without
limitation, any merger or consolidation, the result of which is that any
"person" or "group" (as those terms are used in Section 13(d) of the
Exchange Act), other than the Principals and their Related Parties,
becomes the "beneficial owner" (as that term is defined in Rule 13D-3 and
Rule 13D-5 under the Exchange Act), directly or indirectly through one or
more intermediaries, of 35% or more of the voting power of the outstanding
voting stock of the Company; or
(iv) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Members.
Within 30 days following any Change of Control, unless the Company
has mailed a redemption notice with respect to all the outstanding Securities in
connection with such Change of Control as described in Section 5.1, the Company
shall mail a notice to each holder with a copy to the Trustee stating: (i) that
a Change of Control has occurred and that such holder has the right to require
the Company pursuant to this Section 3.9 to purchase such holder's Securities
(the "Change of Control Offer") at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on a record date to
receive interest on the relevant interest payment date); (ii) the repurchase
date (which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed); (iii) that any Security not tendered shall continue
to accrue interest, if any; (iv) that, unless the Company defaults in the
payment of principal or interest, all Securities accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest, if any, after the
Change of Control Payment Date; (v) that holders electing to have any Securities
purchased pursuant to a Change of Control Offer shall be required to surrender
the Securities to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the date of
purchase for the Change of Control Payment Date; (vi) that holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Change of Control
Payment Date, a facsimile transmission or letter setting forth the name of the
holder, the
47
principal amount of Securities delivered for purchase, and a statement that such
holder is withdrawing his election to have the Securities purchased; and (vii)
that holders whose Securities are being purchased only in part shall be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof.
On a Business Day that is no earlier than 30 days nor later than 60
days from the date that the Company mails or causes to be mailed notice of the
Change of Control to the holders (the "Change of Control Payment Date"), the
Company shall, to the extent lawful, (i) accept for payment all Securities or
portions thereof properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount equal to the Change of Control Payment
in respect of all the Securities or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate stating the aggregate principal amount of
such Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each Holder of the Securities so tendered the
Change of Control Payment for such Securities, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book-entry) to each Holder
a new Security equal in principal amount to any unpurchased portion of the
Securities surrendered, if any; provided that each such new Security shall be in
a principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue
thereof.
SECTION 3.10 Limitation on Dispositions of Capital Stock of
Restricted Subsidiaries. The Company (i) shall not, and shall not permit any
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any
Person (other than the Company or a Wholly-Owned Subsidiary), unless (A) such
transfer, conveyance, sale, lease or other disposition is a sale of the common
stock of such Restricted Subsidiary and, after giving effect to the consummation
thereof, the Company owns (x) more than 50% of the outstanding common stock of
such Restricted Subsidiary or (y) none of the outstanding common stock of such
Restricted Subsidiary and (B) the cash net proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 3.7; and (ii) shall not permit any Restricted Subsidiary to issue any of
its Capital Stock (other than, if necessary, shares of its Capital Stock
constituting directors' qualifying shares) to any Person other than to the
Company or a Wholly-Owned Subsidiary, unless such issuance is an issuance of the
common stock of such Restricted Subsidiary and, after giving effect to the
consummation thereof, the Company owns (x) more than 50% of the outstanding
common stock of such Restricted Subsidiary or (y) none of the outstanding common
stock of such Restricted Subsidiary.
SECTION 3.11 Limitation on Liens. The Company shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, Incur or suffer to exist any Lien (other than Permitted Liens and Liens
securing Senior Indebtedness and Guarantor
48
Senior Indebtedness) upon any of its property or assets (including Capital
Stock), whether owned on the date of this Indenture or thereafter acquired,
securing any Indebtedness, unless contemporaneously therewith effective
provision is made to secure the Indebtedness due under this Indenture and the
Securities or, in respect of Liens on any Restricted Subsidiary's property or
assets, any Note Guarantee of such Restricted Subsidiary, equally and ratably
with (or prior to in the case of Liens with respect to Subordinated Obligations)
the Indebtedness secured by such Lien for so long as such Indebtedness is so
secured.
SECTION 3.12 Future Guarantors. After the Issue Date, the Company
shall cause each Restricted Subsidiary (other than a Foreign Subsidiary) created
or acquired by the Company to execute and deliver to the Trustee a Note
Guarantee pursuant to which such Guarantor shall unconditionally Guarantee, on a
joint and several basis, the full and prompt payment of the principal of,
premium, if any and interest on the, notes on a senior subordinated basis.
SECTION 3.13 Limitation on Lines of Business. The Company shall not,
nor shall it permit any of its Subsidiaries to, engage in any line of business,
other than a Related Business.
SECTION 3.14 Limitation on Asset Swaps. The Company shall not, and
shall not permit any Restricted Subsidiary to, engage in any Asset Swaps,
unless: (i) at the time or entering into such Asset Swap and immediately after
giving effect to such Asset Swap, no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof; (ii) in the
event such Asset Swap involves the transfer by the Company or any Restricted
Subsidiary of assets having an aggregate fair market value, as determined by the
Board of Directors of the Company in good faith, in excess of $1.0 million, the
terms of such Asset Swap have been approved by a majority of the members of the
Board of Directors of the Company and (iii) in the event such Asset Swap
involves an aggregate amount in excess of $10.0 million, the Company has
received a written opinion from an independent investment banking firm of
nationally recognized standing that such Asset Swap is fair to the Company or
such Restricted Subsidiary, as the case may be, from a financial point of view.
SECTION 3.15 Maintenance of Office or Agency. The Company will
maintain in The City of New York, an office or agency where the Securities may
be presented or surrendered for payment, where, if applicable, the Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The principal corporate trust office (the "Corporate
Trust Office") of the Trustee shall be such office or agency of the Company,
unless the Company shall designate and maintain some other office or agency for
one or more of such purposes. The Company will give prompt written notice to the
Trustee of any change in the location of any such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
49
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
SECTION 3.16 Corporate Existence. Subject to Article IV and Section
11.2, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect the corporate existence and that of each
Restricted Subsidiary and the corporate rights (charter and statutory) licenses
and franchises of the Company and each Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve any such existence (except
the Company), right, license or franchise if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, disadvantageous in any material respect to the Holders.
SECTION 3.17 Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a material
liability or lien upon the property of the Company or any Restricted Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in the
good faith judgment of management of the Company), are being maintained in
accordance with GAAP or where the failure to effect such payment will not be
disadvantageous to the Holders.
SECTION 3.18 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 in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they do,
the certificate shall describe the Default or Event of Default, its status and
what action the Company is taking or proposes to take with respect thereto. The
Company also shall comply with TIA ss.314(a)(4).
SECTION 3.19 Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20 Stay, Extension and Usury Laws. The Company and each of
the Guarantors covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any
50
stay, extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Company and each of the Guarantors (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
ARTICLE IV
SUCCESSOR COMPANY
SECTION 4.1 Merger and Consolidation. The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless: (i) the resulting,
surviving or transferee Person (the "Successor Company") shall be a corporation,
partnership, trust, limited liability company or other similar entity organized
and existing under the laws of the United States of America, any State thereof
or the District of Columbia and the Successor Company (if not the Company) shall
expressly assume, by supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture; (ii) immediately after giving effect to
such transaction (and treating any Indebtedness that becomes an obligation of
the Successor Company or any Subsidiary of the Successor Company as a result of
such transaction as having been Incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing; (iii) immediately after giving effect to
such transaction, the Successor Company would be able to Incur at least an
additional $1.00 of Indebtedness pursuant to Section 3.3(a); and (iv) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with this Indenture.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture, but, in
the case of a lease of all or substantially all its assets, the Company shall
not be released from the obligation to pay the principal of and interest on the
Securities.
Notwithstanding clauses (ii) and (iii) and the first sentence of
this Section 4.1, (i) any, Restricted Subsidiary of the Company may consolidate
with, merge into or transfer all or part of its properties and assets to the
Company and (ii) the Company may merge with an Affiliate incorporated solely for
the purpose of reincorporating the Company in another jurisdiction to realize
tax or other benefits.
ARTICLE V
REDEMPTION OF SECURITIES
SECTION 5.1 Optional Redemption. The Securities may or shall, as the
case may be, be redeemed, as a whole or from time to time in part, subject to
the conditions and at the Redemption Prices specified in the form of Securities
set forth in Exhibits A and B hereto, which
51
are hereby incorporated by reference and made a part of this Indenture, together
with accrued and unpaid interest to the redemption date.
SECTION 5.2 Applicability of Article. Redemption of Securities at
the election of the Company or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and
this Article.
SECTION 5.3 Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company,
the Company shall, upon not less than 45 and not more than 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 5.4.
SECTION 5.4 Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities are to be redeemed at any time pursuant to an
optional redemption, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a pro rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements)
and which may provide for the selection for redemption of portions of the
principal of the Securities; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Security not redeemed to
less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
SECTION 5.5 Notice of Redemption. Notice of redemption shall be
given in the manner provided for in Section 13.2 not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of Notes to be redeemed.
The Trustee shall give notice of redemption in the Company's name and at the
Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the Redemption Date, an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
52
(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in Section 5.7, if any,
(3) if less than all outstanding Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Securities to be redeemed and the
aggregate principal amount of Securities to be Outstanding after such partial
redemption,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without charge,
a new Security or Securities of authorized denominations for the principal
amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section 5.7)
will become due and payable upon each such Security, or the portion thereof, to
be redeemed, and, unless the Company defaults in making the redemption payment,
that interest on Securities called for redemption (or the portion thereof) will
cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to the
accuracy or correctness of the CUSIP number, if any, listed in such notice or
printed on the Securities, and
(10) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 5.6 Deposit of Redemption Price. Prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 2.4) an amount of money sufficient to pay the Redemption
Price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 5.7 Notes Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified (together with accrued interest, if any, to the Redemption Date), and
from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; provided,
however, that installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of
53
such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Regular Record Date or Special Record
Date, as the case may be, according to their terms and the provisions of Section
2.13.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 5.8 Securities Redeemed in Part. Any Security which is to be
redeemed only in part (pursuant to the provisions of this Article) shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to Section 3.15 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of such
Security at the expense of the Company, a new Security or Securities, of any
authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered, provided, that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, whether or not such payment shall
be prohibited by Article X of this Indenture, and such default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal or premium,
if any, of any Security when the same becomes due and payable at its
Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, whether or not such payment shall be prohibited
by Article X of this Indenture;
(3) the Company fails to comply with Article IV of this Indenture;
(4) the Company fails to comply with any of Sections 3.2, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, and
3.17 (in each case other than a failure to repurchase Securities when
required pursuant to Sections 3.7 or 3.9, which failure shall constitute
an Event of Default under Section 6.1(2)) and such failure continues for
30 days after the notice specified below;
(5) the Company defaults in the performance of or a breach by the
Company of any other covenant or agreement in this Indenture or under the
Securities (other than those referred to in (1), (2), (3) or (4) above)
and such default continues for 60 days after the notice specified below;
54
(6) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof and the total amount of such unpaid or
accelerated Indebtedness exceeds $5.0 million or its foreign currency
equivalent at the time;
(7) the Company or a Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law (as defined below):
(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 (as defined
below) of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order, decree or
relief remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$5.0 million or its foreign currency equivalent at the time is rendered
against the Company or a Significant Subsidiary if such judgment or decree
remains undischarged or unstayed for a period of 60 days following such
judgment or decree becomes final and non-appealable; or
(10) the failure of any Note Guarantee by a Guarantor (if any) to be
in full force and effect (except as contemplated by the terms hereof) or
the denial or disaffirmation by any such Guarantor of its obligations
under any Guarantee.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or
55
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or (5) of
this Section 6.1 will not constitute an Event of Default until the Trustee or
the Holders of more than 25% in principal amount of the outstanding Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified in said clause (4) or (5) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default under clauses (3), (4), (5), (6), (9) or (10) of
this Section 6.1.
SECTION 6.2 Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.1(7) or (8) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in outstanding principal amount of the Securities by notice to
the Company and the Trustee, may, and the Trustee at the request of such Holders
shall, declare the principal of, premium, if any, and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal, premium and interest shall, subject to Section 10.4 of this
Indenture, be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in Section 6.1(6) above has
occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default or payment default
triggering such Event of Default pursuant to Section 6.1(6) shall be remedied or
cured by the Company and/or the relevant Significant Subsidiaries or waived by
the holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event of Default specified in Section
6.1(7) or (8) with respect to the Company occurs, the principal of, premium and
accrued and unpaid interest on all the Securities will become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holders. The Holders of a majority in principal amount of the Securities
by notice to the Trustee may waive all past defaults (except with respect to
nonpayment of principal, premium or interest) and rescind an acceleration with
respect to the Securities and its consequences if (i) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, other than the nonpayment of principal or
interest that has become due solely because of such acceleration, have been
cured or waived. No such rescission shall affect any subsequent Default or Event
of Default or impair any right consequent thereto.
SECTION 6.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
56
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4 Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (i) a Default
or Event of Default in the payment of the principal of or interest on a Security
or (ii) a Default or Event of Default in respect of a provision that under
Section 9.2 cannot be amended without the consent of each Securityholder
affected. When a Default or Event of Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any consequent right.
SECTION 6.5 Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Sections 7.1 and 7.2, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6 Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal amount of
the Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense (including reasonable
attorneys' fees and expenses);
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 60-day period.
Subject to certain restrictions, the holders of a majority in
principal amount of the outstanding Securities are given the right to direct the
time, method and place of conducting any
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proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. The Trustee, however, may refuse to follow any
direction that conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other holder or that would
involve the Trustee in personal liability. Prior to taking any action under the
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against all losses and expenses caused by taking or not
taking such action.
SECTION 6.7 Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of, premium (if any) or interest on the Securities held by
such Holder, on or after the respective due dates expressed in the Securities,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.8 Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9 Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10 Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness to the extent required by
Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
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SECTION 6.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in outstanding principal amount of the
Securities.
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provisions hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) 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
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
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(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
SECTION 7.2 Rights of Trustee. Subject to Section 7.1, (a) The
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and 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 in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
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SECTION 7.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Securityholder 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 of principal of, premium (if any), or interest on any
Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, a committee of its board of
directors or a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.6 Reports by Trustee to Holders. As promptly as
practicable after each April 15 beginning with the April 15 following the date
of this Indenture, and in any event prior to June 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such April 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
The Trustee shall also transmit by mail all reports required by TIA ss. 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. 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 out-of-pocket expenses
incurred or made by it, including costs of collection, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances of
the Trustee's agents, counsel, accountants and experts. The Company and each
Guarantor shall jointly and severally indemnify the Trustee against any and all
loss, liability or expense (including reasonable attorneys' fees and expenses)
incurred by it without negligence or bad faith on its part in connection with
the administration of this trust and the performance of its
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duties hereunder, including the costs and expenses of enforcing this Indenture
(including this Section 7.7) and of defending itself against any claims (whether
asserted by any Securityholder, the Company or otherwise). The Trustee shall
notify the Company promptly of 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
may have separate counsel and the Company shall pay the fees and expenses of
such counsel; provided that the Company shall not be required to pay such fees
and expenses if it assumes the Trustee's defense, and, in the reasonable
judgement of outside counsel to the Trustee, there is no conflict of interest
between the Company and the Trustee in connection with such defense. The Company
need not reimburse any expense or indemnify against any loss, liability or
expense incurred by the Trustee through the Trustee's own willful misconduct,
negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.8 Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of the Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
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
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succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition, at the Company's
expense, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee. Notwithstanding the replacement of
the Trustee pursuant to this Section, the Company's obligations under Section
7.7 shall continue for the benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture; provided
that the certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1 Discharge of Liability on Securities; Defeasance. (a)
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced
63
pursuant to Section 2.9) for cancellation or (ii) all outstanding Securities
have become due and payable, whether at maturity or upon redemption and the
Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Securities (other than Securities
replaced pursuant to Section 2.9), including interest thereon to maturity or
such redemption date, and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to Section
8.1(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
(accompanied by an Officers' Certificate and an Opinion of Counsel stating that
all conditions precedent specified herein relating to the satisfaction and
discharge of this Indenture have been complied with) and at the cost and expense
of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option"), and after giving effect to such legal defeasance,
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under Sections 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17,
and 4.1(iii) and the Company may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall no longer constitute a Default or an Event of Default under Section 6.1(3)
and 6.1(4) ("covenant defeasance option"), but except as specified above, the
remainder of this Indenture and the Securities shall be unaffected thereby. The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Company exercises its
covenant defeasance option, the Company may, by written notice to the Trustee
prior to the delivery of the Opinion of Counsel referred to in Section 8.2(8),
elect to have any Note Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of any event that, in the absence of
such legal defeasance, would have constituted an Event of Default, and the Note
Guarantees in effect at such time shall terminate. If the Company exercises its
covenant defeasance option, the events specified in Sections 6.1(4), 6.1(6),
6.1(7) (but only with respect to a Significant Subsidiary), 6.1(8) (but only
with respect to a Significant Subsidiary), 6.1(9) and 6.1(10) will no longer
constitute an Event of Default, and payment of the Securities may not be
accelerated because of the occurrence of any such event or because of the
failure of the Company to comply with Sections 4.1(iii).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and (b), the
Company's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.9, 7.7, 7.8, 8.4,
8.5 and 8.6 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.7, 8.4 and 8.5 shall
survive.
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SECTION 8.2 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 with the Trustee for
the benefit of the Holders money in U.S. dollars or U.S. Government
Obligations or a combination thereof for the payment of principal of and
interest on the Securities to maturity or redemption, 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 on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default with respect to the Indenture resulting from the incurrence of
Indebtedness, all or a portion of which will be used to defease the
Securities concurrently with such incurrence);
(4) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the Securities and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of the Securities is an
insider of the Company, after 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' right
generally;
(6) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article X;
(7) 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;
(8) 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 Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or loss
for federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such legal defeasance had
not occurred;
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(9) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States
to the effect that the Securityholders will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred; and
(10) 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 Securities and this Indenture as
contemplated by this Article VIII have been complied with.
SECTION 8.3 Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article X.
SECTION 8.4 Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture. Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
SECTION 8.5 Indemnity for U.S. 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 8.6 Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII 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 VIII; provided, however, that, if
the Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE IX
AMENDMENTS
SECTION 9.1 Without Consent of Holders. The Company, the Guarantors
and the Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities or to secure
the Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to make any change that does not adversely affect the rights of
any Securityholder; or
(8) to provide for the issuance of the Exchange Securities, which
will have terms substantially identical in all material respects to the
Initial Securities (except that the transfer restrictions contained in the
Initial Securities will be modified or eliminated, as appropriate), and
which will be treated, together with any outstanding Initial Securities,
as a single issue of securities.
An amendment under this Section may not make any change that
adversely affects the rights under Article X of any holder of Senior
Indebtedness or under Article XII of any holder of Guarantor Senior Indebtedness
then outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.2 With Consent of Holders. The Company, the Guarantors and
the Trustee may amend this Indenture or the Securities without notice to any
Securityholder but
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with the written consent of the Holders of at least a majority in principal
amount of the Securities. However, without the consent of each Securityholder
affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be
redeemed or repurchased in accordance with this Indenture;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder to receive payment of principal
of and interest on such Holder's Securities on or after the due dates
therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder's Securities;
(7) make any change to the amendment provisions which require each
Holder's consent or to the waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Senior Indebtedness or Guarantor Senior Indebtedness then outstanding unless the
holders of such Senior Indebtedness or Guarantor Senior Indebtedness (or any
group or representative thereof authorized to give a consent) consent to such
change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3 Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.4 Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such
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Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.1 or 9.2 as applicable.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become
valid or effective more than 120 days after such record date.
SECTION 9.5 Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6 Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX 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 the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
ARTICLE X
SUBORDINATION
SECTION 10.1 Agreement To Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities and other obligations relating to the Securities are
subordinated in right of payment, to the extent and in the manner provided in
this Article X, to the prior payment when due in cash or Cash Equivalents of all
Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. The Securities shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Company and only Indebtedness of the Company which is Senior Indebtedness will
rank senior to the Securities in accordance with the provisions set forth
herein. All provisions of this Article X shall be subject to Section 10.12.
SECTION 10.2 Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets or securities of the Company upon a total
69
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its respective properties:
(1) holders of Senior Indebtedness of the Company shall be entitled
to receive payment in full in cash or Cash Equivalents of the Senior
Indebtedness (including interest accruing after, or which would accrue but
for, the commencement of any proceeding at the rate specified in the
applicable Senior Indebtedness, whether or not a claim for such interest
would be allowed) before Securityholders shall be entitled to receive any
payment of principal of or interest on or other amounts with respect to
the Securities; and
(2) until the Senior Indebtedness is paid in full in cash or Cash
Equivalents, any payment or distribution to which Securityholders would be
entitled but for this Article X shall be made to holders of Senior
Indebtedness as their respective interests may appear.
SECTION 10.3 Default on Senior Indebtedness. The Company shall not
pay the principal of, premium (if any) or interest on or other amounts with
respect to the Securities or make any deposit pursuant to Section 8.1 or
repurchase, redeem or otherwise retire any Securities ("pay the Securities") if
(i) any Senior Indebtedness of the Company is not paid when due in cash or Cash
Equivalents or (ii) any other default on Senior Indebtedness of the Company
occurs and the maturity of such Senior Indebtedness of the Company is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded in writing
or (y) such Senior Indebtedness of the Company has been paid in full in cash or
Cash Equivalents; provided, however, that the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of the Senior Indebtedness
of the Company with respect to which either of the events set forth in clause
(i) or (ii) of this sentence has occurred or is continuing. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the preceding sentence) with respect to any Designated Senior Indebtedness
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods, the Company may
not pay the Securities for a period (a "Payment Blockage Period") commencing
upon the receipt by the Trustee (with a copy to the Company) of written notice
(a "Blockage Notice") of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice is no longer continuing or (iii)
because such Designated Senior Indebtedness has been repaid in full in cash or
Cash Equivalents). Notwithstanding the provisions of the immediately preceding
sentence, unless the holders of such Designated Senior Indebtedness or the
Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, the Company may resume payments on the
Securities after the end of such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period.
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SECTION 10.4 Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representatives) of the acceleration; provided, however, that the
Company and the Trustee shall be obligated to notify such a Representative only
if such Representative has delivered or caused to be delivered to the Company
and the Trustee an address for service of such a notice (and the Company and the
Trustee shall only be obligated to deliver the notice to the address so
specified). If any Designated Senior Indebtedness is outstanding, the Company
shall not pay the Securities until five Business Days after the holders or
Representative of such Designated Senior Indebtedness receives notice of such
acceleration and, thereafter, may pay the Securities only if this Article X
otherwise permits payments at that time.
SECTION 10.5 When Distribution Must Be Paid Over. If a payment or
distribution is made to the Trustee or Securityholders that because of this
Article X should not have been made to them, the Trustee or the Securityholders
who receive the payment or distribution shall hold it in trust for holders of
Senior Indebtedness and promptly pay it over to them as their respective
interests may appear.
SECTION 10.6 Subrogation. After all Senior Indebtedness is paid in
full in cash or Cash Equivalents and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness. A
payment or distribution made under this Article X to holders of Senior
Indebtedness which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company of Senior
Indebtedness.
SECTION 10.7 Relative Rights. This Article X defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive payments and
distributions otherwise payable to Securityholders.
SECTION 10.8 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 Securities shall be impaired by any act or failure
to act by the Company or by the failure of any of them to comply with this
Indenture.
SECTION 10.9 Rights of Trustee and Paying Agent. Notwithstanding
Section 10.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than one
Business Day prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article X. The Company, the Registrar or co-registrar, the Paying Agent, a
71
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice.
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. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7. Each Paying Agent shall have the same
rights and obligations under this Article X as does the Trustee.
SECTION 10.10 Distribution or Notice to Representative. Whenever a
payment or distribution is to be made or a notice given to holders of Senior
Indebtedness, the payment or distribution may be made and the notice given to
their Representative (if any).
SECTION 10.11 Article X Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment in respect of the Securities
by reason of any provision in this Article X shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article X shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION 10.12 Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness or subject to the
restrictions set forth in this Article X, and none of the Securityholders shall
be obligated to pay over any such amount to the Company, any holder of Senior
Indebtedness of the Company, or any other creditor of the Company.
SECTION 10.13 Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of 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 X. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article X, and, if such evidence is not furnished, the Trustee
may defer any payment to such
72
Person pending judicial determination as to the right of such Person to receive
such payment. The provisions of Sections 7.1 and 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article X.
SECTION 10.14 Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to Section 10.9, shall not be liable
to any such holders if it shall mistakenly pay over or distribute to
Securityholders 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 X or
otherwise.
SECTION 10.16 Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XI
GUARANTEE
SECTION 11.1 Guarantee. Each Guarantor hereby fully, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, jointly
and severally with each other Guarantor, to each Holder of the Securities the
full and punctual payment when due, whether at maturity, by acceleration, by
redemption or otherwise, of the principal of, premium, if any, and interest on
the Securities (all the foregoing being hereinafter collectively called the
"Obligations"). Each Guarantor further agrees (to the extent permitted by law)
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from it, and that it will remain bound under this
Article XI notwithstanding any extension or renewal of any Obligation.
Each Guarantor waives presentation to, demand of payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of each Guarantor hereunder shall
not be affected by (a) the failure of any Holder to assert any claim or demand
or to enforce any right or remedy against the Company or any other person under
the Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of the Indenture, the Securities
or any other agreement; (d) the release of any
73
security held by any Holder or the Trustee for the Obligations or any of them;
(e) the failure of any Holder to exercise any right or remedy against any other
Guarantor; or (f) any change in the ownership of the Company.
Each Guarantor further agrees that its Note Guarantee herein
constitutes a Guarantee of payment when due (and not a Guarantee of collection)
and waives any right to require that any resort be had by any Holder to any
security held for payment of the Obligations.
The Note Guarantee of each Guarantor is, to the extent and in the
manner set forth in Article XII, subordinated and subject in right of payment to
the prior payment in full of all Guarantor Senior Indebtedness of such Guarantor
and the Note Guarantee is made subject to such provisions of such Guarantees.
The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment of the Obligations in full), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense of
setoff, counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder to assert any claim or demand or to enforce any remedy
under the Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Note Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any of the
Obligations is rescinded or must otherwise be restored by any Holder upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Company to pay any of the Obligations when and
as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Guarantor hereby promises to and will, upon
receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in
cash, to the Holders an amount equal to the sum of (i) the unpaid amount of such
Obligations then due and owing and (ii) accrued and unpaid interest on such
Obligations then due and owing (but only to the extent not prohibited by law).
Each Guarantor further agrees that, as between such Guarantor, on
the one hand, and the Holders, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in the Indenture
for the purposes of the Note Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby and (y) in the event of any such declaration of
acceleration
74
of such Obligations, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of this Note
Guarantee.
Each Guarantor also agrees to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or the
Holders in enforcing any rights under this Section.
SECTION 11.2 Limitation on Liability; Termination, Release and
Discharge. The obligations of each Guarantor hereunder will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor (including, without limitation, any Guarantees
under the Senior Credit Agreement) and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Note Guarantee or pursuant to its
contribution obligations under the Indenture or as set forth below, result in
the obligations of the Guarantor under this Note Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
Each Guarantor may consolidate with or merge into or sell its assets
to the Company or another Wholly-Owned Guarantor without limitation. Each
Guarantor may consolidate with or merge into or sell all or substantially all
its assets to a corporation, partnership, trust, limited partnership, limited
liability company or other similar entity other than the Company or a
Wholly-Owned Guarantor (whether or not affiliated with the Guarantor), except
that if the surviving corporation of any such merger or consolidation is a
Subsidiary of the Company, such Subsidiary shall not be a Foreign Subsidiary.
Upon the sale or disposition of a Guarantor (by merger, consolidation, the sale
of its Capital Stock or the sale of all or substantially all of its assets) to a
Person (whether or not an Affiliate of the Guarantor) which is not a Subsidiary
of the Company, which sale or disposition is otherwise in compliance with this
Indenture (including Section 3.7), such Guarantor shall be deemed released from
all its obligations under this Indenture and its Note Guarantee and such Note
Guarantee shall terminate; provided, however, that any such termination shall
occur only to the extent that all obligations of such Guarantor under the Senior
Credit Agreement and all of its Guarantees of, and under all of its pledges of
assets or other security interests which secure, any other Indebtedness of the
Company shall also terminate upon such release, sale or transfer.
SECTION 11.3 Right of Contribution. Each Guarantor hereby agrees
that to the extent that any Guarantor shall have paid more than its
proportionate share of any payment made on the obligations under the Note
Guarantees, such Guarantor shall be entitled to seek and receive contribution
from and against the Company or any other Guarantor who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 3.6. The provisions of
this Section 11.3 shall in no respect limit the obligations and liabilities of
each Guarantor to the Trustee and the Holders and each Guarantor shall remain
liable to the Trustee and the Holders for the full amount guaranteed by such
Guarantor hereunder.
SECTION 11.4 No Subrogation. Notwithstanding any payment or payments
made by each Guarantor hereunder, no Guarantor shall be entitled to be
subrogated to any of the rights of the Trustee or any Holder against the Company
or any other Guarantor or any collateral
75
security or guarantee or right of offset held by the Trustee or any Holder for
the payment of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Company or any other Guarantor
in respect of payments made by such Guarantor hereunder, until all amounts owing
to the Trustee and the Holders by the Company on account of the Obligations are
paid in full. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Guarantor in trust for the
Trustee and the Holders, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Trustee
in the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Trustee, if required), to be applied against the Obligations.
ARTICLE XII
SUBORDINATION OF NOTE GUARANTEES
SECTION 12.1 Agreement To Subordinate. Each Guarantor agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by each Note Guarantee and other obligations relating to the
Securities are subordinated in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment when due in cash or Cash
Equivalents of all Guarantor Senior Indebtedness and that the subordination is
for the benefit of and enforceable by the holders of Guarantor Senior
Indebtedness. Each Note Guarantee shall in all respects rank pari passu with all
other Guarantor Senior Subordinated Indebtedness of such Guarantor and only
Indebtedness of the Guarantor which is Guarantor Senior Indebtedness will rank
senior to such Note Guarantee in accordance with the provisions set forth
herein. All provisions of this Article XII shall be subject to Section 12.12.
SECTION 12.2 Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets or securities of any Guarantor upon a total or
partial liquidation or a total or partial dissolution of a Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to any Guarantor or its respective properties:
(1) holders of Guarantor Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents of the Guarantor
Senior Indebtedness (including interest accruing after, or which would
accrue but for, the commencement of any proceeding at the rate specified
in the applicable Guarantor Senior Indebtedness, whether or not a claim
for such interest would be allowed) before Securityholders shall be
entitled to receive any payment of principal of, premium, if any, or
interest on or other amounts with respect to the Securities; and
(2) until the Guarantor Senior Indebtedness is paid in full in cash
or Cash Equivalents, any payment or distribution to which Securityholders
would be entitled but for this Article XII shall be made to holders of
Guarantor Senior Indebtedness as their respective interests may appear.
SECTION 12.3 Default on Senior Indebtedness. No Guarantor shall pay
the principal of, premium (if any) or interest on or other amounts with respect
to the Securities or make any deposit pursuant to Section 8.1 or pay the
Securities if (i) any Guarantor Senior
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Indebtedness or Senior Indebtedness of the Company is not paid when due in cash
or Cash Equivalents or (ii) any other default on Guarantor Senior Indebtedness
or Senior Indebtedness of the Company occurs and the maturity of such Guarantor
Senior Indebtedness or Senior Indebtedness of the Company is accelerated in
accordance with its terms unless, in either case, (x) the default has been cured
or waived and any such acceleration has been rescinded in writing or (y) such
Guarantor Senior Indebtedness or Senior Indebtedness of the Company has been
paid in full in cash or Cash Equivalents; provided, however, that a Guarantor
may pay the Securities without regard to the foregoing if the Company and the
Trustee receive written notice approving such payment from the Representative of
the Guarantor Senior Indebtedness or the Senior Indebtedness of the Company with
respect to which either of the events set forth in clause (i) or (ii) of this
sentence has occurred or is continuing. During the continuance of any default
(other than a default described in clause (i) or (ii) of the preceding sentence)
with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, the Guarantor may not pay the Securities for a
Payment Blockage Period commencing upon the receipt by the Trustee (with a copy
to the Company) of a Blockage Notice of such default from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because such Designated Senior Indebtedness has been repaid in full in
cash or Cash Equivalents). Notwithstanding the provisions of the immediately
preceding sentence, unless the holders of such Designated Senior Indebtedness or
the Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, a Guarantor may resume payments on the
Securities after the end of such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period.
SECTION 12.4 Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default and if any
Designated Senior Indebtedness is outstanding, no Guarantor shall pay the
Securities until five Business Days after the holders or Representative of the
Designated Senior Indebtedness receives notice of such acceleration as provided
in the Indenture and, thereafter, Guarantors may pay the Securities only if this
Article XII otherwise permits payments at that time.
SECTION 12.5 When Distribution Must Be Paid Over. If a payment or
distribution is made to the Trustee or Securityholders that because of this
Article XII should not have been made to them, the Trustee or the
Securityholders who receive the payment or distribution shall hold it in trust
for holders of Guarantor Senior Indebtedness and promptly pay it over to them as
their respective interests may appear.
SECTION 12.6 Subrogation. After all Guarantor Senior Indebtedness is
paid in full in cash or Cash Equivalents and the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Guarantor Senior
Indebtedness to receive distributions applicable to Guarantor Senior
Indebtedness. A payment or distribution made under this Article
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XII to holders of Guarantor Senior Indebtedness which otherwise would have been
made to Securityholders is not, as between a Guarantor and Securityholders, a
payment by such Guarantor of Guarantor Senior Indebtedness.
SECTION 12.7 Relative Rights. This Article XII defines the relative
rights of Holders and holders of Guarantor Senior Indebtedness. Nothing in the
Note Guarantee shall:
(1) impair, as between a Guarantor and Holders, the obligation of a
Guarantor which is absolute and unconditional, to pay the Obligations in
accordance with the terms of the Note Guarantee; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Guarantor Senior Indebtedness to receive payments and
distributions otherwise payable to Securityholders.
SECTION 12.8 Subordination May Not Be Impaired by Guarantor. No
right of any holder of Guarantor Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Note Guarantee shall be
impaired by any act or failure to act by a Guarantor or by the failure of any of
them to comply with the Note Guarantee or this Indenture.
SECTION 12.9 Rights of Trustee and Paying Agent. Notwithstanding
Section 12.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than one
Business Day prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article XII. A Guarantor, the Company, the Registrar or co-registrar, the
Paying Agent, a Representative or a holder of Senior Indebtedness of the Company
or Guarantor Senior Indebtedness may give the notice; provided, however, that,
if an issue of Senior Indebtedness of the Company or Guarantor Senior
Indebtedness has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article XII with respect to any Guarantor Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Guarantor
Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article XII shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 7.7. Each Paying
Agent shall have the same rights and obligations under this Article XII as does
the Trustee.
SECTION 12.10 Distribution or Notice to Representative. Whenever a
payment or distribution is to be made or a notice given to holders of Guarantor
Senior Indebtedness, the payment or distribution may be made and the notice
given to their Representative (if any).
SECTION 12.11 Article XII Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment in respect of the Securities
by reason of any
78
provision in this Article XII shall not be construed as preventing the
occurrence of a Default or Event of Default. Nothing in this Article XII shall
have any effect on the right of the Securityholders or the Trustee to accelerate
the maturity of the Securities.
SECTION 12.12 Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Guarantor Senior Indebtedness or
subject to the restrictions set forth in this Article XII, and none of the
Securityholders shall be obligated to pay over any such amount to a Guarantor,
any holder of Guarantor Senior Indebtedness or Senior Indebtedness of the
Company, or any other creditor of a Guarantor or the Company.
SECTION 12.13 Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Guarantor
Senior Indebtedness or Senior Indebtedness of the Company for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Guarantor Senior Indebtedness or Senior
Indebtedness and other Indebtedness of the Company or a Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XII. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Guarantor Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Guarantor Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.1 and 7.2 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article XII.
SECTION 12.14 Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Guarantor Senior Indebtedness and Senior Indebtedness of the Company as provided
in this Article XII and appoints the Trustee as attorney-in-fact for any and all
such purposes.
SECTION 12.15 Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness or Senior Indebtedness of the Company
and, subject to Section 12.9, shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Guarantor Senior
Indebtedness shall be entitled by virtue of this Article XII or otherwise.
79
SECTION 12.16 Reliance on Subordination Provisions. Each
Securityholder by accepting a Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Guarantor Senior Indebtedness, whether
such Guarantor Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Guarantor Senior Indebtedness and such holder of Guarantor Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Guarantor Senior Indebtedness.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Guarantor in addition to performing its obligations
under the Note Guarantee shall perform such other obligations as may be imposed
upon it with respect to this Indenture under the TIA.
SECTION 13.2 Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Advanstar Communications Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx
With a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
if to the Trustee:
Xxxxx Fargo Bank Minnesota, N.A.
Sixth & Marquette
MAC X0000-000
Xxxxxxxxxxx, XX 00000
Attention: Corporate Trust Services - Advanstar Communications
80
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3 Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Trustee shall comply with TIA (S) 312(b) with respect to any
such communication. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA (S) 312(c).
SECTION 13.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
81
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officer's Certificate or on certificates of public officials.
SECTION 13.6 When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 13.7 Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.8 Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 13.9 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 13.10 No Recourse Against Others. An incorporator, director,
officer, employee, stockholder or controlling person, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 13.11 Successors. All agreements of the Company in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 13.13 Variable Provisions. The Company initially appoints
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.
82
SECTION 13.14 Qualification of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.15 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
83
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
ADVANSTAR COMMUNICATIONS INC.
By:/s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name:
Title:
MEN'S APPAREL GUILD IN CALIFORNIA, INC.
By:/s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name:
Title:
APPLIED BUSINESS TELECOMMUNICATIONS, INC.
By:/s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name:
Title:
XXXXX FARGO BANK MINNESOTA, N.A.
By:/s/ Xxxxxxx X. Xxxxx
-----------------------
Name:
Title:
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
No. [___] Principal Amount $[______________]
CUSIP NO. ____________
12% Senior Subordinated Notes due 2011
Advanstar Communications Inc., a New York corporation, promises to
pay to [___________], or registered assigns, the principal sum of
[__________________] Dollars on February 15, 2011.
Interest Payment Dates: August 15 and February 15
Record Dates: August 1 and February 1
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Additional provisions of this Security are set forth on the other side of
this Security.
ADVANSTAR COMMUNICATIONS INC.
By:______________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President-Finance, Chief
Financial Officer & Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
XXXXX FARGO BANK MINNESOTA, N.A.,
as Trustee, certifies that this is one of
the Securities referred to in the Indenture.
By: _______________________________________
Authorized Signatory
Date: February 21, 2001
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[FORM OF REVERSE SIDE OF INITIAL SECURITY]
12% Senior Subordinated Note due 2011
1. Interest
Advanstar Communications Inc., a New York corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on August 15 and February
15 of each year commencing August 15, 2001. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from February 21, 2001. The Company
shall pay interest on overdue principal or premium, if any (plus interest on
such interest to the extent lawful), at the rate borne by the Securities 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
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the August 1 or February 1 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
Initially, Xxxxx Fargo Bank Minnesota, N.A., a national banking
association duly organized and existing under the laws of the United States (the
"Trustee"), will act as Trustee, Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice to
any Securityholder. The Company or any of its domestically incorporated
Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
February 21, 2001 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, the
guarantors party thereto and the Trustee. The
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terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $160.0 million aggregate principal amount (subject to
Section 2.9 of the Indenture). This Security is one of the Initial Securities
referred to in the Indenture. The Securities include the Initial Securities and
any Exchange Securities issued in exchange for the Initial Securities pursuant
to the Indenture and the Registration Rights Agreement. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on: the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the Incurrence of
Indebtedness by the Company and the Guarantors if subordinate or junior in any
respect to any Senior Indebtedness or Guarantor Senior Indebtedness,
respectively, the payment of dividends and other distributions on the Capital
Stock of the Company and its Restricted Subsidiaries, the purchase or redemption
of Capital Stock of the Company and Capital Stock of such Restricted
Subsidiaries, certain purchases or redemptions of Subordinated Indebtedness, the
Incurrence of Liens by the Company or its Restricted Subsidiaries, the entering
into of Asset Swaps by the Company or its Restricted Subsidiaries, the sale or
transfer of assets and Capital Stock of Restricted Subsidiaries, the issuance or
sale of Capital Stock of Restricted Subsidiaries, the business activities and
investments of the Company and its Restricted Subsidiaries and, transactions
with Affiliates. In addition, the Indenture limits the ability of the Company
and its Restricted Subsidiaries to restrict distributions and dividends from
Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Guarantors have unconditionally
guaranteed (and future Guarantors, together with the Guarantors, will
unconditionally guarantee), jointly and severally, such obligations on a senior
subordinated basis pursuant to the terms of the Indenture.
5. Redemption
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to February 15, 2006. On and after such date,
the Securities will be redeemable, at the Company's option, in whole or in part,
at any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
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If redeemed during the 12-month period commencing on February 15 of
the years set forth below:
Period Redemptive Price
------ ----------------
2006 106.000%
2007 104.000%
2008 102.000%
2009 and thereafter 100.000%
In addition, at any time and from time to time prior to February 15,
2004, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Securities with the proceeds of one or more Equity
Offerings received by, or invested in, the Company so long as there is a Public
Market at the time of such redemption, at a redemption price (expressed as a
percentage of principal amount) of 112.0% plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided, however, that at least 65% of the original principal amount of
the Securities must remain outstanding after each such redemption; provided
further, however, that each such redemption occurs within 90 days of the date of
closing of such Equity Offering.
At any time on or prior to February 15, 2006, the Securities may
also be redeemed as a whole at the option of the Company upon the occurrence of
a Change of Control, upon not less than 30 nor more than 60 days prior notice
(but in no event more than 30 days after the occurrence of such Change of
Control) mailed by first-class mail to each holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued and unpaid interest, if any, to, the date
of redemption (the "Redemption Date") (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date).
"Applicable Premium" means, with respect to a Security at any
Redemption Date, the greater of (i) 1.0% of the principal amount of such
Security and (ii) the excess of (A) the present value at such time of (1) the
redemption price of such Security at February 15, 2006 (such redemption price
being described under "Optional Redemption") plus (2) all required interest
payments due on such Security through February 15, 2006, computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (B) the
principal amount of such Note.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two business days prior
to the Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source of similar market data)) most nearly equal to the
period from the Redemption Date to February 15, 2006; provided, however, that if
the period from the Redemption Date to February 15, 2006 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to February 15, 2006
is less than one year, the weekly average
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yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
In the case of any partial redemption, selection of the Securities
for redemption will be made by the Trustee on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Securities of $1,000 in original principal amount
or less will be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the portion
of the principal amount thereof to be redeemed. A new Security in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
holder thereof upon cancellation of the original Security.
6. Repurchase Provisions
(a) Upon a Change of Control, unless the Company has exercised its
right to redeem the Securities as described under Section 5 hereof, any Holder
of Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales permitted by the Indenture, when the aggregate amount of Excess Proceeds
equals or exceeds $5.0 million, the Company shall make an Offer for all
outstanding Securities pro rata up to a maximum principal amount (expressed as a
multiple of $1,000) of Securities equal to such Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase in accordance with the
procedures set forth in Section 3.7 of the Indenture.
7. Subordination
The Securities are subordinated to Senior Indebtedness and the Note
Guarantees are subordinated to Guarantor Senior Indebtedness, each as defined in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose. The Securities will
in all respects rank pari passu with all other Senior Subordinated Indebtedness.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Securities selected for redemption (except, in the case of a
Security to be
A-6
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Securities to be redeemed
and ending on the date of such mailing or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
9. Persons Deemed Owners
The registered holder of this Security may be treated as the owner
of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to provide for the issuance of Exchange
Securities.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest when due on the Securities; (ii) default in payment
of principal on the Securities at maturity, upon required repurchase, upon
required repurchase or upon redemption pursuant to paragraphs 5 and 6 of the
Securities, upon declaration or otherwise; (iii) the failure by the Company to
comply with its obligations under Article IV of the Indenture, (iv) failure by
the
A-7
Company to comply for 30 days after notice with any of its obligations under the
covenants described under Section 3.9 of the Indenture or under other covenants
specified in the Indenture (in each case, other than a failure to purchase
Securities, which shall constitute an Event of Default under clause (ii) above),
(v) the failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) Indebtedness of the Company or any
Restricted Subsidiary if not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $10 million (the
"cross acceleration provision"), (vii) certain events of bankruptcy, insolvency
or reorganization of the Company or a Significant Subsidiary (the "bankruptcy
provisions"), (viii) any judgment or decree for the payment of money in excess
of $5.0 million is rendered against the Company or a Significant Subsidiary and
such judgment or decree shall remain undischarged or unstayed for a period of 60
days after such judgment becomes final and non-appealable (the "judgment default
provision") or (ix) any Note Guarantee ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or any Guarantor denies
or disaffirms its obligations under the Indenture or its Note Guarantee.
However, a default under clauses (iv) and (v) will not constitute an Event of
Default until the Trustee or the holders of more than 25% in principal amount of
the outstanding Securities notify the Company of the default and the Company
does not cure such default within the time specified in clauses (iv) and (v)
hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
14. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such
A-8
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
18. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law
This Security shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
A-9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date: ____________________ Your Signature: ___________________
Signature Guarantee:______________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1 |_| acquired for the undersigned's own account, without transfer;
or
2 |_| transferred to the Company; or
3 |_| transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act");
or
4 |_| transferred pursuant to an effective registration statement
under the Securities Act; or
5 |_| transferred pursuant to and in compliance with Regulation S
under the Securities Act; or
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6 |_| transferred to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act), that has furnished to the Trustee a signed
letter containing certain representations and agreements (the
form of which letter appears as Section 2.7 of the Indenture);
or
7 |_| transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
___________________________
Signature
Signature Guarantee:
___________________________________ ___________________________
(Signature must be guaranteed) Signature
_____________________________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
____________________________
Dated:
A-11
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
Date of Exchange Amount of Amount of Principal Signature of
decrease in increase in Amount of this authorized
Principal Principal Global signatory of
Amount of this Amount of this Security Trustee or
Global Global following such Securities
Security Security decrease or Custodian
increase
--------------------------------------------------------------------------------
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
|_| |_|
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.7 or 3.9 of the Indenture, state the amount
principal amount (must be integral multiple of $1,000): $
Date: _____________ Your Signature ____________________________________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee: _____________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
A-13
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
No. [_____] Principal Amount $[____________]
CUSIP NO. _____________
12% Senior Subordinated Notes due 2011
Advanstar Communications Inc., a New York corporation, promises to
pay to [______________], or registered assigns, the principal sum of
[_______________] Dollars on February 15, 2011.
Interest Payment Dates: August 15 and February 15
Record Dates: August 1 and February 1
B-1
Additional provisions of this Security are set forth on the other
side of this Security.
ADVANSTAR COMMUNICATIONS INC.
By:______________________________________
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President-Finance, Chief
Financial Officer & Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
XXXXX FARGO BANK MINNESOTA, N.A.,
as Trustee, certifies that this is one of
the Securities referred to in the Indenture.
By: _______________________________
Authorized Signatory
Date:
B-2
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
12% Senior Subordinated Note due 2011
1. Interest
Advanstar Communications Inc., a New York corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on August 15 and February
15 of each year commencing August 15, 2001. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from February 21, 2001. The Company
shall pay interest on overdue principal or premium, if any (plus interest on
such interest to the extent lawful), at the rate borne by the Securities 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
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of the
Securities at the close of business on the August 1 or February 1 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
Initially, Xxxxx Fargo Bank Minnesota, N.A., a national banking
association duly organized and existing under the laws of the United States (the
"Trustee"), will act as Trustee, Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice to
any Securityholder. The Company or any of its domestically incorporated
Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
February 21, 2001 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company, the
guarantors party thereto and the Trustee. The terms of the Securities 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
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date of the Indenture (the "Act"). Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the Act for a statement of those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $160.0 million aggregate principal amount (subject to
Section 2.9 of the Indenture). This Security is one of the Exchange Securities
referred to in the Indenture. The Securities include the Initial Securities and
any Exchange Securities issued in exchange for the Initial Securities pursuant
to the Indenture and the Registration Rights Agreement. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on: the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the Incurrence of
Indebtedness by the Company and the Guarantors if subordinate or junior in any
respect to any Senior Indebtedness or Guarantor Senior Indebtedness,
respectively, the payment of dividends and other distributions on the Capital
Stock of the Company and its Restricted Subsidiaries, the purchase or redemption
of Capital Stock of the Company and Capital Stock of such Restricted
Subsidiaries, certain purchases or redemptions of Subordinated Indebtedness, the
Incurrence of Liens by the Company or its Restricted Subsidiaries, the entering
into of Asset Swaps by the Company or its Restricted Subsidiaries, the sale or
transfer of assets and Capital Stock of Restricted Subsidiaries, the issuance or
sale of Capital Stock of Restricted Subsidiaries, the business activities and
investments of the Company and its Restricted Subsidiaries, and transactions
with Affiliates. In addition, the Indenture limits the ability of the Company
and its Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
To guarantee the due and punctual payment of the principal, premium,
if any, and interest on the Securities and all other amounts payable by the
Company under the Indenture and the Securities when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Guarantors have unconditionally
guaranteed (and future Guarantors, together with the Guarantors, will
unconditionally guarantee), jointly and severally, such obligations on a senior
subordinated basis pursuant to the terms of the Indenture.
5. Optional Redemption
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to February 15, 2006. On and after such date,
the Securities will be redeemable, at the Company's option, in whole or in part,
at any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
B-4
If redeemed during the 12-month period commencing on February 15 of
the years set forth below:
Period Redemptive Price
------ ----------------
2006 106.000%
2007 104.000%
2008 102.000%
2009 and thereafter 100.000%
In addition, at any time and from time to time prior to February 15,
2004, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Securities with the proceeds of one or more Equity
Offerings received by, or invested in, the Company so long as there is a Public
Market at the time of such redemption, at a redemption price (expressed as a
percentage of principal amount) of 112.0% plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided, however, that at least 65% of the original principal amount of
the Securities must remain outstanding after each such redemption; provided
further, that each such redemption occurs within 90 days of the date of closing
of such Equity Offering.
At any time on or prior to February 15, 2006, the Securities may
also be redeemed as a whole at the option of the Company upon the occurrence of
a Change of Control, upon not less than 30 nor more than 60 days prior notice
(but in no event more than 30 days after the occurrence of such Change of
Control) mailed by first-class mail to each holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued and unpaid interest, if any, to, the date
of redemption (the "Redemption Date") (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date).
"Applicable Premium" means, with respect to a Security at any
Redemption Date, the greater of (i) 1.0% of the principal amount of such
Security and (ii) the excess of (A) the present value at such time of (1) the
redemption price of such Security at February 15, 2006 (such redemption price
being described under "Optional Redemption") plus (2) all required interest
payments due on such Security through February 15, 2006, computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (B) the
principal amount of such Note.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two business days prior
to the Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source of similar market data)) most nearly equal to the
period from the Redemption Date to February 15, 2006; provided, however, that if
the period from the Redemption Date to February 15, 2006 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to February 15, 2006
is less than one year, the weekly average
B-5
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
In the case of any partial redemption, selection of the Securities
for redemption will be made by the Trustee on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Securities of $1,000 in original principal amount
or less will be redeemed in part. If any Security is to be redeemed in part
only, the notice of redemption relating to such Security shall state the portion
of the principal amount thereof to be redeemed. A new Security in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
holder thereof upon cancellation of the original Security.
6. Repurchase Provisions
(a) Upon a Change of Control, unless the Company has exercised its
right to redeem the Securities as described under Section 5 hereof, any Holder
of Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales permitted by the Indenture, when the aggregate amount of Excess Proceeds
equals or exceeds $5.0 million, the Company shall make an Offer for all
outstanding Securities pro rata up to a maximum principal amount (expressed as a
multiple of $1,000) of Securities equal to such Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase in accordance with the
procedures set forth in Section 3.7 of the Indenture.
7. Subordination
The Securities are subordinated to Senior Indebtedness and the Note
Guarantees are subordinated to Guarantor Senior Indebtedness, each as defined in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose. The Securities will
in all respects rank pari passu with all other Senior Subordinated Indebtedness.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Securities selected for redemption (except, in the case of a
Security to be
B-6
redeemed in part, the portion of the Security not to be redeemed) or for a
period beginning 15 days before the mailing of a notice of Securities to be
redeemed and ending on the date of such mailing or (ii) any Securities for a
period beginning 15 days before an interest payment date and ending on such
interest payment date.
9. Persons Deemed Owners
The registered holder of this Security may be treated as the owner
of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
Communications or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest when due on the Securities; (ii) default in payment
of principal on the Securities at maturity, upon required repurchase, upon
required repurchase or upon redemption pursuant to paragraphs 5 and 6 of the
Securities, upon declaration or otherwise; (iii) the failure by the Company to
comply with its obligations under Article IV of the Indenture (iv) failure by
the
B-7
Company to comply for 30 days after notice with any of its obligations under the
covenants described under Section 3.9 of the Indenture or under other covenants
specified in the Indenture (in each case, other than a failure to purchase
Securities, which shall constitute an Event of Default under clause (ii) above),
(v) the failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) Indebtedness of the Company or any
Restricted Subsidiary if not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $5.0 million
(the "cross acceleration provision"), (vii) certain events of bankruptcy,
insolvency or reorganization of the Company or a Significant Subsidiary (the
"bankruptcy provisions"), (viii) any judgment or decree for the payment of money
in excess of $5.0 million is rendered against the Company or a Significant
Subsidiary and such judgment or decree shall remain undischarged or unstayed for
a period of 60 days after such judgment becomes final and non-appealable (the
"judgment default provision") or (ix) any Note Guarantee ceases to be in full
force and effect (except as contemplated by the terms of the Indenture) or any
Guarantor denies or disaffirms its obligations under the Indenture or its Note
Guarantee. However, a default under clauses (iv) and (v) will not constitute an
Event of Default until the Trustee or the holders of more than 25% in principal
amount of the outstanding Securities notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
14. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such
B-8
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
18. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law
This Security shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
B-9
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ________________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
______________________________________________________________________________
Date: _______________ Your Signature ____________________
Signature Guarantee: ____________________________________
(Signature must be guaranteed)
______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.
B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
|_| |_|
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.7 or 3.9 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: _____________ Your Signature ________________________________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee: _____________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-11
EXHIBIT C
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture dated as of February 21, 2001 (the
"Indenture") among Advanstar Communications Inc., Men's Apparel Guild in
California, Inc. and Applied Business teleCommunications, Inc. and Xxxxx Fargo
Bank Minnesota, N.A., as trustee (the "Trustee"), (a) the due and punctual
payment of the principal of, premium, if any, and interest on the Notes (as
defined in the Indenture), whether at maturity, by acceleration, redemption or
otherwise, the due and punctual payment of interest on overdue principal and
premium, and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article XI of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Note Guarantee.
Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee, on behalf of such
Holder, to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided, however, that the
Indebtedness evidenced by this Note Guarantee shall cease to be so subordinated
and subject in right of payment upon any defeasance of this Note in accordance
with the provisions of the Indenture.
MEN'S APPAREL GUILD IN CALIFORNIA, INC.
By:______________________________________
Name:
Title:
APPLIED BUSINESS TELECOMMUNICATIONS, INC.
By:______________________________________
Name:
Title:
C-1
